The Failure of Publicly Subsidized Transportation
By Scott Wenz
The promoters of MTD for over 20 years stated its “mission” was removing auto travel. What was the truth?
MTD was created to replace the old Santa Barbara Bus Company. It was and is specifically restricted from income other than agencies and government taxes contracting to providing transportation. Restricted to contract income and taxpayer subsidy, was intentional to prohibit any outside monetary activity that would detract from a successful public transportation company. Public Transit (MTD) did not replace and lessen auto travel.
Context of Other Areas
Orange County - Irvine’s iShuttle officially ended service on June 28, closing the chapter on a nearly 20-year-old commuter program that primarily served business parks and office centers. Anti-car groups such as LOSSAN – the same people who gave us CicloIrvine – are the same people who prefer fewer cars and have created a cartoon view of transportation in California. These are the same types who have failed in Silicon Valley where there is a massive three-story shopping mall surrounded by parking lots and two-story parking garages.
Ventura businesses recently forced the re-opening of Old Town Ventura Main Street to auto customers. In other words, patrons who do not use alternative transportation modes. Ventura had resisted this for years but has now done what the public wants and needs.
Does the use and efficiency of MTD over the past two decades sound like Irvine?
It does to us. Over a decade ago MTD reported to SBCAG a 1.2-million ridership loss. Long before COVID.
Here is a strange report: MTD stated (July 2025) and states, their farebox return (paying customers) is 20% of their operating expenses. Flip it and that means 80% of MTD’s operation is taxpayer subsidized. Why is a government agency playing the private sector depreciation game when it does not have to show a profit to investors?
Cars Are Basic (CAB) looked into this over a decade ago and found that the State of California changed the rules and allows in the reporting public transportation “accelerated depreciation.”
Guess what?
This is an IRS accounting rule that states companies can shorten the traditional long-term “capital depreciation” for private firms. It is an IRS rule to help with large working equipment/real estate costs, making them profitable.
It is deception.
Is it a conspiracy to fool taxpayers? Is it a spreadsheet game? CAB asks this again, why when MTD does not have to show a profit to investors? Has never shown a profit because of taxpayer capital subsidy.
Senator Scott Wiener (CA) stated on April 26, 2023, on KNX radio that “public transportation” was and is broken.
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Faced With Reality
In psychological terms there is what is called a Halo Effect. “Oh, it is something ‘new,’ let’s go see!” People rush to experience it. After a while it becomes the “same old thing”, and the bright and shiny toy loses its luster.
Do you remember when MTD decided to “invent” a new all-electric bus? CAB does. MTD, its then director, and the Board of Directors tried and failed, with a criminally tinged attempt to develop – on their own – an Electric Bus that failed to meet freeway standards.
How about those all-electric buses that have cost the taxpayers $millions? Has income (farebox) covered the costs?
Nope.
“The Last Mile” was heavily promoted by MTD to promote workers using rail to come to work.
It failed.
MTD is requesting an increase of its base fare from the current $1.75 to $2.50. MTD fares have remained unchanged since 2009. It is clear that driver costs (wage, retirement, health care), rolling stock maintenance/replacement is forcing fares to go to $2.50. This government agency, with a minimum of 80% taxpayer subsidy cannot continue to operate with so few passengers. Cars are still on the road in greater numbers per population than before. AI assisted or self-driving autos will cut further into public bus transportation.
This is what MTD is today. This is the truth on the streets of South Santa Barbara County.
CAB has a better alternative and has presented it to SBCAG. Ignored and faced with growing costs and little ridership, isn't it time to implement CAB's plan?
Or at least consider it?
Publicly.
Scot Wenz is the founder of Cars are Basic and can be reached at cab@carsarebasic.org
Scott, thank you. You say “CAB has a better alternative and has presented it to SBCAG. Ignored and faced with growing costs and little ridership, isn't it time to implement CAB's plan?” - that's great! But reading this column, I didn't learn what that plan is. And most people who might be on your side don't want to have to search it out. Attention spans, mine foremost among them, are short. There's too much that is a money drain with no benefit to us taxpayers. I think - and please correct me if I'm wrong - this column should have included your plan rather than just what's wrong with MTD.
Conservatives and Republicans must choose their mountains on which to die on. MTD and public transportation is not one of them. It's just a fact of life. A "20/80" public non-profit income/subsidy model is common across the board. All in all, MTD provides good, reliable, affordable service to the South Coast. I ride MTD regularly. I have few complaints.