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Open Access Publications from the University of California

It Wasn't Supposed To Turn Out Like This: Federal Subsidies and Declining Transit Productivity


Consider the urban transit "problem." In the 1960s the problem was declining transit patronage. Finances received little discussion because the industry was essentially self-supporting; operating costs were so low that passenger revenues covered costs. In the 1990s "problem" has a whole new meaning: financial deficits. Today, most transit revenue comes from governments, not passengers, and the result is continual fiscal crisis - the search for money to continue the subsidies. 

The new transit problem grew from our efforts to solve the old one.

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