☆ The Santa Clara County mass transit grift

William Murphy from Dublin, Ireland, CC BY-SA 2.0, via Wikimedia Commons

As another hopeless regional transit tax rumbles towards Bay Area residents this fall (SB63, advanced by Mayor Mahan and the San Jose City Council) the inestimable Randall O'Toole explains why throwing good money after bad mass transit ideas is always a mistake, and VTA is Exhibit A, in this Opp Now exclusive.

Urban transit is a giant scam that has cost taxpayers well over $2 trillion since 1964, when Congress first began providing federal subsidies to transit. All this money has produced practically nothing in return. While the inflation-adjusted cost of operating transit has risen sixfold, the average number of transit trips taken per urban resident has declined from 61 in 1964 to 27 in 2024.

Urban populations doubled, yet 2024 transit ridership was 8 percent lower than in 1964. Meanwhile, the number of transit operating employees nearly tripled, meaning worker productivity fell by two-thirds. Such productivity declines are only found in industries that have been taken over by government.

The Santa Clara Valley Transportation Authority (VTA) has taken full advantage of this scam. Its spending on bus and rail transit operations has more than doubled since 1982 (the earliest year for which data are available) even though it is carrying fewer transit riders today than in 1982. Currently it is spending nearly half a billion dollars a year running buses and light-rail trains that run practically empty: in 2024, VTA’s average 65-seat light-rail car carried an average of just nine passengers while its average 40-seat bus averaged fewer than seven.

Fares paid by VTA passengers covered less than 6 percent of its 2024 operating costs and have never covered more than 14.1 percent of those costs. Such monumental losses suggest that VTA is oversupplying its services and users don’t really value them enough to justify the subsidies.

Despite this dismal record, in the 1980s VTA decided that demand for its services was great enough to justify building a light-rail system that has so far cost taxpayers more than $3 billion. Ridership grew at first (though it would probably have grown even more if less money had been spent improving bus service instead).

In 2001, however, the dot-com crash forced VTA to choose between cutting transit services or defaulting on the debt it incurred building light rail. It cut services, ridership plummeted and never recovered. In 2019, just before the pandemic, bus and light-rail ridership together was less than two-thirds what it had been in 2001; by 2024, it was less than half.

Ignoring this, VTA decided that demand for its services was high enough to justify spending billions of dollars more building a BART line to downtown San Jose. This has already proven to be just another sinkhole for taxpayer dollars.

Since 1982, VTA has sucked up so much money from taxpayers that the inflation-adjusted cost to taxpayers for each rider grew from $5.07 in 1982 to $15.74 in 2024. The Census Bureau estimates that 28,880 Silicon Valley residents regularly commuted by transit in 2024, and VTA light rail and bus operations cost taxpayers $15,000 for each transit commuter, easily enough to lease them new Rivians, Teslas, or other electric cars.

The transit industry has successfully used its surplus of cash persuading people that transit is a sacred cow that is supposedly good for the environment, is vital to poor people, and relieves traffic congestion (they’ll be trying again this November with a measure to lift San Jose sales taxes to 10.5%). Close scrutiny shows that none of these claims are true.

Calculations using the National Transit Database reveal that no transit system outside of the New York urban area is more energy-efficient or greenhouse friendly than driving the average car. VTA in particular uses almost twice as much energy and emits 65 percent more greenhouse gases per passenger-mile than the average car, and far more than the average light truck (pickup, van, or SUV). People who care about the environment should demand cuts in subsidies to polluting transit agencies such as VTA.

The notion that VTA’s services are vital to poor people is laughable considering that well over half of Silicon Valley transit commuters earn more than $75,000 per year while less than 16 percent of them earn less than $25,000 a year. In 2024, of all Silicon Valley workers who earned less than $25,000, only about 3 percent commuted by transit while 57 percent drove alone to work. It would cost far less (and be better for the environment) to give every low-income transit commuter a new electric car every year than to keep subsidizing VTA.

VTA actually harms low-income people because the sales taxes that support it are highly regressive. This means that the 97 percent of low-income workers who don’t commute by transit are disproportionately paying for transit rides they rarely, if ever, take.

Most people of all incomes know that automobiles are the best way for them to reach better jobs, boost their incomes and help people out of poverty. More than 96 percent of Silicon Valley workers live in households that own at least one car, and of the 3.5 percent who don’t, more than a third drive alone to work (mostly in employer-supplied vehicles) while only 15 percent rely on transit. VTA doesn’t even work for 85 percent of people who don’t have cars!

People have a good reason to choose driving over transit. University of Minnesota researchers calculate that the average Silicon Valley resident can reach well over twice as many jobs in a 20-minute auto drive as in a 60-minute transit ride, and at least ten times as many jobs in 10 to 60 minute auto trip as a transit trip of the same duration. VTA is so poorly designed that someone on a bicycle can reach more jobs than someone riding transit on trips of the same duration.

As for congestion, how can VTA relieve congestion when ridership is so low and declining? In 2024, automobiles in Silicon Valley carried 650 times as many passenger-miles as transit. If VTA stopped running tomorrow, the disappearance of all those nearly empty buses and trains would probably do more to relieve congestion than the addition of a few more cars on the road.

VTA Isn’t Working for Most Riders: How The Agency Can Fix It and Why It Probably Won’t

One reason transit doesn’t work is that it is slow. Santa Clara Valley Transportation Authority (VTA) buses average just 11.5 miles per hour, while its light-rail trains average a thrilling 14.1 mph.

Another reason transit doesn’t work is that it doesn’t go where people want to go. Most of VTA’s bus and rail lines go to downtown San Jose, which has less than 3.5 percent of Silicon Valley’s jobs. It’s as if someone designed an airline with a single hub in Kansas City, thus forcing people going from San Jose to Seattle, Boston to Washington, or Houston to New Orleans to fly via Kansas City.

VTA’s downtown-centric system allows about 10 percent of downtown San Jose workers to commute by transit, but only 4 percent of workers in the rest of the region rely on transit. Instead of spending billions on rail transit, VTA should have been trying to figure out how it could serve people who work at Silicon Valley’s many other job centers as well as it serves downtown.

That could mean running the bus system like one of the major airlines, such as American, Delta, and United. These have multiple hubs that each have numerous flights radiating away from them. Non-stop flights between all the hubs allow people to get from almost anywhere in the country to almost anywhere else in, at most, three legs, and usually in one or two.

In the same way, VTA could have multiple hubs connected by non-stop buses with local buses radiating away from each hub. Since the non-stop buses would operate mostly on freeways, this would also greatly increase average transit speeds.

There’s a good reason why VTA hasn’t bothered to make such improvements to its service: it doesn’t have to. Politicians and voters deceived into believing that transit relieves congestion have thrown more and more money at VTA no matter how few people ride transit. Since it currently gets 94 percent of its funds from taxpayers, not riders, VTA has little incentive to care whether ridership goes up or not.

As a result, transit today is less about moving people from one place to another and more about moving dollars from taxpayers’ pockets to the transit-industrial complex. This complex includes the transit bureaucracies, transit unions, railcar and bus manufacturers, rail transit construction companies, and the politicians who receive campaign donations from these other groups. Altogether, the transit lobby spends at least four times as much lobbying for more transit subsidies as the supposedly powerful highway lobby.

Congress renews the legislation providing federal transit funding every five or six years and is scheduled to do so this year. Two important changes will help make transit more responsive to its customers.

First, Congress should eliminate the capital grant programs that encourage transit agencies to waste money on expensive rail boondoggles.

These programs have encouraged agencies to propose projects that are as expensive as possible in order to be eligible for more federal funds. For example, the average cost of light rail construction has risen from about $50 million per mile (in today’s dollars) in the 1980s to more than $470 million per mile today.

Second, Congress should base any remaining subsidies on performance. The best way would be to distribute funds proportional to the fares agencies collect, thus reinforcing the user-pays concept. Unlike ridership numbers, which agencies can fabricate, fares are audited, thus reducing the likelihood of fraud.

Local voters and politicians must be more wary of transit agency claims and remember that the real purpose of transit is to move people and not to provide jobs for union workers, profits for rail construction companies, or donations to political campaigns. Any state and local subsidies to transit should, like the federal subsidies, be performance based, requiring agencies to attract more riders and earn more fares if they want to receive more subsidies.

The reality is that transit is pretty much obsolete in a society with near universal levels of auto ownership supplemented by taxis, ride sharing, and soon widespread robotaxis. If transit agencies aren’t willing to redesign their systems to serve people throughout the urban areas, rather than just downtown workers, then they don’t deserve our subsidies.

☆ The Santa Clara County mass transit grift

VTA Isn’t Working for Most Riders: How The Agency Can Fix It and Why It Probably Won’t

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