I have heard that Light Rail costs an average of something like $35 per round trip for a commuter, and the commuter only pays two or three dollars for the privelege.

Does anyone have information on this? Why would any city want to spend money on mass transit if this is the case?

I think it would depend on how you account for the cost. The equipment and construction for light rail is very expensive, but it's an investment. Operating costs for a trolley would be fairly inexpensive per capita, and for cities like San Diego, where traffic congestion can be a bear, it's well worth it. I'm afraid I don't have any statistics for you, though. (When I lived there, I could get a monthly pass for $35, if I remember, and a pass for my bike for another $2.)