It's the story of a public transit system in Michigan: the more successful it is as it keeps fares low to lure passengers, the more money it appears to lose.

In Lansing, the city's bus system has seen its ridership jump to record numbers from 9.3 million in 2005 to 11.3 million in 2008. Yet its losses have also jumped from $28.6 million to $33.3 million during the same span.

State Rep. Dave Agema, R-Grandville, has introduced House Bill 4185 that would require bus transits to have fares cover 20 percent of their operating costs. Agema said his bill has been stuck in committee since it was introduced a year ago.

Transit was a big beneficiary of the federal stimulus. According to the state, Michigan has received nearly $100 million in federal stimulus funds to be spent on transit authorities.

"I'm not asking them to be profitable," Agema said. "Right now, there is no incentive to be efficient. It's, 'Let's just keep the monster going and lose more money.' "

For Lansing's Capital Area Transportation Authority, fares cover 15 percent of the total operating costs, according to CATA Spokeswoman Debbie Alexander.

Needing more money to sustain operations, CATA asked for an increase in its millage in 2008. It was approved for a 0.787-mill tax increase for five years ending in 2012. For a home valued at $100,000, it meant about an extra $39 in taxes per year.

In Lansing, fares are normally $1.25 a ride, but students ride for 60 cents.

Mackinac Center analyst Jack McHugh said the current public transit model is broken and that reforms are available that will benefit both users and taxpayers.

"By eliminating protectionist regulations that restrict alternatives," McHugh said, "empty buses driven by public employee union members can be replaced by private sector innovations like jitneys, commercial van pools, 'call-and-ride' services, car-sharing and more. This will improve service for transit users at a much lower cost."

Alexander said increasing fares risk cutting off service to the low income riders.

"You could only drive fares up so far before you are unable to serve the population that uses the bus," she said. "Nowhere in the world is any public transportation fully supported by fares. I think there is a fine line between making it valuable and marketable and overpricing it and making it an elite service."

Agema said he's not asking fares pay for the entire cost of operations.

"They say, 'Well, we might lose ridership,'" Agema said. "I don't think it is unreasonable to ask riders to pay just 20 percent of the operating cost." 

The earlier version of this article appears at www.MichCapCon.com/12151.

In Flint, unemployment hit 16.6 percent in December, and U.S. Census data shows that there are three times as many families there living below the poverty level than the U.S. average.

Yet the city's bus station has sealed a deal to purchase two $1.1 million "green" electric buses that cost almost four times as much as typical diesel buses. The "emission free" buses can stay out on the road for up to four hours. Experts say buses are responsible for 0.34 percent of total passenger miles traveled in the Flint area.

It's a contradiction made possible by the federal stimulus program (the American Recovery and Reinvestment Act), under which transit stations were one of the big winners.

According to the state, Michigan has received nearly $100 million in federal stimulus funds to be spent on transit authorities. That is despite statistics that reveal 1 percent of all passenger miles in the state are traveled via buses.

The Flint Mass Transportation Authority got $8.6 million through the federal stimulus program. By comparison, the Flint Police receive $2.8 million, despite the city being named the fifth most dangerous city in a 2009 national survey by CQ Press.

In fact, Flint's transit stimulus take ($8.6 million) is more than the 13 police municipalities in the county received combined ($7.4 million). And transit's total doesn't include the $2.2 million for the two "zero-emission" buses that have been approved for stimulus money but have not been purchased yet.

Genesee County's transit windfall was shared by every transit authority in the state.

• The Ann Arbor Transportation Authority received $6.4 million in stimulus funds — about a quarter of its $24 million operating budget. And the Ann Arbor bus station got the money when it already had $8.3 million in reserves. By comparison, the cash-strapped county government has an operating budget of $102 million and $100,000 less in reserves than the AATA.
• The Thunder Bay Transit Authority will get $3 million in stimulus funds, including $2.6 million earmarked to purchase four hybrid plug-in buses to replace four exisiting diesel buses. The bus service based in Alpena serves about 120,000 passengers a year — about 13,000 more than can fill University of Michigan Stadium.

The transit awards were calculated by a federal formula.

Critics say it shows the priorities of President Barack Obama's administration are misplaced when it comes to solving America's problems.

"What you have in this administration are people where high speed rail and transit are more important than just about anything else," said Wendel Cox, a transit consultant in St. Louis, Mo. "You will have $1.1 million buses traveling around; I'm not sure anyone is going to be on them."

Sam Staley, the director of urban and land use policy for the public policy think tank Reason Foundation in Los Angeles, said transit is "politically favored."

"There is an explicit policy goal in the Obama administration to discourage automobile use and encourage transit," Staley said. "Instead of having diesel buses going around not carrying anybody, now we have electric buses going around not carrying anybody. Somehow, that helps the economy. If you brought together the mayors of all those cities and said, 'We'll give you $25 million. What are your priorities?' the priorities would not be transit. It would be law enforcement, basic infrastructure and improving public service. The problem with transit, less than 1 percent of the travel in Flint is by transit."

Supporters, such as Michigan Gov. Jennifer Granholm, have said it is part of transforming Michigan to a greener economy.

"We don't believe it is an either-or proposition," Beth Bingham, director of the Michigan Economic Recovery Office, wrote in an e-mail. "The Recovery Act investments in Flint and communities throughout the state are supporting citizens and businesses in many ways - public safety and transportation are just two sectors that have received significant funding. It has helped the Hamilton Community Health Network (one of Michigan's 29 Federally Qualified Health Clinics, all of which received funding) hire additional dental staff and a pediatrician and expand their facilities to serve more patients; it has provided funding to keep teachers in the classrooms; it has funded SBA loans for businesses, tax credits and cuts for citizens, additional unemployment benefits and food assistance. ALL of this investment is important and welcome in Flint and throughout Michigan."

Randal O'Toole, an expert on transportation at the Cato Institute in Washington, D.C., said most cities don't need an infusion of money into their transit authorities.

"There are infrastructure problems with transit, but they are not in Flint," O'Toole said. "They are in Chicago, New York and Washington, D.C. The thing about pork, it has to be distributed all around the country. Yes, it was a waste of money."

Additional Michigan Capitol Confidential resources regarding federal stimulus spending are available at www.MichCapCon.com/12151, www.MichCapCon.com/12144 and www.MichCapCon.com/12141.