Category: Social Justice

Which riders matter?

» Given the need to prioritize transportation investments, whose mobility needs are most important?

In an article earlier this month, I described the Seattle region’s draft proposal to spend $50 billion over the next twenty-five years on a massive transit expansion program. In that article, I compared the cost of building and operating new transit projects with the expected number of riders each proposed line would carry, concluding that the region was choosing projects that were relatively ineffective from the perspective of maximizing their benefit-cost ratios.

There is no formula that can definitively tell us whether a project is a good or bad one, or how it stacks up against other potential investments.

What I didn’t delve into was the fact that that metric—like any metric—was founded on an assumption that not only biased my conclusions, but also which was impossible to avoid, even if altered to reflect a different premise.

What I assumed was that every potential rider for a transit line has equal worth. In the Seattle case, for example, I noted that the cost per expected rider of a light rail line from the Ballard neighborhood to downtown was far less than that of a light rail extension to Tacoma, so I concluded that the former project should be built first.

At face value, the idea that we should treat each transit rider equivalently in a comparative analysis may not seem particularly controversial. Doesn’t it make intuitive sense to prioritize transit projects that serve the most people for the lowest cost?

In truth, though, riders are different. Some are taking long trips, some short ones. Some are wealthy, some are poor. Some have no choice but to ride transit, others are picking it instead of driving.

If the Ballard light rail project I noted above was filled with people already using buses to get to work and who would save just a few minutes traveling by train versus bus, while the Tacoma project was to be used by people who otherwise would be driving and who would be saving a lot of time, can we still be confident that the Ballard project is the better one? What if the Ballard project was serving all wealthy people, while the Tacoma one was designed for the poor?

How do we differentiate between riders? Who matters most? These are essential questions that we must answer when we’re picking investments. After all, given the fact that resources are limited, we must have some way to determine how to use them—whether that is through a process of reviewing quantitative statistics or through political debate.

When it comes to urban transit systems in the U.S., determining what riders matter most has a direct impact on what types of services are provided. Many large regions, for instance, have chosen to subsidize commuter rail at a higher rate per rider than other modes of transportation. Essentially that means that suburban, longer-distance travelers are being prioritized over urban travelers.

There are many reasons to think that’s okay: Subsidizing suburban commuters may be necessary to maintain political support for transit; their trips are longer and therefore putting them on transit may do more to reduce congestion and pollution; and urban riders often have better access to a variety of ways of getting around, such as walking and biking. But we can’t avoid the fact that the decision to preference the suburban rider is a choice, not a random outcome.

Another way to look at the way we think about which riders matter is through federal policy. Some years ago, the U.S. Federal Transit Administration required transit agencies building new lines and seeking support from the government to demonstrate the cost effectiveness of their projects by using a formula that divided overall operating and capital costs by the number of hours of rider time savings in the end year of the project.

This system had the consequence of prioritizing projects that saved as much time as possible for riders, rather than focusing on other issues, such as better serving existing transit users, potential transit-oriented development, social equity, or overall mode share. As a result, the government encouraged the extension of lines far out into the suburbs, which scored better than inner-city lines. The downside was that, in general, potential riders who were wealthier and had longer commutes were prioritized over people who lived in poorer urban neighborhoods.

Facing resistance from cities around the country, the FTA altered this rule and significantly reduced its weighting in the determination of which projects to build. In the process, it has redirected its attention toward projects that are questionable from the opposite perspective: They too often emphasize slow, central city travel over fast regional needs.

The reality is that there is no formula that can definitively tell us whether a project is a good or bad one, or how it stacks up against other potential investments. The most we can ask is for a lot of information about not only how many riders a project might serve, but also who those riders would be and how they would be expected to use the system.

Residents, political officials, and policy makers deciding how transportation spending should be distributed need to focus on the question of which riders are most important to them, because in doing so, they will come to a better understanding of what projects to invest in and which services to provide.

Here are three questions that every region should ask about transit riders, not only in reference to new projects, but also about how transit service is being provided today.

Do we want to serve people who are already riding transit, or do we want to attract new people onto transit? If the goal of transit investments is to (1) attract new riders onto the system, new investments should probably focus on areas of the region where transit service is currently poor but adequate demand exists for people to get on trains and buses. On the other hand, if the goal is to (2) improve the quality of life for existing transit riders—who can be depended on to actually take transit when the project is completed—new investments should probably emphasize areas of the region where existing lines are well-used but slow and unreliable. One example of a project that fulfills the latter goal is the Second Avenue Subway in New York City, which will attract relatively few new transit riders (most people in the area already use transit) but dramatically reduce commute times for them by replacing packed and slow buses. It is worth noting that even if more new people ride transit under the first scenario, the second scenario could actually produce more new trips as better transit in dense urban areas is more likely to produce off-peak, weekend, and non-commute trips. It’s also important to emphasize that if a goal of transit is to expand social equity, a focus on existing transit riders, rather than “choice” riders, is essential, since their needs are the greatest.

Do we want to replace longer trips or encourage more trips? If the goal of transit is to (1) reduce overall vehicle miles traveled on the roadways, projects like commuter rail systems can often be very effective because they replace the trips of people who drive long distances. A commuter from the suburbs who drives 50 miles roundtrip each day is causing far more pollution and congestion than a commuter in town who drives 5 miles roundtrip each day. Alternatively, if the goal is to (2) encourage more overall transit trips, urban rail systems serving dense neighborhoods are likely to result in more boardings. In addition, prioritizing longer trips may have the negative effect of encouraging more outward sprawl by making it easier to take longer transit trips to and from jobs; in the long term, this could actually reduce transit use.

Do we want to focus on commuter trips or transit in communities where all-day transit use is possible? If the goal of transit investment is to (1) significantly reduce or provide an alternative to congestion, resources should be concentrated on peak-hour services that parallel a region’s most-travelled corridors, typically expressways. Fast commuter lines can offer a real alternative to congested highways. On the other hand, if the goal is to (2) develop communities where people do not have to rely on their cars for most of their daily needs, projects and services that focus on urban neighborhoods designed around walking are far more relevant. In many cases, investments in these places may have no relationship to relieving congestion but may have far more relevance to issues like transit-oriented development.

No investment decision can be a pure response to any of these questions, but understanding what types of riders we care about can help us identify how we make choices about how to spend public money on transportation.

Image at top: G Train, from Flickr user Jed Sullivan (cc).

Paris Social Justice

Broadening the city through a universal fare card

Post author By Yonah Freemark
Post date 30 March 2015
19 Comments on Broadening the city through a universal fare card

» The Paris region plans a single monthly fare for transit access, eliminating zones for pass holders, with the dual goals of encouraging more transit use and social integration.

What if it were possible to travel as much as you’d like by train or bus within Connecticut, from Stamford to New Haven, Hartford, New London, Waterbury, Danbury, Putnam, and hundreds of other towns, and then to travel within them, all on one transit fare card at the monthly price of just $76?

That’s what, in essence, will occur beginning in September in Île-de-France, the region that surrounds and includes Paris and which is practically the physical size of Connecticut—albeit far more populous and benefiting from a far more extensive transit system.

The plan is to eliminate the current five-zone transit fare system for people holding weekly or monthly passes and replace them with a universal, unlimited fare. The universal card will apply to virtually all transit services within Île-de-France, which is the most populous region in France, with 12 million inhabitants spread over 4,638 square miles (for comparison, the city of Paris proper has 2.3 million residents in 41 square miles, and New York City, which has a universal fare card for Subways and buses, is 305 square miles). The map below compares the shape and scale of Île-de-France with the New York region. Imagine a single monthly fare card for all transit service in that area.

The new monthly fare option will cost €70 ($76) for regular users,* up slightly from €67.10 for unlimited rides today in Paris and small areas just adjacent to the city and way down from €113.20 today for unlimited rides across the full region. The policy was adopted last December by the regional government and fulfilled a 2010 electoral promise by the governing socialist (PS)/green (EELV) coalition.

Everyone in the region with this fare card will now benefit from unlimited travel on the region’s metro, bus, regional rail (RER), and commuter trains. The fare policy change was a political decision. It responds to the sense that the Paris region, as frequently reported, has become increasing geographically unequal, as manifested by poverty in the suburbs and wealth in the inner city. By universalizing access to transit everywhere, people who live in the suburbs and commute to the city no longer have to pay more than their counterparts living within the city. It promotes the idea that access to transportation throughout the region is more of a right than something that you only use when you can afford it or really need it. Moreover, it reflects the fact that as population and jobs have decentralized, commutes are no longer primarily suburb-to-center city; a zonal system radiating from the center is a relic of that antiquated economic geography.

Equally important, it is an aggressively pro-transit policy that further reduces the cost of riding the train or bus compared to commuting by car; this effort corresponds directly to the national and regional government’s massive investment in suburban tramway and BRT lines, plus a vast new network of automated metro lines. Perhaps its greatest benefit is that it encourages people to take the fastest services available on any trip, while current fare policies give people discounts for taking slower local services. For example, while rides on local buses or the metro are currently priced at a single fare per trip, no matter the distance, rides on much faster regional rail or commuter rail services (even when they’re in the same alignment and cover the same stops as the bus or metro lines) are charged by zone, which can significantly increase the cost and likely dissuades many riders from traveling as quickly as they could.

The regional, single-cost fare card is a policy designed to spread freedom of movement.

Over the course of the year, the new fares will save regular commuters in the furthest suburbs more than €500 a year. The policy will add €400 to 550 million in annual costs to the region and is to be paid for by an increase in an employer-paid income tax (the increase was supported by the chamber of commerce).**

The policy comes after two years of weekend, vacation, and August de-zonings for pass holders, which were estimated to have increased travel on the transit network during those periods by 6.5 percent thanks to people choosing to travel outside of the zones they had paid for using their monthly cards.

It seems likely that the universalization of the no-zone policy, and its applicability to every day of the week, will increase use of the system even more significantly and encourage many long-distance auto commuters, who are now put off by higher long-distance zonal fees, to switch to transit.

Unlimited fares have their negative consequences

Of course, this fare policy has its tradeoffs. By eliminating the current zonal policy, the region is reducing the financial disincentive that currently inhibits people from using the system more. While that may mean fewer cars on the road—a benefit—it may also mean more discretionary trips on an already-crowded network, and it may mean eliminating the financial reason many have not to take longer trips, which violates the user pays principle. With several of Paris’ main transit arteries already at or above capacity, will more riders be a good thing for the region? Will the region be able to handle the congestion?

Some might argue that the introduction of this fare policy would make more sense only when the suburban transit improvements and the new regional rail tunnel through the center city are completed, so as to ensure that at least all the new crowds will be riding on a bigger system. Yet those new lines won’t come into service until 2020 and later; should the region do nothing to address transport fare inequities until that time?

Most importantly, the decision to spend hundreds of millions of euros on reduced fares could mean hundreds of millions of euros not being spent on better transit service every year—and some would argue that the best way to improve transportation is to expand service, not to lower fares. Indeed, given a constrained budget, choosing to devote new revenues to reduced fares probably means something else is losing out. (Or, looking at the economy as a whole, raising taxes to spend this money on fare policy means less money for companies to either spend on salaries or profits.)

The cost tradeoff is certainly not one to scoff at. Last week, New York’s independent Citizens Budget Commission recommended capping the number of rides that can be taken with the (far more geographically constrained) unlimited fare card on New York City’s MTA Subway and bus system, in effect putting a limit on unlimited. Though the cap would affect relatively few people, it would be designed to raise revenues in a fiscally tight environment for an agency that is struggling with quickly growing ridership.

On the other hand, were New York to change its fare policies to allow current monthly pass holders to ride the Long Island Rail Road and Metro-North Railroad to far-off destinations deep in Upstate New York, Connecticut, or Long Island—in other words, do what Paris is going to allow this fall—the MTA would be left with fewer revenues.

But customers would benefit. They’d get faster service on commuter rail lines that many now avoid because of the higher price of travel (a trip from Jamaica in Queens to Penn Station in Manhattan, for example, costs $10 on the Long Island Rail Road for a 19-minute trip versus just $2.75 on the Subway for a 35-minute trip). People in neighborhoods currently only served by commuter rail, both in the city and in the suburbs, would suddenly have a reasonable-cost travel option equivalent to their peers with Subway access. People living in the city would suddenly have a much cheaper way to visit Long Island beaches on weekends, and people living on those beaches would suddenly have a much easier way of working downtown. These are not imaginary benefits.

Moreover, the cost tradeoff is not so simple as a conflict between lower universal fares and better service. Rather, the funding used to pay for the universal fare comes from a revenue source that may not have been politically feasible to raise unless it addressed the issue of equalizing transport access among different areas of the city. In other words, the hundreds of millions of euros being spent on this change may have only generated political support for the improvement of the transit system in the context of standardizing fares.

A regionwide single fare has as much to do with equity as boosting transit ridership

In some ways, Paris’ incentives to support cheaper long-distance commutes reflect the undeniable fact that poverty in the French capital region is concentrated in the suburbs (though there are many middle-class and wealthy Paris suburbs as well). Compared with most North American regions, where the very poor live predominantly in inner-city neighborhoods, the impoverishment of many Parisian suburbs (and the wealth of the inner city) may speak to the need for the unique fare policies described above.

The traditional model of urban economics—based on a central core with jobs and radiating rings of residential areas—suggests that as people move out from downtown, they choose to trade off higher transportation costs (in terms of more time and money spent commuting) in favor of lower housing costs (in terms of less cost per square foot, since housing on the periphery of the city is often much larger per person than housing in the center). The theory is that poor people would live in the city in smaller apartments with lower transportation costs. Yet the spread of poverty to the suburbs (in many cases a result of government action), as exemplified by the Paris region, has resulted in many poor people living in the suburbs who cannot afford the cost of the transportation that’s available to them, or at least who are negatively affected by the high costs of transportation use.

Many readers will note that the geographic and demographic environment in North American regions is changing too; indeed, for years the spread of poverty to the suburbs has become an increasingly relevant issue for public transit agencies (as well as governments in general—see Ferguson, Missouri). If there are now more Americans living in poverty in the suburbs than in cities, shouldn’t fare policies reflect that fact? Shouldn’t we reduce the cost of using transit for those who are most in need?

On the other hand—and this is an important caveat—American suburbs remain very different than many French ones in that they are overwhelmingly sprawling and automobile-dependent. Moreover, no U.S. region is investing in suburban transit at even close to the scale of Paris—meaning that even with reduced transit fares, most people would probably still need to use their cars to get to their jobs. Would reducing transit fares at the regional level do much more than support wealthy suburbanites using commuter trains to get to work in the city?

Clearly, the issues faced by U.S. regions (as well as French ones!) extend far beyond the matter of fare policy; addressing poverty requires more than just cheaper transportation options—in many communities even basic transit isn’t available, and finding the funding for decent bus and rail service probably must come before funding reducing fares on that service. But effective, affordable transit is an important element of a just society. Paris is challenging us to think radically about what affordable transit means.

* For people who are unemployed or of moderate means, the universal card will cost €17 a month. The most impoverished families in the region already benefit from free transit use.

** In this article, I’ve skirted around the more esoteric question of who pays for the subsidy provided to encourage people to rely on transit (and I’m not going to address why subsidies are needed—read this on that subject). After all, the reduction in monthly fares for such a large percentage of the population will almost certainly result in reduced revenues per ride taken—meaning more subsidies are needed. The issue of who pays for these incentives is one that raises heckles among people of all stripes and deserves a discussion of its own. In this case, though, it suffices to say that in Paris, transit operations are provided mostly by the historic but independent national rail company SNCF and Paris transport company RATP, but these companies are not “paying” for the subsidy; the regional transportation governance body (STIF) is through taxes it raises. STIF will continue to pay SNCF and RATP the cost of operational supports for the services they provide, irrespective of the fare policy.

This distribution of responsibility in terms of who is paying for the subsidy is only possible because STIF is independent of SNCF and RATP. In the case of the MTA in New York City, for example, this distribution of power has not played out because the governmental body that controls the MTA—the State of New York—has not taken full responsibility for public transportation in the New York region. If MTA decided to equalize fares across the Subway, bus, Long Island Rail Road, and Metro-North Railroad system, it would have to “pay” for the costs of doing so out of its own operations budget. If New York were more like Paris, the Governor of New York could decide that he wanted to achieve that outcome and would use state resources to pay the MTA to substitute for the lost revenue incurred by making such a policy change. But political actors at the state level in New York have avoided taking true responsibility for the transportation agency.

Of course, the New York region would also need a fare card that can be used across systems to make this possible; currently you can’t use the same fare card for any combination of the Subway, Metro-North Railroad, Long-Island Rail Road, or New Jersey Transit.

Photo at top: Houilles train station, from Flickr user harrobaz (cc). Île-de-France/New York region comparison map made by me using MAPfrappe.

Finance Salt Lake Social Justice

A Call for Minimum Service Standards

Post author By Yonah Freemark
Post date 20 August 2014
60 Comments on A Call for Minimum Service Standards

» All across the country, transit agencies are opening new rail lines with inadequate service.

At $37 million for two miles of track, Salt Lake City’s new S-Line, sometimes referred to as the Sugar House Streetcar, was one of the cheapest rail transit projects recently completed in the United States, with per-mile costs equivalent to the typical bus rapid transit project. From a capital cost perspective, it’s a great success.

Too bad the S-Line is such a dud when it comes to ridership. According to recent data from the local transit system, the project is serving fewer than 1,000 riders a day, far fewer than the 3,000 expected for the project. One explanation is that the short route doesn’t attract many people. Another is that the line’s frequency is simply too low to convince people to orient their lives around it.

The thing is, providing new rail lines isn’t enough — service standards really matter when it comes to attracting people to use transit. And on that front, too many transit agencies around the country are failing to offer the services people can rely on. The problem extends far beyond New Orleans and encompasses a large share of the cities that are investing in new rail lines today, ultimately limiting their effectiveness and cutting down on ridership.

We must commit our transit agencies to providing a minimum level of transit service on their lines, particularly those in which it has been deemed necessary to invest millions of dollars in capital upgrades.

Certainly part of the answer should be speeding transit up. In an urban environment where automobiles dominate, making sure that buses and trains can move as quickly as possible reduces commute times and, ultimately, reduces the appeal of driving by providing a time-competitive alternative. At an average of 10 mph, the S-Line is certainly no stunner.

But the streetcar’s bigger problem is that trains only make the 2-mile, 12-minute trip every 20 minutes, or 3 times an hour.* If you miss a trip, you might as well walk, because you’ll save virtually no time waiting for the train. As Jarrett Walker has noted many times, frequency of service can be just as important as speed, since the frequency at which a vehicle on a line arrives determines how long most people have to wait — especially when they’re transferring between services, an essential element of any big-city transit network and one that cannot be significantly improved with real-time data.

An examination of the operations of 49 new or extended light rail or streetcar lines built in the U.S. after 2000, summarized in the table at the end of this article, suggests that the situation experienced in Salt Lake is hardly unique, particularly at off-peak hours. While the large majority of these services offer at least four trains per hour (one vehicle every 15 minutes in each direction) at peak hours, 35% offer fewer than 4 trains per hour at midday and 73% offer fewer than 4 trains per hour in the evening (indeed, 33% offer 2 or fewer trains per hour, or a train every half hour, in the evening).

The difference for a passenger using a transit service offering robust frequencies — 6 trains per hour, or one train every ten minutes — versus mediocre ones — 3 trains per hour, like the S-Line — can be dramatic. A hypothetical rider in the robust city who has to take two 15-minute train trips that involve one transfer between them will spend an average of 40 minutes commuting in each direction (30 minutes on both trains and 5 minutes waiting for each individual train). In the mediocre city, on the other hand, average waiting times of 10 minutes for each train would increase commute times to 50 minutes, or a 25 percent increase. In the worst circumstances, where a rider just misses each train, the rider in the robust city would require 50 minutes to commute while her peer in the mediocre one would need 1h10, a full 20 minutes more.

To create a transit system that is attractive enough to pull people out of their cars, high frequencies of service at all times of the day are essential.

Los Angeles, Minneapolis, and Seattle, as the table demonstrates, have chosen to outfit their new rail lines with a robust level of service that befits the major investment that has been put into them and recognizes the time constraints of their riders. Others, from San Jose to Sacramento to San Diego and even to Portland, have simply chosen to give up on their passengers at night. What they’ve effectively decided is that only people who truly have no other choice should rely on transit outside of peak hours.

The poor service offered on these lines produces infrastructure that is massively underused. One of the frequent arguments made by proponents of investment in rail is that “people know” that the trains will come because of the fixed track and supposedly high quality of service. But inadequate operations make this benefit disappear.

The federal government, which has funded the majority of these projects, has failed to enforce any sort of minimum level of service that these lines must provide. Rather than mandate that new services funded through grants offer service at least every 15 minutes, for example, the Federal Transit Administration simply requires agencies to “develop quantitative standards for all fixed route modes of operation” for issues like vehicle headway. In other words, if a transit agency provides service every three hours on a just-built rail line, that’s fine — as long as that information has been submitted in triplicate to Washington in advance.

The federal government is throwing money at these projects with little supervision over how they are operated. The results are underperformance and relatively low ridership.

Certainly many transit agencies will suggest that the reason they do not offer better service is that they cannot afford to do so; as I wrote last week, the way that transit funding is allocated results in perverse incentives that encourage transit expansion over transit service. But local governments that commit to new projects should be required to identify adequate funding to cover operations if they are awarded federal money for construction.

Other agencies might argue that the service they provide simply matches the demand; there is no need to offer more than three trains an hour on the S-Line because only 1,000 people a day will even ride the thing. This fact raises questions about whether it made sense to build the project in the first place — if it’s not serving many people, is it needed? Or it represents a self-fulfilling prophecy: Of course the line serves few people because the service it provides is so poor.

Choosing to invest in better services comes at a cost. But it’s one that our political leaders and local transit activists should be fighting for. Now that we have some rail lines constructed, let’s start running more trains on them before we rush out to build more track!

Service levels for new or expanded light rail or streetcar lines in the U.S. since 2000

City	Extension Project or New Line	Year	Peak trains per hour (8-9 AM)	Midday trains per hour (12-1 PM)	Evening trains per hour (9-10 PM)
Camden	DMU	2004	3	2	2
Charlotte	Blue Line	2007	6	4	3
Dallas	Streetcar Extension	2013	4	4	2
Dallas	Blue to Rowlett	2012	4	3	3
Dallas	Red to Plano	2002	4	3	3
Dallas	Green	2010	4	3	3
Dallas	Orange	2014	4	3	3
Denver	I-225	2006	4	4	3
Denver	I-25	2006	6	4	3
Denver	West	2013	8	4	4
Houston	Red Line	2004	10	10	3
Jersey City	Tonelle Ave	2006	10	7	4
Jersey City	8th St	2011	5	3	2
Little Rock	Streetcar	2004	2	2	3
Los Angeles	Gold to Pasadena	2003	9	5	6
Los Angeles	Expo 1	2012	5	5	6
Memphis	Madison Line	2004	4	4	0
Minneapolis	Blue Line	2004	6	6	4
Minneapolis	Green Line	2014	6	6	6
New Orleans	Canal	2004	3	3	4
New Orleans	Loyola-UPT	2013	3	3	2
Newark	LRT Penn to Broad	2006	4	2	2
Norfolk	Light Rail	2011	6	4	4
Phoenix	Light Rail	2008	5	5	3
Pittsburgh	Blue Line	2004	2	2	2
Pittsburgh	North Shore	2012	15	8	6
Portland	Red to Airport	2001	4	4	3
Portland	Yellow	2004	4	4	3
Portland	Green	2009	5	4	2
Portland	Initial Streetcar	2001	3	5	3
Portland	Loop	2012	3	4	3
Sacramento	Sunrise-Folsom	2005	4	4	2
Sacramento	South to Meadow View	2003	4	4	2
Sacramento	Green to Richards	2012	2	2	0
Salt Lake	Red Line	2003	4	4	4
Salt Lake	Blue to Draper	2013	4	4	4
Salt Lake	Green/Airport	2013	4	4	4
Salt Lake	Streetcar	2013	3	3	1
San Diego	Green: Mission to Santee	2005	4	4	2
San Francisco	T Line	2007	6	6	3
San Jose	to Alum Rock	2004	4	4	2
San Jose	Sacramento to Winchester	2005	4	2	2
Seattle	Streetcar	2007	4	4	4
Seattle	Central Link	2009	7	6	6
St Louis	Cross County to I-44	2006	5	3	3
St Louis	to Scott AFB	2003	4	3	3
Tacoma	Streetcar	2003	5	5	2
Tampa	Streetcar	2002	0	3	3
Tucson	Streetcar	2014	6	6	3

* This is the level of service provided all day. In its submission to the federal government in 2010, Salt Lake claimed it would provide service every 15 minutes at peak and every 30 minutes in off-peak periods.

Image at top: S-Line Streetcar in Salt Lake City, from Flickr user Paul Kimo McGregor (cc)

Airport Congress DOT Finance Social Justice

Our Government: By the Wealthy, For the Wealthy

Post author By Yonah Freemark
Post date 26 April 2013
26 Comments on Our Government: By the Wealthy, For the Wealthy

» Congress’ willingness to address the sequester, but only for the Federal Aviation Administration, is a disgusting sort of bipartisan agreement.

The sequester, which went into effect at the beginning of last month, cut more than $85 billion from the federal budget for this year alone. Its cuts, whose impacts will continued to be felt through 2021, were disproportionately focused on domestic programs. Public transportation, for instance, was dramatically affected: Almost $600 million was cut from funding directed towards mitigating the effects of Hurricane Sandy; another $104 million was cut from capital investment grants that fund new train and bus lines; Amtrak lost $80 million.

Other cuts, such as those to the nation’s affordable housing, Head Start, schools, and meals for seniors, are even more devastating for the nation’s least well-off.

Congress, however, has been incapable of addressing the issue, allowing the cuts to these essential programs to reinforce America’s growing concentration of wealth, low tax rates for the wealthy, and limited social welfare aid. Austerity, which is the intellectual justification supporting these cuts to federal spending, has been shown to only encourage economic stagnation — and often do so at the expense of the least well-off. Yet the national legislature has, as if in complete disinterest, sat idly by as the cuts set in.

That is, until it became obvious that the sequester was affecting the performance of the Congressional elite’s favorite program: Federal support for air travel. Congresspeople, apparently, just couldn’t support having their flights delayed.

Yesterday, the Senate unanimously approved a bill that allows the Federal Aviation Administration to transfer up to $253 million towards the air traffic control system in order to prevent furloughs that had begun this week. This morning, a large majority of House members agreed to the bill, with only a small group of mostly left-slanting Democrats opposed.

The swift and bipartisan response to the problem of slowed air travel leaves a bitter taste in my mouth. While the bill did not approve new funds to the FAA, it effectively forced the agency to shift funds around in a way to ensure that Congresspeople (and admittedly, all American air travelers) could get around the country more quickly.

There of course has been no similar rush to, for instance, shift funds away from the subsidies provided to the oil industry to support mass transit, or to shift funds away from the mortgage interest tax deduction to support affordable housing. Why? Because the Congress, in this quick response to a national problem, has shown itself to be completely concerned with government issues that affect the nation’s wealthy but unaffected by a loss of government aid to the poor. Democrats, who might have used this situation to argue for restoring essential funds for social programs, simply abdicated responsibility, mostly choosing to vote in line with the GOP here.

Federal aid to air travel has its merits, of course. But we must put in question why keeping it functional while ignoring the plight of the poor makes any sort of policy sense.

After all, air travel is largely the domain of the upper middle class and wealthy. A recent interview of U.S. residents at LAX, for example, showed that 72% of travelers who agreed to state their levels of income were making more than the U.S. median household income. Low-income people are far less likely to travel by plane than the wealthy.

Yet the federal government continues to subsidize air travel at record rates. According to the GAO, for example, air travel security provided by the TSA, which cost upward of $9 billion in 2011, has been more than 70% subsidized by U.S. taxpayers in recent years. Passengers and air carriers only commit 30% or so of the costs.

These policies amount to a shift of wealth upwards. Meanwhile, members of the House and Senate continue to fantasize about ways to further cut public transportation.

Finance Social Justice

A Renewed Look at Federal Funding for Transit Operations

Post author By Yonah Freemark
Post date 12 March 2013
54 Comments on A Renewed Look at Federal Funding for Transit Operations

» With a budget stalemate in Congress, the future for transit funding may increasingly be in the hands of state and local governments. But that could magnify seriously inequitable outcomes, an analysis of data from 65 cities shows.

The federal transportation program is at a crossroads. Congress is apparently incapable of advancing new or expanded funding for roads and transit, and has even passed legislation cutting back on previously approved appropriations.

The stalemate has left academics and commentators grasping about for a solution. Some, as Eric Jaffe profiled in an article this week, suggest that a decline in Washington’s role in funding transportation infrastructure may lead to better decisions by states and localities about how to invest; too many projects, they argue, are poorly designed or executed, in part because of federal sway. In theory, states and cities will raise the funds for their transportation spending themselves and make better decisions as a result.

The federal government’s influence is undeniable, as illustrated by the vast expansion in streetcar projects around the country that followed the Obama Administration’s decision to pump money into them. While few critiques have mentioned that Washington’s role is far more oriented towards providing funding than mandating one approach over another, with the federal government pulling out, states and localities will be more likely to pursue their own course in terms of what kinds of transportation projects should be funded.

Missing from this conversation, however, is the arguably more important issue of how transit operations should be funded. While America’s infrastructure is deteriorating, the most important question for the large majority of the nation’s public transportation users (or potential users) is how often a bus will show up nearby and whether it will take them efficiently to employment or other destinations. While the federal government currently chips in for new vehicles, it rarely spends much of its own money on hiring drivers and paying for fuel (though it chipped in until the 1980s); most of those expenses are covered by passenger fares and subsidies from state and local governments.

But should Washington be more involved?

About a year ago, I reviewed data from 15 cities to evaluate how local funding affected outcomes. Because of the increasingly relevant public discussion on the issue of decentralizing transportation funding, I wanted to reexamine this issue with a larger dataset of all 65 U.S. metropolitan areas with populations of more than 800,000.* In order to conduct this analysis, I took advantage of data provided by the National Transit Database and the Brookings Institution. These sources provided comprehensive information about metropolitan area income and transit spending, both of which I have compared extensively below. Note that the charts below were generated using infogr.am and must be viewed on the website for interactive capability.

The findings, to summarize them quickly, are revealing of the significant potential downside of funding transit operations only at the local or state level. The data demonstrate that increasing local and state transit operations spending is closely correlated with metro area median household income and poverty rates. This is not the case for federal aid, as minimal as it is. In addition, though cities and states with more progressive electoral tendencies appear to be able to increase local funding for transit operations, that contribution may be significantly limited by the incomes of local inhabitants.

In other words, differing local incomes (the wealth of a region’s inhabitants) appear to be considerably affecting the level of transit service provided to the inhabitants of various regions. Since public transportation is a vital social service, this has the perverse impact of providing the least support to the regions that likely need it most.

This review suggests therefore that there is considerable reason to be skeptical of decentralizing transit funding. Indeed, it indicates that a centralization of spending at the federal level could improve outcomes in terms of regional equity by allowing a redistribution of resources based on need rather than ability to pay.

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If local and state governments are tasked with assuming all funding responsibilities for paying for transit operations, the question is whether the result will be a significant divergence in funding for poor metropolitan areas as compared to wealthy ones (after all, it is worth remembering that American regions differ greatly in terms of income, which of course affects local tax revenues).

We already have considerable evidence, based on current local and state funding of transit operations, as shown in Figure 1.

The chart indicates that there is a relatively strong correlation between metropolitan area median household income and the combination of state and local per-capita transit operations funding (R-squared of 0.29). To a significant degree, this makes a lot of sense, since regions with higher levels of tax revenue are able to contribute a more significant amount of funding towards local services. Without aid from the national level, it becomes difficult for poorer cities to pay for the transit systems their wealthier peers can.

Figure 1: Metro area median household incomes versus per capita transit operations spending (state and local levels)

Figure 2 documents some of the very negative consequences of having income as a primary determinant of spending on transit operations. Regions with the highest levels of poverty (closely correlated in itself to lower levels of per capita household income) also clearly have the lowest levels of expenditure on transit operations per capita.

This is a paradox: The regions with relatively lower levels of poverty (such as Washington and Boston) can spend significantly more of their local and state funds on transit operations than regions with higher levels of poverty (such as Detroit and Memphis). None of this indicates that lower levels of poverty (or higher incomes) guarantee more transit funding, but rather that they allow for them. Poorer regions simply can’t afford to pay for better services.**

Figure 2: Metro area poverty rates versus per capita transit operations spending (state and local levels)

How can we explain why some regions pay for higher levels of transit spending and other do not? Figure 3 offers a suggestion.

Among the wealthiest metropolitan areas (those in the 4th quartile), there is a very strong correlation between the share of the vote President Obama received in 2012 in the core county of the region and the per-capita state and local spending on transit operations (an R-squared of 0.77). This indicates that wealthy regions with more progressive populations have pursued policies that result in higher spending on transit.

However, this appears to be less true for lower-income regions, even with progressive populations. Detroit, New Orleans, and St. Louis, for example, have very progressive populations in terms of their voting habits but do not spend nearly as much as other Democratic Party-voting cities. One clear explanation for the difference is that those cities have far lower median household incomes, reducing their tax bases.

Figure 3: Core county support for President Obama versus per capita transit operations spending (state and local levels)

State-level support for transit operations is also clearly influenced by partisan issues, which is good news for those who believe that states should decide independently what is “right” for them. Figure 4 compares the state vote share for President Obama in 2012 with the per-capita state-only spending on metropolitan area transit operations (not including local contributions), and there is a strong correlation (an R-squared of 0.44). There is a clear cutoff between states where a majority of citizens voted for the Democratic presidential nominee (many of which provided generous support for transit operations in their metropolitan areas), and states where a minority did (where most provided virtually no state support to metropolitan area transit operations).

This comparison raises a very significant problem with the idea of promoting a state and local monopoly over transit spending. Cities like Atlanta and St. Louis, which have considerable local support for progressive politics, are nevertheless handicapped by conservative-dominated state politics that refuse to contribute state funds to public transportation.

Figure 4: State support for President Obama versus per capita transit operations spending (state level only)

In sum, this evidence suggests that states and local governments, left to their own devices, will restrict funding on transit operations based on the income of their inhabitants, not based on need. It is not rational that the state and local funding for transit in San Jose is more than six times higher than that in Fresno, just 150 miles apart, much because of the latter’s significantly lower household incomes and more Republican voting tendencies. Fresno, after all, has more than double the poverty rate of San Jose and thus has a significant transit-dependent population that is not being appropriately served.

These data indicate that there is a potentially very important role for the federal government to act as a redistributive agent. If public transportation is an essential social service — almost as important to our society as Medicare or Medicaid or Social Security (that is what we think, right?) — then how is it fair for the people who live in the poorest metropolitan areas to suffer from inadequate transportation services? Why should cities, even if they have progressive populations themselves, have to suffer from low state funding because of conservative legislators?

At heart, this is the logic behind advocating a significant role for the federal government in funding public transportation operations. We cannot simply devolve decision making and financing to state and local governments and hope that the “right” choices get made, with no regard to the regressive impacts of, in effect, asking poorer cities to live within their means as the wealthier profit from theirs.

Of course, the federal government already does fund some public transportation around the country, and it sometimes, albeit not always, mandates rules. How well has this management functioned, in particular in addressing discrepancies between different cities based on their respective wealth?

Washington’s critics argue that the central government’s decisions have produced poor outcomes in capital construction. This may be true; the federal government’s interventions resulted in massive subsidies for automobiles over the past sixty years, with only a relative pittance devoted to transit. Why should we trust Congress or the Department of Transportation to make the right choices, based on that example?

But a clearheaded look at the evidence indicates that Washington has used its transit operations spending to advance redistributive principles. As shown in Figure 5, transit operations spending by the federal government in metropolitan areas across the country has no correlation with regional household incomes or poverty rates. The funding formulas developed by the Congress may not be perfect, but at least they are not discriminating between metro areas based on their respective incomes.

Figure 5: Local/state per capita transit operations spending versus federal per capita transit operations spending

This indicates that Washington is, at least in this way, a reasonable custodian of government dollars when it comes to financing transit operations. To dismiss the federal government’s role is to ignore its important redistributive powers — its ability to transfer tax revenues from wealthier regions to poorer ones to help contribute to a more just society.

But the contribution of the federal government remains quite small, representing on average only about one-fifth of overall spending on transit operations in the U.S. Most federal transportation dollars are committed to capital expenditures, with just a small amount oriented towards operations. As a result, overall spending on public transit operations remains heavily tilted towards wealthier regions.

A more equitable funding system would take into account the differences in income and poverty rates across region and attempt to provide adequate transit services everywhere. To a certain degree, this is an impossibility in a country where so few national resources are devoted to running our buses and trains. Yet what seems evident is that a policy that orients funding towards states and localities will only encourage the unequal funding devoted to transit in rich and poor cities.

Update: It is worth questioning whether the differences in funding between high- and low-income metropolitan areas are, in part, a reflection of higher labor costs because of higher incomes there, as commentor Jeff argues. However, a comparison of metro area poverty and transit service hours (which are almost directly connected with transit service miles according to the data), shows very similar correlations as a comparison of metro area poverty and local and state transit funding, as shown in Figure 6 (the same is true for a comparison of metro household income with service hours). This reaffirms the argument that transit provision is to a significant degree the product of local wealth.

Figure 6: Local/state per capita transit operations spending versus transit vehicle service hours per capita

Note: Metropolitan area household income quartiles are defined as follows: 1st Quartile, $46,821; Median, $52,610; 3rd Quartile, $57,764.

* With the exclusion of Salt Lake City, for which inadequate information was available. The 65 metropolitan areas studied here are: Albany, Albuquerque, Allentown, Atlanta, Austin, Bakersfield, Baltimore, Baton Rouge, Birmingham, Boston, Bridgeport, Buffalo, Charlotte, Chicago, Cincinnati, Cleveland, Columbus, Dallas, Dayton, Denver, Detroit, El Paso, Fresno, Hartford, Honolulu, Houston, Indianapolis, Jacksonville, Kansas City, Las Vegas, Los Angeles, Louisville, Memphis, Miami, Milwaukee, Minneapolis, Nashville, New Haven, New Orleans, New York City, Oklahoma City, Omaha, Orlando, Oxnard, Philadelphia, Phoenix, Pittsburgh, Portland (Oregon), Providence, Raleigh, Richmond, Riverside, Rochester, Sacramento, San Antonio, San Diego, San Francisco, San Jose, Seattle, St. Louis, Tampa, Tucson, Tulsa, Virginia Beach, and Washington.

** That said, we must allow for the possibility of a chicken-and-egg problem; are the regions with better transit wealthier because of those transportation options?