OF ALL THE MANY reductions in federal aid planned by the Reagan administration, none has occasioned more anguish among big city mayors than the proposed phase-out of federal subsidies for operating mass transit systems. The reason for that concern is not hard to find. Without the subsidies -- the money used to defray the daily cost of running a trnasit system -- American cities will have to raise their transit fares substantially. In New York City, for example, the fare would rise immediately from 60 cents to 75 cents, or 25 percent. That rise would likely be only the first step in a series of fare increases if federal aid is withdrawn.
In a report for Congress issued last month, the General Accounting Office noted that the revenues generated from mass transit fares have not kept pace with the climb in the actual cost of riding the bus or train. That cost went up from $1.31 in 1973 to $1.53 in 1978 -- 17 percent -- the GAO said. Most of the rise has been absorbed by federal aid and some local subsidies, leaving passenger fares far below the actual cost of taking the bus or train. By 1985, the report said, the current $3.2 billion subsidy from federal, state and local governments for mass transit will have to double if it is to keep up with the soaring cost of mass transit.
There are sound reasons for local government support for public transit systems. Encouraging riders to give up the personal convenience of their cars benefits everyone in a locality by reducing traffic congestion and pollution. And direct subsidies are a more efficient and less demeaning way to give low-income people access to jobs than complicated schemes for transportation subsidies based on individual need.
Why should the federal government help to pay for a service that so directly benefits the local population? The most immediate reasons, as the GAO report shows, is that local and state governments cannot carry the cost of operating mass transit by themselves. Coupled with a national need for reducing oil imports and encouraging energy conservation and environmental protection, the nationwide need for mass transit makes subways and buses a matter of national concern.
How much of a role -- how large a federal subsidy -- is another question. Ideally, local and state governments, which benefit most directly from having mass transit, should be carrying the lion's share of the cost. Over time, a reduction of federal taxes could allow local governments to increase their taxes for supporting mass transit. And substantial savings could be had by ending some of the troublesome regulations that now come with federal dollars for mass transit, such as handicapped accessibility mandates, prevailing wage rules and requirements to buy American vehicles. Those requirements account for much of the high cost of running a trnasit system. But abruptly withdrawing federal operating subsidies without some preparation to help local governments bear the extra load on their already strained treasuries is no solution; it would be a national mistake.
A more sensible approach to mass transit aid might call for eliminating those federal regulations that drive up local trnasit costs, phasing out federal support for marginal public bus systems where other alternatives seem a less expensive choice and gradually reducing, but not eliminating, federal subsidies to large urban areas where public transportation is an essential and nationally beneficial service.