At least one special favor is hiding deep in the omnibus—giving one county’s government-subsidized transit system the advantage over private transportation.
Buried on page 1,460 of the fiscal year (FY) 2014 omnibus spending bill that the House just passed is a carve-out that shields just one federally subsidized transit system in the country—the King County Metro Transit in Washington State—from enforcement of a federal rule, letting it compete unfairly with private motorcoach companies on charter bus work. It’s no surprise that Senator Patty Murray (D), Senate Budget Committee Chairman, represents the state of Washington.
The carve-out (Sec. 163) essentially says that the Federal Transit Administration cannot enforce what is known as the Charter Rule in King County, Washington. Not a single other place in the country legally enjoys this privilege.
Under the Charter Rule, transit agencies that receive federal subsidies cannot offer charter service over a private charter provider. A few exceptions apply, such as transporting federal employees on official business or when a nearby private charter provider is not available or willing to provide the service. It is in place to guard against unfair competition, because the federally subsidized transit agency would have an advantage over a private company and distort the free market even further. That way, American taxpayers aren’t paying for King County Metro Transit to shuttle fans to Seattle Seahawks or Seattle Mariners games.
Oh but wait, they have. Because Murray’s carve-out is not new, but rather has been concealed in past transportation and other spending bills. It has prompted interested groups from the American Bus Association to the United Motorcoach Association to weigh in and take action on the issue, which results in unfair competition for their members and other private charter bus companies.
Ironically, the King County Metro Transit authority is facing a $60 million revenue shortfall this year, in part because a temporary “congestion reduction charge” it imposed in 2011 expires in 2014. And that new charge was added because of anticipated budget shortfalls back in 2011, which is to say that the transit authority wasn’t on strong financial footing even then.
King County Metro Transit’s fiscal plight is not unique, with transit authorities across the country strapped for cash and burdened with high operating costs. Federal subsidies, in fact, contribute to the high costs by removing incentives for the transit authorities to reduce their operating costs and improve service to attract customers. Above-market union wages and generous pensions are some of the reasons transit’s operating costs are so high.
As Heritage visiting fellow Wendell Cox has written, because transit has failed to deliver on its stated objectives (increased mobility for low-income citizens, reducing automobile emissions, and relieving traffic congestion), “transit should not be a priority for federal funding, especially during severe budget constraints.” It is a local and regional, not federal, concern.
Indeed, Congress should first stop excusing sweet deals such as Murray’s carve-out. Then it should begin phasing out federal transit subsidies and returning the highway user fees that fund much of transit subsidies to their original purpose.