Can we stop using the word “subsidy”?

Here are two sub-headlines in a Streetsblog post about recent transportation referendums:

Seattle’s property tax increase to fund walking, biking, and transit

Voters have spoken and they decided to enact Move Seattle, the $900 million property tax levy for transportation.


The constitutional mandate to subsidize highways in Texas

In Texas, voters overwhelming passed Prop 7, a sales tax measure that will generate revenue for free highways.

In fiscal terms, these two scenarios are identical: A tax is being levied to fund a specific transportation initiative. Revenue comes from non-users in both. It’s not that there’s no practical difference between the two — there’s literally no difference.

And yet look at the language: One is a subsidy, the other a simple funding mechanism. These, of course, are loaded terms. “Subsidize” is a dirty word in these parts of the urban blogosphere — it implies an undeserved, unreciprocated transfer at the expense of everyone else. We often hear about how transit is chronically “underfunded”, but never how it’s chronically under-subsidized. No transit agency in America runs an operating surplus, let alone a profit that could pay for capital upgrades, and yet we bicker about how tolls and gas taxes don’t cover the costs of new highway spending.

Guys, this is a losing framework.

Now, I think noting that drivers don’t “pay their way” is useful — insofar as we’re focused on dispelling that myth. But to say there’s something categorically wrong with the fact that highways are “subsidized” is an argumentative disaster waiting to happen. It appears to me there are a two similar but distinct meanings of “subsidy” here:

  1. A transportation project is funded with any type of revenue at least partly paid for by non-users.
  2. A transportation project is better-funded with any type of revenue at least partly paid for by non-users, relative to other modes.

Each of these has problems. If you use definition #1, your argument quickly reaches a troubling conclusion: that every transit project has to be completely self-funded. True, transit is (operationally) profitable in places like Japan and Hong Kong. Maybe you think that transit could pay for itself if we axed all spending on roads (lol) and we completely did away with zoning (LOL). But practical futility aside, this is America we’re talking about, and I’d imagine it’d take generations to reach a Tokyo-esque equilibrium where densities are high enough to support self-sustaining transit.

And to be clear, this is the hard-line, deontological libertarian argument to make — that government spending is unjust in and of itself. I’d wager most urbanists are uncomfortable with that.

Definition #2 is more subtle. Here, a mode of transportation is subsidized if the playing field is tilted in its favor. If transit gets $100 and roads get $200, definition #1 would dictate that both are subsidized, but under definition #2, only roads are. Think of it as a net subsidy.

But if we argue that the playing field needs to be leveled, we run into the practical problems presented by definition #1. What if transit needs more funding than roads to be effective? Do we pack up and go home, sell our buses and close our subways? What if we even out the funding, only to find that the benefits of an additional dollar of transit funding at that point outweigh the costs? Surely this would be “subsidization” under this framework, for which we’ve been demonizing roads. You can see how inflexible that becomes.

The point I’m trying to make is that talking about subsidies pushes you into a narrow, tortured framework. The political realities of the US and the economics of utility-like infrastructure are such that we’ll never approach a world in which transportation projects aren’t subsidized, whatever that even means. So instead, go utilitarian: why not argue for additional transit funding on its merits alone?

Make your arguments on grounds of social and racial justice. Point out the economic benefits of urban agglomeration that good transit allows for. Talk about the public health angle, or about climate change. The enormous land-use implications. Public space efficiency. Congestion. The fiscal costs of sprawl. Traffic fatalities. Etc etc etc.

Seriously, we have so many to choose from. It’s not difficult. No reason to back yourself into a corner, to pick a fight that you’re not going to win.

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