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On the Move: The Neoliberalization of US Public Transportation

Varying ideological approaches to economic policy shape the role of the federal government and substantially impact investment in transportation infrastructure. Farmer (2013) states that the neoliberal approach, adopted in the 1980’s, to transportation infrastructure works to push transportation investment into the private market. According to Farmer (2013), the neoliberal approach to economic policies drove federal disinvestment in transportation infrastructure placing the funding responsibility on states and local governments. During the 1980’s, federal investments in transportation infrastructure established by legislation, such as The Urban Mass Transportation Act of 1964, declined under President Ronald Reagan. The belief that Keynesian programs over extended the role of the federal government underpinned the disinvestment.

Farmer (2013) cites three ways neoliberal policies shaped the transportation funding structure of the present: the general decrease in federal funding, conversion of federal funding to states into block grants, and the phasing out of the federal daily operations subsidy created by Richard Nixon. An international comparison shows that in 2010 the United States spent 2.4% of its GDP on transportation and water infrastructure, China spent 9% and Europe spent 5%.

In response to decreased federal funding, local governments have generated revenue through taxes and by incurring larger amounts of debt as strategies to fund transportation investment and maintenance. Transit agencies have turned to increased fares and user fees to make up the funding gap. Given the high financial costs associated with transportation infrastructure, municipalities/local governments are also turned to developing public-private partnerships with infrastructure investors. Farmer (2013) sites mixed results in several case studies of public-private partnerships in transportation.

Understanding the funding structure of public transportation infrastructure projects is incredibly important for the field of sustainable development. As in any policy with a fiscal note, understanding the funding sources is key in identifying policy feasibility. Transportation infrastructure is a key component of sustainable development. This article indicates that the future feasibility of sustainable development in transportation largely rests with the ideological underpinnings guiding the federal government’s funding decisions. Additionally, understanding the complex funding structures built around addressing decreases in federal funding is also important when researching sustainable transportation development. The direction American cities take with transportation largely rests with complex tax policies, public private partnerships, and increased use costs, i.e. higher fares for public transportation.

Farmer, S. (2013). One the move: The neoliberalization of US public transportation. Harvard International Review, Fall, 2013.