Just a Highway Department

I've been seeing some calls for stim funding to go to the States to distribute but this is an extremely bad idea for transportation spending. As STB reminds us, most of our state DOTs are basically highway departments. Some MPOs are not much better but at least in the major jurisdictions they have more incentive to push transit, biking, and walking projects. How can we make sure that the money gets into the right hands? That should be a question we're asking. I'm positive that State level is not the answer. And certain Governors should know better.

Great Idea Arnold

Not. Why are we not taking money from highway projects if we must take from somewhere? Seems to me that in hard times, transit funding is rather important. Yet another strike against a Governor everyone seems to think is green, but really isn't.

The governor proposes cutting state assistance to local mass transit programs by $230 million. The Legislative Analyst's Office suggests grabbing revenue not being used by the Department of Motor Vehicles ($55 million) and redirecting some funds paid by Indian casinos for transportation purposes to the state's general fund ($62.9 million).

Local transit officials point out that the budget already diverts $1.7 billion from the state's Public Transportation Account to pay for other programs.

Electric Grids, Gas Taxes and Transit Expansion

David Roberts has a post up on how a gas tax isn't enough. He's right. There is no way we can ever raise enough money for anything we really want with just a gas tax. Especially if we really want to reduce VMT and increase walking, biking and transit. Well as usual, I'm going to do some thinking out loud and let you all shout me down or make the thought better.

What if we got rid of all those laws that pushed apart electric companies and transit companies? Some comments have been made about just getting people on transit instead of changing the vehicles. But honestly, I feel like San Francisco is a better urban place because bus exhaust is not flowing in my face when I'm walking down the street. One thing I noticed this weekend in Charlotte was that the bus terminal is going to lead someone to cancer. The downtown bus center has buses idling under a canopy at all hours creating a smell that means particulate concentration can't be very good.

In any event, with the electric grid needing a serious upgrade, how much more would it really cost to bring overhead wires to the most traveled routes and tie them into the new grid? Some of these could be light rail, some could be trolley buses, and other could be streetcars. But all could be easily adapted to alternative energy if they were using electricity to start with. But also, how could this be a mutually beneficial relationship?

Some thoughts I came up with:

• Use power rates as sort of a business carbon fee. Businesses paying the tax would directly benefit because infrastructure is used to get to work and retail spaces. Bikes, transit, even roadways would benefit from such funding mechanism.
• Transit could get a lower power rate as part of the power company. This means operations could be less expensive meaning more service and if enough transit vehicles are running, perhaps cheaper energy because of power equalization during greater off peak power consumption.
• If we improve the grid and transit is a part of it, charging your plug in hybrid or scooter would pay into the transportation fund as well generating funding for the transport agency as well.
• If we have a business power fee, could it allow us to get away from the sales tax?
• This type of fee would reward more efficient building practices.

Any thoughts on this? Does anyone have any other crazy fundraising schemes?

Boris the Ripper?

Seems like London might soon regret tossing out Red Ken. £3.5 Billion of transit expansion projects have been scrapped. The New Mayor says that this is funding needed for Crossrail, a huge cross city subway line, but many aren't happy with the loss of local projects and say he is just encouraging autocentricity.

There is nothing about how the Mayor will encourage people onto public transport, but plenty about giving back road space and speeding up traffic lights in favour of the 'oppressed' motorist," said Labour's transport spokeswoman Val Shawcross

Enough With the Roads!

This reporter in Madison seems to get it.

This is a highway-heavy road budget, as anti-green as it gets. And when I say anti-green, I'm not necessarily talking about the tree-hugging kind. This budget is bad for our economy. The emphasis on cul-de-sacs, cars and sprawl sets us up for broken budgets forever.

Already, Madison spends millions of dollars a year maintaining the overbuilt roads of yesteryear. If implemented, the mayor's budget would hardwire us to spiraling transportation costs for years to come.

The capital budget defines the urban landscape. Will ours be welcoming to pedestrians, bicyclists, transit riders and cars? Or just cars?

Transit Trouble Coming from Wall Street

This could cause transit agencies trouble. Basically, transit agencies make deals for cash where they sell their capital assets such as buses and trains then lease them back. Metro could owe millions over those leaseback deals.

Things started to go downhill when AIG ran short of cash after running up billions in losses tied to the housing slump. Its credit ratings were slashed and the firm was on the verge of collapse last month when it was bailed out by the federal government.

The lower credit ratings triggered a clause in the lease-back agreements that require the MTA to either find a new firm to guarantee the deals, or reimburse investors for their down payments and lost tax benefits, — a scenario that could cost the transit agency between $100 million and $300 million.

It hasn't happened yet, but if it does, the agency would have no choice but to slash service drastically. It could also hit BART, Muni, WMATA, and the CTA though there was no hint AIG was involved in those as well.

Many of the nation’s largest transit agencies participated in such deals. Among them are the San Francisco Muni system, the BART rail system in the Bay Area, the Chicago Transit Authority and the Washington, D.C., Metro system.

Queen Sized Microcosm

Charlotte leaders asked the federal government to pay for their new light rail line, platform extensions and new vehicles for the existing line, and a north commuter line. Given funding constraints at the federal level you can probably guess what happened. The FTA said they didn't have enough money. As discussed previously, there is a 77 year demand for transit expansion in this country and this just proves that there is either going to need to be a serious infusion of funding for transit on the federal level or cities are going to have to come up with the money themselves. Keith Parker at CATS has made these types of comments as well saying:

...Parker said he'll likely brainstorm other ways to raise money so rail lines can be built sooner.
...
With the cost of raw materials rising, Parker believes it's important to build Charlotte's rapid transit in the next decade, rather than by 2035, the finish line in the current plan. If the federal government isn't willing to send more money to CATS, Parker said he may bring the Metropolitan Transit Commission and the Charlotte City Council options.

After years of spending on things other than transit, the Mr. Parker has the right idea about trying to catch up, which would make it cheaper in the long run. Their 10 year wait for the first line did nothing but cause project inflation and almost lost them thier funding source all together with the referendum last year. Yet Pat McCrory, the Mayor, Gubernatorial candidate, and staunch transit supporter, is against the idea of using any funding outside of the current half cent funding stream.

McCrory said this week he doesn't want to consider a new tax or bond to build the transit system sooner. CATS already wants to use some property taxes to build the commuter rail line, and the city of Charlotte is considering the same for the streetcar.

“We'll have to live within the confines of the half-cent sales tax,” McCrory said. “During these economic times we'll have to be both economically and politically pragmatic. And at times, patient.”

In transit funding, patience costs money, and there are other ways to pay for transit projects. Because transit creates value that often isn't credited to it, there needs to be more attention paid to the value is created and capturing it to pay for the project. Putting a cage on it isn't the answer.

Measure AAARRRR

It doesn't look very good down there. Given California needs 66% of the vote on these types of measures (dumbest rules ever) everyone pretty much has to be on board except for the always wacko. What happens then is one constituency can hold the whole process hostage to get what they want. That is what happens in the state legislature all the time for the budget. A few people get to hold the rest of the state hostage. It will be interesting to see how this pans out. If this goes down, I don't see a replay in a year like Seattle. And it will be a long time to wait and much more expensive for important projects like the Subway to the Sea.

$3 Frakkin Billion Dollars

Apparently no one cares at the state level. In the last 3 years, $3 billion dollars have been channeled away from transit projects. Sick.

Ma Peters Doesn't Want You to Spend on Infrastructure

What? So weird.

Possible Streetcar Network Funding Idea

As cities look to build streetcars, its easy to come up with an initial amount from businesses but its that last few million that seems to be troublesome. A lot of cities look to TIF funding, but that source of funding has limits and many want to use it for different purposes including affordable housing and basic infrastructure such as water/gas lines and sidewalks.

So here I'm about to toss out another crazy idea that I'll need help from my economist friends to see if it is really possible to do. I'll use the Minneapolis streetcar network plan as an example. We know there is not enough funding to do it all at once. If we use Detroit's recent fundraising success from local businesses as seed money, one corridor exists to fuel the others. The fueling is in real estate transfer taxes off of the increase in value that is created by the new streetcar line. Since infrastructure such as the streetcar has been seen to add value, it's only fair that some of that value be reinvested in other areas that will receive similar infrastructure. So bear with me here as I go through the process.

1. Do an initial study to figure out the streetcar network. Once completed this will serve as the base funding area for engineering. A basic TIFF district for the whole in town streetcar network would serve as a base for the rest of the plan. The district boundaries will stay because they will be used later.

2. The Detroit instance shows that businesses and foundations are interested in their cities future. They have raised 75% of an initial $100 million in Capital Costs for a new line down Woodward. The first line should try to pull in money from outside entities and use that line to feed the others.

3. Before the first line is constructed though, a baseline is set on real estate costs in the area defined by the very small increment TIF district that was initially used for the engineering studies. This baseline would be used to calculate a real estate transfer tax that allows the streetcar network to capture the value of rising real estate values along the line. There should also be a transportation fee for new square footage. I believe that San Francisco for a long time had a fee that went to Muni at 5$ for every new square foot in a building. These linkage fees could be tied to parking reductions so its not as much of a burden on the developer, and leaves money for other endeavours such as affordable housing.

4. After completion of the first line using funding raised locally, the rising coffers funded by the transfer tax and linkage fees from the first investment go into the construction of the second line in the district. Once the second line is complete, the real estate around that line goes to the third line and so on starting off a chain of funding that creates the network. Over a 20 year period, I believe it would be possible to build each line.

I also think that if a plan like this was created, it would create more incentive for the federal government to help out if this were tied to a national strategy. So there is the idea. Funding one line at a time by fueling one line at a time as a primer for the next one.

Innovative Financing in Detroit

Detroit business leaders have raised 75% of the construction cost for a new light rail line on Woodward through private donors, advertising, and foundation support. Perhaps this is a model that could be followed in other cities looking to build new transit lines.

Hiawatha as Pork?

Again, the process doesn't always fund necessity so people have to go around the system...

No Transfer

The highway trust fund is out of money. But they aren't going to take from the mass transit account, just borrow from the general fund. Hmm the general fund never pays for highways. Wait a minute...

Ma Peters derided earmarks as the reason for the shortfall. I think earmarks have gotten a bad name in the transportation world and is a catch phrase used by all for waste. However, its hard to complain about earmarks when they are actually being used to circumvent awful policy, such as the one discussed below where highways get 80% funding and transit projects less than 60% funding.
Yeah there are some bad earmarks, but I bet she would lump in bad transit earmarks with ones that are made because of her awful New Starts policy.

Why LA Won't Get 80% Federal Funding on the Gold Line

Contrary to popular hopeful sentiments from local officials we discussed the other day, getting 80% just isn't possible for the Gold Line. After being challenged over on Bottleneck blog by Damien Goodmon (Fix Expo) on my assertion that today federal projects have to have 50% local funding to get funded, maybe 60% if you have a good ridership project that can cover your ratings, I found a GAO report that stated what I remember hearing was true.

Last year, in response to language contained in appropriations committee reports, FTA instituted a policy favoring projects that seek a federal New Starts share of no more than 60 percent of the total project cost—even though the law allows projects to seek up to 80 percent—in its recommendation for FFGAs. According to FTA officials, this policy allows more projects to receive funding and ensures that local governments play a major role in funding such projects. FTA describes the 60 percent policy as a general preference; however, FTA’s fiscal year 2005 New Starts report suggests that this policy is absolute in that projects proposing more than a 60 percent federal New Starts share will not be recommended for an FFGA.

They will not fund anything over 60%. That is unless you make a deal like Salt Lake City where they will pay 80% for one project but it will equal 20% for all projects. Hopefully this helps folks realize that while highways still get 80% and bankrupting their funding account, the mass transit account has only been allowing 50% or less matches over the last 4 years. It's actually been lower in certain instances with Dulles asking for 30%. Why the feds are able to kill that project when they aren't even close to the majority financial stake is beyond me.

Roger Snoble is Right

Let's put aside for a second whether we think the Gold Line project is a good idea or not. Recent postings on the Bottleneck Blog state that Rep. David Drier has asked LACMTA chief Roger Snoble for $80 million in order to put the line into the New Starts pipeline to get a $320 match. Snoble wrote back saying they were not going to commit money because there was no way that was going to happen any time soon. He's right.

It is likely to be many years at best before the Foothill project completes the lengthy and rigorous New Starts process, assuming the FTA allows the project to remain under consideration.

The FTA process for most places recently has taken 10 years from first application. Lines such as Charlotte, Phoenix, Seattle , and Oceanside (Links to New Starts Report Dates) which are just opening started planning thier lines in the end of the last decade. So LA County Supervisor Mike Antonovich writes back saying the DOT and Ma Peters (Thanks Ryan) told him differently. (which makes me laugh as it should any of you all who have watched the process of the FTA over the last few years from your own experience as well as on this blog) Here's his comment:

The information in your letter to Congressman David Dreier is not consistent with what I was told last month when I was in Washington D.C. meeting with the Secretary of Transportation and the Chief Counsel of the Federal Transit Administration. Both made it quite clear that the reason the Gold Line Foothill Extension project has not been able to progress under the FTA’s “New Starts” program was due to the MTA’s failure to prioritize the project as part of its long-term project list.

When Mary Peters tells you something about transit and the FTA it's kind of common knowledge now that you can't believe a thing she says. That's a great excuse they give though. Not only will the Gold Line be hard to fund through the federal process that favors BRT, it is impossible they will be able to get $320 million out of the deal. In the history of new starts, the only cities that got 80% of thier project costs paid for were back in the late 90s. 80% is what the match is supposed to be and what highways get, but the New Starts program is underfunded. I dare anyone however to find a project that gets more that 50% in the most recent new starts list. Recently its been more like 50% or for example Salt Lake City signed an MOU to fund 4 lines at 20% federal match.

So sorry Mike, if you andRep. Drier were actually paying attention to what is happening at the FTA in Washington, you would know that what you're looking to do is insane and not even the most powerful congressional teams have been able to get any more without an earmark. Mr. Snoble is correct in saying if you want the project built sooner, its better to go local, at least until the next transportation bill gets written.

Miracle Light Rail Bill Passes

Again it's mainly symbolic but it opens up the discussion to connect Virginia Beach to Norfolk. And it gives me a good feeling about Tim Kaine on transit if he were to say be nominated for Veep. It's better than the Tomnibus bill which again shot down Metro funding.

WSJ Article Treasure Trove of Bush Transportation Lunacy

The house has passed a bill to inject $8 billion dollars into the highway fund for projects from the general fund. It passed with a veto proof majority yet the President has threatened to veto it. As people conserve more gas by driving less and driving hybrids, they also cause the transportation fund used to pay for freeways and transit to dwindle.

Let's put aside for a second the fact that congress wants to spend more infrastructure money on roads instead of putting it towards sustainable transportation or alternative energy or railway electrification. The Decider's hooligans made me laugh then shake my head in embarrassment for this country when they made the following statements in the Wall Street Journal:

The White House called the bill "a gimmick and a dangerous precedent that shifts costs from users to taxpayers at large."

Since when did users pay for freeways anyway? I'm lost, isn't the usual argument for taking money from other pots to pay for roads that all taxpayers are users of the system in some form or fashion. But lets not take from taxpayers to help users when we could instead...

The administration has proposed covering the trust fund shortfall by shifting money out of a mass transit account.

Yeah, that's a great idea. In a time of great pressure on transit systems due to high gas prices, let's expand roads using transit funds! That will totally help us cut our dependence on foreign oil and to lower gas prices, lets increase demand for driving! I'm sorry, but what a bunch of *^&@*%$$ morons! Really?! And what's a good transportation article without saying that really tolls aren't taxes and the Republicans don't want to raise taxes:

But the administration and many Republicans oppose tax increases, instead favoring greater tolling and a heavier emphasis on private-sector investment.

Isn't relying on tolling still making people pay more money. Not that I'm against tolling in certain instances, but its still a tax. I wish someone would call them out on that. I wish someone would call them out on all of this.

If Ridership Is Up, Why Service Cuts?

My friend Nick was wondering, if ridership is way up, why are some places cutting routes and service. Wouldn't the increased ridership pay for it? In theory I guess it should but there are a number of factors that are specific to the economy and transit funding which need to be addressed.

Part of the problem is that most transit agencies are primarily funded through sales taxes. The problem with this is that when the economy is down and people need to take transit more, transit suffers more because revenue comes down due to that already existing gloomy market. Also, ridership only pays a fairly small amount for most transit system's budget. An article in the Boulder Daily Camera covers this quite well:

But, therein lies the terrible Transit Paradox. It turns out the same factors that are driving a spike in demand for transit services are having an unfortunate negative impact on RTD finances.

Fuel costs, roughly 9 percent of the RTD expenditure budget, have risen 47 percent over last year's rates. At the same time, sales and use tax income, which accounts for approximately 66 percent of RTD operations revenue, is coming in at about 5 percent below projections. The cumulative impact of these two economic factors, alone, is expected to be a hit of about $23 million to RTD's total operations budget.

Adding insult to injury, the fares transit riders pay only cover a portion of the cost of each bus or train trip. Thus, the unprecedented 9 percent increase in transit ridership that RTD is welcoming into the system is actually creating a substantial additional financial burden.

What needs to happen is a better way to fund projects and operations than the sales tax. While it seems the most common form of funding for transit, it often creates these problems with the shrink swell of funds and service. Tri-Met funds transit through a payroll tax. I'm not sure if that is much better but its something different. And then there are development fees for capital expansion and perhaps carbon taxes for operations. Another idea thats used is parcel taxes on estimated value. Anyone have ideas on this?

So also there was an article in the Rocky Mountain News that tests the water for another increase, the idea of just 4 years after Fastrax was passed, having to go after more money to pay for the program. This is somewhat of a problem from an advocates standpoint. It gives opponents a lot of fodder, even though none of them really complains when freeway projects go over, which they almost always do. See Katy Freeway in Houston and I-485 in Charlotte.

Even though the Denver Projects (T-Rex, SW Corridor) have been on time and on budget, its hard to predict the amazing increases in materials that have happened since the initial project budget was created in 2004. It's also hard to predict what the costs are going to be in the future when the lines hadn't even been engineered yet. I think that is kind of the problem with engineering projects. There is generally a standard and other projects, but all projects have different challenges and difficulties. While I think cost/benefit analysis is good, people getting super upset if a big project doesn't meet its exact budget is a little bit out of order. But unless its a project like the big dig which was a ridiculous overrun, people see the benefit in freeway projects, but chide transit projects...why? Most of the time they have no alternative plan, they just don't like transit for some reason.

Cost Rocket

The Denver Transit Stop discusses how expensive roads are going to be to us in a few years.

Focusing just on CDOT, Governor Ritter's Blue Ribbon panel for Transportation Finance and Implementation found that there is a $51 Billion gap just in sustaining the infrastructure we already have. By 2030 that gap is expected to be $104 Billion. What does that mean exactly? According to CDOT, by 2016 if you spend an hour on the highway, about 40 min of it will be on rough pavement (currently it's 20 minutes).

But then again it will cost a lot for transit as well. Krugman jumped on the transit talk express, so Robert Reich joined up.

Even though it’s a hundred times more efficient for each of us to stop driving and use trains and buses, there’s not enough money in the public kitty for us to do so.

So are we gonna keep funding what helps people spend more money, or save it?