Todd Litman

Transit tax saves you money

Founder, Victoria Transport Policy Institute, Feb 25, 10.

Tagged with transportation, economy, transit, taxes

Most North American cities offer only basic public transit service, with limited coverage and frequency, modest speeds, unattractive waiting areas, poor land use integration, and few amenities. Such service is used primarily by people who lack alternatives. In such communities, riders tend to abandon public transit as soon as feasible.

In cities with high quality public transit even affluent people often use alternative modes. In addition to travel shifted directly to transit, high quality transit tends to leverage additional vehicle travel reductions by stimulating compact, mixed, walkable development. As a result, residents of communities with high quality public transit tend to own fewer vehicles and drive less, and spend less on transportation, than they would in communities that offer only basic transit service.
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According to analysis described in our new study, Raise My Taxes, Please! Evaluating Household Savings From High Quality Public Transit Service, providing high quality public transit service typically requires about $268 in annual subsidies and $108 in additional fares per capita, but reduces vehicle, parking and road costs an average of $1,040 per capita. For an average household this works out to $775 annually in additional public transit expenses and $2,350 in vehicle, parking and roadway savings, or $1,575 in overall net savings, in addition to other benefits including congestion reductions, reduced traffic accidents, pollution emission reductions, improved mobility for non-drivers, and improved public fitness and health. Physically and economically disadvantaged people tend to enjoy particularly large savings and benefits since they rely on alternative modes and are price sensitive.

Transportation investments are not usually evaluated in this way. Conventional economic evaluation compares transit investments with just roadway costs; vehicle and parking costs are generally ignored, although roadway transport requires a vehicle and parking for each trip. Other benefits, such as improved mobility for non-drivers, reductions in sprawl-related costs, and improved public fitness and health are also ignored. As a result, conventional analysis underestimates the full savings and benefits of public transit service quality improvements.

Full story: Raise My Taxes, Please! Financing High Quality Public Transit Service Saves Me Money Overall
Source: Planetizen, February 22, 2010

Victoria Transport Policy Institute report: Raise My Taxes, Please! Evaluating Household Savings From High Quality Public Transit Service (pdf, 213 kb)

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