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WHY POPULARITY DOESN'T ALWAYS PAY

(Page 3 of 3)



In Chicago, where some 90 percent of the area residents coming downtown to shop or work each day use mass transit, there is also concern that the system is not being adequately maintained. While insisting that enough money is being spent to keep the Chicago rail and bus system safe, Harold H. Geissenheimer, general operations manager at the Chicago Transit Authority, warns that "orderly replacement of the system requires much more than we are spending."

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The result, he says, is that the city's rail system, particularly the elevated "loop" that circles downtown, has a "turn-of-the-century look" that does little to entice new riders.

The worsening financial plight of the nation's public transit industry is evident in two developments since 1972: While ridership has increased, the combined net operating deficit of operators nationwide has been rising by an average annual rate of nearly 20 percent, according to an analysis by Michael A. Kemp, a senior research associate at the Urban Institute.

To the rescue have come federal, state, and local governments. They now provide more than half the money it takes to keep the nation's public transit systems operating. The rest comes from fares.

Major federal involvement in public transit began in 1964 with legislation that permitted capital grants for new equipment and facilities. Such grants amounted to $51 million in 1965 and required operators to meet one-third of the cost of projects with local funds. Today, capital grants from the federal government require only a 20 percent local contribution, and they are budgeted at $3.3 billion for fiscal year 1981.

Since 1974 the federal government has also been providing operating assistance to help transit systems meet day-to-day expenses. Operating subsidies have grown from $300 million six years ago to more than $1 billion in fiscal 1981.

Theodore C. Lutz, administrator of the Urban Mass Transportation Administration, says the level of federal investment is warranted when one considers that the nation's urban transit service was near collapse when government involvement began in the 1960s. And, he maintains, "the alternative to this investment was not so hot: more freeways, congestion, and pollution."

Still, most analysts agree that the rapid growth of federal assistance to public transit in the 1970s will not be matched in the '80s.

Sen. Harrison A. Williams Jr. (D) of New Jersey, a longtime advocate of public transportation and the architect of many of the funding bills that have funneled more aid to it, warns that the "fragile coalition supporting urban transportation in recent years is rapidly changing." It is being altered by more fiscal conservatism in Congress, and could jeopardize any major increases in federal transit aid in the coming years, he says.

President-elect Ronald Reagan has said little to indicate his views on government aid to public transit, but his clear preference for a reduced federal role in local affairs could mean fewer dollars for transit. California's Mr. Gray, who also served in transportation during Mr. Reagan's tenure as governor, speculates that Reagan "will tend to see if the private sector can take care of more of the cities' transit needs before encouraging more government involvement."

One sign that federal dollars for public transportation may grow more scarce is reflected in the heightened sense of competition for federal subsidies among transit operators. As this goes to press, Congress was considering a major transit authorization bill that would alter the formula for awarding operating grants. It would be based on the amount of service provided. The current system is based instead on an urban area's population and density.

The net effect of such a formula change would be to shift more money to the large, already established transit systems at the expense of cities where public transportation is a relatively minor component of local travel.

With tax subsidies expected to become more scarce, transportation analysts predict that transit operators will be forced to make existing systems run more efficiently and to explore new, more cost-effective kinds of paratransit service.