How much does your transit authority cost you? Rail may seem affordable to the citizens of a transit district until they read about transit’s annual cost per household.
Here is my conclusion about the Houston transit authority which is fueled with a one percent sales tax. It is launched on a $3 billion rail expansion project to replace 1% (30 miles) of bus service.
Metro’s cost per household: $500!
Assuming three million people in the Metro district and assuming the Metro household size reflects that of Harris County, and assuming 2.8 persons per household, we can conclude there are 1,071,429 households in the Metro taxing district.
Dividing that into Metro’s $520 million yearly sales tax income produces an average annual household payment to Metro of $485.
Thus — The average Metro household pays Metro almost $500 a year and we can guess that a single person pays about $200 a year.
Since a small portion, perhaps 10% of the goods and services taxed by Metro are sold to nonresidents of the district, the actual cost might be smaller than what we see here. But Metro makes millions in interest on reserves that represents an “opportunity cost” to Metro households, and since Metro also collects federal grants funded by the highway trust fund which includes taxes collected from Metro’s taxpayers, $500 a year is probably a fair estimate of the cost per Metro household.
1. The National Transit database says that in 2007, the Metro taxing jurisdiction had 2,796,994 people. It has surely grown in the two years since. LINK
2. Various sources online state that the average household size in Harris County is 2.75 to 2.8 people.