Federal Transit Aid Harms Cities

The federal government spends $13 billion a year on subsidies for local rail and bus transit systems. This spending should be zeroed out in the next federal transportation bill.

Federal transit aid prompts cities to spend on boondoggle projects that citizens do not want and cities would not spend on if they had to pay the full costs themselves. Transit aid has been mainly for capital costs, not for operations and maintenance. That has induced cities to purchase excessively costly systems ill-suited to solving local mobility needs.

A case in point: a $133 million electric bus system in Albuquerque, New Mexico, which has turned out to be a big waste of money, as revealed by the Los Angeles Times. City leaders sprang for an expensive electric bus system because federal subsidies covered more than half of the costs.

We see this pattern over and over—the lure of federal money induces state and local politicians to make dumb decisions. I discuss this folly in a forthcoming Cato study on federalism.

From the LAT:

Shortly after being elected in 2017, Albuquerque Mayor Tim Keller stood on one of the passenger platforms for ART, the city’s ambitious new $133-million all-electric bus line that cuts through a 10-mile stretch of the city.

“Drivers waved and cheered, ‘Congrats to the new mayor!’ ‘I voted for you!’ ‘Go get ’em!’” said Keller. “And then in the next breath, they would lay on the horn and give the giant ART sign the middle finger out the car window.”

Civic leaders had initially pitched Albuquerque Rapid Transit as a way to revitalize the city’s former stretch of Route 66 and make the community a national leader in sustainable mass transit. Instead, the ART project resulted in parts of what’s now Central Avenue being ripped up to host dedicated lanes for the electric buses, which are currently out of commission and have so many problems that Keller freely calls them “a bit of a lemon.”

ART was supposed to supplement Albuquerque’s regular bus system by the fall of 2017 with a fleet of 20 buses. But Keller slammed the brakes on the project in January last year, barely a month after ART’s debut.

Shiny stations along the line stand dormant. Vandals have smashed ticket dispensers. Flat-screen televisions meant to alert passengers about boarding times flash a request to get rebooted. Autos can’t use the bus lanes, which cyclists have claimed as their own.

“It’s a nightmare with nothing to show for it,” says Jonathan Hartshorn, a librarian at the University of New Mexico.

… “I don’t know anyone who’s for it,” said a local restaurant owner, adding that business had plummeted by nearly 40% since Central Avenue was constricted to make way for ART stations and the dedicated bus lane. “Who would be for a dud?”

ART has roiled Albuquerque for years. Public meetings saw citizens shout down public officials in English and Spanish over a lack of definitive answers.

… [Steve] Schroeder has owned Nob Hill Music, named after a trendy neighborhood on Central Avenue, for a decade and has been among ART’s loudest opponents. Schroeder claims he’s lost 12 pounds since 2016. That’s when the federal government announced it would award Albuquerque a $75-million grant for ART.

… The Albuquerque City Council, with the support of then-Mayor Richard Berry, eventually applied for and received the federal grant that allowed the city to begin construction in the fall of 2016. Berry found bipartisan support for the funding thanks to New Mexico’s congressional delegation.

… [Schroeder’s] website, SaveRt66.org, lists more than 50 businesses he claims have closed since construction on ART began less than three years ago. His record store has suffered, he says, with visitors complaining that GPS systems consistently tell them to bypass Central Avenue altogether because of congestion: Traffic is now reduced to one lane each way as a result of the changes wrought to design the non-running ART line.

“This is now,” he said while ringing up a customer, “the ugliest street in New Mexico.”