Finance Social Justice

Reversing Roles: Should Washington Cover Operations Costs?

» Are public transportation operations too much of a redistributive function to be funded by local governments?

Since 1998, Congress has banned the use of federal funds to pay for public transportation operations in communities of more than 200,000 people, effectively requiring transit agencies to pay for all of their salary, electricity, and fuel costs using local or state revenues. Meanwhile, the U.S. government has continued to sponsor a majority of costs for capital expenses, including the construction of expensive new fixed-guideway bus and rail lines.

This split in funding has resulted in a number of particularities in the American transportation system — during the recent recession, transit agencies actually received more money to pay for new construction programs from the federal government’s stimulus and steady transportation allocations, but less to sponsor services from fluctuating state and local revenue sources. This has produced a situation in which many cities are actively building new rail lines even as they’re cutting offerings on their bus operations.

Should Washington be asked to help find a way out?

Since last year, when the full effects of the recession were making themselves clear, some agencies have been clamoring for the federal government to take a bigger role in operations funding; they’ve argued that the stimulus would have little effect if they’re forced to fire drivers and technicians. Recently, several Democratic Senators have suggested promoting a two billion dollar emergency operations aid plan and several agencies have been asking for the flexibility to use capital funds for operations, though the American Public Transportation Association and several other agencies argue that this would limit their ability to adapt to changing fiscal conditions; they prefer their operations and capital budgets separate.

In the past, I’ve argued against federal aid for operations, suggesting that such policy would reduce local funding responsibility and ultimately diminish the ability of the U.S. government to fund investments in new corridor construction programs. Federal Transit Administrator Peter Rogoff suggested last month that local agencies must find more local funding before the federal government will commit to sponsoring their expansion schemes.

Nonetheless, it may be worthwhile to consider the possibility of entirely reversing the current equation — what if the federal government paid for operations costs while local governments invested in new capacity?

Paul E. Peterson — the urban political theorist whose views on most issues I hardly share — nevertheless provides an interesting approach to considering this question. In his seminal 1981 book City Limits, Peterson addresses the issue of what role urban governments should have within the U.S. federal system. He argues relatively persuasively that cities and their leaders should have only a minor interest in promoting policies that are designed to move wealth from that city’s wealthiest residents to its poorest; “The local interest in economic growth all but precludes a commitment to redistribution,” he suggests (93). “Broad-scale redistributive policy proposals are inappropriately addressed to local governments. For example, if a city-wide minimum wage is passed, it will drive business outside the city’s boundaries. If good quality, subsidized housing is built with local funds, not only must it be paid for out of local tax dollars, but it might very well attract low-income families from other places” (173).

The suggestion is that cities cannot in their own budgets commit to politics that aid the poor; these policies generally have the tendency to encourage the wealthy to leave cities and the poor to stay, ultimately resulting in a declining tax base. Rather, Peterson argues, cities will produce more benefit by investing in developmental projects that increase attractiveness and expand the tax base. Obviously, all of these arguments must be understood with a grain of salt — they’re not all-encompassing, and cities are affected by trends outside of their own making. We also must assume that it is in a city’s primary political interest to want to increase its tax base.

Also, Peterson does not argue against redistribution entirely — City Limits does leave room for higher levels of government to be involved in funding services designed specifically for the poor — he simply points out that it is not in a city‘s long-term interest to use locally raised funds on the lower class. After all, the net migration in and out of a city can be quite significant (the city of Baltimore, just to take an example, has lost a third of its population since 1950), while the country as a whole, and its tax base, will mostly remain constant.

If we take these assumptions as more or less true, what implications do they have for public transportation? The answer comes down to both whether we define transit operations as a redistributive resource or as a developmental one and whether the tax base of a transit district is sufficiently broad as to be able to ensure long-term revenue sources from middle and high-income populations.

The first question — whether transit operations are redistributive or developmental — is not easy to answer. If a bus or rail system serves almost entirely as mobility of last resort, used only by people in the lower class to get around, it is almost assuredly redistributive. Cities that provide such services are, according to Peterson, investing in something that will ultimately lower the local tax base (I’m not sure if I would go that far, but the argument still makes some since). In these situations, it would make complete sense for the federal government to pay for operations, because it is unfair to burden already poor cities with the need to raise local funds to cover social services.

The more progressively oriented Washington’s political climate is, in other words, the more local transit operations would be subsidized. The question of how many services to provide comes down to how much we want to help the lower class.

On the other hand, if transit proponents are to suggest that bus and rail operations in themselves produce economic benefit — i.e., if you have more buses on the same line, you get an increase in economic activity — than there is an argument for local funding based on Peterson’s assumptions. If the transit system is used by a whole spectrum of the population and increases overall efficiency of the local economy, it isn’t really redistribution. In these cases, it seems highly advantageous for cities to invest local money in their day-to-day transit, even if it means taking out loans to do so.

But the other problem posed by Peterson’s arguments is where the money is coming from; the basis of the city “limits” relies on the idea that the wealthy can leave (presumably into the suburbs) if they feel overburdened by taxes to support the local poor. Yet if a transit district is large enough, this poses less of a problem. For example, if a district covers everyone in a metropolitan region and taxes them all, there is no problem with paying for redistributive transit services — assuming the taxes aren’t so high as to encourage people to leave the region entirely.

On the other hand, if that district fails to grow with an expanding population, it may lose its ability to perform these redistributive functions. Take Dallas as an example: Though the local DART agency includes a number of suburban jurisdictions within its tax base, it hasn’t expanded to encompass the region’s far exurbs, ultimately reducing its ability to maintain necessary budgetary growth. This means that it has less of a capacity to invest in essential transit services that don’t necessarily ensure long-term economic benefit.

Is a potential answer to ask Washington to pay for operations as cities and their metropolitan regions invest in new rail and bus capacity as a developmental tool? Perhaps: If cities investing in new public transportation projects can prove that that spending will increase their tax base over time, there may be advantages to taking out loans to pay for new projects and then paying them back using the corresponding increase in local tax revenues. On the other hand, because cities have a whole variety of circumstances, some places may be more capable of doing do than others; whereas a fast-growing metropolis like Phoenix may have no problem seeing immediate return in its capital investments, cities with falling populations like Detroit may not. In those situations, it should be the federal government’s role to step in, even on construction spending.

It may be in the federal government’s interest to provide adequate operations funds to ensure (or even require) a minimal level of transit services in every community of a certain size. That idea, however, requires federal intrusion into policy that is overwhelming affected by state and local decision-making; this could pose insurmountable obstacles to this concept. That said, it may be time for cities to take more responsibility for the funding of new transit capacity through capital construction. If these investments do produce a measurable return on investment — and that’s an argument made frequently by proponents of new light rail lines, for instance — then municipalities should have an economic interest in using local funds to pay for them.

Image above: New York City’s George Washington Bridge Bus Terminal, by Yonah Freemark

Finance Social Justice Washington DC

As Congestion Mounts, Transit Agencies Consider Varying Pricing

» Washington Metro considers charging customers more to use system’s most congested stations, increasing peak-hour commute costs.

Downtowns play a primary role in organizing the daily lives of millions of Americans. Despite increasing suburban sprawl and the more recent comeback of inner-city housing, downtowns remain the single largest work centers of virtually every U.S. metropolitan area.

In the biggest of those center cities, rail rapid transit plays a vital supporting role; by hauling in tens of thousands of people to a limited number of downtown stations every morning, these systems allow the creation of dense urban cores that would not be possible were everyone to rely on private automobiles. Just as importantly, most urban rail systems would make little sense if they didn’t serve highly attractive destinations; it’s not a coincidence that almost every American urban rail line reaches the job center of its respective region. Downtowns and rapid transit are mutually reinforcing.

Why make this seemingly obvious point? Because private interests and the public sector have spent the last century working together to build these jobs centers, and the congestion now experienced daily on major rapid transit systems from New York to San Francisco is not unexpected: It was planned.

There’s nothing sinister about this fact: From a social equity perspective, there are good reasons to concentrate employment growth downtown and there are positive effects of economic accumulation that result from dense downtown cores. But that clustering — in addition to the standardized work hours enforced by most employers — ensures that rail lines and especially their downtown stations are packed in the morning and full in the evening, only to be frequently empty at midday. It’s not a particularly efficient distribution of ridership, but it’s what happens when thousands of people are working in close quarters downtown.

Facing a tough budget year and little hope of significantly more money from local, state, or federal sources, the managers of Washington, D.C.’s Metro system are considering adding a 50¢ surcharge for customers using or passing through the network’s busiest stations in the center city during peak hours. It’s an approach that has been promoted by a coalition of transit advocates and smart growth proponents who argue that some combination of additional fees would aid in the budget crisis, affect mostly wealthy riders, and reduce congestion by encouraging people to go to work during off-peak hours.

Similar schemes have been proposed over the years for a number of American transit agencies suffering from congestion at downtown stations.

Washington’s Metro already charges varying fares based on distance and hour traveled; a trip between suburban Bethesda and Union Station, for instance, varies between $3.00 at peak times and $1.95 other times. Metro requires customers to pay more for the train than the bus, likely resulting at least partially in the very different demographics of the city’s rail and bus systems. This is quite different from New York’s Subway and city buses, for instance, which charge a single, set fare at all times and for any journey, no matter the distance.

The “congested core” surcharge now under study for implementation for Washington could go into effect at the “peak-of-the-peak,” between 7:30 and 9:00 AM, and between 4:30 and 6:00 PM, when Metro is packed with riders. The mode of implementation has not yet been determined — nor has the funding device been approved at all — so I won’t get into the nitty-gritty of specifics.

Though this fee would likely reduce congestion at some stations and perhaps induce several thousand employees to change their work hours, its primary effect will be simply increasing the fares of most system users. This would provide immediate financial benefits to the cash-strapped transit agency, but it seems unlikely to solve long-term capacity problems with the Washington Metro or substantially increase the number of off-peak commuters. Most people, it turns out, still need to get home to their families at a reasonable hour, which means that most people will choose to pay the extra fare instead of changing their work schedules.

Thus the fee won’t reduce congestion dramatically — especially since the system continues to see ridership growth.

But more fundamentally, one should ask whether it makes sense for a transit system to charge extra for exactly the service it is supposed to provide best: journeys to and from the downtown core at peak hours. Should the District of Columbia push for years to increase the number of office jobs downtown if it decides to reverse the game later on and disincentivize the use of the region’s primary transit service to get there? Why penalize the people who are using the system in exactly the way that the system was designed to work?

Unlike automobile congestion zones, which are meant to increase the number of people using public transportation and other alternatives to driving (and, in turn, encourage the further densification of core land use), a transit congestion zone serves the opposite role. By increasing the cost of getting downtown by train, it degrades the value of the transit system’s primary use, which is to get from the outskirts to downtown during rush hour. It encourages car use and the build-up of areas outside of the core instead of within it.

Washington’s proposed fee is relatively minor and its global effects would be minimal, but there remains a conceptual gap between the idea of charging more to use center-city stations and the way in which American cities are currently designed. If we’re going to continue the concentration of center-city offices, we need to provide transit that reinforces it, not that works against it. Transit systems play an essential part in organizing regional developmental geography; their fare policies must reflect broader land use goals, not defeat them.

Houston Light Rail Social Justice Urbanism

Rallying Against Rail in Southeast Houston

» Residents fear light rail would cause accidents, gentrification, and displacement. Can any transportation project be so influential?

Like many sunbelt cities, Houston is rushing to build a transit system that can provide an alternative to the congestion caused by a population that has exploded by more than a million people over the past forty years. Now with about 2.3 million inhabitants, the city has developed a five-line light rail plan that would extend rapid transit across the densest areas of the metropolis. Though fiscal difficulties may result in a delay in the construction of two of the planned corridors, most of the project is expected to advance as planned, with new lines opening beginning in 2012.

Houston’s first modern rail operation — along Main Street from downtown to the stadium complex — opened in 2004 and has been a roaring success, attracting more riders than initially foreseen.

Yet any plan as ambitious as this will encounter controversy, so the news that some residents along the proposed Southeast Corridor are protesting the project isn’t particularly surprising. But are the concerns expressed by community members affected by the line’s construction worth considering? Can city officials make the planning process more democratic with the aim of ensuring a sense of local incorporation, even while advancing a program whose aims are more about long-term, citywide goals?

The six-mile Southeast line will extend the light rail system from downtown to Palm Center, along Scott Street, Wheeler Street, and Martin Luther King Jr. Boulevard, reaching the University of Houston, MacGregor Park, and an area of the city whose population is predominantly poor and black. Eleven stations will stop in zones that have low to moderate residential densities and relatively little retail. A rail corridor could project a new vitality into the area — or it might have little influence on the community’s look.

Not yet sure of the eventual outcome, however, some residents have been vocal in expressing their concerns that the new light rail line — which will operate primary in the median of relatively wide streets — will put in danger the neighborhood’s existing conditions by endangering pedestrians and transforming the low-rise community into a medium or high-rise one.

The specter of out-of-control light rail trains mowing down seniors and children is, frankly, an absurd one: trains don’t travel any faster than do cars, and unlike automobiles, trains stay in their travel lanes. Yet people from Houston to Los Angeles to the Washington suburbs are convinced that the sheer unfamiliarity of the trains will make them a danger. Meanwhile, the average fifty Houston pedestrians who die every year after being run over by drivers doesn’t seem to elicit much soul-searching; no one is talking about shutting down the major arterials of Southeast Houston to cars.

But the worry about neighborhood change is a legitimate one: one of the very explicit goals of the new light rail system is to increase density along affected corridors and to encourage a change in the landscape of Southeast Houston, much of which today is hardly different than your average sprawling suburban neighborhood. And indeed, the fear that improved transit can produce negative mutations is shared between communities both rich, often convinced that criminals will ride trains into wealthy neighborhoods, and poor, anxious that rail will bring in developers who will search to kick the impoverished out of their homes.

Transit isn’t as powerful as either its proponents or opponents would suggest: it won’t instantly result in a radically morphed neighborhood, for the better or worse. The by-products often attributed to new rail systems are usually the consequence of a series of decisions and investments, not just those related to transportation. In other words, it’s not really the light rail trains themselves residents of Southeast Houston should be afraid of, but rather the way in which that light rail system is used to shape the growth of an area. The inhabitants of the neighborhood certainly won’t suffer from better transit access!

Municipal governments have a powerful say in arbitrating the use of improved public transportation to spur development. If local authorities choose to concentrate growth in specific parcels near stations, they can provide incentives to build bigger there, or ban new housing or commercial outlets from areas outside of those zones. On the other hand, some governments do very little, choosing not to up-zone land around stations and allowing low-density sprawl to remain the name of the game.

For the sake of increasing ridership and the development of walkable urbanism, there are clear advantages in promoting the former: higher-density neighborhoods at transit stops.

But residents of affected neighborhoods don’t necessarily want to see that kind of environment: many people live in Southeast Houston because of how it looks, not because they’re looking to see it evolve into a district of four-or-five story structures. That kind of neighborhood change is exactly what the people who are protesting are trying to prevent.

The City of Houston, like any place developing improved transit, has a responsibility to encourage expanded democratic involvement in determining how the neighborhood can or should transform. Houston has set up a community office near the terminus of the proposed line at Palm Center, a former shopping strip, and this is a good first step. But the city should be engaging in an open dialogue with willing community members about which parcels to improve and which to keep as they are. The transit line is only the first stage in what must be a permanent back-and-forth about how to make the neighborhood a better place.

Encouraging this kind of civic discussion will reduce uninformed criticism of light rail as well as ensure that new housing and commercial developments along the line are scaled appropriately in an attempt to meet local desires. There is no perfect way to go about doing this, but making an effort could certainly expand popular support for the project and potentially even improve it.

Image above: Rendering of Houston’s Southeast Light Rail Corridor along Martin Luther King, Jr. Boulevard, from Metro

Finance Social Justice

Responding to the Transport Needs of the Impoverished Suburbs

» How will automobile-dependent suburbs handle an influx of the poor?

A new Brookings Institution report by Elizabeth Kneebone and Emily Garr puts in dramatic clarity the rise of suburban poverty in the United States. Not only do a plurality of impoverished Americans now live in the suburbs of major metropolitan areas — 1.5 million more than in their respective central cities — but in many regions, central city poverty fell in the period between 2000 and 2008, even as it rose in the surrounding suburbs.

In the time period studied, 5.2 million more individuals descended into poverty, which in 2008 included 13.2% of the population — before the most recent recession and its devastating economic effects.

In most regions described by the study, which documented changes in the nation’s 95 largest metropolitan areas, poverty rates in suburbs and central cities mirrored one another — and overall growth statistics roughly replicated trends we’ve been seeing for years. Central city poverty rates were nearly twice as high as those in the suburbs, 18.2% versus 9.5%. Meanwhile, suburbs grew by 12.5% overall, compared to urban cores, which grew only by 3.9%. The nation suffers from growing economic inequality: more than 30% of the population fell below 200% of the poverty line by 2008. The situation has undoubtedly grown worse over the past year.

But poverty is clearly shifting outwards: the number of people living in poverty grew by 25% overall in the suburbs, compared to only 5.6% in central cities. In eighteen of the 95 metropolitan areas studied, inner-city poverty decreased or remained the same even as suburban poverty increased or remained the same. This was true of Northeast U.S. regions as a whole. The old assumptions about American cities being home to the poor and their suburbs housing the wealthy are quickly falling by the wayside.

I wrote about Paris’ investment in its suburban transit capacity on Tuesday to show how regional officials have prioritized improving public transportation in areas outside of the inner city. The French example — spurred by abundant transit within the city of Paris but insufficient services virtually everywhere else in the Île-de-France region, despite high densities and elevated social needs — may be increasingly relevant for the U.S.

I mentioned Boston, San Francisco, and Washington as three places that could benefit from expanded investments across the suburbs, and indeed, all three feature decreasing poverty rates in the urban core and increasing rates in the suburbs, as noted in the table below. Each has an old, relatively small central city and a focused transit system, fast-regenerating urban cores, in addition to a number of built-up, somewhat dense suburbs. (Note, however, that “suburbs” like Cambridge, Oakland, and Arlington are considered “central cities” by the Brookings report.) The same could be said for Baltimore, New York, Providence, and St. Louis, each of which are experiencing similar trends.

In these regions, the socio-spatial geography of a gentrifying core with less-wealthy surroundings stereotyped by Paris is coming closer to reality — though of course there is still plenty of poverty in American inner-cities. Thus far, few metropolitan areas have responded adequately to the transportation concerns that will progressively manifest themselves; while central-city-oriented transit networks are promoted vigorously, the concerns of suburbs are sidelined (including by this site). This condition seems unlikely to improve, with few metropolitan areas actually planning as a region, unlike Paris, where transportation planning and financing is conducted from the regional level.

There are major differences between the U.S. and France: American suburbs are incredibly sprawled-out, which means that high-quality, high-capacity transit would be both inefficient and inappropriate in most places. Indeed, U.S. poverty can increasingly be defined as a car-dependent one — which means that expecting to address transportation needs of the least well-off in the suburbs through better public transportation will be a failure in the short-term. This also means, unfortunately, that policies that increase costs of driving will fall directly on a large number of the working poor.

The development of a more equitable and sustainable transportation system demands an intense effort to densify and pedestrianize the same suburbs that are rapidly becoming economically diverse. We cannot continue allowing — and often subsidizing — people to live in isolated cul-de-sac neighborhoods completely inaccessible to anything by anything but a private automobiles. We must construct new town centers in suburban communities with essential services and mixed-income housing accessible via transit to urban cores. The current trends, enforced by local, state, and national planning decisions, are producing a lower class that spends far too much on private transportation.

It’s a reckless course barreling straight towards increasing inequality.

Metropolitan Areas where Center City Poverty Decreased while Suburban Poverty Increased between 2000 and 2008 (table is sortable)

Cities with the largest number of transit commuters.

PlaceTransit commuters 2014Transit share 2014Change in transit commuters 2005-2014Percent change 2005-2014
New York City2,231,97857%359,63819%
Los Angeles197,77111%26,56116%
San Francisco163,53934%38,65031%
Jersey City62,67249%16,67636%
Remainder of the U.S.4,034,5223%700,87721%
Source: U.S. Census, means of transportation to work.
Note: Poverty levels are defined by the U.S. government and equal $21,834 or less annually for a four-person family in 2008 dollars. Chart based on data from the Brookings Institution.
Finance Social Justice

Taking Away When Needs Are Greatest

» California Governor proposes cutting state support for transit to balance the budget.

The most stormy period of the recession may have passed us by, but states and cities continue to face the devastating consequences of the millions of jobs lost over the past two years. Unlike the national government, which is able to maintain a budgetary deficit, lower-level governments in the U.S. federal system have a legal requirement to produce a balanced budget each year — a difficult task to fulfill when raising taxes is political suicide even as citizens expect a minimum standard of minimum public service.

As falling tax returns have become standard, that’s bad news. It’s especially troubling for transit systems in California, which may face a collective $1 billion cut in support if Governor Arnold Schwarzenegger gets his way on the state’s next budget.

California’s legislators faced down a massive budget deficit earlier this year, closing a gap of $43 billion in February and $26 billion more in July only by cutting aid to schools, health care institutions, and prisons. For next year, it has another $21 billion for which to account, and there are fewer and fewer places from which to skim the fat.

The Governor is expected to argue that the state’s commitment to mass transit ought to be one such casualty when he announces his proposed budget early next year. His plan would transfer about $1 billion in annual funds currently devoted to public transportation operations to other essential services, basically leaving local transit agencies to fully sponsor their own services. The gap would have an immediately destructive effect: Los Angeles’ Metro transit agency, for instance, has come to rely on $50-100 million in yearly state appropriations. This is compared to the system’s roughly $3.8 billion budget for FY 2010; in other words, this is no minor loss, and the same principle applies to the state’s other bus and train networks.

Mr. Schwarzenegger has been fighting to reduce funding for transit agencies for years, despite his claims to be a “green” politician at the recent Copenhagen Climate Conference. Since 2007, he has led the state legislature in redistributing transit money towards other programs, though that effort was declared unlawful by the State Supreme Court in June, leading to the repayment of $3 billion in missing tax revenues to needy transit systems.

Another such transfer would be similarly against the law, so the Governor has invented what his staff sees as a novel policy to get around the issue: get rid of the source of the problem. Mr. Schwarzenegger would simply eliminate 5¢ of the state’s sales tax currently pointed towards transit programs and replace it with a new excise tax of an equal sum designed to go to the general fund. Protections for highway spending, of course, would remain entirely in place. The Governor plans to ask Washington for aid, but no support has yet materialized. Offshore oil digging is an additional element of the plan.

Whether the Governor will get his way in his last year of office is up for question — particularly since he currently has a 27% approval rating. Yet the legislature will have to find spending cuts somewhere, since the assembly’s Democratic majority isn’t large enough to vote for increased taxes that would be necessary to prevent any service reductions. California’s constitution makes it very difficult for the legislature to agree to new sources of revenue.

The proposal would strike at the heart of the state’s transit systems after a difficult year. Generally poor economic conditions resulted in an overall decline in ridership nationwide of 3.8% in the first nine months of the year, according to the American Public Transportation Association. That statistic will not improve if transit agencies continue to make service cuts as a result of fewer revenues — before the state cuts spending any further. Already planned for next year: AC Transit in Oakland will reduce operations by 8%, San Francisco’s Muni will increase fares, San Jose VTA will delay the purchase of dozens of buses, and San Diego will cut more than half its services on Sundays. This is no easy time for the state to reduce aid.

Last Christmas, I wrote of the need to use transit as a tool to encourage social justice, and I maintain that public transportation must fulfill a role beyond that of simply increasing “mobility.” Reducing public transportation service is an outrageous idea when driving is simply too expensive for a large percentage of the population, as the environmental consequences of carbon emissions mount, when the lives of our cities demand alternatives to the automobile.

California’s predicament is no easy one: it could maintain state financing for transit, but it would have to reduce spending somewhere else, probably just as important. The state’s politicians have a responsibility to their constituents: to be courageous enough to fight for increased taxes to pay for the vital needs of their communities. That may require altering the constitution, or it may necessitate convincing a few Republicans of the need to augment revenues. Either way, something must be done; a cutback in services is no way to celebrate the new year.