Study On Subsidy Mechanism Of Beijing Ground Public Transportation

Ground public transportation has played a crucial role in relieving the traffic pressure in the city and promoting the harmonious development of the city. The intrinsic properties of the ground public transportation are quasi-public goods, while it also undertakes the task of increasing in social welfare, these determine the income of ground transportation irreparable its huge expenditures and the related companies will inevitably lead to a loss. In this situation, the government needs to provide financial subsidies to the ground public transport companies.From the early days of our country founded, the Beijing municipal government had provided strong fiscal and policy support to the ground public transport companies. Huge financial subsidies are allocated every year. Although the subsidy mechanism has been reformed and improved for several times, there is not a comprehensive standard to measure the utility of subsidies. Therefore, the existing subsidy mechanism also has some imperfect aspects, such as the loss of defining the range of the subsidy, the difficult to make sure the proper amount of subsidy, the single source of subsidy, the lack of rational and effective evaluation mechanism when the government give subsidy to the companies. What makes the plight of subsidies are ultimately the incentive and the constrained problems. Thus makes it difficult to determine the reasonable amount of government subsidy for the ground public transport companies and difficult to make full use of the taxes people paid. Worse still, the ground public transport companies will rely on the subsidies heavily, then they will lack motivation to improve their business performance, and develop not very well.The purposes of this study are to find ways to improve Beijing’s ground public transport subsidy mechanism, and put forward reasonable policies and measures for improvement. Therefore, this article is based on the Beijing existing ground public transport subsidy, and this article come to the conclusion of the ground public transport companies must need reasonable government subsidies to keep the companies running. After the theoretical study and practical experience in domestic and international frontier, this article summarizes the experience of other cities which Beijing can learn from them. The article also constructs two models of ground public transportation subsidy mechanism, one is based on the accounting method measuring the actual income and cost, and the other is based on the transit-oriented city development mode, thus provides support for the Beijing ground transportation subsidy mechanism. At last, this article puts forward some suggestions. The Beijing government needs to improve relevant laws and regulations, establish a special agency that oversees the use of public transport subsidies, gradually introduce the market-oriented operation mechanism of line with China’s national conditions in the ground public transportation industry, clear the scope of subsidies, strengthen subsidies evaluation mechanism, and develop the mechanism of Cost-Price-Subsidies linkage.