1.389 Million Lies about Mica Plan

The responses to Representative John Mica’s plan to reduce transportation spending to affordable levels are shrill and bombastic. “1.4 million infrastructure jobs lost due to republican transportation budget short sightedness” claims a Florida newspaper. It’s the “road to ruin” says Oregon Representative (and ranking minority member on the Highways and Transit Subcommittee) Peter Defazio. Many others decry Mica’s proposals to cut or merge their favorite slush funds programs.

Let’s look at that 1.4 million jobs claim. The paper said Mica’s plan would “eliminate one million four hundred thousand jobs with the cuts to be made to our transit funding.” That is laughable. Page 18 of APTA’s Public Transportation Fact Book says the transit industry employes about 402,000 people. Federal funding of about $5.2 billion in 2010 represents less than 10 percent of total transit industry expenses of about 57 billion (page 22 of APTA Fact Book).

Mica’s presentation suggested that transit and highways would each be cut by about the same amount. Cutting federal funding by 30 percent thus represents a 2.7 percent drop in transit funding. If no other funds are found to replace the decline in federal funds and transit agencies find no ways of saving money other than to lay off personnel, a 2.7 percent drop in funds may result in a loss of 11,000 jobs. The Florida paper was off by a mere 1 million 389 thousand jobs, or about 12,600 percent.

How did they get it so wrong? Partly, perhaps, because they counted one job for six years as six different jobs (meaning they would have counted 11,000 jobs as 66,000 jobs). Also, the paper probably counted secondary jobs; for example, if you had a job building a McMansion for a bus driver earning $100,000 a year, but lost it because the driver’s transit agency cut back on his overtime to save money. But secondary jobs are typically two for every primary job, so we have a total of less than 200,000 jobs, meaning the paper still overestimated by more than 500 percent.

Defazio’s view is based on a highly questionable principle (unless you are a super-neo-Keynesian economist like Paul Krugman) that we can and should try to borrow-and-spend our way back out of the recession, especially if you spend on ego projects that few will ever use. Left unsaid by Defazio is whether he thinks we should cut budgets when the recession is over and, if not, where the money is going to come from to pay for his utopian dreams in the long run.

The League of American Bicyclists is appalled that a Republican would say that one his top priorities “is to eliminate ‘frivolous spending for bike trails.’” Let’s get this straight: bike trails are not frivolous. They are just not something that should be funded by the federal government.

One critic made a perceptive point about the plan: The 1950s Called and Want Their Transportation Bill Back. Actually, it would be accurate for the ’60s too: the idea that users should pay for their own transportation began to get lost in the 1970s when Congress allowed cities to spend the cost of cancelled freeways on transit.

The Republican proposal is getting support from some quarters, including the American Highway Users Alliance and the American Trucking Association. Mica’s plan would cut federal funding to highways just as much as transit, but these groups seem to recognize the corrosive effects of long-term subsidies on agencies and the economy as a whole.

While the Republican plan is a step in the right direction (meaning the direction of less federal involvement in state and local transportation), there is plenty of room for improvement. Mica proposed to eliminate most competitive grant funds in favor of formula funds, which is a good thing as competitive grants are much more highly politicized.

But while he would kill the New Starts transit program, which has led many cities into building disastrously expensive rail transit projects, Mica would keep some other competitive grant programs such as the Congestion Mitigation Air Quality (CMAQ) fund. Most CMAQ projects neither relieve congestion nor improve air quality, or if they do they don’t do it cost-effectively.

While Mica’s preference for formula funds is a good thing, many of the formulas in use are arcane and inane. For example (to quote a recent book), “9.32 percent of the Urbanized Area [Transit] Fund is divided among areas that have 50,000 to 199,999 residents based on their populations and population densities. Of the other 90.68 percent, 33.29 percent goes to urban areas of 200,000 people or more with fixed guideway transit based on the route miles and vehicle revenue miles of fixed guideway transit. The remaining 68.71 percent goes to urban areas of 200,000 people or more with bus transit based on their bus vehicle revenue miles, population, and population density.” Each portion of these formulas has some special-interest group behind it demanding that their members get a share of the take.

The Antiplanner humbly suggests that federal transportation spending be reduced to three or four formula funds that heavily depend on the actual user fees collected by state and local governments for transportation facilities. Best of all, short of completely eliminating federal transportation funding, would be one formula fund distributed to the states based heavily on user fees. States could spend their share of the fund any way they wanted but would be constrained by the knowledge that future funding would depend on the user fees they could collect from projects funded today.

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18 thoughts on “1.389 Million Lies about Mica Plan

  1. C. P. Zilliacus

    Though I am of the opinion that the Mica proposal is working at cross-purposes against some state agency efforts (at least some of which are supported by Mica’s fellow Republicans), notably proposals to toll I-95 in Virginia and North Carolina, as Peter Samuel of TOLLROADSnews wrote in an editorial here, critical of parts of the Mica proposal.

  2. John Thacker

    Transit and rail fans who want more subsidies often complain, in my experience, about subsidies to roads. (Usually they get some figures wrong, but we’ll accept that the end of the last transportation bill supplement and the stimulus subsidized roads from general funds.)

    However, show them a bill that would end subsidies from non user fees, and it seems like most go ballistic. I believe that they’re revealing that they don’t really oppose subsidies for roads, so long as they get enough subsidies for their pet projects to be built. Perhaps they even prefer road subsidies, as it allows them to ask for their own out of fairness.

    If people feel that there should be more transportation spending, they should push for higher user fees, including gas tax if they wish.

  3. bennett

    John,

    Well, you certainly thrashed the straw man there. But you are correct in that transit advocates “don’t really oppose subsidies for roads, so long as they get enough subsidies for their pet projects to be built,” (Much like Antiplanners actually like heavy handed government planning that results in big lots with big SF houses). When transit advocates mention road subsidies on this blog, it’s not in opposition to them, it’s to show the logical fallacy in the anti-transit subsidy arguments being made by our opponents. Our complaint is not about subsidies to roads, but that those who complain about transit subsidies ignore the massive road subsidies (or say that “roads” are paid for with user fees as on this blog).

    I personally have no fundamental problem with the idea of subsidies, but would like to see subsidized services be more efficient. Tell me if I’m wrong, but it seems that my opponents feel that if it can’t be done by the private sector, or operated by 100% of user fees, it shouldn’t be done at all.

    Why do we subsidize anything? Could it be because there are some services that the private sector cannot or will not do, or cannot be funded by 100% user fees?

    Now for my straw man: We could choose to end subsidies for most everything and I’m sure the Randian robber-barons on this blog would be just fine, and I’m sure the wouldn’t loose any sleep over the millions of people that would suffer as a result. But that why the Antiplanner “movement” is nothing more that a blog. Most people have a heart.

  4. Andrew

    According to Adam Smith, one of the primary functions of government is to provide basic infrastructure.

    “According to the system of natural liberty, the sovereign has only three duties to attend to … thirdly, the duty of erecting and maintaining certain public works and certain public institutions, which it can never be for the interest of any individual, or small number of individuals, to erect and maintain; because the profit would never repay the expense to any individual or small number of individuals, though it may frequently do much more than repay it to a great society.”

    “Good roads, canals, and navigable rivers, by diminishing the expense of carriage, put the remote parts of the country more nearly upon a level with those in the neighbourhood of the town. They are upon that account the greatest of all improvements.”

    There is no reason infrastructure “needs” to be paid out of “user fees” any more than police, firefighters, postal service, courts, or public schools need to be. It certainly can be, and it might make economic sense to do so, but at other times it might not. Rural free mail delivery makes more sense to me than charging market rates, and letting houses burn to the ground because someone did not pay a volunteer fire company is ridiculous.

  5. MJ

    According to Adam Smith, one of the primary functions of government is to provide basic infrastructure.

    Ironically, there were plenty of examples of the private provision of infrastructure in the UK at the time Adam Smith wrote that quote.

    His point about unremunerative public works was really an argument about public goods. Some infrastructure does have the characteristics of a public good (e.g. local roads), but most does not (water, electricity, freeways, etc.), which suggests that not only are user charges feasible, but often so is private provision. That is why I disagree with this argument:

    There is no reason infrastructure “needs” to be paid out of “user fees” any more than police, firefighters, postal service, courts, or public schools need to be.

    Failure to adopt appropriate user charges leads to large inefficiencies, such as congestion in the case of roads and cross-subsidy of different classes of service by the Post Office.

    Public safety may be considered a public good, though the case is more difficult for firefighting. The typical argument in that case is that it should be treated as a public good to prevent negative spillovers (e.g. your neighbor’s house catching fire when yours burns), but I would think that absent this circumstance, the public good argument is weaker.

  6. MJ

    …Now for my straw man:

    Actually, your straw man started a couple of paragraphs before that when you said:

    (Much like Antiplanners actually like heavy handed government planning that results in big lots with big SF houses).

  7. MJ

    Why do we subsidize anything? Could it be because there are some services that the private sector cannot or will not do, or cannot be funded by 100% user fees?

    There are plenty of services that the private sector cannot (or will not) provide. But I believe that the bar is set far too low in terms of which ones the public sector does provide. I think that there are plenty of cases where rent-seeking behavior does a much better job of explaining subsidy decisions than traditional social welfare considerations.

  8. Dan

    Some infrastructure does have the characteristics of a public good (e.g. local roads), but most does not (…electricity, freeways, etc.),

    Corrected it for you.

    Randal wrote: Let’s get this straight: bike trails are not frivolous. They are just not something that should be funded by the federal government.

    That’s a judgement the American People should make. I think they are now.

    DS

  9. John Thacker

    Well, you certainly thrashed the straw man there. But you are correct in that transit advocates “don’t really oppose subsidies for roads, so long as they get enough subsidies for their pet projects to be built,”… Our complaint is not about subsidies to roads, but that those who complain about transit subsidies ignore the massive road subsidies (or say that “roads” are paid for with user fees as on this blog).

    So what you’re saying is that I wasn’t making a straw man argument at all. A straw man argument is where you attack a position that people don’t hold. You’re saying that I wasn’t doing that, that I was correcting a mistaken impression that I (and others) had about what transit fans believed, and, according to you, accurately characterizing the views of you and most other transit fans.

    That’s not a straw man argument. We both agree on what your position is– I was only helping people see what it is. Simply because I disagree with your position after accurately explaining it doesn’t make it a straw man.

    I was saying that in my experience, some transit fans like to give the impression of opposing subsidies, and saying that “sure, they’d love for there to be no subsidies, but since roads are subsidized so much it’s only fair that transit and rail get its share.” It appears that this claim is a facade, and bennett agrees with me.

    I still believe that bennett is wrong, because road subsidies aren’t “massive” in any real sense, such as in percentage of use or percentage of funds used paid for, and especially not at the federal level, which is more important. The problems of spending somebody else’s money are reduced when the funds are directed at the local level. Like Rep. Mica, I have no problem if a local community wants to spend their formula funds on local transit instead. They can make their own choices.

  10. John Thacker

    When transit advocates mention road subsidies on this blog, it’s not in opposition to them, it’s to show the logical fallacy in the anti-transit subsidy arguments being made by our opponents.

    Except that the opponents on this blog oppose road subsidies as well. That’s not a logical fallacy. Even if they secretly supported road subsidies, that wouldn’t be a logical fallacy on the part of the Antiplanner, that would be a claim of dishonesty and hypocrisy. You seem to have a very difficult time understanding what is a logical fallacy and the meaning of various logical terms. In fact, experts on logic and rhetoric refer to tu quoque, which is what you’re doing, as a logical fallacy.

    It does seem that you’re saying that you would oppose cuts in road subsidies, since it would deprive you of a rhetorical weapon (and you otherwise don’t oppose them, only wanting more transit subsidies.)

    I don’t understand how you can completely agree that I’ve accurately characterized your position and claim that most transit fans hold the same position that I’ve accurately characterized, and call it a straw man argument.

    I did the opposite of a straw man argument. If it were a straw man argument, I would claim that transit fans really had the view that you say they don’t have, and then attack that view. I’m not doing that at all, according to you. At most, I’m accusing some transit fans– but not you– of hypocrisy and not putting forth their true arguments in some settings, but it certainly could have been me getting a false impression.

  11. bennett

    John,

    I respectfully disagree (at least personally, I won’t speak for other Pro-planners). The reason I called your argument a straw man, is because I think you got the whole opposition to road subsidies wrong. You say transit advocates are against road subsidies. I say they’re not. I think the opposition is to the anti-subsidy argument, not subsidies to roads (we’re pointing out a double standard). Fact is, many professional planners (such as myself) work hard to maintain local road subsidies because streets are an important factor in the quality of life in our communities. Again, we don’t oppose road subsidies, hence the straw man.

    As for the my opponents opposition to road subsidies… only lip service is given to this. When it gets down to the nuts and bolts we always end up talking about limited access highways (most of which are paid for with gas tax). When the discussion turns to local roads, arterials, and feeder streets (of which the limited access highway system would be completely obsolete without) the most we ever get is “the developer paid for the streets in my suburban OR neighborhood.”

    The fallacy is that many antiplanners say the oppose all road subsidies (or all subsidies period for that matter), but their arguments clearly indicate otherwise. It’s very similar to how many antiplanners claim to despise heavy handed, top down, big government planning until it results in outcomes they like (see: US Interstate System), but then heavy handed, top down, big government planning, magically becomes the free market.

    To reiterate, I don’t oppose road subsidies, I oppose the double standard of the anti-transit argument on this blog.

  12. MJ

    Corrected it for you.

    I presume you mean to suggest that water is a public good. That’s not correct. It is both rival and excludable, hence it is a private good.

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