Per passenger mile, federal subsidies to Amtrak are 30 times greater than federal subsidies to airlines and 500 times greater than federal subsidies to intercity buses, according to a new study from the American Bus Association. The study also reports that federal subsidies per passenger mile to public transit are 3,200 times greater than federal subsidies to autos.
The report, written by economist Robert Damuth of Nathan Associates, compared federal outlays for each mode with excise taxes collected from highway users and air travelers. It also apportioned costs to users such as auto drivers, intercity buses, and commercial airlines.
For example, the study found that federal expenditures on air travel between 2002 and 2009 averaged about $19 billion a year (p. 7), and it cited a Federal Aviation Administration report attributing about 70 percent of that cost to commercial air passengers (p. 12). The study also found that various taxes collected from air travelers averaged about $9 billion a year (p. 14), for a net subsidy of about $4.5 billion a year (p. 24).
A summary of the report compares subsidies per trip. But no one has estimated trip numbers for autos, and it doesn’t seem fair to compare transit trips, which average about 5 miles, with Amtrak and airline trips, which average hundreds of miles.
Fortunately, the full report also calculates subsidies per passenger mile. From 2002-2009, the report says, federal subsidies per passenger mile to air travel averaged 0.8 cents; to autos averaged 0.006 cents; to intercity buses averaged 0.05 cents; to Amtrak averaged 25.4 cents; and to urban transit averaged 19.3 cents. The federal subsidy to highways was actually negative (meaning highway users paid more than highway costs) until 2001, and turned positive mainly because Congress made spending mandatory regardless of revenues (a policy that was corrected this year).
Despite these highway subsidies, subsidies to autos are tiny, the report says, because auto drivers pay about two-thirds of the revenues into the Highway Trust Fund (p. 16) but only impose about 60 percent of the costs (p. 12). Even then, the report erred in counting only passenger car passenger miles, ignoring light trucks (pickups, SUVs, and full-sized vans). Adding these passenger miles would reduce the subsidy per passenger mile by 40 percent.
Bus companies pay a lower fuel tax per gallon than auto drivers, but the report cites DOT cost allocation studies that show that bus contributions to the Highway Trust Fund offset costs. The latest study, however, is for 2000, which means that it doesn’t account for the surge in Internet-driven bus companies such as Megabus, Bolt Bus, and the various “Chinatown” buses. In addition to general highway funds, the study counts about $60 million in annual earmarks to intercity buses, including Federal Transit Administration funds and grants to add wheelchair lifts to help companies comply with the Americans with Disabilities Act.
The report estimates that “commercial buses” carry about 125 million passenger miles per year (p. 19). The author apparently calculated this by subtracting “transit bus” and “demand response” from “bus” in National Transportation Statistics. However, this still leaves school buses, which are usually not “commercial.” The American Bus Association’s annual motorcoach census (which was also written by Nathan, but by a different researcher), charter buses, tour buses, airport shuttles, and intercity buses carry about 60 million passenger miles a year, about a quarter of which is intercity buses. Subsidies to these buses are therefore about double the subsidies calculated in the report. That still means per-passenger-mile federal subsidies to intercity buses are about one-eighth of airline subsidies and 1/250th of subsidies to Amtrak.
What about state and local subsidies? A first approximation of such subsidies can be found by subtracting expenses from revenues in National Transportation Statistics. The results suggest that total subsidies to air travel are tiny, subsidies to highways are large (but tiny per passenger mile), and subsidies to transit are in between (but much larger per passenger mile). National Transportation Statistics doesn’t have state and local subsidies to Amtrak or intercity buses, but I suspect the former are much larger than the latter.