http://transportation.i2i.org/category/publications/Colorado Transit: A Costly Failure
Public transit is often portrayed as a low-cost,
environmentally friendly alternative to auto driving.1
In fact, transit is much more costly than driving, and
requires huge subsidies to attract riders. Moreover,
transit systems in the vast majority of American cities
use more energy and emit more greenhouse gases than
the average car.2
For every dollar collected in fares from transit riders, the
average transit system in America requires more than
$2 from taxpayers for operating subsidies plus more
than $1 for capital improvements and maintenance.3
So it is not surprising that transit systems in Colorado
require large subsidies. What may be surprising is
that most are far less environmentally friendly than a
typical sports utility vehicle.
The Cost of Driving
Before looking at the cost of transit, it is useful for
comparison sake to calculate the cost of and subsidies
to driving. Americans drive for 85 percent of their
travel not because we are somehow addicted to
the automobile but because autos are both more
convenient and less expensive than most of the
alternatives. Unlike transit buses, trains, or airplanes,
automobiles make it possible for people to go where
they want to go when they want to go there.
According to the Bureau of Economic Analysis,
Americans spent $950 billion buying, operating, and
maintaining their cars and light trucks (including pick
ups, SUVs, and full-sized vans) in 2008.4 That’s a lot
of money, but those cars and light trucks also carried
us nearly 4.5 trillion passenger miles, for an average
cost of less than 22 cents per passenger mile.5
*SNIP*The Cost of Transit
By comparison, the national average cost of public
transit is more than 90 cents a passenger mile, more
than 70 cents of which is subsidized by non-transit
users. In Colorado, the costs are a little higher: $1.00
per passenger mile, $0.84 of which is subsidized.12
Most transit agencies do not even pretend to try to
cover their operating costs, much less their capital
costs, with passenger fares. Colorado transit agencies,
for example, spent $419 million operating transit lines
in 2008, but collected only $97 million in fares.
In addition to the annual operating costs, transit
subsidies include the capital costs of buying buses and
other facilities. Capital costs fluctuate tremendously
from year to year as transit agencies receive federal
grants to replace large segments of their bus fleets in
some years and make few capital purchases in other
years.
The Federal Transit Administration has published cost
data for every transit agency from 1992 through 2008,
providing 17 years’ worth of capital cost data.13 After
adjusting for inflation, the average of these 17 years
provides a reasonable approximation of annual capital
costs for bus transit. In the case of Denver’s light-rail
system, actual capital costs of the existing system were
depreciated over 30 years at 7 percent, as directed by
Federal Transit Administration accounting rules.14
Annual capital costs and depreciation add another
$181 million to the cost of running Colorado transit,
meaning taxpayers lost $503 million per year on
transit systems in 7 Colorado cities. This does not
count the transit agency in Berthoud, which did not
submit sufficient information to the Federal Transit
Administration to calculate these numbers.
