Tracing the Fault Lines Between Public and Private Transit Operators

Should private transit companies enjoy the same federal gas tax
exemption that many public operators receive? How does the existence of
private inter-city bus service affect the government's development of
new high-speed rail lines? And does it matter that private transit firms
are eligible for public subsidies, even if at a much smaller rate than
public rail and bus agencies?

A private
firm recently signed a deal with New Orleans officials to help run the
city's streetcars, seen above. (Photo: NYT)

Few definitive answers to those questions were on offer today at a
transit panel sponsored by the Mobility
Choice coalition, which allies members of conservative-leaning
think tanks with a handful of environmental advocates and urbanists --
but the discussion yielded some provocative evidence of the fault lines
between public and private operators.

Principally sponsored by the Institute for the Analysis of Global
Security (IAGS), the group describes
itself as adopting "a fiscally responsible, free market oriented
approach to expanding
competition among transportation modes for the purpose of reducing
oil's strategic value."

American Bus Association (ABA)
Chairman James Jalbert, whose group represents private bus and
motorcoach companies, lamented that the U.S. DOT's implementation of its
$10.5 billion high-speed rail program -- which is expected to receive
billions more in federal funding in the coming years -- did not envision
a role for private-sector firms that already provide inter-city
service.

"A good-quality system that could be included in a rail project is
now going to be run over by that rail project," said Jalbert, also the
president New Hampshire-based bus company C&J. "We want to be part of the
solution, but we need to be invited to the party."

Integrating private bus operators into proposed passenger rail
projects has to start at the state level, where officials make the call
on whether and how to pursue federal bullet-train money, Jalbert added.
He described a potentially successful partnership between public
inter-city rail and private bus companies as a shared scheduling system,
where passengers could purchase tickets for rail during peak hours but
an equivalent bus journey during off-peak times, when operating a
motorcoach could be more efficient.

Tom JeBran, ABA vice chairman and president of Trans-Bridge Lines in
Bethlehem, Pennsylvania, went further than his private-sector cohort in
suggesting that public transit agencies receive an unfair advantage,
thanks to their operating subsidies and exemption from the federal gas
tax.

"The only way I'd support" raising fuel taxes and adding new
interstate tolls to pay for nationwide transport improvements, JeBran
said, would be if both private and public transit operators got an
exemption from those new charges.

Robert Padgette of the American Public Transportation Association (APTA), the transit
industry's leading D.C. trade group, fired back at JeBran's depiction of
government subsidies that go only to public operators. The U.S. DOT's Section
5311 grants, Padgette noted, do make taxpayer funds available to
smaller, private inter-city bus companies.

While Jalbert distanced himself from JeBran's push for a tax and
toll exemption for private operators, he could not help but answer
Padgette. The public subsidies for private inter-city bus companies
average about 8 cents per passenger, Jalbert told the panel attendees.
"With all due respect," he quipped, "it's butt dust."