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New York, Already Shortchanged on Federal Transportation Funds, May Become Even Bigger Loser

May 27, 2003
N-268, 2002-03

NYU Study Demonstrates That Appearances Can Be Deceiving In Transportation Funding.

In a new study, scholars at the Rudin Center for Transportation Policy and Management at NYU's Wagner Graduate School of Public Service have found that while New York State seems to do well on federal transportation funds - receiving more from Washington then it sends in highway taxes - on closer inspection New York State does not receive a fair share of transportation funding. And an upcoming Congressional proposal for a new formula for distributing transportation funds will make it even worse for New York.

The study, "Dividing the Pie: Placing the Transportation Donor-Donee Debate in Perspective," found that:

  • New York is 49th among the 50 states when its federal highway funding is evaluated on a per capita basis, and New York pays a bigger local share of transportation and transit costs than any other state.
  • While New York appears to get more money from Washington for transportation than it sends in the form of fuel- and other transportation-related taxes, this is because a greater percentage of New Yorkers use mass transit than anywhere else.
  • New Yorkers also get the lowest federal subsidy for mass transit of any state per passenger mile.
  • A proposal to be presented this week in Congress by the states that receive less money in transportation funds then they send in fuel taxes could cost New York State over $300 million, putting New York in an even worse position.

Moreover, in terms of overall federal spending, New York is a loser; the State receives only 83 cents for every tax dollar it sends to Washington, ranking it near the bottom - 42nd - among all states.

Elliot Sander, the director of the Rudin Center, said, "This was an important piece of research for us to pursue. As the reauthorization of transportation funding goes forward, you can expect a number of other states to call for 'fairness': for them to receive transportation funds in the same proportion as they pay transportation taxes. They call this proposal 'SHARE.'

"But this is a spurious form of 'fairness.' It ignores the vital importance of mass transit, with all its attendant benefits for energy efficiency and the environment. It ignores the fact that the states from whom the money will be taken have older, more costly road infrastructure. And it ignores the fact that a state like New York, which would lose $300 million in federal transportation funds under their 'fairness' proposal, already sends Washington $26 billion more in taxes then it gets back in federal funds overall.

"A close look tells you that the allocation formula is already unfair to New York, and the SHARE proposal, were it to go through, would make it even more unfair. Frankly, it is a threat to our roads, our transit systems, and our regional economy, which doesn't work if we cannot efficiently move goods and people."

The study also finds that many of New York's neighbors would be hard hit by the SHARE proposal as well. For example, Pennsylvania would lose $194 million of transportation funding and Connecticut would lose $163 million.

The study was written by Rudin Center co-director Allison C. de Cerreño and researcher Mark Seaman to inform the discussion and debate about the Transportation Equity Act for the 21st Century [TEA-21], the omnibus federal transportation bill pending before Congress. The study analyzes federal transportation spending from 1957 through 2001, focusing on dollars sent back to the states for both highway and public transit construction and maintenance.

"New York State, by dint of its large population, receives a sizeable amount of Federal transportation money in absolute numbers but these figures are misleading and a closer examination of the data shows that New York's overall level of transportation funding is rather paltry," said Dr. C. de Cerreño.

"New York's per capita level of total Federal transportation funding is only average, ranking 25th out of the 50 states. When you remove mass transit dollars from the equation, the State ranks near the bottom - 49th out of 50 states - in per capita federal spending on highways from the years 1996 through 2000.

"Further, while New York receives more Federal mass transit money in total dollar amount [18% of the national total in the 5 years ending in 2000] and in per capita terms [$225 per capita from 1996 to 2000, versus the national average of $82 in the same period], a more accurate inspection again shows these data to be misleading," C. de Cerreño continued.

The study's researchers instead compared federal mass transit receipts by particular mass transit agency, instead of entire states, because mass transit users are concentrated in urban areas. "Through this lens, we see that New York's 18% share of national transit spending helps support the largest transit system in the U.S. - the Metropolitan Transportation Authority [MTA], including NYC Transit, MetroNorth, Long Island Railroad - which serves 32% of the nation's mass transit users everyday," said Mark Seaman, the study's co-author.

In addition, the researchers compared transit spending by weighting it against the annual passenger miles - the sum of distances of all passenger rides in one year - a measure adopted recently by the American Public Transportation Association.

"We examined transit spending in terms of the actual number of passengers who use mass transit and the actual miles they travel. Using this measure, the study found that the MTA received only 7 cents per passenger mile in 2001, near the bottom of the country's 20 largest transit agencies. Only the New York City Department of Transportation, which runs the Staten Island Ferry, received less, 4 cents per passenger mile. So again, numbers were misleading, and New York doesn't fair well at all even in terms of transit spending," said Seaman.

To obtain a copy of the full report, "Dividing the Pie: Placing the Transportation Donor-Donee Debate in Perspective [May 2003]," please contact the Rudin Center at rudin.center@nyu.edu or 212 998- 7545 or visit the Rudin Center website at www.nyu.edu/wagner/rudincenter .

MEDIA ONLY To arrange an interview with Rudin Center director Elliot Sander or the authors of the report, please contact John Beckman [212 998-6848].

With a team of visiting scholars drawn from both the transportation and academic communities, the Rudin Center supports research, holds conferences, provides education and training, and promotes and supports key policy networks in the field of transportation policy and management. Founded in 1996, the Center was renamed in September 2000 in recognition of a generous supporting gift from NYU trustee and alumnus Lewis Rudin and the Rudin family.

NYU's Wagner Graduate School of Public Service, established in 1938, is known for its ability to integrate theory and practice. NYU Wagner offers advanced programs leading to the professional degrees of Master of Public Administration, Master of Urban Planning, Master of Science in Management and Doctor of Philosophy. At Wagner, students transform personal commitment into public leadership and engage with a faculty that is changing the way the world looks at issues of public concern. NYU Wagner School alumni are in leadership positions in nonprofit, health and public sector roles in this country and internationally.

New York University, established in 1831, is one of the largest and most prestigious private research universities in the United States. Through its 14 schools and colleges, NYU conducts research and provides education in the arts and sciences, law, medicine, dentistry, education, nursing, business, social work, the cinematic and performing arts, public administration and policy, and continuing studies, among other areas.

This Press Release is in the following Topics:
Robert F. Wagner Graduate School of Public Service

Type: Press Release

Press Contact: John Beckman | (212) 998-6848


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