» A project that cheered suburban officials hoping for more economic development lacks adequate funding.
If the recession taught us anything, it’s that long-term fiscal projections aren’t to be trusted. After pulling together a massive 25-year expansion plan just four years ago based on assumptions of decades of increased tax revenues, Dallas’ DART has had to pull back dramatically, putting in purgatory all planned capital projects not yet under construction.
Now under threat: the long-planned light rail connection to Dallas/Fort Worth International Airport.
It’s not that DART’s management has committed serious financial malpractice, it’s just that its guesses in 2006 about how the economy would expand haven’t played out as expected. Just as importantly, though Dallas is at the heart of one of the nation’s fastest-growing metropolitan regions, the population within the district DART serves is becoming less wealthy compared to the national average and especially compared to unserved (and untaxed) suburban areas nearby.
Yet the announcement by DART CFO David Leininger last week that the full Orange Line project — which was supposed to extend northwest from Dallas into the city of Irving and then to the airport — would not be completed on time still came as a bit of shocker. In April, the news of a decline in tax revenues seemed to imply a choice between the Orange Line and a new downtown light rail link — a contest that the cheaper and closer-to-construction airport link was supposed to win. But the situation has evidently gotten far worse in the last few months, pushing both projects down the drain.
Irving, which has contributed more than $800 million in funds to DART since it joined the agency’s service district in 1983, has planned billions of dollars of new residential and commercial construction around Orange Line stations, hoping to attract businesspeople wanting the ideal compromise between downtown Dallas and D/FW Airport. Its politicians are understandably upset about the loss of the future airport connection.
Two earlier phases of the Orange Line, with six stations and nine miles of track, are still roughly on schedule, currently under construction and expected to be finished in 2011 and 2012. But the 4.7-mile project from Belt Line Road to the airport, which DART says it needs $275 million to complete, was supposed to be done in 2013 and now has been put off indefinitely. With $7 billion accumulated in debt, the agency can’t do much more other than support existing operations now that it will have $3 billion fewer revenues than originally projected. Unless the agency identifies a new source of local funds or collects a major federal grant, it has little chance of building the airport connection before 2030.
The airport link is particularly expensive because it would run directly into the airport, ending services between two terminals, where it would also meet a proposed commuter rail line from Fort Worth. DART reevaluated the connection last year — considering a solution that would connect the light rail and commuter lines north of the airport — but eventually decided to stick with the original plan.
The separate Green Line project, which extends northwest and southeast of downtown, plus the Blue Line extension from Garland to Rowlett, remain funded; both are under construction and the first is supported by a federal New Starts grant.
For the city of Irving, the arrival of the Orange Line was supposed to mean a denser, more urban future focused around areas such as the Las Colinas urban center (which has its own people mover system) and the former site of the Texas Stadium. The city paid for most of the costs required to re-route the line into designated areas of high-density development. But leaders there are convinced that the growth they’re looking for in the future won’t happen unless the airport is directly connected to the line. If the project doesn’t happen, there is some suggestion that Irving may even consider leaving DART — a move that would not only hurt the agency directly, but also limit the ability of the organization to maintain support in other suburban jurisdictions that may feel slighted by the predominance of Dallas in the region. Some estimates suggest that the airport station would attract as many weekday passengers as all the others on the Orange Line combined.
Much like in many regions with transit authorities that spread out across city lines, from inner-city to suburb, Dallas faces a situation in which it has only limited funds to sponsor projects that must serve areas across the region. Everyone expects to see high-quality transit service thanks to their contributions to the overall revenue base, but only so many projects can be funded. Irving may be upset about its own loss, but so is downtown Dallas — and no one’s running to its defense right now. The fact is that DART cannot afford to build the D/FW connection in the next few years, and that’s not a personal affront to Irving, it’s just the result of bad timing. And even the truncated Orange Line will provide significantly improved service into this suburban city, if only towards downtown Dallas.
That said, it could be argued that the airport connection is vital: The facility plays an important role in the economic viability of the region as a whole. From that perspective, a future federal grant could be an important step towards filling in the gap, but Washington’s current belt-tightening isn’t likely to make getting hundreds of millions of dollars a particularly easy process. (I don’t know why the Orange Line was never submitted for partial federal funding through the New Starts program.)
The failure to fund the Orange Line link to the airport is only the most recent example of the consequences of the financial problems facing similar transit agencies across the country. You can’t envy those forced to explain why they can’t build projects promised just months ago.
Image above: Dallas DART preferred D/FW Airport Connection options, with future Cotton Belt Commuter rail, from DART
5 replies on “Once Assured, Dallas Light Rail Expansion to Airport Now Off Track”
Dart’s problem isn’t a matter of bad timing. It isn’t that tax revenues are down 4-6% but that they’re already carrying too much debt. They didn’t have any wiggle room because of that. That is, too much of what is there today was already built counting dollars in the future. That’s poor management not to realize the situation and over promise.
If Irving were to leave DART, how would that impact tax revenues?
Contract law would dictate that Irving opting out of DART would only shield it from the time after it exits the partnership. Any costs incurred from the time it joined to the time it left, Irving would still have to pay.
The real problem here is Texas – which allows MPOs to be jerked around by their ‘member’ cities without mercy, but would never allow Dallas, for instance, to opt out of having gas taxes sent to TXDOT.
Since nobody on the planet did a good job in 2006 of predicting the global economic meltdown, it is hard to see why DART should be singled out.
Transit agencies can’t save up money for capital projects; any substantial reserve generates demands for lower fares, higher salaries, or even rebates to member juridictions.
Federal grants to transit are very small relative to demand, relative to highway spending, and relative to the standards in any other developed country.
DART is only one more casualty of the funding structure that forces borrowing and the global financial crisis that makes borrowing unsustainable.
Good summary. Although Nouriel Roubini *did* predict the meltdown, you can’t expect a random transit agency (rather than an econ professor) to do so.