This paper was presented at the "Beyond the tooth fairy : responding to the crisis in urban transportation financing" panel discussion These proceedings are available on CD-ROM. This paper discusses the reasons for transit subsidies and how the conditions in which no subsidies are required can be created. It addresses some environmental and other concerns that subsidies can produce. It touches on subsidization experiences elsewhere, noting that just about every conceivable method of financing urban transportation has been used somewhere in the world, as has about every imaginable method of reducing transit costs. The conclusion is that the best form of subsidy is one provided directly to transit systems and their customers by operators of non-transit vehicles. The paper shows how this kind of subsidy could be provided, using a Stockholm proposal as the model. (A)
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