2019 Passenger Costs and Subsidies

The Federal Highway Administration has posted most highway finance spreadsheets for the 2019 Highway Statistics, which means we now have almost all of the data we need to calculate transportation costs subsidies for airline, highway, Amtrak, and transit passengers. A couple of airline numbers are only available for 2018, but those numbers don’t change much from year to year so should be a good estimate for 2019.

Americans spent an average of 25.0 cents per passenger-mile driving their cars, light trucks, and motorcycles, while highway subsidies averaged 1.1 cents per passenger-mile. Subsidies to highway trucking, incidentally, averaged 0.8 cents per ton-mile.

These highway subsidies compare to subsidies of 1.1 cents per passenger-mile to air travelers, 36 cents to Amtrak passengers, and $1.09 to transit riders. Amazingly, air travel is by far the least-expensive mode of travel, costing passengers just 13.8 cents per passenger-mile, while Amtrak fares average 38 cents and transit fares 30 cents per passenger-mile. Here’s how I calculated these numbers.

Air Travel

The Bureau of Transportation Statistics (BTS) reports average air fares per passenger-mile in table 3-20 of National Transportation Statistics. In 2019, they were 13.8 cents, a slight increase from 13.7 cents in 2018. The table also reports average Amtrak fares, but BTS unwittingly accepts Amtrak’s claim that state subsidies to Amtrak are “passenger revenues,” a claim I reject.

Two other tables from National Transportation Statistics list total government revenues from airline travelers and government expenditures on airports and air travel. Table 2-32 says that the federal, state, and local governments collected $38.5 billion in airline ticket fees and similar revenues, while table 2-35 says that those governments spent $46.5 billion, for a net subsidy of $8.0 billion. (These numbers are from 2018, but 2019 won’t be much different.) When divided by 2019 domestic air travel passenger-miles shown in table 1-50, that works out to 1.06 cents per passenger-mile. Note that international travel isn’t included and would push the average subsidy downward.

Highways

I calculate highway subsidies by adding all of the general funds, including income, property, and sales taxes, that are spent on highways, and subtracting from them any diversions of gas taxes, tolls, and other highway user fees that are spent on mass transit, education, or other non-highway activities. These numbers can all be found in table HF-10 of Highway Statistics. The Federal Highway Administration hasn’t yet posted that table, but we can also gather the numbers from six other tables.

Federal subsidies: Table FE-210 reports that, when Congress last reauthorized federal highway and transit funds, it appropriated $50.9 billion in general funds to the highway account of the Highway Trust Fund (plus $19.2 billion to the transit account). That was to be spent over five years, so 2019’s share was $10.2 billion.

Table FE-10 shows that the federal government collected about $43.5 billion in highway excise taxes (including taxes on fuels, trucks, trailers, and truck tires). Of this, $5.5 billion immediately went to mass transit and $1.3 billion went to the Land & Water Conservation fund and other non-transportation programs. Plus, during the year, an additional $1.6 billion was transferred to mass transit, making total federal diversions of $8.4 billion.

State subsidies: Table SF-1 says that the states spent $39.7 billion in general funds on roads in 2019. Some of this was offset, according to table SDF, by $9.8 billion in diversions to transit and $15.1 billion in diversions to other non-transportation programs out of state gas taxes, vehicle registration fees, and tolls.

Local subsidies: Table LGF-1 says that local governments spent $55.1 billion in general funds on roads in 2019. A small percentage of this was offset, according to table LDF, by $875 million in diversions to transit and other non-transportation programs out of local tolls.

2019 Highway Subsidies in Billions of Dollars
General FundsDiversionsSubsidies
Federal10.28.41.8
State39.725.014.7
Local55.10.954.2
Total104.934.370.7

Total highway subsidies: As shown in the table above, net highway subsidies in 2019 totaled to just over $70 billion.

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Highway use: According to table VM-1, highways carried 5.6 trillion passenger-miles in 2019. However, this counts truck driver miles, and I don’t consider truck drivers to be passengers. It also counts bus miles, but as I’ve noted before, I believe the bus numbers are wrong. So I’m just going to count light-duty vehicle and motorcycle passenger-miles, which total to 4.9 trillion. With user costs of $1.23 trillion, that works out to 25.0 cents per passenger-mile.

Highways also moved freight, and here’s another time when we have to resort to 2018 data. Table 1-50 of National Transportation Statistics shows that trucks moved just over 2.0 trillion ton-miles of freight in 2018, while table 3-21 shows that shippers paid an average of just under 19 cents per ton-mile in 2018.

Assuming this grew to 19 cents in 2019, then about 24 percent of the total amount spent by users on highway transport was freight and 76 percent was passenger. So I attribute 76 percent of the $70.7 billion in highway subsidies to passengers, which at 4.9 trillion passenger-miles works out to just under 1.1 cents per passenger-mile. Freight subsidies averaged 0.8 cents per ton-mile.

Amtrak

Pinning down Amtrak passenger revenues and subsidies is difficult because the quasi-government agency is so deceptive in its accounting practices. Aside from claiming that state subsidies are passenger revenues, none of its published reports reveal how much the company receives in federal subsidies.

Amtrak’s year-end report for fiscal year 2019 (which ended September 30) indicates that Amtrak received $2.3 billion in ticket fares and $0.1 billion in food & beverage revenues from passengers who traveled 6.475 billion passenger-miles. That works out to user costs of 37.6 cents per passenger-mile.

The report also says that state operating subsidies (which it includes with “passenger related revenue”) were $234.2 million and that “state capital payment amortization” was $127.4 million. For federal subsidies, we have to go to a recent Congressional Research Service report, which says that Congress gave Amtrak $1.942 billion in 2019 (and $3.018 billion in 2020). Total 2019 subsidies, then, were $2.3 billion, or 35.6 cents per passenger-mile.

Public Transit

Transit numbers are all found in the National Transit Database. The fares spreadsheet says that the transit industry collected a total of $16.1 billion from passengers. Operating expenses were $51.0 billion while capital expenses were $24.0 billion, for a net subsidy of $58.9 billion. The service spreadsheet says that transit agencies carried 54.1 billion passenger-miles, so fares averaged 29.7 cents and subsidies averaged $1.09 per passenger-mile.

Intercity Buses

Unfortunately, no one keeps track of bus fares or subsidies or how many passenger-miles were carried by scheduled intercity buses. The American Bus Association last did a census of motor coach operators in 2017. Based on the numbers in that census and other reports, I estimate that before the pandemic scheduled intercity bus companies such as Greyhound and Megabus carried a little less than 20 billion passenger-miles per year at fares averaging a little less than the 13.8-cent airline fares. Subsidies were probably about the same as auto subsidies; bus operators pay less federal gas taxes, but this is offset by higher occupancies than the average car.

In sum, the total cost (including both user costs and subsidies) of moving someone a passenger-mile on Amtrak was almost five times as great as the cost of moving a passenger-mile on the airlines, while the cost per passenger-mile on public transit was more than five times the cost per passenger-mile by automobile. Amtrak subsidies per passenger-mile were more than 30 times airline subsidies while transit subsidies were almost exactly 100 times as much per passenger-mile as highway subsidies.

Even after the subsidies, Amtrak really isn’t competitive as its fares per passenger-mile were more than 2.7 times as much as air fares and 50 percent more than the per-passenger-mile cost of driving. Even transit fares are almost 20 percent more than per-passenger-mile driving costs.

A question that is impossible to answer accurately is how much of Amtrak and transit’s high costs are due to the subsidies enabling them to be inefficient and how much are due to the fact that they are using functionally obsolete technologies and business models. However, the differences are so great that, even if subsidies ended and Amtrak and transit systems became as efficient as possible, most intercity passenger trains would be unlikely to survive and transit service would be cut back to the densest cities and most heavily used routes.

The pandemic, of course, will change a lot. Highway use is currently down only about 10 percent so highway costs and subsidies will remain about the same. Transit and airline use are currently down 63 percent and Amtrak is down 74 percent, so they face much bigger changes. All will recover to some degree in the long run but it will be much more difficult justifying subsidies to Amtrak and transit if, as seems likely, they significantly increase above what they were before the pandemic.

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About The Antiplanner

The Antiplanner is a forester and economist with more than fifty years of experience critiquing government land-use and transportation plans.

5 Responses to 2019 Passenger Costs and Subsidies

  1. Henry Porter says:

    “Amazingly, air travel is by far the least-expensive mode of travel….”

    I’m not the least bit amazed about this. Consider that planes fly at high speeds with most seats occupied while buses crawl with mostly empty seats. It’s about productivity.

    For example, a pilot might earn five times as much per hour as a bus driver but the pilot might produce over 1,700 times as many passenger miles during an average hour.

    500 seats x 90% pax/seat x 550 mph = 247,500 p-m/hour

    60 seats x 20% pax/seat x 12 mph = 144 p-m/hour

    247,500/144 = 1,718

  2. rovingbroker says:

    Technical question … When UPS puts a trailer on a railroad car in Los Angeles and takes it off in Chicago, are those miles included in highway or rail numbers?

  3. paul says:

    It should also be noted that because depreciation and insurance cost do not increase evenly with miles driven, the cost per mile decreases with the increase in miles driven, especially for new cars. For example, drive a new car 6,000 miles a year for 10 year and the car will still not be worth much more than the same model driven 14,000 miles a year. Insurance also does not double when the miles driven is doubled. So, anyone with newer car can put on extra miles at much lower than the average cost per mile. For used cars this is more complex. However, I am aware of several people who have bought a used car for about $3,000, driven it for 12,000 miles with almost no maintenance, and then sold it for the same $3,000. This with a minima insurance cost. In many cases a cheap used car may cost very little per mile. It should be noted that many transit systems are actually competing with this lower cost per mile, not the average.

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