Shovel-Ready Mass Transit

There's been a lot of talk about the infrastructure component of the proposed stimulus, and whether it's too slanted towards roads, bridges and other aspects of our car-dependent transportation system. One complication is that, in order to make for effective stimulus, the infrastructure investments have to be "shovel ready", that is, ready to start up almost immediately. My understanding is that this one of the problems (from a stimulus perspective) with high-speed rail. But what about metro and urban public transit? My experience has been that they are perpetually underfunded and starve for dollars for capital improvements. So, do transit authorities around the country have "shovel-ready" projects ready to go?

To answer this I asked my top-secret source inside the Chicago Transit Authority. Here's what he had to say in full:

1. The funding mechanisms for transit are perverse--IL funds its transit systems' operating budget through sales taxes and a small amount through real estate transfer taxes. The feds stopped providing operating support to transit systems in 1998. Roads are funded (again, generally speaking) w/gas tax. There have been attempts to realign this crazy situation with congestion pricing and other more equitable arrangements but nothing has come of it. And to recover federal capital dollars a state usually has to provide a state match (and sometimes a local match). IL, unable to pass a capital program since 1999, has recently forfeited much of the federal transit dollars it was to receive in the last transp. law.

2. Connections between operating funding subsidies (state/local/sometimes federal) and capital support (infrastructure) are key. For CTA, under law we have to recover 50% of our operating costs from our customers (it's called the "recovery ratio"). Or, put another way, only 50% of our operating costs are subsidized by government. Houston, Denver, Phoenix all have much, much lower recovery ratio requirements (I think Houston is like 11%). Thus they can "afford" to build out there transit infrastructure because they know they will be able to recover the requisite operating costs through revenue. Having a new line that a system can't "afford" to run is obviously not a good idea.

3. So simply dumping money into capital programs won't solve the problem. First and foremost we need changes in how these systems are funded.

4. That said, CTA currently has about $7 billion in unmet capital needs just to get our system into a "state of good repair"--i.e. our bridges safe, our rolling stock upgraded, signal systems upgraded, etc. That's not expansion, that's not "improvements"--that's just getting it into the shape it should have been in had capital support remained at appropriate levels. So the needs for us is huge. Put another way, we are $7 billion in the hole and it's growing. The real cost to the region (and taxpayers) here is much larger. Congestion, land use, job creation, mobility, air quality all suffer (and conversely improve when transit is appropriately funded). The "death spiral" awaits--given teh recovery ratio, transit systems cut back service to meet recovery ratio requirements, thus fewer riders ride, thus systems have to charge more to pay for service, thus fewer ride, until no one's left.

5. Add expansion plans, and we're talking around twice that just for CTA. We have concrete, vetted expansion plans that are "shovel ready" (at least most of them are). I'm not an expert in the permitting/federal funding process, but my understanding is that roads are much, much easier to build from a regulatory standpoint. In an interesting twist on this, most new rail expansions in metro areas w/established transit systems are being done on toll road right of ways--see O'Hare Blue Line, DC's Metro, for example. The Tollways have been so well supported that they are up and running and transit systems are begging to have access to their right of ways to expand. To me the "readiness" argument is bullshit.

6. Right now we cannot meet our ridership demand w/our existing capital infrastructure. We don't have enough buses, trains or rail lines to meet it. So there is a real need. And of course we'd argue that not only can't we meet it, but from a policy standpoint the region should make decisions that encourage even more transit ridership (like greater levels of subsidization for operating costs, so we can lower fares). Transit is a money losing venture if you look at money put in v. revenues generated. And it SHOULD be. If we asked our riders to pay the actual cost of a ride, we're talking about $6 per ride. That is not only untenable, but exactly the opposite of how we should ask our customers to support us given the benefits we provide. We should find progressive funding mechansisms (congestion pricing) because the actual transaction for taxpayers and metropolitan regions continues to be one that greatly favors transit investment. Roads, on the other hand, are bad investments when looked at regionally.

7. We have had to steal from our operating budget to pay for critical capital work (basic safety work, etc.)--that, of course, further exacerbates the problem.

8 So this is all to say that from a policy standpoint, transit loses v. roads right now. From a funding standpoint, they lose. From a political influence standpoint, they lose (some say because most manufacturers of transit rolling stock--buses and trains--are no longer in US, which shouldn't in itself be a problem). Transit is still viewed as a service for low income minority populations, and still viewed as a colossally bad investment given the high entry costs. Experience after experience,e expert after expert, has shown this to be bullshit, but roads still command the policy and political attention.

9. A recent trend to address all of this is to privatize systems' capital resources---public private "partnerships". This to me is a story that is dying to be written. Who is the most important person in Chicago City government? Next to the Mayor, I'd say John Schmidt (at Mayer) who is crafting and executing the wholesale selling off of any capital resource in Chicago that does (or could) generate revenue. Roads, parking meters, airports--transit is next. The merits of this trend are much debated out there, and most systems outside the US are privatized in some way (London being the most famous). I find this really, really corrosive and disturbing. The social contract is changing around here--we just expect our government to provide services into the very near future, no matter how they are funded, no matter how much they cost, no matter who is providing them, and no matter that the way they are funded is in fact eroding our ability to enjoy those services into the future. Giving up (that's what it is) our crown jewels is not only the least creative and honest way to address the revenue crunch, but it is also giving up the most valuable resources we have. I fear that transit will fall victim to Schmidt and RMD's strategy.

Comments (20)

1. Problem is, Mr Hayes, you're talking a fundamental shift or paradigm shift (though both phrases are widely over-used) in American transportation thinking.

   Except for maybe New York and Chicago, public transit is a mish-mash of buses and rail...almost none of which is populated by anybody with some disposable income.

   Americans like to drive cars...period.

   They don't want to ride the bus or subway/metro and rarely intra-city rail. They want to drive and that means highways, roads, and bridges.

   And unless you want to make gas go back to $4 a gallon (or higher), that's not even going to shift a LITTLE bit (didn't shift that much even in the oil crises of the 70s).

   Posted by Mask at 01/13/2009 @ 11:01am

2. Shovel-Ready Mass Transit

   I can see now....8 guys, all diversified, standing around watch 1 guy using the shovel and another wheels the wheel barrow of dirt out of the hole while another guy unloads the wheel barrow into a truck driven by yet another guy..all separate unions, of course...

   and the Mass transist being finished on time and at budget.

   Think about wjhat you know really happens...after the Big Dig model in Boston...

   or will it look like what happened when the earthquake flattened the freeways in CA, and the unions were paid off to get out of the way and the project was finished in months instead of years...and the contractors being paid bonus for faster, excellent work, BY THE STATE?

   I am seeing a never ending project that is never finished and a train that never runs...

   after all Amtrack, that model of efficiency and organization, still has Fireman(who stoked the engine) and Brakeman (who hand crank the brakes)... and double dip in Federal pensions...all unionised up the ass, of course..

   Ever ride the rails out in the prairie? An experience..really something to watch run..

   Happy Days are here again...

   Posted by YourJomamma at 01/13/2009 @ 11:08am

3. They 'like it', Mask... because they (we) have been encouraged to like it, and have had all the more logical options removed from the table.

   Mass transit is, when allowed to evolve into a more advanced state than we have in this country, MUCH preferable to a gridlocked and tight-jawed pretense to 'freedom'.

   It is more economical, it frees up the user-ship from a great deal of the needless auto-culture responsibilities, and like in Japan, where many books are written durring daily commutes... the personal freedoms brought about by state of the art mass transit can be many and varied.

   Just imagine all the hours wasted in America every day... just going to and from work... that could be hours focused on innovation, family, and relaxation...

   ...and cars could become 'fun again' on our days off.

   Posted by ttr at 01/13/2009 @ 11:24am

4. as a resident of the south i would love to see some mass transit infrastructure.

   MASK has a point about our uhmuhruhkun obsession with personally owned vehicles, but i also know many in my mid sized southern town who would love to have a reliable public transportation system, but...

   i also reccomend rezoning options for many suburban neighborhoods. it would be nice if corner lots were zoned for optional locally owned small business, especially for those who live at the property.

   we are lucky in my neighborhood to have a local owned convenience store located close by, allowed to remain after rezoning because of a grandfather clause. not only does it provide a close option to pick up some esentials, but it serves as a neighborhood gathering spot, brings the community together, and the extra cost of some of its products is no problem, in that it is within walking distance of many and such saves gas and time.

   the village concept is being integrated into many new neighborhoods now, but i still think such could be retrifitted to established pure residential zones without hurting property values (actually if done right, increasing property values).

   Posted by ibbleblibble at 01/13/2009 @ 11:29am

5. but i still think such could be retrifitted to established pure residential zones without hurting property values (actually if done right, increasing property values).

   Posted by ibbleblibble at 01/13/2009 @ 11:29am | ignore this person | warn this person

   clarification - old neighborhoods could be retrofitted blah blah blah

   Posted by ibbleblibble at 01/13/2009 @ 11:32am

6. by YourJomamma at 01/13/2009 @ 11:08am...

   You are writing about your accurate reflections on the effects of 70 years of corporate sabotage... damage that has deferred the public trust and sullied public confidence in the ability of government to greatly improve the 'standard of living' of all Americans.

   Your 'lazy worker' metaphor can't hold a candle to the 'even lazier investor' scenarios that are becoming commonplace in our world as we speak.

   Your ideology is stagnant.

   Posted by ttr at 01/13/2009 @ 11:34am

7. Posted by ttr at 01/13/2009 @ 11:34am

   No one is talking lazy worker...lazy govt and idiots who think the answer to corporate crime is govt "efficiency"...

   It is not as simple as you tried to make out to be...

   Efficiency and a viable plan that works is the issue along with realistic expectations...

   not make work projects...

   Give GM all the money it needs with out a change in union behavior or management overhauls up stairs and all you will get is a govt mandated car, designed by govt decree that costs too much, wont work, and no one will buy....and GM will be back next year with hands out.

   same for mass transit..

   I live in midwest and would love to go to Chicago, Denver, St Louis or anywhere on a bullet train at 200 MPH run on electricity...but...

   how do I go to the next city nearest to me..100 miles away?

   Or the grocery store 2 miles away?

   The number of lawyers, enviromental nuts, union officials, land owners who do not want a train throiugh their fields..will tie this up in courts for generations. See nuclear power plants..10 years..just for paper work.

   the number of hearings alone...you will be dead long before one spike is driven...and by then,flying cars will be common(I think one is for sale already)... but the rail lines will begin!! just in time to be obsolete...and another trillion will be eaten.

   Posted by YourJomamma at 01/13/2009 @ 11:50am

8. Gotta go to work..got profits to hide by summer..

   Posted by YourJomamma at 01/13/2009 @ 11:51am

9. It's about time we upgraded the transportation systems across the country, buses and trains are used more frequently in Europe and the access is much better. Most bus stops here are "special" pick up points" that could be miles from where you live...how do you get there, use the car of the course well that makes sense does it not!!!! It would mean more buses, more drivers and a lot more pick up points and that would in turn create more jobs, makes sense to me. We have so few trains that are easy access to people unless you live in a city or just on the outskirts, also there are many train tracks around the country that are only used for freight....why can't regular trains use them as well, seems a waste of a extra transportation to me.

   Posted by Caj at 01/13/2009 @ 12:26pm

10. Isn't it the dream of every unemployed stockbroker? Working a front-loader clearing earth for public rails.

    At least it would be honest work ;-)

    Posted by freiheit1 at 01/13/2009 @ 12:33pm

11. Posted by ttr at 01/13/2009 @ 11:24am

    I'm not saying public transit is a bad thing, ttr.

    I'm saying that there is a VERY strong American sensibility about it that won't use it.

    Now, if you want to get gas upto $7-8-9 a gallon, increasing taxs and fees, raising the driving age to 20, AND spend 30 years on public information campaigns to change that...fine.

    But today, right now, in America, in a "perfect city" (politically) for mass transit, like Los Angeles, what's the ridership?

    Posted by Mask at 01/13/2009 @ 12:45pm

12. I hope that the anonymous Chicago source gets his/her information to DC. The source has a lot of importance to say. BTW, I ride Amtrak across the prairir annually and it seriously needs more money!! We're seriously behind on mass transit.

    Posted by mimsky at 01/13/2009 @ 1:22pm

13. We all watched the mass transit being built in Denver and watched no one ride it since it never went to the places people needed...it did stop in the ghettos, but not out to the airport which they built in Kansas..

    Now it has expanded and I have seen it downtown, out to the mega malls and shopping centers...looks nice and clean so far...not alot of graffiti on it...but everytime I drive by and look into the cars, they are empty....and when I see the stops they built, very nice..but when you get off you are going...it seems to be no where...

    The are pretty, tho.

    Posted by YourJomamma at 01/13/2009 @ 1:25pm

14. Posted by YourJomamma at 01/13/2009 @ 1:25pm

    This IS one of those clear times where the American Left deludes itself into thinking that the USA can (or should) become like Europe...where train travel and mass transit are common and used by all.

    It's not going to happen.

    Posted by Mask at 01/13/2009 @ 2:13pm

15. It's not going to happen.

    Posted by Mask at 01/13/2009 @ 2:13pm

    Why not, are we such a lazy nation that we have to drive right up to the front door to everywhere? If people are not given the choice of anything different how will they know how good it can be? We in America think we are the only ones with "good" ideas and we can't be beaten in that area.

    Posted by Caj at 01/13/2009 @ 3:53pm

16. What difference does it make how many state boundaries you cross? The majority of the country lives in metropolitan areas that could benefit from one or more Rapid Passenger Rail system connecting them to other metro areas within 300 miles. And also save public funds otherwise needed for highway construction and airport operating and expansion costs as well.

    But the article is not about regional transport, its about transit ... about putting some money into the most cost-effective ways of adding transport capacity in urban and suburban areas ... mass transit on routes that can attract 100,000 riders, light rail on routes that can attract 10,000 to 100,000 riders, quality buses, trolley buses and streetcars on smaller demand routes.

    Of course with outer suburban and rural roads heavily cross-subsidized by gas taxes paid by urban residents, the outlying free riders don't <i>want</i> a fair share to go to urban transport. But free riders develop a sense of entitlement all around the world - it seems like its part of the human condition.

    Posted by BruceMcF at 01/13/2009 @ 8:03pm

17. And unless you want to make gas go back to $4 a gallon (or higher),

    Posted by Mask at 01/13/2009 @ 11:01am

    2010⅖ we'll be seeing that.

    with all those rubber dollars floating around......

    Posted by frosty zoom at 01/13/2009 @ 9:12pm

18. Cut taxes by suspending or dramatically cut back on income tax & FICA withholdings! Let individuals decide where their dollars go!

    Posted by HAPPYLonghorn at 01/13/2009 @ 11:32am

    to capital one.......

    Posted by frosty zoom at 01/13/2009 @ 9:14pm

19. hey, how did this happen?

    "TORONTO -- Canadian scientists have successfully grown new blood vessels in laboratory animals by injecting a collagen-based material that attracts new cells to regenerate tissue."

    i thought only private medical systems generated breakthroughs.

    Posted by frosty zoom at 01/14/2009 @ 01:19am

20. Americans do want to ride transit; after all, transit ridership in 2008 reached all-time highs. Transit might account for a small percentage of trips nationally, but in our most dynamic and high-value urban centers it's a way of life. These parts of the U.S. are densely populated and account for an outsized share of the U.S. economy; the 14 northeast-corridor states almost rival the EU in population density.

    With the right incentives, new transit systems in cities like Charlotte, Denver, and Los Angeles can help to shape the cities around them. Indeed, officials in Charlotte rightly see transit less as a means of moving people between their current destinations as a way to shape the city so that destinations happen around transit. Reorienting cities in this fashion will help citizens achieve time, cost, energy, and environmental savings.

    Meanwhile, one key reason why stimulus discussions have included a lot of construction is that the construction sector is shedding lots of jobs right now as the property bubble's fallout continues to propagate. Now is a great time to build things, if you can get the money: many of America's most famous structures, like the Empire State Building or many of the IND subways, were built at the outset of the Great Depression -- under budget, in many cases, since labor and materials costs dropped dramatically. Even during the last boom, even the much-maligned CTA was able to deliver high-profile construction projects like the Cermak branch reconstruction, or repairing the O'Hare branch, on time.

    Transit can be a great way to invigorate urban economies today, and sustain their growth in the long run. Given today's energy and environmental challenges, it obviously deserves greater public investment.

    Posted by paytonc at 01/15/2009 @ 5:43pm