4
External Policies and Factors Affecting Transit Use

A central aim of this study is to explore the broader external factors that contribute to higher rates of transit usage in Western Europe and Canada than in the United States. Some of the patterns and policies discussed in the previous chapters have been the result of factors well beyond the control of individual transit agencies. These factors, reviewed in this chapter, include differences in basic demographic and economic conditions, in history and tradition, in public attitudes and institutions, in urban highway and housing programs, and in transit management and funding environments.

To be sure, the abundance of historic cities—settled long before the mass introduction of automobiles—has made the provision of public transport especially critical throughout much of Western Europe. Limited urban infrastructure to accommodate automobiles can make driving costly and inconvenient. Yet there are numerous other reasons why Western Europeans use transit more than Americans. Their governments have a long history of taxing automobiles as luxury goods, tightly regulating urban land use, and controlling the supply and location of housing—policies and practices that have tended to encourage both compact urban areas and limited automobile usage. Moreover, the timing, character, and size of population and economic growth have differed markedly in Western Europe and the United States, having deep-seated effects on urban form, consumption patterns, and travel behavior.

In this chapter, these external factors and their possible role in causing the significant differences observed in the extent of transit-supportive policies and in transit availability and usage among cities in the United States, Canada, and Western Europe are reviewed. In the course of this review, it



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Making Transit Work: Insight from Western Europe, Canada, and the United States - Special Report 257 4 External Policies and Factors Affecting Transit Use A central aim of this study is to explore the broader external factors that contribute to higher rates of transit usage in Western Europe and Canada than in the United States. Some of the patterns and policies discussed in the previous chapters have been the result of factors well beyond the control of individual transit agencies. These factors, reviewed in this chapter, include differences in basic demographic and economic conditions, in history and tradition, in public attitudes and institutions, in urban highway and housing programs, and in transit management and funding environments. To be sure, the abundance of historic cities—settled long before the mass introduction of automobiles—has made the provision of public transport especially critical throughout much of Western Europe. Limited urban infrastructure to accommodate automobiles can make driving costly and inconvenient. Yet there are numerous other reasons why Western Europeans use transit more than Americans. Their governments have a long history of taxing automobiles as luxury goods, tightly regulating urban land use, and controlling the supply and location of housing—policies and practices that have tended to encourage both compact urban areas and limited automobile usage. Moreover, the timing, character, and size of population and economic growth have differed markedly in Western Europe and the United States, having deep-seated effects on urban form, consumption patterns, and travel behavior. In this chapter, these external factors and their possible role in causing the significant differences observed in the extent of transit-supportive policies and in transit availability and usage among cities in the United States, Canada, and Western Europe are reviewed. In the course of this review, it

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Making Transit Work: Insight from Western Europe, Canada, and the United States - Special Report 257 becomes evident that far fewer such factors differentiate the United States from Canada than from Western Europe. Yet while the United States and Canada have shared many of the same economic, demographic, and historical trends, Canadians continue to make better use of public transit. More than the countries of Western Europe, therefore, it would appear that Canada can provide insight into how American policies and practices can be made more supportive of public transit. To this end, the salient differences between the two countries are examined in the final section of the chapter. DEMOGRAPHIC AND ECONOMIC CONDITIONS Pressures from Population and Social Change Basic demographic data reveal major differences in population trends in North America and Western Europe, especially since World War II. Western Europe’s population has been static as compared with that of the United States and Canada during this period (see Figure 4-1). The U.S. population has doubled since 1950, up by more than 130 million people. Nearly all of this growth has occurred in metropolitan areas, placing greater pressure on undeveloped land. Since 1950, the share of the country’s population in metropolitan areas has increased from about 65 to 80 percent (Bureau of the Census 1999, 46). In contrast, the combined population of France, Great Britain, and Germany (including the former East Germany) has grown by about 40 million since 1950, or about 25 percent. This total has been surpassed by the three U.S. states of California, Texas, and Florida, which have gained more than 45 million inhabitants during the same period. Other demographic differences are notable and likely to have had an important effect on urban settlement and travel patterns. In Germany, Belgium, France, the Netherlands, and Great Britain, more people are over age 65 than are under age 18—a demographic pattern that has persisted for more than two decades. In contrast, nearly twice as many Americans are under 18 as are older than 65. During the 1960s—as millions of young Americans in the baby boom cohort were reaching adulthood—there were three times as many Americans under 18 as over 65. The maturing baby boom generation

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Making Transit Work: Insight from Western Europe, Canada, and the United States - Special Report 257 FIGURE 4-1 Population growth in the United States, Canada, and Western Europe, 1930–1990 (Bureau of the Census 1970–1995).

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Making Transit Work: Insight from Western Europe, Canada, and the United States - Special Report 257 entered the workforce, the housing market, and concomitantly the driver population during the mid-1960s to mid-1980s. During this period, the U.S. economy produced many more jobs than did the economies of Western Europe. Between 1960 and 1995, the U.S. workforce nearly doubled, growing by about 60 million (Bureau of the Census 1971; Bureau of the Census 1998). By comparison, nearly as many people left the workforce each year as entered it in Western Europe. From 1960 to 1995, the combined workforces of Germany, Great Britain, and France grew by only 20 percent, an increase of about 15 million workers (Bureau of the Census 1971; Bureau of the Census 1998). Given these disparities in population and economic growth, it is sensible to question their effects on the differing patterns of urban development that have been observed in the United States and Western Europe. Another important difference in demographic patterns is that a large share of the newcomers in American cities after World War II consisted of immigrants from Asia and Latin America, as well as African Americans from the rural South. Because many of the urban immigrants were poor and belonged to minority racial groups, social tensions in cities were exacerbated. Seeking better housing and schools, many middle-class whites left center cities in favor of the newer suburbs. Many older cities not only lost residents and jobs, but also suffered declining tax bases, eroding city services, and growing crime and poverty, making it increasingly difficult to retain and attract new home owners and businesses. Such social problems were largely absent or occurred on a smaller scale in Western European cities (Downs 1999, 24). To be sure, the social and economic stresses that plagued U.S. cities contributed to the continual outward expansion of metropolitan America and to the difficulty of instituting public policies designed to reverse or slow this trend. The many complex and interrelated forces associated with the declining American central city cannot be evaluated here.1 Yet inasmuch as transit systems traditionally have been configured to serve cities, the shift of residents and workers to suburbs, coupled with concerns about urban crime, has exacerbated ridership declines. Whereas Western European transit operators have not been immune to such problems, they have not been as profoundly affected. With so many economic, demographic, and social factors differentiating urban America, Canada, and Western Europe, it is certainly reasonable to question their comparability.

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Making Transit Work: Insight from Western Europe, Canada, and the United States - Special Report 257 Affluence and Consumerism Many Americans have long been able to afford automobiles and to own their own homes. Like automobiles, nearly all major consumer goods, from televisions and kitchen appliances to central air-conditioning, were mass introduced years earlier in the United States than in Western Europe. Throughout much of the post–World War II period, the array of consumer choices available to Western Europeans was limited, not only because of public policies, but also because of economic conditions. Few Western Europeans had sufficient income to buy their own home, much less a single-family house on a large lot outside the city. Rationing initiated during the war remained in effect into the 1950s, and by 1960, per capita purchasing power in nearly all Western European countries was only a fraction of that in the United States: 60 percent lower in France and West Germany and two-thirds lower in Austria and the Netherlands. Only Sweden, which escaped significant war damage, had a per capita income (measured in purchasing power) at least half that of the United States (Bureau of the Census 1998). Not until the mid-1960s did Western Europe begin to close the gap, and by this time American and Western European urban forms had diverged further. Today the income levels of most of the major Western European countries have climbed to within 25 percent of that in the United States. Household income is positively correlated with automobile ownership and use (Lave 1992; TRB 1997, 65). As mentioned earlier, Germany now averages nearly one car for every two people—equivalent to the level attained in the United States during the 1970s. France is also approaching one car for every two people, as are several other Western European countries. Despite high levels of car ownership, however, Germans still drive, on average, about as much as Americans did in the late 1960s. Although they own many cars, they do not use them at the same high rate as Americans. One would have to go back to the 1950s and early 1960s to find U.S. driving levels comparable with those currently found in Great Britain, Denmark, Sweden, and France. For the most part, however, Western European automobility and suburbanization are increasing with economic growth. These trends will continue to test the ability of Western European policy makers to regulate urban land use, preserve center cities, and encourage use of public transit.

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Making Transit Work: Insight from Western Europe, Canada, and the United States - Special Report 257 HISTORY AND TRADITIONS Tradition of High Automobile Costs History and tradition have also played important roles in the differing policies that affect urban form and transportation choice in the United States, Canada, and Western Europe. As Nivola and Crandall (1995) point out, the origins of high petroleum taxation in Western Europe can be traced to various sources—from centuries of monarchy-imposed excise taxes to the perceived need for greater energy self-sufficiency after World War I. Whatever their origins, taxes on motor fuel and automobiles in Western Europe have been high in comparison with U.S. levels for many decades (see also Chapter 3). In 1960, for instance, the average cost of a liter of gasoline (in 1960 dollars using exchange rates at the time) was $0.15 in West Germany, $0.12 in the Netherlands, $0.13 in Great Britain, and $0.20 in France. Taxes accounted for 50 to 75 percent of these prices. Meanwhile, American motorists paid about $0.08/L, around one-third of which comprised federal and state taxes.2 Figure 4-2 shows gasoline prices (indexed to U.S. prices) in several countries from 1955 to 1995. Canada is the only country whose fuel prices have been comparable with those in the United States, although its prices have increased more rapidly since 1980 because of rising taxation. High taxes predated widespread car ownership and use in Western Europe. Because few Western Europeans owned motor vehicles until the 1960s and 1970s, it is doubtful that many paid much attention to early fuel tax policies. As late as 1960, there were only 4.5 million automobiles in West Germany, or about 1 for every 12 people (see Figure 4-3). Other Western European countries averaged 1 car for every 8 to 12 people. Thus for most Western Europeans, levies on gasoline were probably viewed as being luxury taxes until at least the 1960s, and so perhaps as providing a politically acceptable source of government revenue. In contrast, by 1960 more than 60 million passenger cars were registered in the United States, or about 1 for every 3 persons. By then, most Americans viewed cars as necessities and had grown accustomed to low fuel taxes. Instead of being regarded as a source of general government revenue, these impositions were viewed as user fees to be reinvested in the highway system. The number of cars has grown dramatically in Western Europe since the 1960s. For instance, in 1995 Great Britain had 1 car for every 2.5 people, while the ratios in West Germany and France were 1 to 2.1 and 1 to 2.3, respectively. As might be expected, from the late 1960s to the early 1990s,

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Making Transit Work: Insight from Western Europe, Canada, and the United States - Special Report 257 FIGURE 4-2 Index of retail (after-tax) gasoline prices in selected Western European countries compared with the United States (API 1959; API 1967; MVMA 1980; IEA 1991; IEA 1996).

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Making Transit Work: Insight from Western Europe, Canada, and the United States - Special Report 257 FIGURE 4-3 Passenger cars per 100 people in the United States, Canada, and major Western European countries, 1960–1990 (AAMA 1997).

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Making Transit Work: Insight from Western Europe, Canada, and the United States - Special Report 257 passenger car travel per capita increased greatly throughout Western Europe—tripling in most instances (see Figure 4-4). Despite these marked increases in car ownership and use, Western Europeans have continued to accept fuel taxes that have raised the retail price of motor fuel to three to four times the levels in the United States. The highly publicized negative public response to recent escalations in fuel prices, however, suggests that this acceptance may be eroding as Western Europeans use automobiles for a growing share of their daily trips. Faced with stiff public resistance, the British government, for instance, abandoned its plan to raise fuel taxes at an annual rate of 6 percent above the rate of inflation. Additional changes in tax policy are expected to ease the burden of sharply higher fuel prices. Nevertheless, Western European motorists continue to pay fuel taxes that are several times higher than those in the United States, and they pay much higher excise taxes for vehicle acquisition and fees for registration. These levies also have origins that can be traced back many decades—in some cases originating as import duties to protect local automobile makers (Nivola and Crandall 1995). Like fuel taxes, motor vehicle fees have become a source of general government revenue. During the past two decades, however, public concern about traffic noise and congestion, air pollution, greenhouse gas emissions, and other side effects of automobiles have prompted some Western European countries (e.g., Norway and Denmark) to raise these taxes even further.3 For a large and growing number of Western Europeans today, the car is no longer treated as a luxury but as an everyday necessity. Still, few Western European motorists can recall a time when taxes on motor vehicles were low, and most appear to have become accustomed to these impositions. As discussed next, the older and more compact Western European cities are simply not as well suited to the automobile as the newer, more dispersed American cities. Thus, whether by adopting higher vehicle taxes, promoting public transit, or restricting cars in center cities, Western Europeans have many compelling reasons to take steps that discourage automobile use. Historic, Preautomobile Cities The mass introduction of the automobile occurred early in the United States and at a time when many American cities were growing rapidly. Cars

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Making Transit Work: Insight from Western Europe, Canada, and the United States - Special Report 257 FIGURE 4-4 Trends in passenger car travel per capita in the United States and Western European countries (TRB 1997, 63; original data derived from Schipper 1995).

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Making Transit Work: Insight from Western Europe, Canada, and the United States - Special Report 257 were mass introduced a generation or more later in Western European cities and at a much more advanced stage in their growth cycle. The escalating use of automobiles in older Western European cities during the 1960s presented urban planners, transit operators, and traffic engineers with challenges seldom faced in the United States. The combination of physical constraints and a desire to preserve historic cities meant that Western Europeans could not build the kinds of extensive freeway systems found within American cities. Even by the mid-1960s—when automobile usage was just beginning to surge—many Western European cities already were suffering from serious traffic congestion in their downtown areas. By this time, recurrent congestion also was becoming a problem in small towns and villages. In response to these problems, many Western European cities have taken steps to restrain the automobile and to promote other transportation options (Vuchic 1999, 128–130). Some of their actions are described in the preceding chapter. For instance, large, medium, and small cities alike—from Leeds, England, to Freiburg, Germany—have banned automobiles in portions of their historic centers and on some of their busiest downtown streets, converting the streets to pedestrian malls and transitways (Hass-Klau 1993). In some cases, the automobile-free zones cover several square kilometers and encompass entire commercial districts. In the largest cities, such as Paris and London, such areas are limited to small enclaves; however, more extensive pedestrian zones have been established in some German, Austrian, and Dutch cities, aided by postwar “ring” roads and bypasses that direct traffic away from the historic downtowns. That Western Europeans are willing to accept such limits on city automobile use is often regarded as the manifestation of a strong urbanist mind-set—one that leads them to preserve their historic cities and move closer to the city center as they become more affluent (Fishman 1990). Conversely, Americans are often portrayed as lacking such preferences and being more experimental and consumer-oriented, quick to adopt new technologies even if doing so leads to frequent relocating or refashioning of their surroundings (Rybczynski 1996, 235; Goldberg and Mercer 1986, 12–32). The contrast in the way American cities eagerly introduced electric streetcars at the end of the 19th century while Western European cities remained cautious (see Chapter 2) is sometimes cited as an example of these underlying cultural differences (McShane 1988; McKay 1988).

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Making Transit Work: Insight from Western Europe, Canada, and the United States - Special Report 257 much of the United States. Katz and Bradley (1999, 27) maintain that it is the cumulative effect of these policies that has “boosted the allure of suburbs and put cities at a relentless disadvantage.” Cervero (1986) and Schimek (1996) maintain that the refusal of Canadian provinces to pursue similar policies—for instance, by not providing tax subsidies for new public water systems on the outskirts of cities—has fostered a lower rate of detached, single-family home construction (usually about 50 percent of new housing starts in Canada each year as compared with about 70 percent in the United States) and more compact urban development patterns generally. In addition to the direct provision of housing units, most Western European governments have many other programs and policies affecting housing demand and supply. Sweden and Great Britain, for instance, have at one time or another allowed home owners to deduct mortgage interest, as has been the policy of the United States for several decades (Heidenheimer et al. 1990, 123). Likewise, Denmark has provided taxpayers with credits for home purchases. Although in recent years these policies have been revised and in some cases scaled back, they were instituted to promote new home ownership. The plethora of government policies and programs that influence housing demand, supply, and location throughout Western Europe and North America makes it difficult to assess their relative roles in shaping urban development and related trends in public transit. Urban Highway Programs Some analysts believe the means by which public highways are funded and administered in the United States has led to a disproportionate amount of highway building (Pucher and Lefevre 1996, 190–200). Some even suggest that the government’s emphasis on highway construction has exceeded what the public truly desires and demands (Mowbray 1969). They contend that state and federal fuel tax revenues that are dedicated almost exclusively to highways, coupled with the local political benefits derived from highway construction projects, favor highway programs to the detriment of funding for public transit. Others point out, however, that highways are paid for largely from taxes generated by users (motorists), whose continued willingness to pay these taxes suggests a strong preference for automobile travel (Altshuler et al. 1979; Meyer et al. 1965). Federal involvement in road building can be traced back to the 1916 Rural Post Roads Act, which authorized federal grants to help defray the

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Making Transit Work: Insight from Western Europe, Canada, and the United States - Special Report 257 cost of building rural roads for mail delivery (Small et al. 1989, 3–5). For the most part, however, road building remained the responsibility of state and local governments. Roads were initially funded almost entirely from general government revenues, although by the 1930s many states had created trust funds in which revenues from gasoline taxes were reserved for highway construction and maintenance (Rose 1979). After World War II, the federal government boosted its role through the creation of the National Highway Trust Fund and Interstate Highway Program. Federal and state fuel tax revenues remain the chief means by which highways are funded today. The gradual expansion of the federal role in road building did not become controversial until the construction of urban highways in the 1960s. The Interstate Highway Program was originally conceived as a means of connecting populated areas across the country—not as a means of improving intraurban travel. Many city mayors at the time, however, believed that new high-capacity freeways would relieve city traffic congestion and revitalize downtown commercial districts and neighborhoods. The federal government soon expanded the program to include urban freeways (Rose 1979, 59; Rybczynski 1996; Tarr 1984). Federal aid covers as much as 90 percent of the cost of building urban freeways and other major arterials. This financing formula has been especially controversial. Critics claim it skews investment in favor of freeway building, since few local entities are likely to pass on the opportunity for significant federal aid when so little local funding is required (Rose 1979, 96).9 Another concern is that the central role of federal and state government in paying for and building urban highways has spurred urban highway construction without proper consideration for local impacts, including changes in urban form and public transit demand. This imbalance led to federal grants for public transportation, funded in part by the Highway Trust Fund, beginning in the 1960s. Canada has a different process for providing urban transportation infrastructure, one that is frequently cited as more neutral with respect to transit and highways. In Canada, where the powers of the national government are limited, the provinces and municipalities share responsibility for funding most urban transportation infrastructure. Cervero (1986) believes Canadian cities have built fewer urban freeways as a result, largely because the process compels local governments to weigh the benefits and costs of such investments along with their other funding demands. Pucher and Lefevre (1996, 171) maintain that the absence of a nationally funded urban highway pro-

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Making Transit Work: Insight from Western Europe, Canada, and the United States - Special Report 257 gram in Canada has led to more local discretion in transportation spending and more integrated transportation planning of highways and public transit. TRANSIT POLICY-MAKING AND FUNDING ENVIRONMENT Management Autonomy The decision-making authority of public transit managers in the United States is often highly circumscribed and subject to regulatory and political influences that impede innovation, add to management and labor inefficiencies, and otherwise complicate efforts to respond to the demands of customers. The American preference for electing officials to direct nearly all local government activities—from school boards to public safety commissions—is evident in the structure of most transit agencies, which are usually governed by a large and active board of politically appointed or elected officials. By and large these oversight boards concern themselves with transit policy matters, such as fare levels and route structure, but they can, and often do, become involved in the most routine personnel management, operations, and planning functions of the agency. Transit boards often reflect the differing views of many constituencies, making it difficult to reach a consensus concerning a consistent and well-defined set of goals. Because these boards are frequently composed of representatives from jurisdictions that contribute funding (as opposed to at-large members), transit agencies must often provide services on an equitable basis to all jurisdictions, not necessarily according to where the concentrations of riders reside. This situation can lead to a too-thin distribution of services, which are often underused, to remote and low-density areas within the transit funding district. The multitude of public funding sources can further reduce management autonomy. Most transit agencies receive financial aid from federal, state, and local governments. Each funding source carries with it various legislative and regulatory stipulations that compel transit managers to balance an assortment of goals, requirements, and interests, some of which are mismatched or conflicting. For instance, as public agencies, transit operators may be directed to reduce the cost and increase the speed of their services while also being obligated to extend service out to lightly traveled areas that have a politically active constituency, to maintain rigid labor

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Making Transit Work: Insight from Western Europe, Canada, and the United States - Special Report 257 agreements, to reduce noise and air emissions by upgrading equipment, and to accommodate the special needs of elderly and disabled riders. A common observation of U.S. transit professionals returning from study tours abroad is that Western European and Canadian transit managers are given more freedom and time to implement the long-term policy goals of elected officials. This situation may reflect differing political processes and public values. Western Europeans and Canadians are frequently characterized as more trusting of, or even deferential to, public bureaucracies for the provision of a wide range of services (Goldberg and Mercer 1986, 13–32; Heidenheimer et al. 1983, 274–310). German municipalities, for instance, have a long tradition of operating museums, theaters, warehouses, markets, utilities, and even slaughterhouses (Heidenheimer et al. 1983, 274–310). The public administrators of these enterprises are given wide latitude to manage as they choose. Methods of Financing With few exceptions,10 both transit capital and operating expenses are paid for in large measure with government subsidies. Most American transit systems have been subsidized for more than 30 years, since the introduction of federal aid in the mid-1960s. As discussed in Chapter 2, private ownership was the norm in the United States for most of the century (Lave 1991).11 In Western Europe and Canada, public ownership and subsidization occurred much earlier in the century. Today, nearly all public transit agencies in industrialized countries—Great Britain being a notable exception—rely on public subsidies for 25 to 75 percent of their operating revenues and 100 percent of their capital funds (Pucher and Lefevre 1996). Both the size and the source of public subsidies are often associated with declining transit productivity and performance (Bly and Oldfield 1986; Pucher 1982; Jones 1985). Since the U.S. federal government began providing capital support for transit in the 1960s, this effect has been the subject of much academic study. One observation is that the federal emphasis on capital, to the exclusion of operating costs, has led to overcapitalization, as evidenced by the proliferation of urban rail projects (Wachs 1989; Richmond 1998). Cross-national differences in funding methods warrant consideration as a possible cause of disparities in transit use across countries. Pucher

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Making Transit Work: Insight from Western Europe, Canada, and the United States - Special Report 257 (1988), for instance, has found that government subsidies whose use is not constrained by highly prescriptive spending requirements can lead to more local decision making about how funds are to be used to meet local needs. The approach taken by Germany is to provide state and local governments with block grants for spending on transit, highways, or other modes of transportation. State and local officials can thus decide on the appropriate allocation of the funds, for instance, between capital and operating expenses. Likewise, local governments in Denmark, Norway, and Sweden bear the main responsibility for allocating subsidies to meet transit capital and operating needs (see Table 4-2). As mentioned, there is virtually no federal involvement in transit funding or planning in Canada. The provinces and municipalities share responsibility for determining and implementing urban transport policy and are thus responsible for allocating subsidy funds. Some believe this arrangement instills greater spending discipline, reduces bureaucratic delays, and gives local governments the flexibility to meet their own particular transportation needs (Soberman 1983; Pucher 1994; Cervero 1986). WHAT DIFFERENTIATES CANADA? The many factors that help explain why public transit has enjoyed much success and favorable public policies abroad are most salient when contrasting the United States with Western Europe. Many of these same factors, however, do not offer a satisfactory explanation for the marked differences in transit use observed between the United States and Canada. Like Americans, Canadians enjoyed early economic prosperity, the mass introduction of the automobile before World War II, ample land on which to spread out, and dynamic population growth for many decades. And unlike the countries of Western Europe, Canada does not have a long tradition of high motor fuel and automobile taxes; its housing policies have been largely market driven; and its cities are relatively young, most having been formed during the 20th century. Still, Canadians average about twice as many transit rides per capita as Americans, and they have a record of transit-supportive government policies. There are, however, some notable differences. Some observers suggest that political values and other cultural factors differentiate Canadians from Americans (Goldberg and Mercer 1986, 11–31). Canadians, like Western Europeans, are portrayed as having a strong collectivist spirit

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Making Transit Work: Insight from Western Europe, Canada, and the United States - Special Report 257 Table 4-2 Sources of Transit Operating and Capital Subsidies in Selected Countries Country Source of Government Operating Subsidy Source of Government Capital Subsidy Dedicated Sources of Financing National Regional (State, Province) Local (County, Municipality) National Regional (State, Province) Local (County, Municipality) Operating Capital United States a xx xx xx x x d d Canada   xx xx   xx x     Norway   xx xx   x xx     Sweden     xx x   xx     Denmark     xx x   xx     Germany   xx xx xx x x e   Netherlands xx     xx         Austria   xx xx xx x x e   France b xx xx xx x x   f United Kingdom c   xx c         Note: Commuter rail systems in most European countries are owned by the national government, and their operations are subsidized by the national government. xx = primary role, x = secondary role. aNational operating subsidies in the United States are more significant for small transit systems but usually account for less than 10 percent of operating subsidies. bThe national government provides large operating subsidies in the Paris capital region only. cThe national government does not subsidize bus services, except in greater London and on some other routes designated as socially necessary. Subsidies are provided for light and rapid rail systems. dAvailability of dedicated revenue sources varies by state and local jurisdiction. eRevenues earned from profitable city-owned public utilities may be used to cover transit operating deficits. fRevenues generated from an employer “transportation payments tax” are used for capital funding.

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Making Transit Work: Insight from Western Europe, Canada, and the United States - Special Report 257 and thus being more willing than Americans to accept regional or national restrictions on the use of private land if they are deemed to be in the interest of the public as a whole. Americans are viewed as being wary of national or regional governments curtailing local government autonomy over land use regulation, education, and various other public functions and services. It is also true, however, that political institutions in Canada are more centralized than those in the United States. Although the national government of Canada has little influence on urban planning and transportation, the 10 provinces exert considerable control. Most have established metropolitanwide governments that have been able to integrate tax, land use, transit, and highway programs across regions. In contrast with the United States, where most state governments have ceded land use controls to local government, the provinces have retained this authority, along with controls over transportation decision making. The ability to raise tax revenues, guide land use, and plan transportation at the regional level has proven to be a powerful tool in Canada; however, having the institutional capability for such regional governance does not ensure that this capability will be used to promote compact urban areas favorable to public transit. In a democratic society, the public must desire such an outcome. Canadians have evidently accepted, and presumably demanded, regional planning that fosters more compact cities, fewer urban expressways, areawide parking policies, and a transit-first approach to traffic management. In short, the Canadian experience suggests that public policies complementary to transit can be implemented and prove effective in the absence of a wide array of transit-supportive historic, demographic, and economic factors. That experience also suggests, however, the importance of political institutions and the fundamental values and attitudes of the public. NOTES 1.   See Mills and Lubuele (1997) and Mieszkowski and Mills (1993) for a thorough consideration of these reasons. 2.   For countries with per capita incomes half that of the United States, these price differences from nearly 40 years ago are even more significant. 3.   Though not as resistant to fuel and vehicle taxation as Americans, Western Europeans are becoming more reluctant to accept further increases. For instance, the

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Making Transit Work: Insight from Western Europe, Canada, and the United States - Special Report 257     British Parliament recently repealed a 6 percent annual fuel tax escalator (above inflation) in response to widespread and adverse public reaction to the duty. 4.   See, for instance, Rothblatt and Garr (1986). 5.   Although the U.S. federal government itself owns a substantial amount of mostly rural land (much of it in the western United States) and regulates some aspects of private land use (such as limits on the use of wetlands), it has little direct influence on most urban land use planning and regulation. 6.   According to the General Accounting Office (1999), 11 states have passed state-level growth management policies of one kind or another. 7.   The Federal Housing Administration and Veterans Administration offer home buyers mortgage insurance at reduced rates. Because the reduced-rate mortgage insurance allows for lower down payments, home buyers can afford more expensive homes (Rothblatt and Garr 1986, 32–33). 8.   Freddie Mac and Fannie Mae, privately held companies chartered by Congress, purchase mortgages from lenders and package them into securities that are sold to investors. By doing so, they seek to provide home owners and renters with lower-cost housing through more efficient and effective mortgage financing markets. These programs also developed the market for long-term (20- to 30-year) mortgage loans. The longer amortization periods and smaller monthly payments allow home buyers to carry larger mortgages (Rothblatt and Garr 1986, 32–36). 9.   Some of the same concerns about the distortion of federal aid have been raised with regard to transit funding, particularly the incentives to use federal aid to build expensive light rail lines (Wachs 1989). 10.   The most notable exceptions are the private bus services in Great Britain (outside greater London). 11.   According to Lave (1991, 117), 82 percent of transit agencies with $1 million or more in annual passenger revenue were privately owned in 1964. That year, federal legislation providing financial assistance to state and local governments for the acquisition of transit companies was passed. REFERENCES ABBREVIATIONS AAMA American Automobile Manufacturers Association API American Petroleum Institute IEA International Energy Administration MVMA Motor Vehicle Manufacturers Association TRB Transportation Research Board AAMA. 1997. World Motor Vehicle Data. Washington, D.C. Altshuler, A., J. P. Womack, and J. R. Pucher. 1979. The Urban Transportation System: Politics and Policy Innovation. MIT Press, Cambridge, Mass. API. 1959 and 1967. Petroleum Fact Book. Washington, D.C.

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