Paying for public transportation : the optimal, the actual, and the possible

Abstract

Passenger transportation poses challenges to American cities in the form of air pollution, traffic congestion, auto collisions, and barriers to mobility. Public transit has the potential to be part of a solution to these urban problems, yet transit agencies across the country clamor for more resources. Transit finance in the U.S. is heterogeneous, and rarely approached with a comprehensive view of transit's social benefits. This thesis suggests a framework for a more rational magnitude and incidence of public transit funding based on a more comprehensive view of transit's social benefits. I take up the case of the Chicago metropolitan region and quantify the transit system's major emissions, safety, congestion, and mobility benefits. Next, I survey and highlight current practices in transit finance from other cities in North America and Western Europe. Finally, I assess the size, structure, and distribution of burden of Chicago's current transit funding status quo against theoretical and practical principles of transit funding and offer a range of financing alternatives to solve the current fiscal crisis in Chicago.

(cont.) I find evidence that the social benefits of public transportation in Chicago outweigh its costs, suggesting that preserving transit services there is justifiable. Transit's benefits accrue to a variety of jurisdictions in diverse and measurable ways which the current funding structure does not approximate. I find evidence that of the multiple beneficiaries of transit in the region, the subsidy structure in Chicago disproportionately benefits auto drivers who receive significantly more congestion benefits than they pay for. Last, I propose several policy options to increase public subsidy to transit in Chicago, and suggest that one particularly theoretically appealing alternative may be to establish tolls on existing roadways.