TELECOM Digest OnLine - Sorted: Re: Clean Technology Bigger than Internet Claims Bill Joy

Re: Clean Technology Bigger than Internet Claims Bill Joy
21 May 2007 10:14:45 -0700

On May 17, 8:20 pm, wrote:

> There is no place in the world where public passenger transportation
> does not require a subsidy; in most cases, outright operation by a
> governmental entity.

Highways (and airways) require a general subsidy too, but it is
unknown because it is indirect and buried in other accounts:

Highways and airports take up enormous amounts of land. Land is
taxable, but when a highway or airport grows, that land is taken off
the tax base. That's quite a nice subsidy. When transit was provided
by private companies, they had to pay very high property taxes where
their competition paid nothing.

Highways require extensive public safety services -- police, fire,
rescue -- that is generally paid by local residents, not the users of
the highway. On serious accidents, quite a few public safety
responders and their equipment are tied up assisting in cleanup and

Highways and airports were built with tax free safe bonds which
accordingly paid low interest. Transit systems were built with
private bonds that had to pay a much higher interest rate. The Fed
picked up the difference since the bonds were income-tax free. Note
that to this day many passenger rail facilities are still on private
land that is taxed.

Until about a few decades ago, private passenger trains were tightly
regulated and forced by the government to run unnecessary services or
charge fares too low to cover expenses. This hurt the system. When
such systems became public there was substantial rebuilding necesary.

Passeger train carriers have been hit hard with modern day
requirements, such as PCB and asbestos abatement of their inherited
infrastructure and handicapped accessibility reconstruction. All of
that is very expensive.

> Also, rail transit systems are tremendously expensive to build in
> established cities.

As are highways. The Big Dig in Boston cost $25 billion.

Transit lines have the advantage of being about to snake around things
and be underground, something impractical for most highways.

On May 21, 11:33 am, wrote:

> You know, I keep hearing this about road use taxes not fully paying
> for road construction and upkeep, but then I hear equally emphatic
> folks saying that so much of the revenue is used to support "mass
> transit" that it *could* pay for the roads if it didn't have that
> burden. No one, on either side, seems to be citing sources for this
> received wisdom. Do you have any? Preferably without agenda, though

One book that discusses these issues is "Empire on the Hudson", which
is a history of the Port Authority of NY & NJ. It discusses how they
financed bridges and tunnels and went to the trouble to get tax

A history of Pennsylvania Station, NYC by William Middleton, and a
history of American railroads by Don Ball both document how railroads
were paying steep property taxes on their facilities. The money was
used by muncipalities to build new airports, which competed with the

Another source would be your local government, to see how much they
spend on public safety for streets. Each area varies in
responsibility, but in general public safety services come out of your
property taxes.

If a road has been widened or newly construted in your area, you could
call the tax collection office and find out how much land went off the
tax rolls, then ask how it will be made up.

Note that different states do things differently. In New Jersey,
property taxes support a network of county roads, in Pennsylvania, the
equivalent class of roads are supported by the state via gasoline
taxes. Penna has higher gas taxes and lower property taxes than NJ as
a result of that.

This issue of cross and indirect subsidies also applies to the
telephone industry, as we've discussed here recently.

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