Federal Subsidies to Passenger Transportation

Federal Subsidies to Passenger Transportation

The net flow of funds to and from the federal government for passenger transportation varies by mode and over time (figure 10-8). On average, transit received $5.1 billion (in chained 2000 dollars1) per year in net federal subsidies2 between 1992 and 2002, more than any other mode of transportation. During this same period, highway users paid an average of $7.8 billion a year in excess of user charge payments, such as fuel taxes, over their allocated costs, making highway travel the only mode of transportation whose net federal subsidy showed negative values for the entire period [1].

The pattern of net federal subsidies to passenger transportation changes when subsidies are normalized by passenger-miles (figure 10-9). By this measure, rail passenger transportation is the most heavily subsidized mode of passenger transportation, averaging $196 per thousand passenger-miles in federal subsidies.3 Aviation has also received a sizable federal subsidy during recent years, despite a decline in net federal subsidy per thousand passenger-miles from 1997 to 2000. The decline in aviation's federal subsidies in this earlier period occurred because of an increase in federal receipts from aviation users. (An increase in excise tax rates and the introduction of new taxes in 1997 preceded increases in expenditures.) In contrast, users of automobiles, pickup trucks, and vans paid an average of $2 per thousand passenger-miles in excess of their allocated subsidy from 1992 to 2002. Meanwhile, highway bus transportation received an average federal subsidy of about $4 per thousand passenger-miles [1].


1. U.S. Department of Transportation, Research and Innovative Technology Administration, Bureau of Transportation Statistics, Federal Subsidies to Passenger Transportation, December 2004, available at http://www.bts.gov/, as of February 2005.

1 All dollar amounts are expressed in chained 2000 dollars, unless otherwise specified. To eliminate the effects of inflation over time, the Bureau of Transportation Statistics converted current dollars (which are available in appendix B of this report) to chained 2000 dollars.

2 Net federal subsidies constitute the excess of expenditures over revenues.

3 Rail includes both Amtrak and Alaska Railroad.