Citing Competition for Funds, US DOT Limits Commitment to Portland-Milwaukie Light Rail

» Facing construction cost increases, project planners asked for a higher federal share than originally planned. But the FTA has now made clear it will only pay so much for the nation’s biggest transit projects.

In recent years, the federal government has failed to provide a logical explanation for the manner in which it determines the share of funds it contributes to each proposed New Start major transit capital project, leaving the rest to local and state sources. The agency hasn’t provided strong incentives for cities that provide the most “cost-effective” expansion programs, nor has it produced a formula that allows transit agencies to plan their finances for new projects from the get-go. It has also been markedly ambivalent about investments in very expensive transit projects, no matter their respective value per dollar.

Under this system, big cities with big projects serving a lot of transit riders are systematically denied their right to a proportional share of Washington’s spending. Nor is there any clear distribution of funds by metropolitan area or state, in contrast to the formulas used to distribute standard maintenance funds for existing transit networks.

Last week, Portland received the unexpected and unhappy news that the Federal Transit Administration will only commit to 50% of the costs — up to around $736 million — of the 7.3 mile, $1.47 billion Portland-Milwaukie light rail line, a long-planned extension of the region’s MAX rapid transit network.

The project’s completion cost was estimated at $1.2 billion up to only a few months ago. At that time, the TriMet transit agency was able to assemble $600 million in local and state funds, enough to limit its national funding demand to 50% during the New Starts evaluation process, in which it received a medium-high rating, good enough to virtually ensure an eventual federal commitment. The increase in construction costs convinced it to ask for 60% of total funds (around $880 million), the same as it had received for many of its other rail expansion projects in the last two decades.

Yet the FTA has only a limited budget for new transit capacity (its spending is constrained by the decisions of the U.S. Congress), so Portland’s attempt to convince Washington to increase its commitment fell on helpless ears. The FTA argued that the agency didn’t want to imply that it would fund more than half of future transit projects costing more than one billion dollars, that its budget hasn’t significantly increased, and that the Congress has been unable to compromise on the development of a reauthorized Transportation bill, which determines allocations for the government’s transit investments.

This situation leaves the region with a $135 million funding gap if the corridor is to be built as currently planned. The federal government hasn’t demanded that Portland reduce the line’s cost, just that it pay for more of them with local dollars.

But TriMet, unconvinced that local governments will fill the money hole, has committed itself to a “recalibration” of the program to a $1.2 billion price tag, which could involve simplifying stations and reducing the size of park and rides and maintenance facilities. Another option is delaying the construction of the last section of the line. One possibility, unlikely considering the amount of engineering work that has already been completed, is converting the project to bus rapid transit.

The link will extend south from the Portland Transit Mall (which already features the Green and Yellow light rail lines), into the South Waterfront development, over the Willamette River into Southeast Portland (along a bridge shared with the city’s future streetcar loop), and finally into Milwaukie and Northern Clackamas County. It would primarily be built along an existing railroad right-of-way and draw about 30,000 daily passengers.

I have previously suggested that the project has the potential to induce the construction of a number of valuable transit-oriented development projects thanks to its alignment that in some places runs right through an already active cityscape. The Green Line in east Portland, which opened along the side of an interstate highway last year, has fewer such possibilities for densification around stations. And there is always a benefit to working with the transportation technology that already exists; since Portland already has such a large light rail system, there are advantages to sticking with it.

Yet the FTA’s decision to limit its commitment to only 50% of the project’s costs is not about the merits of the project but rather a sign that the government agency will not be able to withstand unlimited increases in transit project costs, and that it will stick to its policy of providing incentives to smaller programs no matter the merits of bigger ones. In some ways, this represents a significant clarification of the DOT’s position when it comes to capacity projects worth more than a billion dollars: The more a city wants to spend after a certain point, the more it will have to find in local funds. This has national implications.

That said, placing blame on the FTA for this situation would be an unfair reflection of the agency’s situation. Again, its budget for New Starts projects is limited by acts of Congress, and it would be politically difficult if it decided to, for instance, spend all its capital funds one year for one massive project. Considering its situation, it has no choice but to impose limits on how much to pay for individual corridors.

But for cities that have transit projects larger than even Portland’s quite expensive line, this city’s financial difficulties should serve as a warning. Either proponents of public transportation encourage their delegations in the House of Representatives and Senate to find a way to increase the money flow for such projects, or restrain expectations about how much Washington will be willing to chip in.

Image above: Rendering of Portland-Milwaukie MAX Project at Milwaukie’s SE 21st Avenue Station, from TriMet

41 Comments | Leave a Reply »
  • Carter R

    I wonder what kind of implications this has for LA’s 30/10 proposal, or CA’s HSR plan. Both require crucial Federal cash/loans in the tens of billions of dollars.

    Fundamentally, everything is going to be confusing and stuck until a new transportation bill is passed.

  • MacJim

    Get in line Portland. Look at Denver.

    Another way to make sure cities got their “fair share” would be for the federal government to lower taxes and get out of the transit business and let the states and cities that want to finance these projects have more room to raise their own taxes. As it stands, a lot of the transit funds get doled out to tiny municipalities in rural areas due to the makeup of the Senate.

    Finally, I don’t understand what a light rail line in Portland has to do with interstate commerce.

    • This is more the first clause of Article I, Section 8:

      The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

      The public transit funding being an attempt to provide for the general Welfare of the United States. Note that there is no reason to force states to apply for funds, so the primary regulatory powers required are the terms and conditions on accepting the money.

    • The Interstate Commerce clause gets more into why the Federal Railway Authority has such broad regulatory authority on the nation’s railways.

  • John

    Given the interstate nature of many metro areas (including Portland), metropolitan public transit is directly tied to interstate commerce. When the Columbia River Crossing project is completed, TriMet will join the ranks of systems like Metra in Chicago, the South Shore Line in Indiana, Metro North in New York, NJ Transit in New Jersey, PATH in New Jersey, Metro in Washington, DC, VRE Commuter Rail in Washington, DC, MARC Commuter Rail in Washington, DC, and Baltimore, SEPTA in Philadelphia, PATCO in Philadelphia, MetroLink in St. Louis, and other public transit systems that transport people across state lines within metro areas.

    More indirectly, ensuring that workers that produce products that are transported across state lines have a means to reach their places of work regardless of traffic and congestion and providing transit alternatives that consume no or less petroleum, a product that is almost inevitably imported across state lines, are related to interstate commerce.

    Since when did this site become a choice place for trolling by teabaggers?

    • poncho

      All these metro regions that cross state boundaries have their transit systems greatly complicated and hindered. If there was one place for the Feds to get involved with transit, this interstate transit travel would be a very good place. Urban economies and settlement patterns dont abruptly end at statelines, why should transit systems? The NYC region manages it better than most multistate regions, but look at the needless complication dealing with various jurisdictions and agencies in NY, CT, NJ.

  • matt

    John, that is a rather weak answer for interstate commerce, and calling people names is not helpful.

    It is absurd to think that states could not collaborate on interstate transit without the Federal government’s help. Transit planning could work better if the funds were controlled locally and the local people could decide how to best use those funds, rather than the Federal government pooling everyone’s money and deciding how to dole it out; without much consistency or predictability, I might add.

  • MacJim

    You presume much John. You don’t know me or my politics. Is any dissent trolling?

    While its true that many of the mass transit systems you name do cross state lines, many others do not, and all are essentially local in character. As such, they should be locally funded. These are not part of a high speed network that really is national or regional in character.

    • Adirondacker12800

      Most interstate highways don’t cross state lines when they span a metro area. There are few that don’t cross any state lines. Most of the secondary interstates – the ones with three digit designations don’t cross state lines. Those should be locally funded according to your logic. They don’t have anything to do with interstate commerce…

      • Andy K

        I agree with Matt and MacJim on this. Sending money to Washington, just to have it doled back out to locals does not add any value, but does seem to create waste. Local control would seem to be better – for roads as well as transit.

    • We import 2/3 of our oil, and over 2/3 of our oil goes into transport. The idea that local transport only has local impacts is a bit strained.

  • Dan

    MacJim,

    That’s an awfully myopic view of the regional/local/national divide. Mass transit systems, designed properly, encourage growth, connect regions, and produce new opportunities for residents. Having more competitive regions and cities is certainly in the national interest. Also, since states are prohibited from defecit spending and borrowing on the scale of the Feds, they have a hard time financing large projects.

    Moreover, national mass transit funding is a TINY percentage of your federal tax burden. It’s not like if the feds decided not to fund light rail construction you’d be able to retire early. Also, collecting revenue at the local level and at the farebox is the most regressive way of funding mass transit systems that benefit everyone.

  • John

    I have never, ever heard the commerce clause used as a defense on the Transport Politic for a change in federal intervention in mass transit policy and funding. It’s a very different argument than one that Yonah has made in the past that the federal government should fund operations to free up local funds for maintenance and expansion.

    My comment was not meant to be an argument on transportation and policy merits of federal government involvement in mass transit but rather on the Constitutional merits of involvement, which are fairly strong.

    My assertion that there is Constitutional grounds is not limited to the direct cases of transportation systems that cross state lines but also that availability of mass transit has an impact on interstate commerce by increasing worker mobility and freeing those consumers to spend less of their money on transportation costs.

    As for the assertion that states could cooperate on their own for regional policy and funding, simply see some of the issues discussed on this blog (the lack of coordination on the commuter rail tunnels coming into Manhattan and Long Island springs to mind, along with the failure of Maryland and Virginia to adequately fund Metro’s maintenance needs). These cases, I think, are grounds for more national planning of mass transit priorities rather than less.

    Moreover, look at China, not only are they making massive investments in high-speed intercity rail but also in local mass transit systems. These will place our urban areas at a huge competitive disadvantage in the future as our workers are more dependent on petroleum products to reach their workplaces and face more traffic congestion in order to do so. The lack of a national mass transit plan is not just a state/local issue but also a national competitiveness issue.

    PS — Please spare me your faux outrage at the use of the term “teabagger”. It’s been documented that teabaggers used the term themselves first, so I’m sticking it with it. If you don’t like the label, then make a transportation policy-based argument rather than a Constitutional one (and a weak one at that).

  • MacJim

    You’ve never heard an argument so it’s illegitimate? Sorry to rattle your echo chamber.

    Your commerce clause is weak sauce. It renders the commerce clause is effectively meaningless. There’s nothing the federal government can’t do on a whim.

    Turning to transit policy . . . because rural areas are overrepresented in the Senate, funding local transit systems at the federal level inevitably means more bridges to no where in Alaska. If you think that’s a worthwhile use of federal dollars, then by all means.

    Whether or not local collections are regressive depends on how that revenue is raised, not what level of government it is raised at. Portland could finance its mass transit through a millionaire’s tax instead of through a sales or flat tax.

    States have to run balanced budgets only if their constitutions require it. There’s no reason they can’t engage in deficit spending. Moreover, even if you grant a balanced budget requirement, there’s no reason they can’t go to the bond market. It’s easier for the feds to spend, but will they spend wisely? I think not. In addition to the problem with the Senate, there’s a strong case to be made that local oversight is stronger when it is local dollars that are at risk (moral hazard). This applies whether it be a rail project or a highway project like the big dig.

    Just because China does something doesn’t mean we should too. China also imprisons political prisoners and denies freedom of the press. Does that mean we should too? State owned companies are also purchasing thousands of aircraft and expanding airports. A new coal fired power plant opens in China every week. I doubt you think these are increasing china’s national competitiveness, even though its the same “China” that’s doing the purchasing. For all you know, they could be over-investing in rail and transit. There’s more to being competitive than transportation you know. Without market signals, how do you know resources are being allocated properly? Are we at a competitive disadvantage vis a vis Europe because they have more highly developed mass transit? Our GDP suggests we are not.

    • Walter

      States cannot engage in deficit spending because they can’t print money. The federal government, through the Federal Reserve, can print as much money (or Federal Reserve “notes”) as it pleases to cover deficit spending and sell that currency around the world to keep its value. States can enter the bond market, but that tends to be usurious, as New York’s Metropolitan Transportation Authority is discovering. The National Infrastructure Bank is supposed to help remedy this problem, but will have to wait for the next transportation bill (if it happens at all).

      The EU, by the way, has the same GDP as the United States, and besides, the regions of our country with the strongest, most advanced, and most resilient economies (Chicago, Washington, San Francisco, Boston, etc; look at how Phoenix, Vegas, and most of California have performed the past two years) tend to have the best mass transit, including our richest and most vibrant city. Why else would Los Angeles, Houston, Dallas, Seattle, Portland, and Charlotte toil to build out their transit systems unless they realized world class economic centers require transit to offer efficient and predictable travel to economic, residential, and institutional centers?

      • allen

        “States cannot engage in deficit spending because they can’t print money.”-Walter

        That’s absurd. Deficit spending merely means spending more money than they’re taking in. States can and do regularly borrow money from various sources to do this. It has nothing to do with the Fed increasing the money supply.

        “Why else would Los Angeles, Houston, Dallas, Seattle, Portland, and Charlotte toil to build out their transit systems unless they realized world class economic centers require transit to offer efficient and predictable travel to economic, residential, and institutional centers?”- Walter

        Why else? For one, as mentioned in the article above, the feds have been handing out billions of dollars for these projects.

        • There’s a difference. States cannot spend money they do not have. They can always BORROW money, in which case they have the borrowed funds at their disposal (and an obligation to repay them back), but they cannot create money out of thin air.

          The Federal Governemnt, on the other hand, has a control over a sovereign currency. Such control is devolved onto the Fed, to prevent politicians turning on the printing press in an irresponsible fashion; but at the present time, the Treasury can always find a willing market for its bonds, without the need to produce collateral (such as a bonding measure). And if the private market doesn’t like US Treasury securities, the Fed can always go buy them instead–it has a printing press and can buy as many as they like. (The Fed can’t buy them directly by law, but it can buy them on the secondary market).

          The Fed doesn’t go buying municipal bonds, however.

  • poncho

    I’m skeptical of development value along this route. I think its really just at both ends of the bridge for mostly existing institutional expansion and SE Clinton St where there could be great potential if a developer was able to acquire various individual industrial parcels around that station to make one large parcel which I dont see happening. There might also be some small infill potential around SE Lake Street in Downtown Milwaukie.

    Yeah McLoughlin isnt a freeway like I-205, but its pretty damn close to freeway standards.

    • Unlike the Green Line, which has I-205 on one side and land (some developed and some not) on the other, MLR has OR99E on one side, and the UPRR mainline on the other.

      For a trunk line, it’s not a bad arrangement, as it is effectively good as grade separation. But for a shorter line that ends in the inner ring of suburbia (unlike the Blue Line which extends all the way to outer ring suburbs), it’s not the most effective arrangement.

  • Danny

    All those who argue that the federal government should take a greater role in funding of transit systems seem to forget that the most inconsistently funded transit system is the one that relies the most on the federal government, WMATA.

    The truth is that the federal government is way too politicized and polemicized to be an adequate funder of transit systems. Transit tends to grow old and unmaintained while waiting for funding from the Federal government, and the consistency of that funding will vary based on the political parties in power and their priorities at the moment.

    Transportation spending is likely to remain the most stable if it is taxed on the local level first and the state second and the federal level last. When your local subway system defers maintenance and a runaway train kills 50 people…it is a priority for the people who live there, not people who live across the country. Why would you ever want to depend on the politics and whims of someone five states over for your local transit issues?

    Of course there is a problem with recessions and local tax revenues, but those can be overcome fairly easily. Depend more on property taxes and less on sales taxes. Use income taxes. Transit use tends to increase during recessions, so having higher transit fares can help to correct the imbalances of tax revenues.

    And if metro areas cross state lines? Who says the federal government has to get involved? PATH was instituted without federal intervention purely through cooperation between states. The best way to create jurisdictions is to let local municipalities vote to include themselves within the transit district, giving the transit district authority to levy taxes, and with leaders democratically elected by represented and taxed communities.

    • What is it about swinging political winds that exempts state and local politics?

      The argument about “waiting for Federal funding” is an argument that Federal funding of local transport should be focused on capital grants with a local match rather than on operating subsidy, which (1) is how its presently done and (2) ignores the national stake in the operation of local transport.

      • Danny

        The WMATA has had its capital expenditures AND operations funded mostly by the federal government since its very inception. And they still wait for it. In terms of deferring maintenance, nobody does it like the WMATA.

        The difference between local and national politics is one of accountability. A subway crash in Chicago due to deferred maintenance can cause Richard Daley his office. Transit cuts in Chicago can lose Richard Daley his office. But can they lose John Cornyn his office? They NEVER will…because the effects of his decisions won’t be felt in Texas.

        Without the accountability for the effects of his decisions, there is no incentive to vote responsibly. He can posture and polemicize and it costs him absolutely nothing.

    • simple

      Danny (and others in the down-with-federal-funding camp), we don’t need to speculate about whether “transportation spending is likely to remain the most stable if it is taxed on the local level first…” — we have a great example of what happens when federal funding involvment in transit is eliminated, and that’s on the operations side. There has been no federal operating support for transit since the 1990’s and the hit that transit agencies are taking on the operating side due to the recession has been severe. States and localities just don’t have the ability to sustain public services during recessions the way that the feds can.

      • Danny

        Transit use has increased faster than population growth since the 1990s, reversing a trend that had held for more than 40 years. Do you really want to use that example?

        There are plenty of ways to reduce the effects of recessions on transit funding. Transit agencies that are hardest hit by the recession are the ones that have the least stable funding sources (sales taxes, instead of property or income taxes) and the lowest fares (which makes for low farebox recovery and thus higher reliance on volatile taxes).

  • I have (and continue to have) a sneaking suspicion that the FTA has noticed the rapid escalation in rail construction costs in this country (an escalation which isn’t matched in many other countries, including several “wealthy” ones; and fare exceeds similar cost structure changes for road construction), and is not amused.

    The cost/benefit equation between the two modes (BRT and LRT), it seems, has changed dramatically over the past decade, and the bus solution is catching up in many areas, due to new innovations in bus technology. There are many ways in which rail is still superior to BRT (much higher capacity, a generally more comfortable ride, and attractiveness to an I-won’t-ride-a-bus demographic which still exists in much of the US), but the gap is narrowing. Yet rather than rail construction prices going down due to the presence of a potentially-disruptive technology entering the marketplace, it’s instead going up. What’s up with that?

    • What’s happening to the total amount of rail construction taking place? The less desperate bidders are for the business, the easier it is for bids to edge up.

    • simple

      EngineerScotty, Do you have examples to show that transit construction costs are generally continuing to escalate like they were in the early and mid-2000’s, or is this one example just a Portland thing? My observations in the Midwest are that major civil works project bids (including both transit and freight rail) have nearly all been coming in well under budget for the past two years. Construction cost inflation was a big problem 3-8 years ago, both for materials and labor. But I don’t see those conditions anymore where I am.

      • See this article at The Urbanophile for more on the subject, this one too.

        But a common–and valid–complaint about MLR, is that the Canada Line was cheaper on a per-mile (or per-km if your prefer) basis; that’s a fully-grade-separated driverless metro that also includes a new bridge across a major navigable waterway as part of the project. Direct comparisons have to be careful of currency issues, but the projected cost of MLR is US$1.5 billion for 7.3 miles (11.7 km), the Canada Line cost C$2 billion for a 11.8 mile (19.2 km) line.

        If we in Portland could just tunnel the thing down SE 17th, rather than paying UPRR gazillions of dollars to put it between the highway and the freight line, and still meet the same budget, I’d happily rather do that. (Somehow, I doubt that would fly…)

        • poncho

          Better yet if you’re tunneling, tunnel under Milwaukie Avenue and you hit the heart of Sellwood, right in the center of the commercial districts and in the middle of the residential areas to the east and west of the avenue.

          Something really does not add up with this project as far as cost and value and that troubles me as a very frequent TriMet transit rider and Portland resident. We’re paying $50 for a to-go McDonalds happy meal with a decent toy (i.e the bridge) when for the same money we should be getting a nice sit down steak dinner at a fancy restaurant. I expect a lot more for $1.5 billion.

  • Woody

    MacJim, Matt, Danny — I guess we should welcome new users to this blog, whether they show up one by one or as a mutually reinforcing group.

    But if I understand the attacks on any federal authority that relies in part on the commerce clause, what you really seek is to overturn the precedents of 40 years, dating back to LBJ in the matter of federal funding of urban transit, or perhaps to overturn the precedents of 211 years or so, to take us back to the style of government we suffered under the Articles of Confederation. I’m a more traditional believer in the current Constitution, with its extensive authority for the US government to support measures that provide for the general Welfare of the country and its citizens.

    And maybe I’ve lived in all the wrong places — first in small town Texas about equidistant from the Confederacy and the Mexican Border, and lately right across the Hudson from New Jersey — but I have less confidence in the integrity and wisdom of local governments than I do in the feds.

    I know that in theory a government closer to the people should be better. But in theory even Communism looked like a viable system. Reality as I see it shows that our current messed-up, democratically-elected federal government is still a better government than all the other forms.

    • Danny

      I’m a conservative and I don’t think there is anything wrong with that. And I’m also a transit advocate and I don’t think there is anything wrong with that either. Through my efforts at transit advocacy, I have helped to convince key conservative council members to support construction of light rail in SLC, and the changed votes of those council members are the only reason why TRAX exists today.

      I take offense when people think transit advocacy is something that can only be done by progressives or liberals, and that we must all view our reasons for such transit advocacy from the same lens. When we rely on one party or one ideology (while making fun of others) to advance a transit cause, we end up with systems that will never get the broad based support that functional systems need. And as a result, we end up with systems that go underfunded, underused, and underappreciated…because they become exclusive clubs for likeminded individuals.

      To that, I say thanks for your welcome.

      As far as your perception of the efficacy of federal vs local government, I completely disagree. And not just on theoretical grounds. My local government, in my view, is a million times more effective at passing legislation in a timely manner, and I feel like their legislation is far less affected by partisan politics.

      The simple fact that we are trying to influence pie-in-the-sky ideas like this shows me how ineffective the federal government really is. I can tell you that even if someone influential in the FTA was listening intently at the people discussing this blog post, that it would still take years of internal advocacy within the FTA to get everybody else on board.

      Tell me…how long do you think it would take to cause a change in how the federal government allocates transit funding (say for example a switch from an emphasis on capital to an emphasis on operations)? Two years? Three years? Ten? My guess would be in the decades.

      Trying to influence federal politics for massive changes is like trying to get a glacier to flow uphill. Presidents (quite possibly the most influential politicians in the world) have been trying to significantly reform Health Care since Richard Nixon. We haven’t seen any meaningful action until more than 30 years later. And it took 30 years of unacceptable cost inflation for us to really do it. And we still had to make a million compromises to get it to pass through a Democratic majority Senate AND House.

      Sorry, I don’t like those kinds of political processes. I much prefer situations where it comes down to a simple vote by a city or by council members.

      • Danny,

        You might enjoy this rant. And its good to see self-identified conservatives supporting robust public transit–few prominent ones do so (Andrew Sullivan is an exception, and he’s presently persona non grata in many “conservative” circles, both for his sexual orientation and for his support of President Obama). While liberals are generally better at supporting transit (and the present state of the Democratic Party is far less obnoxious than the present state of the GOP), in far too many places Democratic politicians act as though they care more about the guy driving the bus than the folks riding it. (Now I’m gonna be in trouble with Al…)

        • Danny

          I enjoyed the rant, and I agree…sometimes politicians care way more about the guy driving the bus than the guy riding it.

        • Sullivan is a persona non grata in conservative circles because he’s no longer that conservative; for one, he’s pro-Obama.

          People further to Sullivan’s right do get away with supporting transit, for examples Paul Weyrich and William Lind.

          • He still considers himself as such, and the present GOP as nothing less than full-throated reactionaries. I’m inclined to agree, especially with the second part. And while he’s pro-Obama, he still distrusts much of the wider Democratic party–both the establishment, which he considers to be craven, cynical political operators and careerist, and the liberal wing, which advocate many economic policies that Sully detests, and no doubt remind him of the Labour Party in his homeland, which he utterly despises.

      • MacJim

        To take this further, if the federal government makes a policy mistake, that mistake is nationwide and much more difficult to reverse than at the local level. At the local level, you the individual can move to a different jurisdiction. This is both a check on bad policy making and protects individuals by giving them the means to escape bad policy decisions.

        At the federal level, roads are financed by a fee on users of the system (the gas tax). The more the system is used (or at least the higher the gas tax collections), the more investment there is in roads. User fees also finance airports. People don’t realize this when they say “all infrastructure is subsidized!” Mass transit runs both capital and operational deficits. The more you build, the less affordable the system becomes, the more expensive to maintain. Farebox collections don’t cover the costs. Sales taxes are a poor mechanism of financing mass transit because there is no (or only a slight) relationship between mass transit and sales taxes (and sales taxes fluctuate for reasons that have nothing to do with transportation). A better financing scheme would be to use property or land-value taxes to finance mass transit. Honest supporters of mass transit admit that it does not decrease road congestion, and often cite “livable, mixed use communities” or “TOD” as a justification for building rail. If this is so, and if rail increases property values, then the property tax is the appropriate “user fee” to finance mass transit construction. Property tax zones could be instituted within a radius of new station construction.

        • A more accurate statement would be: “Honest supporters of mass transit have many other goals in mind besides improving the convenience of motorists”. While removing some motorists from the highways is a useful goal in some respects–and useful politically when dealing with existing urban framework which is auto-optimized–you’re right in that it isn’t really the point.

          Building transit to relieve highway congestion, building highways to relieve highway congestion, and adding transit capacity to relieve crowded busses and trains all suffer from the problem of induced demand; far better ways to deal with crowding on infrastructure include congestion pricing (rush hour tolls, higher fares, etc) and such.

          The good reasons to build transit are instead things like transportation diversity, environmental concerns, allowing more efficient use of land (without the need to allocated acres of space to hold parked automobiles, and the resulting sparsity which causes many other infrastructure costs to skyrocket), and the like.

          While low-usage transit (the kind which is found in most parts of the US) is heavily subsidized, high-usage transit is subsidized to a far lesser extent, and once a system is place, marginal costs per rider are low. This is a good reference on the subject.

        • Everyone can make mistakes; state and local governments can be remarkably good at copying each other’s mistakes, because of their unwillingness to learn from foreign examples.

  • Gotta say, $200 million/mile seems a little steep. It would probably be better to do what it takes to get the line up and running. Especially when we consider that in the land of falling prices, this project has somehow gotten more expensive. Obviously an art, and not a science.

    And sheesh, all the blather about the “inefficiency of government”. Has someone forgotten that GM managed to blow off every huge advantage they’ve held in the markets for the past 50 years and reduce themselves to rubble? Or that they’ve hardly been alone in the ability to fail? Private enterprise wouldn’t last ten minutes if you took it out of the cradle rocked by big government in America.

  • This decision sounds like bad news for big projects which I think is bad in general. Big projects tend to be ones that occur in bigger metropolitan areas with more costs. Bigger projects tend to also be more transformative in nature. I say this because they are usually projects that will either attract more riders. For example building a underground subway line in a section of a city that will draw 100,000 riders a day is going to be a lot more transformative overall than a BRT line transporting 30,000 a day. Hopefully that is not the case because I think things like the subway extension in West LA would have a huge impact on their respective cities.

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