Transit Subsidies in New York and Chicago: Local, State, and Federal Assistance in a Historical Context

Abstract

Nearly all studies of the impact of government subsidies on the transit industry have excluded systems with rail transit. Thus, previous findings cannot simply be extended to transit systems in major metropolitan areas. As a preliminary step in addressing the issue of subsidies and large transit systems, this paper presents historical information on the financial state of the two largest transit systems in the U.S.—Chicago’s CTA and New York’s NYCT. In addition, the subsidies to each system are broken down by level of government—federal, state, and local. The patterns for the two systems are quite different. The CTA remained in relative financial health longer than the NYCT. While the CTA’s operating expenses have stabilized recently, its ridership levels (and revenues) have declined sharply. In terms of subsidies, the CTA receives most of these funds at the regional, not state or local, level. In contrast, NYCT’s revenues were actually greater in 1995 than they were in 1954 (in constant dollars). However, its operating costs ballooned throughout the 1980s and only recently have been contained. Subsidies to the NYCT come almost equally from state and local sources.