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December 10th, 2008
Despite decreasing gas prices, Americans continue to turn to mass transit

Even as gas prices decline, according to the American Public Transportation Association (APTA), Americans continue to ride public transportation at record levels.

More than 2.8 billion trips were taken from July through September – an increase of 6.5 percent over the third quarter of 2007. In that time, there was an increase in ridership of 8.5 percent on light rail (streetcars), 7.2 percent on buses, 6.3 percent on commuter rail and 5.2 percent on subways. Additionally, a person can have an average annual savings of $8,416 per year by taking public transportation instead of driving (based on today’s gas prices and the average unreserved parking rate).

Last year, 10.3 billion trips were taken on U.S. public transit – the highest number of trips taken in fifty years.

Yet, despite the continued rising ridership demand, severe budget deficits and declining sales and property tax revenues are forcing many transit agencies to raise fares and cut service.

The Washington Post reports, “Fares and tolls in New York will increase 23 percent in July; severe cuts in bus and subway service are slated for spring. In Washington, Metro officials say they hope to maintain service levels next year by cutting other costs. Maryland officials are proposing reductions in MARC commuter train service and the fast-growing commuter bus service, effective Jan. 12. The Cleveland transit agency cut bus and rail service by 3 percent and raised fares 25 cents last month.”

Gas Tax

The average price of a gallon of gas, which peaked at over $4 last summer, is now about $1.75. It is welcome relief to Americans in these economic times. At the same time, the recent plunge in oil prices may have created the opportunity for states and the federal government to readdress the gas tax.

The Editorial Board of the Washington Post argues “that today’s drivers are enjoying the equivalent of 1980 prices… Meanwhile, the average per-gallon tax on gasoline is about 40 cents, including state levies. The federal portion of that has held steady at 18.4 cents since 1993; thus, in real terms, consumers have gotten a significant gas tax cut over the past 15 years.”

And as states and the federal government are facing ever-increasing budget deficits, an increase to the gas tax could better assist in funding President-elect Barack Obama’s stimulus proposal, which heavily emphasizes infrastructure spending. As of right now, states and the federal government will have to rely on bonds and further borrowing to fund the plan. But since gas tax revenues fund a good portion of road, bridge and transit projects, raising the gas tax could potentially be a fiscally responsible way to assist in funding the next stimulus package.

In New York, Governor Paterson (D) is backing down from his pledge to avoid raising taxes to balance the state’s budget. He says higher gas taxes will be needed to fill a $15 billion deficit over the next two years.

Additionally, in an interview with Newsweek, former Vice-President Al Gore endorses the idea of increasing the gas tax as both a way to continue to curb driving numbers and fund alternative transportation. As Vice-President, Gore successfully advocated the last increase to the federal gas tax. However, it was such a minimal increase that it had little impact on altering driving patterns or funding infrastructure projects.

Despite the recession, Americans seem willing to pay to maintain mass transit in their cities and states. On this past Election Day, voters in communities throughout the country passed 25 of 33 ballot initiatives to increase local and state taxes for public transportation.

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