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Transit: An Economic Recovery Vehicle

February 12, 2009 By Conrad deFiebre, Transportation Fellow
Minnesota's public transit system is in so much trouble in these tough economic times that it's starting to adopt disastrous policy prescriptions from right-wing transit haters.

Marshall Area Transit in southwestern Minnesota recently tripled the price of a monthly bus pass, from $25 to $80, in an effort to cover operating costs as state funding declines. Many, if not most, buyers of the passes have been senior citizens with few other mobility options.

This is just fine with so-called free market conservatives who insist that transit pay its own way while ignoring the many subsidies and economic externalities that underpin auto travel. They've even got a through-the-looking-glass argument for why this should be: Public transit, they say, provides a "private benefit," but drivers of private cars enjoy a "public good" in government-subsidized roads and bridges.

More on this nonsense and its economic implications a little later.

Transit financing in Minnesota is tanking because of the state's absurd funding formula that dictates when fewer people buy cars, fewer will be able to ride buses, too. That's because motor vehicle sales taxes provide the state's dedicated transit funding, and we know what's happened to the car business lately.

This upside-down policy also assures more funding for transit when more people are buying cars and, therefore, need less transit service. Go figure.

Metropolitan Council Chairman Peter Bell calls this "a major continuing challenge" for the council's Metro Transit system. That system, by the way, logged 82 million rides in 2008, a 27-year high despite a quarter fare increase. Rural and suburban bus lines also gained ridership.

Meanwhile, to make ends meet, Minnesota transit systems are cutting services, such as Metro Transit's closure of two suburban park-and-ride lots and SouthWest Transit's elimination of bus routes in the Chaska area.

While Minnesotans are voting for transit with their feet, they're also outspoken in their wish for more of it, not less. For the seventh time in eight years, a Met Council survey found the No. 1 concern of Twin Cities seven-county residents to be transportation, including congestion and "the need for more transit options," the council reported.

The poll of 1,500 respondents was conducted after last September's Wall Street meltdown, and still the economy got only a third of the mentions of concern as transportation. Maybe folks are catching on that you can't have a good economy without a strong, balanced transportation system.

Zero-sum economic conservatives argue against transit funding on the grounds that a government subsidy to hire a bus driver subtracts private-sector jobs because taxpayers have less to spend on food, clothing and shelter. But what if those taxpayers can't get to work without transit? Thus deprived of a paycheck, they'll probably spend even less on life's necessities.

And we know the sorry result of last year's federal tax rebates. Showered with more than $100 billion of deficit-financed stimulus, most taxpayers saved the money rather than spending it. There's no timely economic boost in that.

In this crisis of economic despair, private investment has fallen off a cliff. It's up to the government to rebuild confidence with recovery investments, preferably on things the public really wants that also boost economic efficiency.

Like transit.

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