Would transit funding be better off with devolution?

This topic has arisen quite often given our Federal budget brinkmanship: would transit in the US be better off with devolution?

Let’s define some terms. Devolution is the political science speak for movement of fiscal and governance responsibility from higher to lower levels of governments–usually federal to state governments. Traditionally, the governance of cities has been a complex blend of home rule and state statute, and since I am not a lawyer and don’t play one on tv, I can’t explain much more than that.

My grouchy libertarian (actually quite genteel and decent) colleagues tend to refer to transit funding in the US as “making bets with other people’s money.” That is, the transit revival so far in the US, with a few notable exceptions like much of the LA system, has been funded via cracking into Federal revenues, largely from gas taxes, for regional transit projects (capital investment). Perhaps nothing embodies the old lobbying adage that “this issue isn’t going to go away until we pass it” more than transit advocacy–unless perhaps high speed rail advocacy. And advocates have been successful, even if they don’t have the funds they’d like.

Beginning in 1992, the US opened progressively more of gas tax revenues to nonhighway purposes. In fact, in the tradition of “not going away” to get funding at the Federal level, I’d argue, prompted a bunch of livable city folks to begin advocating for Federal support of bike and pedestrian projects. (And there is money used for those; if you are going to allocate Federal cash for projects and expect a match, localities are able to afford much more in the way of bike and pedestrian stuff even if nominally it has to look like the money for those things comes from their funds.)

Many people have grumped about Federal funding for transit another such local/regional projects, and I’m one of those, with caveats. It’s not clear to me that Federal taxpayers should pay for the sidewalk outside my door. I realize that the earth will crash into the sun at the mere mention of property taxes, but land value improvements that I capture directly as homeowner, like sidewalks, are what property taxes or private homeowner association fees are for.

Arguably, local leaders would make more prudential developments if they were to be accountable to their constituents for investing wisely, instead of what they are accountable for now–chasing for their share extra-jurisdictional dollars.

I’m not particularly sympathetic to whining that roads got their investment at the Federal level and now fairness requires that transit get its fair share. I tend to reserve social justice arguments for people rather than modes, and if we want to support transit for civil rights reasons, let’s do so based on those compelling reason—and do it right, by concentrating the dollars in the communities, projects, and services where civil rights and access are most needed rather than overcapitalizing into low-density, low-employment suburbs because of political payola.

I also don’t expect Federal taxpayers to pay for the pothole outside my door.

Federal gas taxes were initially dedicated for an interstate system, which we did, in fact, build (though some may be surprised to remember that the “urban freeways” they deplore do connect into a larger network). So the Federal role in high speed rail money makes far more sense, in terms of network coordination and connectivity, than the idea that Federal taxpayers should be on the hook for the Crenshaw Line Light rail (wonderful project though it is) or the Number 8 express busline in Upper Sandusky.

Federal involvement in transit also has led to a heavy capital bias in transit investment, prompting local and regional agencies to build transit projects, again and again, that they can’t afford to run with any frequency. This leads to a wider geographic coverage for transit–which probably still isn’t wide enough to deal with spreading regions–and with lower frequencies than really make for high service quality. (And sprawl is bad, bad, bad, evil and terrible! The worst thing ever! There? Will that sentence keep some of you land-use people outta my grill for the purposes of this post? Can I talk about something else now? Thanks.)

Transit has been on the teeter-tottery edge of those issues and criticisms for a long time. Why can’t New York pay for its own subways? Or Los Angeles? Or anywhere? That’s why we have local taxes and general funds, right? If you want transit, don’t go holler at the feds. Make it happen if you want it. Perhaps there would be a greater chance of that self-helping if leaders know that the buck really began and stopped with them, and they might instead be much more careful to match investments to operations.

The US Congress is overly dominated by rural interests, and many of us for years have argued that this creates a hostile environment for transit funding in the first place, as many rural senators wonder: “what’s in it for my constituents?” and the ineffectual spreading of scarce resources around to systems that aren’t particularly viable or worth investing in. Porky McPorktown.

This graphic appeared in the Economist (where I have been a devoted subscriber for a very long time; please don’t sue me) accompanying this story about US Federal spending by donors and recipients of Federal largesse:

Voila Capture122

I encourage you to read the entire story. This is about all Federal spending, and I’d rather like to dig into their numbers when I get time. This map, I suspect, would be basically the same if it were to map out gas tax revenues and disbursements. The big states, like New York and California, give more than they get. The states with Senator Bedfellows making careers out of yammering on about the evil Feds get a lot more than they give. Who can explain these politics? I can’t.

So if places like California, New York, Illinois, and Minnesota were running their own budgetary shop, they could keep the revenues they are currently sending to Portland and Memphis and Charlotte.

Here’s the glitch: these donor state are only fiscally better off with Federal gas tax elimination or erosion if those donor states prove capable of passing a gas tax on its residents equal to or better than the 18 cents a gallon [- whatever the Feds give away to other jurisdictions]. And I’m not seeing that happen, at least not in California. Maybe in Minnesota. Maybe in New York, or Massachusetts. Maybe.

And there’s another question: would there have been a Portland at all if there hadn’t been Federal taxation, redistribution, and willingness to invest in smaller regions? It’s not clear that Portland wouldn’t have been willing or able to raise the money for its own perky transit miracle, but I have my doubts as to whether Portland as a region would have evolved as it had had it not been for their aggressive pursuit of Federal funding early on.

Wouldn’t many people feel rather bad about that?

One thought on “Would transit funding be better off with devolution?

  1. If the ability to levy gas taxes was devolved to the states, would those with the highest transit needs be able to raise sufficient revenues to meet them?

    If so, then great. Only projects requiring national or possibly regional coordination would be federal. Local accountability would breed investment wisdom and transit pork would be diminished. (Only maybe not so great, since states have less fiscal muscle/flexibility and many have equally dysfunctional politics. Is state pork any superior to federal pork?)

    But I have my doubts. Transit is expensive, after all, so it tends to involve regional redistribution. But it is necessary, both so metros don’t choke on congestion and so regions can grow strategically. It could be that even donor states can’t fully afford their own transit investment.

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