A response to a critical comment regarding my previous post: The concept of public transportation provided by our government is not a concept which seeks to generate a profit or a direct, accountable return on a specific investment. The returns generated are always indirect returns; they include but are not limited to macro and microeconomic growth around transportation corridors, industrial and professional development, relaxed spending on less efficient and higher-maintenance modes of long-distance transport (long-distance roadways), and many more relative gains. Much like the idea that your personal automobile doesnt appreciate in value and ultimately does nothing but cost you money and leave you at a loss, when considering what your car enables you to do, the car pays for itself many times over. Do the roadways in which we invest provide an direct, accountable, in-the-black return for the investment? No, they dont; they are nothing but a constant liability, yet you are probably thinking but without the roadways, there would be no commerce. That is the indirect return were talking about now and that well talk about below. Here is how transit pays for itself: Transit (bus and local rail) is funded by taxes. The first principal tax sources are what we deem a have tax. The federal government contributes a portion and the state contributes a portion. The have tax equates to a nearly unnoticeable amount of money charged through sales, property, and income taxes, only a fraction of a percent in most cases. This ensures we all pay for the presence of the system because we (and our government) all gain indirect returns from the economic development it creates. The next principal source of funding is through a use tax. Most people dont want to pay for something if they dont personally use it, so it is only fair to fund part of the system through a use tax, also known in this case as a fare. When you pay the fare, you are paying a use tax because you are utilizing the system and creating the need for the system, burdening it by commanding the use of the employees and vehicles necessary to provide the service. The more you use it, the more you pay. Does the use tax (fare) have to pay for everything required to operate it? No, it doesnt. You pay have and use taxes for your roadways as well. Basic tax structures fund roadway infrastructure, and you pay use taxes based on sales taxes per gallon of fuel you consume as well as additional registration tax funds for the weight of your vehicle if you operate an excessively heavy, road-stressing vehicle (although the tax burden for road-burdening heavy vehicles is disproportionately low for the damages they cause). At the end of the year, the transit system either has surplus funds or has spent more than what was allotted the previous year. If more funds are necessary, the system will streamline its operations, request the most reasonable funding increase necessary, and create an operational plan within the confines of what they were given for that fiscal year. If there is a surplus, who gets this profit? All I can tell you is that surplus funds are either rolled into the funding for the next year or they are redistributed among other government agencies. Will your government lower taxes or lower fares because of a surplus? Probably not, leaving your guess as good as mine when we try to figure out where surplus went if it was redistributed to other agencies. Railroads have a crappy disadvantage from the start: they have to construct and maintain their own roadways without government assistance. The government then tells them that they have to marshal government-operated passenger trains on the tracks that they own and operate, and if there is a delay due to malfunction, there are laws that, if enforced, can begin billing the railroad tens of thousands of dollars per citation for delaying a passenger train. What do the railroads do? They pay lobbying agencies to lobby those in Congress who may be favorable to voting against passenger rail. If our government is going to demand better passenger service along privately-owned roadways, we need to pay our fair share to help maintain those roadways and give the private railroad corporations a break or offer - without takeover - to assist with maintenance and dispatching. Trucking companies, private bus lines, and limousines are using government-provided roadways and airlines are using government-provided airports and air traffic controllers (which we pay for) to make a profit. They can often do so at a cheaper rate than the current rail situation because they are not paying enough into the system. They destroy these roadways, runways, and the airport terminal equipment year after year and we keep paying to repair them because there arent many viable rail alternatives as in most civilized countries around the world. If more freight moved by rail, we would spend much less maintaining roadways and interstate highways. If more passengers moved by rail, we would spend much less on road widening and other volume-related roadway development. Car insurance rates would lower, fuel prices would lower, etc. While the idea of the government taking control of the railroad rights of way and maintaining them sounds like a possibility, I am afraid that every corporate entity would yell socialism and claim they are being robbed. Many of them maintain rail freight monopolies in certain areas because they own the only tracks through town. There are also nearly 200 years of private rail infrastructure investment that wouldnt become government property without a fight. Because of that history, I dont think the pro-corporate politicians, Wall Street, or any politician who wouldnt want to become a target in many bad ways would support a government takeover of rail infrastructure maintenance, but there is no reason that a constructive cooperation such as Amtrak cant be further developed into a passenger rail transportation system which meets international standards. Given the information above, what is *really* costing us the most? What investment is the most wise? Which investments could generate the largest long-term indirect returns?
Posted on: Sun, 21 Sep 2014 21:48:11 +0000
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