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CA High-Speed Rail and Positive Train Control in the News

Posted on May 18, 2012, 4:30pm | Baruch Feigenbaum

During the past few weeks, High-Speed Rail (HSR) and Positive Train Control (PTC) have both been in the news. 

First, last Thursday Secretary of Transportation LaHood warned California lawmakers to take action on high-speed rail. According to The Sacramento Bee:

U.S. Transportation Secretary Ray LaHood warned California lawmakers Thursday not to wait until fall for a vote on high-speed rail, urging its approval in a budget vote next month.

"We need to make sure that the commitment is there to obligate the money," LaHood told reporters at the Capitol, where he was meeting with lawmakers and Gov. Jerry Brown.

The state's commitment, LaHood said, will be demonstrated when lawmakers "put it in the budget and take a vote on it."

Brown and the California High-Speed Rail Authority want to start construction on a $68 billion rail project by early next year, proposing initially to use $2.6 billion in state rail bond funds and $3.3 billion in federal funds.

Lawmakers remain skeptical, however, and the nonpartisan Legislative Analyst's Office has recommended against it.

Not only has the nonpartisan Legislative Analyst’s Office recommended against it, so has every other independent research group and government watchdog. The Legislative Analyst’s Office has criticized the project for relying on uncertain federal funding. Of course there are a multitude of reasons to dislike HSR in California:

• The new line is not true high-speed rail and will not connect Los Angeles and San Francisco in two hours forty minutes or less (as required by the state ballot initiative). The 600 mile circuitous route is at least 200 miles longer than the route would be if it were a direct line.
• HSR will not reduce pollution dramatically. The California business plan fails to account for the greenhouse gas emissions of building the rail-line or the reduced greenhouse emissions from new cars and airplanes.
• The slower speed will attract fewer passengers. Most high-speed rail lines attract passengers primarily from airplanes. A slower speed means fewer air travelers will switch to high-speed rail.
• California is relying on revenue from an untested environmental cap and trade system. The revenue is supposed to support environmental causes, which HSR is not.
• No serious private investor would touch this project. Private investors rely on making money. Almost all HSR lines throughout the world have been publicly financed because governments outside of California realize no private sector group would be interested.
• State revenue could be better used on transit repairs, or school improvements or…

The current California high-speed rail plan is a classic government boondoggle. California should decline its federal grant. If it takes the money it will be required to build the line and operate the service. California does not have the additional $55 billion it needs to build the system. And the first part of the line will travel between Merced and the San Fernando Valley instead of starting in downtown Los Angeles or San Francisco. If the Obama administration is committed to HSR, it should use the California money to begin work on a true high-speed train in the Northeast corridor. That project will not be cheap but at least it makes sense. Of course if the Obama administration understood or cared about transportation in the first place they would have started with the Northeast corridor but that is a discussion for another day.

For more on HSR in Fantasyland see my blog post here and my colleague Adam Summers excellent commentary here.

Meanwhile the Federal Railroad Administration (FRA) has modified its rule on positive train control; unfortunately the changes are minor in nature. The new rule requires PTC on 63,000 miles of track as opposed to 73,000 miles. The FRA changed its ruling since the 10,000 affected miles of track are not expected to transport hazardous materials in 2015. The new rule is displayed in its entirety here.

First, the positive, railroads will not be required to install PTC on routes that do not transport poisonous materials or are used for transporting passengers. Now, the negative, the change does not go nearly far enough. The FRA should be congratulated for using a little common sense to modify the rule. However, PTC is still required on most tracks. As I mentioned in a commentary here requiring PTC on any track by 2015 is problematic:

• Railroads are one of the safest forms of transportation with a fatality rate of 0.2 per 100 million passenger miles.
• PTC will prevent only 4% of current railroad accidents at a cost of $14 billion.
• PTC can prevent accidents but so can many other technologies. The FRA failed to require PTC in 2005 because it miserably failed any cost-benefit comparison. Senators, most of whom know very little about transportation, decided they knew better and passed a law in 2008 mandating PTC on all class 1 tracks.
• PTC may make rail travel more dangerous. As the railroads have to spend $12 billion implementing the technology in three years, track maintenance and ofter safety issues may be ignored.
• PTC will make train travel slower and less efficient by prematurely slowing the train. Humans are much better at breaking than today’s PTC systems.

While the FRA decision is a step in the right direction, it is only one baby step. Congress needs to delay PTC implementation until the benefits outweigh the costs.

Polling Metro Denver Voters' Support of Tax Hikes for Public Transit

Posted on May 18, 2012, 12:09pm | Harris Kenny

Last month I wrote on Reason Foundation's Out of Control Policy Blog about the Denver Regional Transportation District (RTD) Board's decision to abandon a proposed tax hike that would have doubled the current transit-dedicated, 0.4 percent regional sales tax along the Northwest Corridor.

For context, the new revenue would have specifically gone towards FasTracks, a regional transit program approved by voters in 2004 projected to cost $4.7 billion and be complete by 2017. According to the latest estimates, FasTracks costs ballooned up to $7.4 billion and won't be complete until 2042. For more on FasTracks see my previous posts here, here and here.

Two major factors behind RTD's decision were uncertainty over voter support and ambiguity over the proposed use of funds. A reader recently sent me a poll conducted by Ciruli Associates, a Colorado-based research and consulting firm, which sheds light on metro Denver voters' attitudes towards tax hikes for FasTracks. This poll was released prior to RTD's decision and likely played a role in their decision.

According to Ciruli Associates:

The Ciruli Associates question in this survey used a historical context of the revenue provided for the project since its 2004 inauguration.  Previously, polls have shown people like transit, especially light rail, and would like the system built out quicker.  But, the decline in trust in government makes RTD and its ability to manage finances and the project an issue in this election.

First, the broad numbers. 49 percent of voters support the tax increase, while 46 percent of voters oppose it. Only 17 percent of voters definitely support the tax increase, while 30 percent (almost one-third) definitely oppose it.

Next, a breakdown by party affiliation. A majority of Democrats (65 percent) support the tax increase, while a majority of Republicans (57 percent) and independents, or unaffiliated, voters (56 percent) oppose it.

Finally, a breakdown by geography. Ciruli Associates note that interestingly, "Voters in the two counties that should receive the most benefit from the next phase of transit expenditure, Adams and Boulder, are among the least supportive of the tax increase. Even Denver is only mildly supportive."

This poll was conducted from April 6-10, 2012 in the seven-county metro area known as the Northwest Corridor by Ciruli Associates for The Buzz. Ciruli Associates used RDD probability sampling with 500 voters and calculated a margin of error of ⁺ 4.4 percentage points.

This poll was not widely cited in the lead up to the RTD Board's vote and only came to my attention today, however its results remain informative. Most Colorado transportation observers recognize that the relevant question is not if RTD will seek voter approval for another transit-dedicated tax hike, but when?

For related research, see Reason-Rupe's December 2011 national poll on transportation and public transit here.

Senate Transportation Bill Uses Creative Math

Posted on May 17, 2012, 10:07am | Baruch Feigenbaum

It has been three months since the Senate passed its Transportation bill, MAP-21. This has given analysts time to examine the bill in more depth. Unfortunately, the more transportation analysts research the bill, the more non-transportation spending they find. Since the House passed a shell bill, the eventual bill that becomes law will have many similarities with the Senate bill. Ken Orski who publishes Innovation NewsBriefs has highlighted many of the problems with the bill. I want to detail a few of his insights:

The non-transportation provisions that are raising eyebrows include the creation of a new National Endowment for the Oceans, Coasts and Great Lakes to be housed in the Department of Commerce (Sec. 1603(4) of MAP-21), and a seven-year reauthorization for the Land and Water Conservation Fund which is a National Park Service program within the U.S. Department of the Interior (Sec. 1701 of MAP-21). Indeed, the Senate bill includes over $6.8 billion in new non-Highway Trust Fund spending that has nothing to do with the core purpose of the bill. 

Creating an endowment for Oceans, Coasts and Great Lakes may be a good program. The same is true for the reauthorization of the Land and Water Conservation Fund. Two other unrelated provisions, the Restore Act and Rural Schools, each received more than $1 billion each in dedicated funds. The Restore Act sends money to the four gulf states affected by the BP oil spill. The Secure Rural Schools and Community Self-Determination Act reimburses counties for tax-exempt federal lands. However, both are environmental programs that have nothing to do with transportation. If Congress wants to fund these four programs, it should do so through a subject-related bill. While all four of these programs have some merits, none is transportation-related. These programs have no place in a transportation bill. 

The Republican House has been criticized for trying to include the Keystone Pipeline in its transportation bill. While the Keystone Pipeline is badly needed, it is not transportation and should not be included in a transportation bill. However, it is hypocritical for Democrats in the Senate to complain about Keystone when they have funding for non-germane programs in the Senate bill. 

This is Washington politics at its best; stick a program in at the last minute and hope that nobody notices. A total of $6.8 billion in new non-Highway Trust Fund spending is a substantial amount for a two-year bill. 

Further:

Critics are also paying close attention to changes that were quietly slipped into the Senate bill and approved on the floor by unanimous consent without debate on March 13, one day before the final passage of the bill.  They include, notably, an amendment affecting the treatment of transportation "enhancements" (Sec. 1113 of MAP-21). This provision shifts the flexibility to decide how to spend the enhancements set-aside money from the state DOTs to local government agencies, thus substantially modifying an earlier agreement reached by the leaders of the Environment and Public Works (EPW) Committee. As the Committee's chairman, Sen. Barbara Boxer (D-CA) and its ranking member Sen. James Inhofe (R-OK) agreed at the November markup of the bill, it was only a compromise on that contentious issue that allowed the parties to move forward on the entire bill.  

Transportation enhancements funded by the gas tax and included in the highway section of the transportation bill fund non-highway related provisions such as acquisition of historic battlefields, rehabilitation of historic transportation buildings and establishment of transportation museums. Of all the wasteful non-highway spending in the transportation bill, Transportation Enhancements may be the most egregious. The last minute change slipped into the Senate bill shifts program administration from state DOT’s to local government agencies. While Senate Republicans should have eliminated Transportation Enhancements, the Senate bipartisan approach is a welcome change in DC. But Republicans should not accept wasteful programs in the name of bipartisanship. Under the original Senate agreement, state DOT’s would have controlled enhancement funds. At least in this scenario, program funds could serve some sort of statewide purpose. If local governments control the purse, the funds will be used for local piecemeal projects making a mockery of a national bill. If local governments want to support transportation museums they should do so with local funds. It is doubtful they would since spending for actual roads, schools, hospitals, etc. is far more vital. 

Additionally:

Other MAP-21 provisions that have raised questions include … authority to revoke passports of tax delinquents (which the bill estimates would raise $743 million over ten years to help cover the $12 billion shortfall in transportation spending).

Finally, the bill is supposed to find offsets for new spending. It is doubtful the Senate could have offset the entire amount, but the authors could have made a better effort. The bill relies on provisions such as raising $743 million from revoking passports of tax delinquents. However, these types of provisions only total $3.1 billion. Where is the other $9 billion? How can the Senate justify that the bill will not increase the deficit? The Senate will be using offsets over the next 10 years to fund a 15-month bill. These future year transportation funds will not be able to support future transportation needs. Further, it requires a great deal of “imagination” to tote a bill as balanced when much of the funding for this two year bill comes from tax revenue projected over the next 10 years. 

Most transportation types want a new transportation bill. We are now on the 9^th extension of SAFETEA-LU that expired 2 ½ years ago. Hopefully the conference committee will eliminate much of the non-germane funding from both the Senate bill and the House proposal. But if this is the best we can do, maybe we need a 10^th extension to get serious about creating a transportation bill that actually funds transportation within our current budget. 

Washington Outer Beltway and I-495 BRT Have Benefits

Posted on May 11, 2012, 8:27am | Baruch Feigenbaum

Last Week transportation reporter Martin Di Caro of Metro Connection received a dressing down by David Alpert of Greater Greater Washington. Alpert argued in a column that Di Caro’s transportation article was one sided. Specifically, Alpert took notion with the idea that an Outer Beltway or other arterial highway could solve congestion in the Washington area. Other environmental and smart growth advocates issued similar critiques. 

Alpert accurately highlighted some of the shortcomings of the article. He was honest in noting that all of his articles are opinions and in detailing the difference between editorials and objective news coverage. I also agree with him about the quality of transportation coverage. Washington DC is fortunate to have dedicated, knowledgeable transportation reporters such as Robert Thompson of the Washington Post. But transportation is not as big a priority as issues such as taxes or defense. Sometimes transportation beat reporters are just passing through to other more lucrative positions. Most of the DC media tries very hard to offer balanced transportation coverage; but transportation is often the red headed stepchild.

However, I think there are several good reasons that Albert is not considering for building a parallel expressway. While some pro-highway groups can serve as boosters for new roads that may not be justified, some environmental groups are just as guilty of bias. Environmental groups have delayed many needed highways with minimal environmental impacts. 

Yes, new highways do induce demand. But that does not mean highways should never be built. A highway linking western Fairfax and western Montgomery could also serve drivers trying to avoid the Capital Beltway. As Alpert notes the Capital Beltway does not serve its original purpose. As many commuters travel from one location along the Beltway to another, travelers trying to bypass Washington D.C. become stuck in the 4-hour morning and 5-hour afternoon rush-hour traffic jams.

New highways do not necessarily induce new development. Several steps can be taken to lessen this phenomenon. First, the number of exits can be limited. Much of the new development occurs near exits because highways offer quick access between existing jobs and new residences. Second, the exits can be placed in areas that are already developed. Small existing communities are prevalent in Western Fairfax and Western Montgomery counties. 

Further, Washington is a growing metro area. While some new residents move to the District, Bethesda, or Tysons Corner those locations are not right for everybody. Some residents prefer to live outside the beltway or in the exurbs; others cannot afford to live close-in. Proclaiming that we are never ever going to build new highways is “solutionism” where one solution is the answer for every problem. It is no better a policy than deciding to build new highways everywhere, wherever there is a slight amount of traffic congestion. 

The region absolutely needs better transit solutions between Bethesda and Tysons Corner. The challenge is finding the best solution. In many corridors it is bus-rapid-transit (BRT) and not rail. BRT runs managed lanes such as high-occupancy vehicle (HOV) or high-occupancy toll (HOT) lanes. In addition to providing operating space for reliable, cost-effective and attractive transit, managed lanes encourage carpooling and vanpooling. Virginia will allow single person vehicles to use the managed lanes providing they pay a small toll. However the tolls will rise and fall with congestion to ensure buses will always travel at 45 miles per hour or higher. Virginia is building managed lanes from I-95 to The Dulles Greenway. Maryland is studying the system. A managed lanes system from The Dulles Greenway to I-270 could be operational in less than ten years. 

In many situations the solution is not rail. The most recent cost estimate for Maryland’s proposed purple line from Bethesda to New Carrolton is almost $2 billion. While Maryland is hoping that the federal government will pick up half the tab, opposition to the route and the cost continues to grow. A deluxe BRT system would cost less than a third of the light-rail line. The BRT system would also cost about $10 million less per year to operate. More details on why BRT is a better choice for that corridor are available here.

Unfortunately, many urban interstates were built through low-income minority neighborhoods. Routes were built in these locations because land prices were the cheapest and opposition the least well organized. In addition highways were used for socially nefarious goals. While urban interstate construction was often curtailed for good reasons, DC never built a highway network. As a result there are a limited number of ways for traveling in the DC region. The Potomac River and the lack of interjurisdictional cooperation further increase congestion. While it is much more challenging to build a new highway now than it was 40 years ago, a well-placed new expressway could provide many benefits. 

Being Taken for a Ride on High-Speed Rail in California

Posted on April 27, 2012, 4:21pm | Adam Summers

In my latest commentary, I once again tackle the boondoggle that is the California high-speed rail project, specifically, the most recent version of what passes for a business plan from the California High-Speed Rail Authority (CHSRA).

When the High-Speed Rail Authority recently released yet another version of its purported business plan, it was just another day in the world of the ever-changing high-speed rail plans and assumptions made by the Authority and its backers. The fourth incarnation of the plan relies upon sharing tracks with commuter trains in both Los Angeles and the Bay Area in order to trim estimated costs from $98.5 billion to "only" $68.4 billion—still more than 50% more expensive than the plan voters thought they were approving in November 2008. But, as the non-partisan Legislative Analyst's Office (LAO) observed, this plan makes no more sense than any of the previous ones.

The LAO analysis concludes,

We find that HSRA has not provided sufficient detail and justification to the Legislature regarding its plan to build a high-speed train system. Specifically, funding for the project remains highly speculative and important details have not been sorted out. We recommend the Legislature not approve the Governor’s various budget proposals to provide additional funding for the project.

The vast majority of the expected funding continues to be wishful thinking. As I relate in my article,

As with every other attempt at a plan, the latest effort from the CHSRA lacks any basis in reality. Once again, most of the funding is to come from unidentified federal and private-sector sources that almost certainly will not materialize. In fact, 83.2 percent of the project’s proposed funding is unaccounted for, including $38.6 billion the CHSRA hopes to receive in federal funds (in addition to the approximately $3.5 billion in federal stimulus and transportation funds that has already been allocated), $13.1 billion expected from private investors, and $5.2 billion to come from other sources such as local governments.

In response to such criticisms, CHSRA Chairman Dan Richards argued that it is simply common practice for transportation projects to go forward without knowing from where the money will come. “I spent 12 years on the [Bay Area Rapid Transit] board in the transit world; we never knew where all of the money was coming from,” Richards said. “Our colleagues in Southern California just adopted a $540 billion regional transportation plan for the Southland, for the next 20 years, same time period we’re talking about here. They don’t know where all of the money is coming from.” Added Richards, “It is just part and parcel of the transportation world that people don’t know these things now.”

If ever there was a window into the mindset of a government central planner, this is it. So the excuse for such irresponsibility and carelessness with scarce taxpayer dollars is the notion that “Everyone else (in government) is doing it!” Besides, who needs to know minor details like how something is going to be paid for when your state faces yearly multi-billion-dollar deficits?

Yet CHSRA board member Mike Rossi calls the new business plan “credible, reasonable, and transparent.” Many of the high-speed rail planners are clever people, so it is hard to believe that they could be so divorced from reality. There are many special interests involved in a project of this scope, however (which is yet another reason why such things should be left to the voluntary decisions of people in a free market, rather than forced down people's throats through the political process), so perhaps it is simply an attempt to intentionally delude taxpayers whom they hope will be too apathetic or uncritical to notice otherwise.

One of the things that continually amazes me is how basic assumptions such as the cost of the project and the estimated ridership—which affects everything from how much revenue the system will generate to how much it will affect traffic congestion and greenhouse gas emissions—can change so dramatically, so quickly, and yet the supporters of high-speed rail cling to the project with religious fervor and never question how these seemingly arbitrarily-determined numbers affect the viability of such a large project. As I argued in my column,

The CHSRA and many advocates of high-speed rail have demonstrated that they are beyond reason, despite all the facts that contradict their hopes and assumptions. High-speed rail advocacy has become more of a religious crusade than a policy position. Avoiding the facts stacking against this project is how cost estimates can triple, then be reduced by one-third. It’s how ridership estimates can magically plummet to one-third of their original estimates (see this CalWatchdog article for a good summary on the project’s changing assumptions). It’s how major decisions such as changing from dedicated high-speed rail tracks to tracks shared with slower commuter trains on both ends of the system can be made. And yet with all these arbitrary changes, high-speed rail acolytes have not batted an eye or even questioned how the plan can still be considered feasible, much less profitable.

Moreover, the bond measure (Prop. 1A) that voters narrowly passed back in 2008 requires that a trip between Los Angeles and San Francisco on the high-speed train system take no more than 2 hours, 40 minutes. That probably would not have happened even under the older plans, but seems to be pure fantasy now that the high-speed trains will have to share tracks with slower commuter trains at both ends of the system. As Quentin Kopp, former California state senator and CSHRA chairman who was a leading figure in pushing for the passage of Prop. 1A and the creation of the CHSRA, admitted of the new plan, “This isn’t high-speed rail.” Added Kopp, “High-speed trains have separated tracks. That’s how they could achieve speeds and travel times promised to voters in the 2008 ballot measure.”

The high-speed rail project is such a disaster on so many fronts—economically, politically, even environmentally—that one can only hope that the plug will be pulled before California wastes more billions of dollars it does not have. At the very least, voters should have the chance to re-vote on such a project that is so different from the one put before them in 2008. Barring that, it will be up to the voters to use the initiative process to kill the high-speed rail system in order save themselves from more financial waste and abuse.

See my full article here.

Las Vegas City Neighborhoods Fare Worse Than Suburbs

Posted on April 25, 2012, 5:00pm | Baruch Feigenbaum

Much of the hype from the Great Recession has focused on how exurbs are losing population while closer in neighborhoods are gaining population. In reality the opposite is often true. At last week’s American Planning Association conference in Los Angeles, Alan Mallach of the Brookings Institution highlighted that in Las Vegas the suburbs and exurbs have survived the recession while the older parts of the city have not fared as well.

Mr. Mallach who researches urban revitalization and real estate divided sun-belt towns into four categories: bust high-cost, bust low-cost, small-decline and stable. Mallach found that although some cities particularly in California, Florida, and Nevada have high unemployment rates and depressed housing prices, any notion that the sunbelt is declining is a myth. Some sunbelt cities are outperforming the rest of the country. Texas metro areas have been some of the least affected places in the country by the recession. Mallach found that over the past fifty years, the only significant variable in predicting migration and growth is the average January temperature. This research supports the idea that the Sunbelt will begin growing again when the recession ends.

Typically the ghost towns in boom/bust cities such as Las Vegas are not distant suburbs but closer in neighborhoods. Home prices in the newer planned suburban communities decreased less than home prices in the older urban neighborhoods. The “less walkable” suburban developments saw smaller price depreciation than the “more walkable” urban developments. The vacancy rate in the new planned communities actually decreased during the recession. And during the recession, most home buyers continued to purchase a dream-house in a planned community with a 15-30 minute drive from their workplace. These homeowners do not consider a 15-30 minute one-way drive time an inconvenience. Other boom/bust cities across the country have housing characteristics similar to Las Vegas.

Mr. Mallach does not expect a radical change in the economy of demographic patterns. The most popular places in boom/bust cities like Las Vegas will most likely remain the suburbs. 

There are two takeaways from this research. First, while many have been quick to promote the death of the suburbs and the rebirth of central cities, in many metro areas this is not the reality. While revitalized cities have many positives, policymakers need to use facts not desires to create new policy. 

Second, many people still prefer to live in suburban areas. Yes many people, particularly the young prefer cities for their variety and excitement. Historically, younger people prefer cities. As these younger people age, have families, look for better schools and more affordable housing, they often move to the suburbs. People should be free to choose between the cities and the suburbs; both have advantages and disadvantages. The U.S. is a large country; promoting the same solution for every metro area is not the way to improve the neighborhood or the economy.

Denver's RTD Abandons Tax Hike for FasTracks

Posted on April 25, 2012, 12:56pm | Harris Kenny

Monte Whaley of The Denver Post reports:

A FasTracks proposal to link commuters in the northwest Denver metro area to downtown is stalled after the Regional Transportation District (RTD) board of directors decided Tuesday night not to pursue a tax increase in November that would fund the idea.

All 12 members of the RTD board said the timing is wrong for any kind of tax hike—which would have gone for to all unfunded and partially funded corridors—and there still remains too many questions about the plan.

This vote shelves an ongoing conversation about solving surface transportation needs in the Denver metropolitan area. In this piece I highlight two motivating factors behind their decision, and offer three takeaways for what to expect moving forward.

First, for those unfamiliar, I outlined the context of this vote in a reason.org commentary last month:

In 2004 voters in Denver’s Northwest Corridor approved raising a regional 0.4 percent sales tax, generating $894.6 million to build a Commuter Rail Transit (CRT) line known as the Northwest Rail Line by 2017. The proposed 41-mile diesel, 7-station diesel-powered (non-electric light rail) CRT would start at Denver’s Union Station and would have stations in Westminster, Walnut Creek, Broomfield, Louisville, Boulder, Gunbarrel and Longmont. The Northwest Rail Line is one piece of a larger regional transit program known as FasTracks...

Overall FasTracks is a multi-billion dollar transit expansion program that aims to ultimately comprise of 122 miles of CRT and light rail, 18 miles of bus rapid transit (BRT) and 21,000 new complementary parking spaces across eight counties. When voters approved FasTracks it was projected to cost $4.7 billion - these estimates have proven to be totally inaccurate.

Fast forward to spring 2012: FasTracks costs ballooned from $4.7 up to $7.4 billion and the system is not expected to be complete until 2042. Last year alone FasTracks' system-wide capital costs increased by $968.3 million and eighty five percent of that increase came from the Northwest Rail Line. The RTD Board of Directors weighed four options for the Northwest Rail Line that all hinged on ballot placement, and voter approval, doubling the initial FasTracks regional sales tax from 0.4 percent up to 0.8 percent. They pursued—and ultimately abandoned—a hybrid option prepared by the RTD staff that would have provided supplemental BRT from Westminster to Longmont until CRT was complete.

The RTD Board of Directors essentially punted on making a decision by abandoning the tax hike for the hybrid option, and they were primarily motivated by two factors.

1. It's uncertain whether or not voters would approve a tax increase this fall. For example, last fall voters rejected Proposition 103, which would have collected an estimated $3 billion in tax revenue for education, by nearly 40 points. Gov. John Hickenlooper famously described the state of the electorate last fall saying, "There's no appetite for taxes anywhere, all over the state." In addition to their analysis and public outreach, RTD reportedly conducted telephone polling to gauge voter willingness to support a tax increase and they likely weren't encouraged by the results.
2. Several board members expressed concern over the ambiguity of the proposed hybrid option. Board member John Tayer was quoted in The Denver Post saying, "I will not support going forward... until we have a specific plan and a specific time frame."

This vote is only a temporary setback, as the Board explains in a press release:

RTD will continue to work aggressively to seek alternative funding sources for the program including grants, public-private partnerships and unsolicited proposals. The Board will continue to explore pursuing a sales and use tax election in the future when the time is right for the region.

There are three takeaways from this vote by the RTD Board of Directors.

1. It's only a matter of time before another revenue raising ballot measure is discussed for the Northwest Rail Line. Stakeholders along the corridor have expressed continued dismay over the fact that full service won't be provided until 2042 at the earliest.
2. This may open the door for more innovative alternatives. Initial cost and completion projections have been totally inaccurate throughout FasTracks with the exception of one aspect: the Eagle P3 Project. The Eagle P3 project is a 34-year design-build-finance-operate-maintain (DBFOM) public-private partnership signed with Denver Transit Partners in July 2010. As mentioned above, RTD has signaled willingness to pursue similar public-private partnerships in their efforts to complete the line. RTD currently evaluating an unsolicited proposal for rail along I-225. 
3. Finally, with more time, it's likely that officials will be convinced of the merits of BRT. A recently launched global database on BRT systems demonstrates their efficacy in 134 cities around the world carrying over 22.4 million passengers daily. U.S. BRT leaders include New York City, Pittsburgh and Boston. The Board considered BRT prior to choosing the hybrid option. Compared to the CRT option, the BRT option would have offered: an earlier competion date, more frequent on-peak and off-peak service and more frequent stops; while offering comparable travel times, costing half as much in the short run and requiring lower annual operation and maintenance costs in the long run.

This project is one to watch in the coming months and years ahead because RTD has signaled interest in the types of innovative alternatives that would meaningfully address the Denver metropolitan area's surface transportation needs—before 2042 and beyond.

For more on the Northwest Rail Line and FasTracks, see my previous posts here and here.

Denver’s RTD Publishes 2011 Report on FasTracks

Posted on April 15, 2012, 5:56pm | Harris Kenny

Every year Denver’s Regional Transportation District (RTD) publishes a report detailing ongoing rapid transit projects within the boundaries of the Denver Regional Council of Governments (DRCOG). RTD’s largest project is FasTracks, a multimodal, multi-billion dollar transit expansion program that aims to ultimately comprise of 122 miles of commuter rail transit (CRT) and light rail, 18 miles of bus rapid transit (BRT) and 21,000 new complementary parking spaces across eight counties.

When Denver-area voters approved FasTracks in 2004 the system was slated to cost $4.7 billion and be complete by 2017. RTD has been unable to finish FasTracks on budget or on time. The report notes that overall costs increased from $4.7 billion in 2004 up to approximately $7.4 billion in early 2012. All other things unchanged, the system won’t be done until 2042. So, what’s next?

Last week RTD published its 2011 Annual Report to DRCOG on FasTracks. For a detailed system-wide update by region, see the full report available online here. The report includes an RTD map with a comprehensive view of the system:

FasTracks Plan, Rapid Transit Lines

Source: Regional Transportation District, 2011 Annual Report to DRCOG on FasTracks, April 3, 2012.

While the system is large, the Northwest Corridor has been at the center of the conversation over the past six months. RTD is asking DRCOG to approve a new option that would double the original regional 0.4% sales and use tax along the Northwest Corridor to generate more revenue for FasTracks. This option would expedite portions of rail construction and provide intermediary BRT service until rail is complete. Ultimately RTD hopes to complete the Northwest Rail Line out to Longmont, and estimates they will initiate construction and begin revenue service between 2026-2032. If DRCOG approves this option, then RTD will begin the process of placing the initiative on the November 2012 ballot.

For more on FasTracks see my previous reason.org commentary, "Denver’s RTD Weighing Options for Northwest Corridor."

DOT OIG Uncovers Financial Mismanagement in TIGER Grants

Posted on April 11, 2012, 9:38pm | Baruch Feigenbaum

The Office of Inspector General (OIG) of the Department of Transportation has uncovered financial management problems in a significant number of the TIGER stimulus programs. Inspector General Calvin Scovel detailed some of these problems in last week’s testimony before the House Subcommittee on Transportation, Housing and Urban Development.

According to The Fiscal Times:

But federal investigators have uncovered widespread financial management problems with many of the projects. As of early March, federal authorities were investigating 66 cases of alleged false statements, bid rigging, fraud and embezzlement, according to a report by Calvin L. Scovel III, the Department of Transportation’s inspector general. Justice Department lawyers are scouring 47 of those cases for potential prosecution, according to Scovel.

Twenty-five of those cases involve alleged fraud by minority-owned or operated enterprises that received preferential treatment in the awarding of the contracts, while 22 involve allegations of false claims. Investigators are also looking into nine cases of alleged violations of the prevailing wage law, three involving corruption and one case involving embezzlement, according to a report Scovel presented to the House transportation appropriations subcommittee on March 29. A spokesman for Scovel’s office declined to provide further details of the ongoing investigation, but stressed, “We take very seriously any allegations of waste, fraud, abuse or violations of the law.”

The section is part of a larger report on DOT management practices where OIG studied effective stewardship of the department’s resources and enhancing aviation, surface, and pipeline safety. The report states that a number of, “Ongoing and emerging management challenges remain.” The full report is available here. 

Among the findings, FHWA has not yet enhanced the local public agency program that managed projects overseen by cities, counties, and other local entities. The OIG found “persistent risks” including insufficient state oversight, non-compliance with federal labor requirements, and improper processing of contract changes. FTA directed a significant amount of funding to major projects, which had not been adequately monitored. For example, the department awarded $423 million to the Fulton Street project, which “had experienced significant cost increases and delay.” Meanwhile FRA and MARAD are still implementing oversight practices for grants some two years after the first grants were awarded.

The agency should have expected problems with the TIGER Grants. Any new program, no matter how well designed, brings new opportunities for fraud. And the TIGER program was not well designed; the administration rushed to create it without implementing sufficient checks and oversight. Without additional monitors, the TIGER Grants Program could be a goldmine for corruption.

How can DOT solve these problems? First, FHWA should immediately create a task force to fix the local public agency program. This task force should include state and local agency heads and create interim deliverables and a full-report within a year that details how to improve management and cooperation of local governments. FTA should create a special review team to oversee large projects. The OIG indicated that large transit projects have the majority of problems; creation of a special team over the next six months to monitor only these projects should not be that expensive or difficult. FRA and MARAD need to implement review teams immediately. While resources are always constrained, it is inexcusable that the divisions have been awarding TIGER Grants for two years and still have not implemented oversight practices. If these two divisions have not implemented practices by this August, Congress should reduce the budget for these two divisions. 

Creating new discretionary spending programs is challenging. It is impossible to consider all of the implementation challenges and opportunities for fraud. One of the disadvantages of large government programs, including merit-based programs, is they bring out the crooks. Grant programs need to be created methodically. While the Obama Administration wanted to create its program quickly for economic reasons, a more deliberate creation process would have yielded more benefits and less fraud. Hopefully, future discretionary grant program creators will take note and work to prevent some of the problems of the TIGER grants in any new program.

Latest California High-Speed Rail Plan is Still a Trainwreck

Posted on April 5, 2012, 7:49am | Baruch Feigenbaum

The California High Speed Rail Authority (CHSRA) released its latest business plan. And the plan is a trainwreck. Better in some ways than its predecessor and worse in other ways, the plan is more of a political exercise than a sound business plan.

Why did the authority release a new plan? (For those keeping track this is the fourth business plan the agency has released). Governor Brown ordered the board to rethink the previous plan after a majority of voters became disillusioned. The proposed high-speed rail line between Los Angeles and San Francisco has been much criticized. The $98.5 billion price tax was about triple what voters were told the line would cost when they approved it in 2008. The California High Speed Rail Peer Review Group expressed doubts in January concluding that it “…cannot at this time recommend that the legislature approve the appropriation of bond proceeds” because the project “represents an immense financial risk” to the state. This was in addition to criticism from the Bureau of State Audits, Legislative Analyst’s Office, the UC Berkeley Institute of Transportation Studies, Treasurer Bill Lockyer, democratic state senators, etc…Partly as a result two top board leaders, CEO Roelof Van Ark and Chairman Thomas Umberg, resigned in January. 

What changes does the agency’s latest plan make? First, the plan will save money by merging the bullet train with existing commuter rail lines in San Francisco and Los Angeles. An additional $1 billion in voter approved bonds will be used to upgrade the commuter rail tracks. The new first phase will link Merced and the San Fernando Valley by 2022, expanding on the original 130-mile Madera to Bakersfield section. However, the plan delays arrival of high-speed rail into Silicon Valley and the Bay Area. By running the bullet train on commuter rail lines, $30 billion is saved. However, the $68.4 million price tag is still $23.4 million higher than the plan voters approved four years ago.

While train service will now reach Los Angeles by 2028 instead of 2033 and the costs are somewhat smaller, the shared tracks will make service worse. Trains will not travel at average speeds of 150 miles per hour from Los Angeles to San Francisco, but at 150-200 miles per hour only in the Central Valley. In other areas where the service shares track with commuter railroads, trains will average between 30-60 miles per hour. This is slower than a car travels at highway speeds. 

This slower speed will make a big difference in attracting passengers. In order to attract passengers high-speed rail has to be time-competitive with airlines. In no country in the world has high-speed rail succeeded in luring drivers out of their cars. Automobiles offer many benefits that trains cannot match such as flexibility and comfort. In other countries, the high-speed rail passenger mix has been 90% former flyers, 5% former drivers and 5% people who previously did not make the trip. 

And the new business plan fails to solve many other problems. The plan’s funding component is still in Fantasyland. First, the plan continues to rely on billions from the U.S. Congress. With both Democrats and Republicans opposed to California high-speed rail that money is unlikely to be appropriated. 

Second, the network relies on fees from an untested cap and trade system. California is planning such a system to reduce its greenhouse gasses. Economists are wary about economic consequences from a cap and trade system. Many environmental policy makers do not think a cap and trade system is the best way to reduce pollution. And even environmentalists who support such a system think the funds should be used on environmental purposes, likely setting up a major fight over revenue. 

Third, the association is relying on mysterious private investors who will jump aboard and risk their own money once construction begins. This is the most ludicrous part of the proposal. (And for this project that is really saying something.) The private sector will become involved only when there is profit potential. This project uses artificially low costs and artificially high benefits. Nobody believes the agency’s math; and no transportation expert thinks this project could hope to break even, never mind turn a profit. No serious investor would touch this project. 

This high-speed rail line has several problems that no business plan could realistically fix. Los Angeles to San Francisco is not an ideal high-speed rail corridor. High-speed rail works best in short corridors from 200-350 miles in length. The 381-mile trip is already a little long to be ideal for rail. In addition, this rail line does not take the shortest path. California’s chose a 600-mile circuitous route because local municipalities lobbied for train service to their city, but the greater the number of cities served, the slower the train will travel. The Obama administration did not help by mandating the train served cities in the central valley. 

Why is this project still alive? Governor Jerry Brown sees this as his legacy. While he cuts other state services and proposes to raise taxes, high-speed rail remains the sacred cow. If California builds this line he will have a legacy but it won’t be anything to be proud of. This latest business plan is no better than the first three, California citizens should use all legal means to pull the plug on this trainwreck.

My colleagues Adrian Moore, Sam Staley, Adam Summers, and I have written extensively on California high-speed rail. Articles include: 

While Portugal Cancels High-speed Rail, U.S. Government Considers $5 billion for Second California Project

Jerry Brown Continues to Push High-Speed Rail Boondoggle while California Drowns in Debt 

California's High-Speed Rail Fibs 

The Detailed Concerns of the CA HSR Peer Review Group 

High-Speed Rail Gets Congressional Scrutiny

Streetsblog Misleads on Tappan Zee Bridge

Posted on April 2, 2012, 8:23am | Baruch Feigenbaum

Last October, the Obama Administration selected 14 infrastructure projects for expedited federal approval. The Tappan Zee bridge replacement project in New York was one of the selected 14 projects. New York State plans to add transit to the corridor. However, the transit will not be in place when the new bridge opens. The state decided to delay the transit portion because of the $5.3 billion construction costs for the transit system.

The state’s decision upset Streetsblog. The organization, which created a special page on its website, has written about the bridge 24 times since January 1st. The organization has used its webpage to lambast groups that are usually its allies including Governor Cuomo and The New York Times. These groups support building a bridge that will not include new transit service from day one. 

Streetsblog makes several valid points. Transit is heavily used in the region; there is a market for small increases in transit service. Bus-rapid transit (BRT) is cost-effective transit. BRT has low operating costs and virtually no capital costs as it shares the road with other vehicles.

In a world where the State Department of Transportation did not have a deficit, lobbying for immediate transit service would be appropriate. Unfortunately we do not live in that world.

The Tappan Zee Bridge was built in December 1955 to connect Suffern and Yonkers. Designed to carry 100,000 vehicles, 138,000 traverse the bridge on a typical day. While the infrastructure crisis in the United States is sometimes exaggerated, this bridge is in bad shape--parts of it are literally falling down. 

New York State began studying how to replace the bridge in 2002. The Alternative Analysis process in 2006 identified more than 150 suggestions on how to improve conditions in the corridor. Those 150 options were condensed into 16 different scenarios that were analyzed for their environmental impact, ease of construction, cost and mobility improvement. The state had plans but no money. 

Enter the Obama Administration. According to The New York Times:

Citing the bridge’s deteriorating condition, the federal Department of Transportation decided it would let the state go forward with the project as long as it streamlined its earlier plan to make a new bridge a centerpiece of a $21 billion, 30-mile transportation corridor. The federal agency said it would help speed up the process for the state to build a $5.2 billion eight-lane bridge, to which mass transit could be added in the future.

John D. Porcari, the deputy transportation secretary, said the expedited review process would allow different government agencies to work concurrently, shaving two and a half years off the building process. 

The state will pay for the project by issuing $3 billion in bonds against its toll revenues; the remaining $2.2 billion will be financed with loans from labor pension funds and the Transportation Infrastructure Finance and Innovation Act. 

However the available funding is limited. As a result the State will wait to construct transit. While Streetsblog accuses NYDOT of telling lies, the website is not exactly being honest. 

The state has gone out of its way to accommodate non-traditional commuters. New York DOT is building a 12-foot wide bicycle and pedestrian path. Residents of most of the other 49 states would be thrilled to have a state DOT that built a pedestrian structure on a highway. It is unlikely that many people will choose non-motorized transit to traverse the three-mile bridge; the fact that the state included such a wide path is noteworthy. Governor Cuomo is also studying the possibility of converting the current bridge into a recreational park. Converting the old bridge to a park is not free as the State will have to maintain the structure. 

Streetsblog lists 12 local political leaders who want to restore transit to the bridge. Yet there are at least 17 political leaders in favor of fast-tracking the bridge without immediate transit. And of the 12 who support it—not one of them has offered to commit one dime to the project. It is much easier to be in support of something if you do not have to pay for it. 

The bridge is on the national interstate system. The system’s purpose is to transport people and goods between points A and B. The primary goal is and should be about motor-vehicle movement. The new bridge will be paid for by tolls paid by drivers, labor pension funds, and TIFIA loans. Not one dime of the cost comes directly from transit users.

The state already operates BRT service on the corridor. It might not be as extensive as proponents want but the service exists. And operating it is not free. The state spends $2 million dollars to provide the service to 2,000 riders a day. 

As Streetsblog notes if the State starts BRT service that uses the general-purpose lanes, buses will get stuck in traffic. And for BRT service to be effective the state would have to add dedicated BRT lanes on I-87 from the Garden State Parkway to the Cross Westchester Parkway. But in another posting, the website complains that constructing the bridge wide enough to allow future BRT service in a dedicated lane is actually a conspiracy against transit. If the bridge needs dedicated BRT lanes for successful BRT service and the state includes them, how is that a conspiracy against transit? 

The longer the state waits to construct the new bridge, the more money it needs to spend maintaining the old bridge. Yet if the State has to spend money to maintain the existing bridge, it has fewer funds to spend on a new bridge. It is a catch-22 situation. Both sides are in favor of transit. But one side wants it from day one regardless of how long that delays construction. To say that the State does not want transit is misleading.

Data Does Not Support Claims that Light Rail Improves Rider Health

Posted on March 30, 2012, 4:27pm | Baruch Feigenbaum

The Department of the Treasury and the Council of Economic Advisors recently released a new report titled “A New Economic Analysis of Infrastructure” that lists many different reasons to improve infrastructure. Some of the reasons are good, some bad, and others bizarre. But the most noxious claim is that transit usage improves public health. Despite the report’s spin, the cited studies do not reach that conclusion.

The report is split into four major sections that detail the Return on Investment, Investing in Infrastructure, Uses (for) Underutilized Resources, Supporting the Middle Class and Americans Want More Transportation Investment. (Note to the authors: Americans might want more transportation investment but they do not want to pay for it. Unless the transportation genie builds a beautiful new highway, finding the funds to build that highway will be challenging.) Report subsections include such fluffy topics as Building a National Community and Creating a More Livable Community. The report also proclaims that “Now Is The Time to Act.” I am waiting for one of these reports that says tomorrow is the time to act. The report also details the role of a merit-based national infrastructure bank. Perhaps the authors can explain a merit-based national infrastructure bank to the President, because he still does not understand the merit part. 

The report has several good suggestions. The Next Gen section correctly notes the delays from our existing outdated aviation system. The Analytic Approach for Measuring Congestion details the high quality analytic work of the Texas Transportation Institute. (This study is about the only document that praises analytical work to come out of the Executive branch.) And it is hard to argue with building a Safer and More Reliable Infrastructure Segment. 

But the most bizarre and inaccurate claim buried on page 24 of the report is the Public Health Benefits of Transit Investments. The section begins by saying, “If improved infrastructure changed the way Americans live and work, there would be significant benefits to health and wellness.” The report then details several studies that supposedly show this happening in the real world. I have always been skeptical of these claims; logically, walking more should improve your health; but there are often many other factors at play. Furthermore, justifying expensive transportation investments based on small health improvements is a very weak argument.

Quoting from the actual study:

Using data on individuals before (July 2006 to February 2007) and after (March 2008 to July 2008) the completion of a light rail system in Charlotte, North Carolina, they find that the use of light rail to commuter to work is associated with a nearly 1.2 point reduction in body mass index as well as an 81 percent reduction in the odds of becoming obese. Moreover, improved perceptions of neighborhoods as a result of the availability of light rail were associated with 15 percent lower odds of obesity as well as higher odds of meeting weekly recommended physical activity levels for walking and vigorous exercise. 

First, this is one study in one metro area. The results in Charlotte, North Carolina may not be transferrable to other areas of the country. Second, the sample size is very low. Only 26 of the 498 people used light-rail transit (LRT) to commute to work on a daily basis. Although this 5.2% of the total population living in the area is statistically significant, making generalizations based on its small size is a bad idea. Third, there are several lurking variables that might affect the results. LRT users were three times as likely to be African-American as residents of the neighborhood as a whole. Different population groups have different rates of high blood pressure and diabetes. This is something that report should have taken into consideration. The LRT commuters are twice as likely to rent as opposed to own their houses compared with the neighborhood as a whole. Does this affect health or propensity to exercise? It might. 

There are also several key limitations to this study. Quoting from the study:

There is likely substantial reporting error in estimates of these outcomes. For example, the measure of meeting vigorous RPA is likely high because of self-reporting bias. … Establishing the potential long-term effects of light-rail use on obesity will require subsequent follow up studies with larger samples of individuals that specifically measure walking distances through pedometers. 

In other words, the study does not definitively report anything. 

The second related study that the report quotes considered whether building new light-rail systems could be justified based on the potential health benefits. The study was rather blunt: 

While these results suggest that there is a sizable public health benefit associated with the adoption of light rail, they also indicate that the effects are relatively small compared to the costs of constructing and operating such systems. These findings suggest that planning efforts that focus solely on the health impact of modifications in the built environment are likely to overstate the economic benefits.

In other words, the benefits do not exceed the costs. 

The fact that the health part of the report was buried deep inside the contents indicates the Department of the Treasury realized that this is not the strongest part of the report. So why include it at all? 

The Obama administration is on a mission to increase transit spending. It is throwing everything at the wall in hopes that some of it will stick. Since there is little quantitative data to support the administration’s claims, the administration is changing the New Starts rule so its pet projects can be evaluated by qualitative measures instead. My colleague Bob Poole has more details here. This administration decides what transportation policy it wants and then tries to find the data that supports that policy. The claim that light-rail transit improves public health is not supported by the cited studies.

While Portugal Cancels High-speed Rail, U.S. Government Considers $5 billion for Second California Project

Posted on March 27, 2012, 9:11am | Baruch Feigenbaum

While Portugal’s government cancelled a high-speed rail line between Lisbon and Madrid, politicians in the U.S. want to build another unnecessary high-speed rail line in California. According to the The Wall Street Journal:

Prime Minister Pedro Passos Coelho immediately suspended the expensive project when he took over the office in June last year, saying Portugal didn't have financial conditions to pay for it after requesting a EUR78 billion international bailout. Discussions on the line's future, however, continued.

Portugal's plan to build the EUR8.3 billion high-speed train network was launched in 2006 by then prime minister Jose Socrates. Many economists have raised doubts as to the benefits of the project, noting that the funds used to build the high speed train network would be better used for other means, or saved. 

While California’s economy is not nearly as debt ridden as Portugal’s, there are valid comparisons. Both California and Portugal have substantial debt; California has $361,000,000,000 and climbing. This equates to 18% of California’s GDP. Portugal has 400,000,000,000 euro of debt. This equates to 106% of Portugal’s GDP. Both have cut other services. Portugal started cutting pensions and reducing public service wages in 2010. California has already cut Social Security, child-care, public education, public safety, and libraries. According to Governor Jerry Brown, “These cuts to universities, in  home supportive services, schools, prosecutions are not good, they are not the way we would like to run California, but we have to live within our means. 

Apparently “living within our means” does not apply to high-speed rail. The meandering service connecting Los Angeles with San Francisco is now forecast to cost $100 billion. The first section will not start at either Los Angeles or San Francisco but connect Bakersfield to Merced in the sparsely populated central valley. The project has been panned by the California High-speed rail review group, the California Transportation Institute, the Institute of Transportation Studies and every other non-partisan group. Many Democrats in the state legislature now oppose the project. Senator Joe Simitian of Palo Alto said “…we don’t know, after three and a quarter years, what the plan of the High-Speed Rail Authority is.”

And the insanity does not stop with one line. According to NBC’s Today Show, a company linked to Senate Majority Leader Harry Reid wants to build a second bullet train line from Victorville (which many consider the middle of nowhere) in California to Las Vegas. The location of the train station is so remote that is not currently in the city limits. The Obama Administration is close to awarding $4.9 billion to build the 150 mile-per-hour train. The loan would be three times the amount that FRA has loaned 32 other projects through the Railroad Rehabilitation and Improvement Financing program since 2002. Transportation Secretary Ray LaHood has blessed the train because, “It means jobs.” Yet, the professionals at the Federal Railroad Administration (FRA) have major doubts about this new line.

Construction cost estimates stand at $6.5 billion not including interest on the loan. FRA found numerous problems with the way the consultant conducted the analysis. These include the overall model, the accounting of air travel time and air delay and the inducement of day-trips. FRA found almost all of the touted 80,000 jobs would be temporary. At most 722 would be permanent. Desert Xpress, the company that plans to build the line, was depending on private dollars. However after private investors failed to materialize, Desert Xpress turned to the attractive loan terms of federal money.

The biggest problem with this line is it relies substantially on automobile users. The Federal Railroad Administration, Congressional Research Service, and the Office of the Inspector General have found high-speed rail does not induce people to leave their cars or reduce highway congestion in any way. In the U.S. and across the world, rail improvements of less than 150 miles reduce automobile ridership less than 1%. Why? According to the Inspector General “Automobile travel differs greatly from air or rail travel in that it generally involves door-to-door service, offers greater flexibility in time of departure, and does not require travelers to share space with strangers.”

Other studies found most travelers were “broadly happy” going to Las Vegas by car or airline. Currently flights from Los Angeles to Las Vegas can be booked for under $100. This is likely far cheaper than tickets for the train could be.

Even pro high-speed rail group America 2050 does not think much of the Los Angeles to Las Vegas line. This type of project ranks poorly in the group’s two primary criteria of regional population and employment in the central business district. There is little population in Victorville and even less employment. The group did not think much of a plan to link downtown Los Angeles to Las Vegas, ranking it 5^th in the region behind almost every other California corridor. This project that starts in the middle of nowhere, 100 miles from downtown Los Angeles, would rank even lower. 

The project has much to do with the political power of Senator Harry Reid. Reid initially backed another rail program but changed his mind after Sid Rogich, a Republican adviser to two presidential campaigns, helped Reid win re-election in 2010. Anthony Marnell, another member of Republicans for Reid, is president of one of several companies associated with Rogich. Marnell has donated at least $15,000 to political committees connected to Reid since 2010.

The Victorville-Las Vegas rail project is another unnecessary high-speed rail project. It makes less financial sense, than the Los Angeles to San Francisco project that stands to cost at least $100 billion to build. Instead of acting like Portugal and canceling the first unnecessary high-speed rail program, politicians may burden California with a second unnecessary high-speed rail line. Practical infrastructure and California do not belong in the same sentence.

Chinese Rail Section Collapses After Rain

Posted on March 16, 2012, 11:01am | Baruch Feigenbaum

Despite sacking two senior rail officials China’s high-speed rail program has not fixed its safety issues. A section of railway collapsed in China’s Hubei province following heavy rains. It is expected to take at least one month to repair the section. While state media initially claimed that the problem affected only 1,000 feet of track, government officials now admit that 4.3 miles of track will need to be replaced. While the tracks had been built to tolerate a sinking of as much as 3 millimeters, the foundation for the train tracks sank 3.33 to 4.22 millimeters. 

The railway section had already undergone test runs and was supposed to open in less than two months. While heavy rains are the official cause of the incident, other reports indicate construction methods on another section of the line, including the substitution of soil for rocks in the railway bed is the real cause. While the section sunk last week, state media did not reveal any information until this week. 

This is the latest in a series of incidents for high-speed rail in China. In one instance, according to The Washington Post, almost all of a $260 million railway line in northeast China had to be redone after bridge foundations were filled with rocks and sand instead of concrete. Last year one bullet train rear-ended another, killing 40 people. As a result of the bullet-train crash, China is scaling back rail-expansion plans. China will spend only 400 billion yuan this year after spending 707 billion yuan in 2010 and 464 billion yuan in 2011. The high-speed rail network is scheduled to reach 16,000 kilometers by 2015. 

Clearly there are still major problems with Chinese building quality. Despite last year’s dismissal of two high-level governmental officials, corruption is still prevalent. According to The New York Times, Contractors working for the ministry say they are regularly squeezed by officials who pocket money intended for construction. One contractor claimed he was forced to cut corners on building materials to make a profit. 

There are two takeaways for the U.S. First, it does not matter how much money a country spends if the infrastructure does not last. In one of the most popularly-quoted lines the U.S. spends 2.4% of its GDP on infrastructure, Europe 5% and China almost 10%. And what has China received for that 10%? It has some substantially richer government officials. For 2012 alone, China is forecast to spend $120 billion on new high-speed rail infrastructure. Train speeds have been reduced. Some officials have questioned whether the infrastructure is durable enough to last more than 10 years. Higher government expenditures are not buying better quality. 

Second, high-speed rail creates its own constituency groups. The money that the Chinese government is spending on high-speed rail is as much to enrich government officials as it is to provide transportation options. Many average Chinese residents cannot afford the high-speed rail and instead rely on conventional trains. But Chinese officials cannot make money by maintaining traditional train tracks. While the U.S. would not have the corruption of the Chinese system, there are parallels in California’s high-speed rail plans. Similar to China, there has been no groundswell of residents demanding high-speed rail. Similar to China certain government officials including U.S. Secretary of Transportation Ray LaHood and California Governor Jerry Brown have a dogmatic vision of high-speed rail divorced from reality. And similar to China, cost escalations are a problem. While the train crashes in China could most likely never happen in the U.S. there are several disturbing parallels. 

Reason has written extensively on Chinese high-speed rail issues. The latest stories are here and here.

Secretary LaHood's Blind Support for Honolulu's Rail Project

Posted on March 16, 2012, 9:07am | Samuel Staley

U.S. Department of Transportation Secretary Ray LaHood went before the U.S. Senate Appropriations Committee's Subcommittee on Transportation, Housing, and Urban Development to reiterate the departments support for a $5.3 billion elevated rail project on Oahu, Hawai'i. The Secretary was responding to copies of emails released the day before by plaintiffs in a legal challenge to the inititative showing the Federal Transit Administration has serious reservations about the viability and utility of the project.

According to the Hawai'i Reporter (March 15, 2012), Secretary LaHood told the commmittee:

"Since I have taken this position, I have had the privilege of being with you in your state. We’ve talked about this project. You were kind enough to convene a meeting about this and other projects in Hawaii. I want you to know that we are committed to this project. This is an important project. This will deliver people all over the island. It’s an important project and at this point, we will continue to work through whatever issues need to be worked through. We’re committed to this. We’re committed to the money; we’re committed to the project. And, until we hear differently from others who are intimately involved in this, I see no reason why we won’t go forward,” LaHood said.

"LaHood was reaffirming his Department of Transportation’s FY2013 budget request that asks for $250 million for the 20-mile Honolulu Rail Transit project, the "largest single item in the Department’s New Starts portfolio," and addressed the emails after Inouye asked him for his current view of the project."

Hmmm. I wonder of Secretary LaHood has actually seen the alignment of the rail project. I toured the alignment from beginning to end in 2010, and the rail line will not "deliver people all over the island." The elevated rail line is pretty much a straight shot along the southern edge of the island of Oahu, starting in a largely unpopulated region on the western side of the island (Kapolei) and terminating on the east in downtown Honolulu. It won't serve the island's population in the north central region, North Shore, eastern shore, Diamond Head, or Waikiki. In fact, it won't serve much of anyone in the early decades because the terminal point is located in the middle of vacant fields.

Before touring the route and seeing Honolulu first hand, I thought this project might be a case where rail made sense. It didn't take long for me to believe that this project doesn't because  the constructin is mistimed, the potential for growth is limited, and Honolulu's jobs and population is suprisingly dispersed despite its relatively high densities. While the corridor is highly congested, the connections along the rail alignment aren't sufficient to really create meaningful time savings. The potential for transit-oriented development is quite limited, particularly along the western reaches of the alignment.

High Speed Rail and the Vision Myth

Posted on March 10, 2012, 1:43pm | Samuel Staley

The Los Angeles Times (March 8, 2012) has an article on California's high-speed rail program that implicitly, if unintentionally and subtley, shows a media bias toward these glitzy projects. The article starts off with the main thesis:

"The bullet trains that would someday streak through California at 220 mph are, in the vision of their most ardent supporters, more than just a transportation system. They are also a means to alter the state's social, residential and economic fabric.

But those broader ambitions are triggering an increasingly strident ideological backlash to the massive project.

The fast trains connecting Los Angeles and San Francisco would create new communities of high-density apartments and small homes around stations, reducing the suburbanization of California, rail advocates say. That new lifestyle would mean fewer cars and less gasoline consumption, lowering California's contribution to global warming.

The rail system also would reduce the economic and transportation isolation of the Central Valley, which would grow by 10 million or even 20 million people, according to Gov. Jerry Brown."

The amount of space devoted to the arguments of the advocates in and of itself is telling, but the real bias is in the framing of the article itself: as a clash of visions. Anytime the core debate over an issue is cast as a conflict over visions of the future, the opposing view is inevitably short changed as advocates of new programs are cast as forward looking and unconstrained by the narrow trappings of current thinking. Thus, high-speed rail proponents are able to sell their nearly $100 billion project without data or evidence, while the critics are cast as reactionaries and obstacles to progress. When core issue is a tug-of-war between competing visions, evidence and data mean little because the discussion is fundamentally about values, not implementation.

Yet, in the case of California High-Speed Rail, an increasingly rising groundswell of opposition to the project is based on evidence and data, not competing visions. The cost of the CA HSR project has gone from under $40 billion when voters were asked to approve funding at the ballot box to nearly $100 billion. At least three independent panels have reviewed the project's business plan, assumptions and forecasts and found them, to be charitable, wanting. Ridership forecasts are based not only on implausible demographic trends, but unreasonable assumptions about rail's ability to capture market share among the traveling public and questionable applications to California of the operating experience of facilities in other parts of the world. Choices about alignments and investments have been based on political expediency, not operational efficiency or effectiveness. Politically, the entire project has been a debacle since the ballot initiative. If the issue is cast as a debate over competing visions, these more practical issues can be conveniently sidestepped.

To be fair, the LA Times article mentions a few areas where experts have questioned the efficacy of the program, not just the vision. These two practical criticisms were relegated to a few quotes questioning the forecasts of rising population growth (the state's population growth won't grow from today's 37.5 million people to 60 million by 2050), and HSR's carbon benefits will take 30 years to achieve rather than 50. But, given the serious questions raised about the CA HSR program's transparency and costs, these criticism pale in terms of their importance.

The debate over HSR in California is not, for most, a conflict over visions for California's future. Most of the opposition is rooted in very practical and pragmatic concerns about whether this program even makes sense.

For more on Reason Foundation's work on high-speed rail in California and elswhere, check out our mass transit topic page.

Transit Governance Legislation for Atlanta Dead for 2012

Posted on March 6, 2012, 8:25am | Baruch Feigenbaum

Voters in each of Georgia's 159 counties will head to the polls on July 31st to vote on whether to raise their sales tax 1% to fund transportation. The vote will be one of the bigger national transportation stories of 2012.

The sales tax is one part of the Transportation Investment Act that became law in 2011. For the Atlanta region, the bill also includes a Transit Governance Study Commission. The commission released a report that recommends combining the transportation agencies in the state of Georgia under one state agency.

While experts generally agree some sort of organization is necessary, the devil is in the details. Last Friday, Jeff Mullis, R-Chickamauga, and Jay Roberts, R-Ocilla, introduced a blueprint for a regional state transit agency. However, the bill has numerous issues.

Ariel Hart of The Atlanta Journal-Constitution has covered the issue extensively here and here. In summary:

In a blow to hopes for Atlanta regional mass transit, a blueprint for a regional transit agency was finally introduced in the General Assembly this week after more than a year of work -- and immediately condemned Friday as so thorny that it probably will not come up for a vote this session.

The sponsor of Senate Bill 474, Senate Transportation Committee Chairman Jeff Mullis, R-Chickamauga, said he had not taken a vote count and did not rule out hope. But he said that it was better to wait to get "perfect policy" and more support.

"We are going to keep on working on it," he said, and "bring more people on board before we move forward. We'll just keep on working even if it takes more than a year."

The issue was how much control the state should have over a service that it hardly funds.

SB 474 would create a regional transit council composed mostly of mayors and county commissioners to oversee the patchwork of local transit systems. The council could help the systems coordinate overlapping services, making them less of a patchwork. And the whole effort held out hope that at some point in the future, the state might begin funding regional transit operations.

However, the council would be part of the Georgia Regional Transportation Authority, whose board would be appointed by the governor, the House speaker and the lieutenant governor. And that state board, even if the state paid nothing for transit, would hold veto power over the local officials.

An additional issue that concerns MARTA officials would remain: A restriction on spending MARTA's own money would stay in place -- unless MARTA gave up power to the state over federally funded capital projects.

Mayors and other officials in Fulton and DeKalb counties, where taxpayers currently pay the 1 percent MARTA sales tax, lobbied in vain last year for a regional mass transit bill. They said they doubted their voters would approve another transportation tax, the 10-year regional one, if there wasn't a new regional system to spread around the financial burden they already have with MARTA.

Unhappy with the original bill, Democrats introduced an alternative bill.

Some local officials and residents of DeKalb and Fulton counties complained that the proposals seemed to give too much power to the state, as opposed to the region or local officials, when the state hardly funds mass transit. They said that was unfair to MARTA taxpayers, who are in DeKalb and Fulton.

As an alternative, Democrats this week introduced House Bill 1200, which would instead create metropolitan transit authorities. But they do not hold a majority of votes.

The bigger question is what does this mean for the Transportation referendum?

"This would have been counterproductive," said Sen. Vincent Fort, D-Atlanta. He called some of the provisions in the bill "insanity," particularly the terms for MARTA to control its own money.

But others said the failure to move any legislation would have a "significant" impact on voters' willingness to vote for the referendum in Fulton and DeKalb counties, where the referendum needs its support to stay strongest. Enough to defeat the referendum entirely? "I don't know," said Sen. Fran Millar, a Republican who represents parts of DeKalb and Gwinnett counties. "Time will tell."

Sandy Springs Mayor Eva Galambos had asked for regional transit governance. Now, "the fact that that bill didn’t go forward doesn’t bother me at all," she said, citing that it didn't do anything to ease the burden on Fulton and DeKalb. However, "the fact that nothing productive is going forward, that does bother me ... I don’t think it helps the [referendum] passage."

Most citizens do not realize that the law authorized a transit governance commission. Whether someone votes for or against the resolution will have more to do with the questionable project list and funding mechanism than an abstract governance problem. 

However, the failure of politicians in the Atlanta region to agree on a board to oversee transit, never mind the type of transit itself, is discouraging. The state argues it should control the process because its Georgia Regional Transportation Authority (GRTA) is the only regional transportation agency. Unfortunately the state contributes very little in actual transit funds. The Metropolitan Atlanta Regional Transit Authority (MARTA) argues it should control transit because it operates the majority of service and better understands the funding and grant process. However, due to features it can control (high costs) and features it cannot (anti-urban and xenophobic feelings) it is not and will never be a regional agency. Both agencies make good points. Some sort of compromise is technically possible. 

That is until you realize this is really a political fight. State leaders, mostly Republicans, are fighting with Fulton and DeKalb leaders, mostly Democrats over money and power. Delaying this vote until after the election is certainly the right move. But I am not convinced that the political gamesmanship will disappear in 2013. The metro region certainly needs transportation relief. But, the failure to enact transit governance legislation starts metro Atlanta on the wrong track.

China High Speed Rail's Hard Lessons for the US

Posted on February 28, 2012, 6:50pm | Samuel Staley

I've weighed in on China's high-speed rail debacle and what lessons it has for the US in commentary just published by Reason Foundation (February 28, 2012). I wroter a much longer version for National Review (December 19, 2012), but this story has important implications for US policymakers.

One of the critical weaknesses of the China high-speed rail program was the national profile given to it by the national government. The mere size of the program combined with its political profile pushed the program faster than it could keep up while inviting corruption.

As I point out in the Reason commentary:

"China's enthusiasm for high-speed rail and the national pride it engendered outpaced the ability of its engineers to adapt technology safely and efficiently. China began to adapt technology to the particulars of the Chinese system through joint partnerships with experienced foreign firms in 2004. As glitches became apparent (none of which appeared significant at the time), the government moved the goal posts to achieve even more ambitious objectives, according to extensive investigative reporting  by the Chinese business magazine Caixin. Instead of 200 kph trains, the trains were expected to achieve speeds of 250 kph, then 300 kph. Technology never really caught up, a factor compounded by the uniqueness and vastness of the Chinese system."

China is not retreating from commitment to high-speed rail (it's system is largely built out at this point), the cost of moving too quickly has been significant in terms of its international prestige as well as the damage to the government's domestic political credibility. One of the "learnings" from China is fairly simple: Once a program achieves national prominance and becomes part of a broad-based political platform, it's a good time to step back, reassess, and slow down.

Converting HOV Lanes to Managed Lanes Decreases Travel Time and Increases Transit Quality

Posted on February 17, 2012, 12:31pm | Baruch Feigenbaum

Converting high occupancy vehicle lanes (HOV) lanes to managed lanes decreases commute times and increases the quality of transit service. This cost-effective transportation solution has proven effective in multiple cities throughout the country. This was the conclusion of a session at last month’s Transportation Research Board conference in Washington D.C. The session highlighted improvements in Seattle, Miami, San Diego and Minneapolis. 

There are several common factors present in each metro area. All cities feature variable pricing. (In variable pricing when congestion increases in the managed lanes, the price increases to encourage people to switch to the general lanes or another route. When congestion decreases, the price decreases to encourage people to use the lane.) All projects used travel time information either as signs on the highways, as part of an application for smart phones, or both. All projects improved transit service and decreased travel times. Finally, all projects located their transit stations in the middle, above or adjacent to the managed lanes. 

Seattle: In the early 2000’s, Sound Transit and the Washington Department of Transportation partnered to improve I-405. On I-405 the HOV lanes were not meeting performance targets while on SR-167 the lanes had unused capacity. Transit service needed improvement in both corridors. The plan added two new managed lanes in each direction to I-405 and improved travel time on local arterials. The transit part of the plan added a Bus Rapid Transit system, 9 new transit centers, a 50% increase in service, high-occupancy vehicle (HOV) direct-access ramps and flyer stops, a managed lane system, 5000 new park and ride spaces and 1700 new vanpools. The conversion decreased travel times and increased transit service. Managed lanes are being studied for the new SR 520 bridge and future improvements to I-5.

Miami: During 2010, the Florida Department of Transportation (FDOT) partnered with the Miami-Dade and Broward transit agencies to improve travel speeds and options. The DOT converted one HOV lane to two managed lanes. This project added one additional lane in each direction to the highway. The average travel speed during the afternoon nearly tripled from 18 miles per hour to 50 miles per hour. The Miami-Dade and Broward transit agencies took part in a regional bus program that operates express buses from the suburbs into downtown Miami during the morning and evening rush hour with 30-minute headways. Over the last two years the express buses have increased every month in popularity, slowed only by the lack of parking spaces at the transit station. This increased the total ridership in the managed lanes from 1,800 during the peak hours in 2009 to 4,600 during the peak hours of 2011. The state plans to expand the program to I-75 and I-595. 

San Diego: The San Diego Association of Governments (SANDAG) in cooperation with CalTrans and the local transit operators added managed lanes to I-15 in southern California. The 35-mile corridor ranges from Escondido in the north to downtown San Diego in the south. The corridor features a four-lane barrier separated facility. The movable barrier provides either 1, 2, or 3 lanes depending on the time of day. The spacing of stations every 4-5 miles allows the buses to travel at highway speeds for most of their journey. The new managed lanes move 21% more people per lane than the general-purpose lanes. And the high-occupancy vehicles represent 80% of the total managed lane users. The 2050 plan includes managed lanes on I-5, I-805, SR 52, SR 54, SR 56, SR 94, and SR 125.

Minneapolis: The Minneapolis Department of Transportation and MetroTransit partnered for the I-394 project. Minnesota converted I-394 HOV lanes to managed lanes in 2005. Minneapolis prioritized maintaining and improving its quality bus service. The city has an extensive Express Bus system with 18,000 users riding more than 100 express buses. The I-394 corridor is a shoulder lane with BRT stations. The revenue is shared with transit providers in the corridor. The HOT lanes provide a new option to solo drivers while increasing the quality of service for transit users. Minnesota plans to build managed lanes on I-35E, I-35W, I-94, I-494, I-694, US 169, SR 36 and SR 37.

These four different HOT-to-managed-lane conversions prove that managed lanes can succeed in almost any location by increasing vehicle speeds, passenger throughput, and quality transit service.

More on the President's 2013 Transportation Budget--Totally Politics and Mostly Irrelevant

Posted on February 16, 2012, 8:27am | Baruch Feigenbaum

The Office of Management and Budget released the President’s 2013 budget for the Department of Transportation. Due to new agreements for Aviation and the President’s desire to adopt the Senate transportation bill, parts of his proposal were irrelevant as soon as the document was released.

My colleague Adrian Moore summarized the budget here. Ken Orski of Innovation Briefs also discussed the document. I want to take an in-depth look at the budget and highlight the worse parts. 

The proposal increases funding for the highways account to $41.8 billion in 2013, an increase over 2012’s $39.1 billion but less than $42.2 billion proposed by the Senate. The proposed funding for the Federal Aviation Administration totals $16.1 billion. This is $196 million more than 2012 and $326 million more than the new long-term aviation bill. The budget requests $10.8 billion for the Federal Transit Administration, an increase of $233 million over 2012. Because of account restructuring, the actual increase to transit may be closer to $300 million. A total of $2.7 billion will go to the Federal Railroad Administration. Of the total, $2.5 billion will fund Amtrak and High-speed rail. This is more than a billion dollar increase from 2012. Will this administration ever face the reality that high-speed rail is not going to be built anytime soon? The bill also includes $580 million from the federal Motor Carrier Safety Administration and $981 million for the National Highway Traffic Safety Administration, $276 million for the Pipeline and Hazardous Materials Safety Administration, and $344 million for the Maritime Administration. The Office of the Secretary again proposed $500 million for the TIGER style discretionary grants. The full transportation proposal is available on the Office of Management and Budget website here. 

This transportation part of the budget proposal has several major problems: 

1) Parts of it are already moot. The House and Senate have agreed on a new aviation bill that the President signed yesterday. The Senate has proposed a new transportation bill that the President intends to support. As a result, the highway, aviation, and transit parts are irrelevant.

2) The President’s plan ignores the failure of the Super Committee. The failure of the committee lowers the budget cap from $1.05 trillion to $958 billion. The President’s plan assumes this cap will be tossed aside.

3) The budget reclassifies high-speed rail, Amtrak funds and new subway and light-rail projects as mandatory. Previously these programs were discretionary. What does this mean? “Mandatory funding” operates under different budgetary rules. The President can include large funding increases for mandatory programs that he cannot include for discretionary programs.

4) A $50 million national infrastructure bank is included (again). The President has cajoled Congress into passing this proposal. Congress has been studying the issue since 2009. At least three bills have been proposed and subsequently died in the Senate. An infrastructure bank is a good idea in theory. However, the U.S. already has an infrastructure bank called TIFIA. The recently passed Senate bill increases TIFIA funding to $1 billion. The President’s proposal is not a bank but rather a discretionary grant program. The White House already has discretionary grant programs, including TIGER. Another grant program is not needed and only figures to increase politically motivated discretionary grants. (My colleague Robert Poole previously discussed the problems with creating a good infrastructure bank here.)

5) The President’s proposal has no funding plan. It is easy to dream of grandiose solutions but without funding they are just dreams. Both the House and Senate bills have funding issues. The House bill relies on unrealistic revenue from oil and gas leasing. The Senate bill has a large funding hole. However, at least both the House and the Senate have attempted to find revenue and explore different revenue sources. What revenue sources is the president considering? Will he consider a vehicle-miles-travel fee? No. Is he willing to cut non-motorized transportation that benefit only local interests from the bill? No. Will he cut local transit? No. Will he cut high-speed rail funding or the TIGER Grants Program? No, and No.

6) It is a campaign document. Budget documents are always somewhat unrealistic. The past three Presidents have used even year budgets to promote their policies. Presidents limited to proposing legislation, not passing it. The 2013 budget is intended to please his base. However, past transportation proposals have included sensible programs with a realistic sense of passage. 

Perhaps it was too much to expect this President to make transportation a priority. When SAFETEA-LU the last long-term transportation bill expired in 2009, the President did not place a high priority on enacting a new bill. Over the last two and half years he has been content to create the political TIGER Grant Program while his Secretary LaHood focuses on distracted driving. This budget is exactly what we should have expected from the White House.

Follow the Swedes to Market-Based Taxi Deregulation

Posted on February 13, 2012, 10:14pm | Samuel Staley

One of the most common objections I run into with respect to taxi deregulation is the concern that taxi drivers might have the audacity to charge different prices for different trips and customers. I think ultimately this fear is born from a lack of experience with riding in a taxi, but many people, including "experts," believe that the taxi market is so dysfunctional that drivers and customers couldn't voluntarily settle on a price based on willingness to pay. Thus, the government has to set a "fair" price. (Ironically, most taxi users think that taxi laws are protecting their interests when, in fact, they protect the interests of the established taxi companies as I discuss in a January/February 2012 article in the Freeman.)

Moreover, a number of cities in the US, usually smaller ones, don't regulate taxi fares at all. Most big cities do, however, and that's where most people draw on their experience.

I didn't realize until recently that one of the best examples of taxi deregulation didn't exist in the US at all. Rather, taxi deregulation is working quite well in the cradle of the modern weflare state: Sweden. Deregulation began in earnest in 1990, and the Swedes deregulated fares as well as entry into the market and created dynamic and competitive market that serves consumers quite well as a result. A full analysis can be found in a 2007 report from the Organization for Economic Cooperation and Development (OECD) beginning on page 174. One important rule that still exists? Taxis have to publish their fares so that users can see them before they step into the cab. As the report notes:

"Since the deregulation taxi companies are free to set their fares but are required to inform customers about the fare prior to trips. There are guidelines and agreements on how prices should be presented to customers both inside and outside the taxicab. Taxicabs must also be equipped with receipt writing meters."

The system has been working well ever since (although new regulations were added in 1995 to beef up driver requirements such as background checks for violent crimes). Perhaps it's time US cities followed the Swedes toward this market reform.

Preserving the Highway Trust Fund and Paying for Transit Projects

Posted on February 9, 2012, 3:49pm | Robert Poole

In recent weeks my Reason Foundation colleagues and I have been strongly critical of the House proposal to supplement the Highway Trust Fund (HTF) with revenues to be derived from expanded oil and gas production. Indeed, we participated in a joint news conference with the Competitive Enterprise Institute, Natural Resources Defense Council, and Taxpayers for Common Sense in defending the principle that the federal program should continue to be based on the users-pay/users-benefit principle. Closing a large HTF funding gap with non user-tax revenues, even if there were enough money to do so (which there isn’t) would destroy the HTF’s protected status as exempt from across-the-board federal spending cutbacks. That’s because the Budget Control Act grants that protected status only to trust funds that obtain at least 90% of their funds from user taxes.

But last week, the House Ways & Means Committee came up with a way to save the Trust Fund. It would shift funding for urban transit out of the HTF (where it has been since 1983) and support it out of general federal revenues. That would close $40 billion of a projected $50 billion gap in the four-year House bill, which would retain the Highway Trust Fund’s protected status. (To be sure, the $40 billion general-fund amount for transit would still have to be “paid for” by other spending and revenue changes, but because the new Alternative Transportation Account would not be a user-tax-supported trust fund, the arena of possible “pay-fors” is wide open.)

Needless to say, transit-friendly interest groups are going berserk over this change, putting out news releases using terms such as “decimate,” “slash,” and “just short of defunding” transit. When you look past the rhetoric, they seem to be advancing three arguments.

First, even if the first four years’ $40 billion (preserving recent funding levels) is ensured, all bets are off in subsequent periods. They fear that in the coming era of reducing the size and scope of the federal budget, the merits of continued federal support for urban transit will fail to carry the day. Since I don’t see supporting urban transit as inherently federal, I wish they were correct, but given the lavish federal support transit has received over the last several decades, I don’t see that happening—so those fears are greatly exaggerated.

Second, these “progressives” rely on the argument from . . . tradition. There has been a Mass Transit Account within the Highway Trust Fund ever since 1983, with about 20% of all highway user tax revenues being diverted to transit. That’s true, but times change, and we have entered an era in which all kinds of traditional federal programs will have to be rethought. The actual history of the transit account’s creation (see James A. Dunn’s book, Driving Forces) shows that it came about when President Ronald Reagan’s Department of Transportation Secretary Drew Lewis decided to build a coalition in favor of a gas tax increase that Reagan himself opposed. Urban Democrats held out for a transit carve-out in exchange for supporting the gas-tax increase, and Lewis gave it to them—though Reagan still threatened to veto the bill. But after a poor GOP showing in the November 1982 elections, Reagan gave in, justifying the increase as helping to repair roads and bridges (and ignoring the transit provision).

Third, and most egregiously, transit advocates are simultaneously defending federal transit funding as helping to reduce the congestion faced by gas-tax-paying motorists while simultaneously cheering on the Administration’s proposed gutting of Federal Transit Administration evaluation rules based on congestion reduction. A January 25^th Federal Register notice would replace the “antiquated” formula under which new rail and bus projects must demonstrate travel-time savings with a “simplified” measure: annualized capital and operating cost per trip, regardless of whether it saves any time or reduces congestion. But it’s worse than that. If you read the fine print, all kinds of costs would be excluded from this calculation—extra pedestrian access, aesthetically oriented design features, LEED certification for transit facilities, etc. And benefits that “capture the vision of a community” including environmental benefits and impact on local economic development will also increase a project’s score. Sponsors would no longer have to use actual local travel forecasts in projecting ridership; they could use an Federal Transit Administration-developed “simplified national model.” Nor would they have to develop a baseline alternative.

Pure and simple, this is a way to allow “nice to have” projects like streetcars and other projects with minimal impact on congestion to gain federal funds. The more you read this stuff, the less it sounds like transportation and the more it sounds like the community development projects that the Department of Housing and Urban Development (HUD) funds. By embracing these kinds of criteria, the transit community has essentially conceded the case for no longer funding transit out of highway user taxes.

Interestingly, what we now call the FTA began life as the Urban Mass Transit Administration, located within HUD. Perhaps in addition to shifting federal transit to the general fund, Congress should move FTA back to HUD, where it would be a better fit.

Atlanta Streetcar Costs Increase by $22 Million

Posted on February 3, 2012, 2:38pm | Baruch Feigenbaum

Earlier this week, Secretary of Transportation Ray LaHood flew to Atlanta to celebrate the ground-breaking of the Atlanta Streetcar. 

Before he handed out balloons and threw a parade, he should have take an objective look at the latest cost estimates. 

I previously disclosed the faulty economic analysis that USDOT used to justify the project. The price-tag of the project has increased according to The Atlanta Journal-Constitution,

The city now estimates the cost at $84.7 million plus $9 million to move water and sewer pipes along the route.

The U.S. Department of Transportation estimates the cost to be $94 million, up from $72 million at the time of the federal grant award last year.

“About $9 million of the added cost comes from a decision to use newer and more expensive streetcars that could last 20 years longer than the refurbished models initially envisioned,” said Duriya Farooqui, Atlanta’s chief operating officer. “The newer cars ride lower and comply with the Americans With Disabilities Act, while the older ones would have required ramps that could have interfered with local businesses,” she said.

It was common knowledge that water and sewer pipes would need to be moved. Yet the city omitted this information from its application for the TIGER Grant. The city also knew about the complications with the compliance of older streetcars with the Americans With Disabilities Act. Proper planning would have factored those costs into the project’s total costs. 

There are two reasons why Atlanta did not disclose these costs in its grant application for federal funds. The first is that the city had no idea that it needed to move water and sewer pipes or that it needed to comply with the American with Disability Act. Mayor Kasim Reed and other leaders should have known about these requirements. 

The second and more likely reason is that the more efficient the project, the more likely that the project will receive funding. City officials figured since some city would get the funds, the best option was to make its grant application as inviting as possible so that Atlanta was that city. The city did not disclose the total project cost. The mayor rightly calculated that the city council would have to approve spending more money on this project; otherwise the city would have to forfeit the grant. 

While the city of Atlanta will pay the additional costs, the funds could have supported other transit projects. Instead of improving transit services for local residents, the money will be spent according to Ray LaHood on, “…A magnet for tourism.” 

This funding is for a 1.3 mile one-way trip scheduled to take about 10 minutes. The average speed will be 7.8 miles per hour while costing riders $2.50 per trip and costing taxpayers much more in subsidies. 

Gaming the system is one of the many problems with the TIGER Grant Program. Despite recommendations from the Department of Transportation Inspector General and the U.S. Government Accountability Office, DOT has not disciplined applicants for submitting incomplete information. This problem is one of many reasons that the TIGER Grants are a poor program that should be abolished. DOT will award a fourth round of TIGER Grants this year.

How is it a good idea for the Federal and Local Governments to spend almost $100 million on this transit line?

French Style Light-Rail Will not Work in the U.S.

Posted on February 1, 2012, 11:51am | Baruch Feigenbaum

While many U.S. politicians chase the streetcar named Desire, French presenters explained why French style light-rail will not work in the U.S. The presentation entitled “State-of-the-Art Light-Rail: Lessons from France” occurred at last week’s Transportation Research Board Conference organized by the National Academy of Sciences. Several French rail practitioners detailed the differences between France and the U.S. 

While the French have some of the most successful light-rail trolley systems in the world, success is a relative term. Success in light-rail equates to losing somewhat smaller amounts of money compared to the large losses of U.S. operators such as Houston’s METROrail.

According to the speakers, French light-rail impacts land use and land value, creates jobs, spurs economic development, and affects long-term transportation patterns. The following ten factors have created successful light-rail in France.

1) Leadership: Creates a political system where mayors have six-year terms

2) Funding: Enables payroll taxes to fund the capital and operating costs of trains

3) Urban Form: Encourages high-density cities

4) Auto-culture: Increases the cost of owning a car

5) Pro-transit Planning: Includes protection from NIMBYists

6) Experience: Uses consultants for operations and implementation

7) Culture: Takes pride in identity and ownership of projects

8) Flexible Design: Designs different looking trains for each city

9) Inter-operation: Enables easy transfers between buses and rail

10) Utilities: Requires utilities to relocate pipes with no compensation 

The light-rail transit committee deserves credit for an objective session explaining the positives and negatives of this trolley technology. Many politicians do not want to admit the truth that French style light-rail seldom works well in the U.S. 

While I recognize that this technology works better in France than in most places in the world, I question whether this type of technology is transportation. Trolley-style light-rail is more about improving land use, increasing land value, and enabling urban revitalization than moving people from point A to point B. Increasing land values and enabling urban revitalization can be positives but like all other non-transportation causes, they should not be funded with transportation funds or pitched as solutions to transportation problems. 

Some of the factors that create successful French rail such as increased governmental powers and added economic distortion are negatives which should not be copied in the U.S. French light-rail is funded by a payroll tax; this tax is not a user fee. There is no relationship between one’s salary and one’s use of transit. Urban form should be decided by the free-market not the government’s desire to increase tax collections. Raising the cost of owning a car is acceptable if it eliminates hidden auto subsidies. However, when it penalizes auto owners it creates problems. Planning should be neutral not pro-transit or pro-highway. Utility companies should be appropriately compensated for relocation. They should not be forced to move something with no compensation.

Additionally, French style light rail is slow. France’s average light-rail speed is 15 miles per hour. In comparison, U.S. Heavy-rail systems average speeds range from 25 miles per hour in New York City to 35 miles per hour in San Francisco. How slow are U.S. trolley systems? Read on. 

If French light-rail is problematic, why are U.S. systems worse? Let me count the ways. First, many of the French political and cultural characteristics are absent in the U.S. Mayors do not have long-terms and there is less pride in civic identity. Second, many of the increased government powers in France are not popular in the U.S. (thank goodness) including high payroll taxes, control over urban form, anti-auto culture, pro-transit planning, and government requirements of private utilities. 

Third, the demographics of U.S. urban areas are very different from France. In France, wealthier residents live in the central city and the poorer residents in suburbs. Urban Revitalization in France is encouraged by the wealthier homeowners who accept the resulting higher taxes. In most U.S. cities, poorer residents live in the central city. Many of these residents are happy with their neighborhoods. If the city increases property taxes, many established residents can no longer afford their homes. Most of these minority residents are forced to leave their communities even though they have lived there for generations. 

Fourth, U.S. light rail is even slower than French light rail. According to the presenters, the average streetcar light-rail train in the U.S. averages between 5 and 10 miles per hour depending on whether dwell time is included. Many Americans can get to their destination faster by foot than by taking this trolley-style light-rail. Not surprisingly the French indicated that all train systems with an average speed below 12 miles per hour (including dwell time) are not practical in France because they are too slow. Trolley-style rail in the U.S. is slow compared to other types of rail. The average U.S. trolley train is 3-5 times slower than the average heavy-rail train. Fifth, the economic issues are more pronounced than in France. While fares on heavy-rail systems in New York City and the District of Columbia only cover 50% of their operating costs, this is better than the typical 20 % of cost returned on any U.S. light-rail systems. Because of different land-use rules, most U.S. systems will never reach the 40% farebox recovery levels of the French system. 

French style light-rail may never work well in the U.S. I am not convinced it works well in France. But even if it is successful in France, the U.S. is a very different country. This “solutionism” where one particular plan is right for every city in every country regardless of circumstances does not work.

Jerry Brown Continues to Push High-Speed Rail Boondoggle while California Drowns in Debt

Posted on January 27, 2012, 2:59pm | Adam Summers

The California high-speed rail project has become a disaster before the first track has been laid. Perhaps that is a blessing because it may allow the state to pull the plug on the project before sinking billions of dollars it does not have into it. Assemblywoman Diane Harkey (R-Dana Point) has introduced a bill, AB 1455, which would eliminate any bond funding for the project that has not already been contracted, state Senator Doug LaMalfa (R-Richvale) has promised to bring forth legislation that would authorize a revote on the project, and Beverly Hills resident Peter Seidel has started circulating a petition for an initiative called the No Train Please Act which would kill the project entirely.

Considering that cost estimates have soared from between $40 billion and $45 billion just a couple of years ago to between $98.5 billion and $117.6 billion now, and ridership estimates have plummeted from 117 million passengers per year by 2030 to between 23 million and 34 million per year by 2035, while the state is running a $9.2 billion budget deficit, a $10 billion unemployment fund deficit, and an unfunded pension liability in the range of $400 billion to $500 billion, pushing forward with the high-speed rail project is unconscionable and incredibly fiscally irresponsible. Yet Governor Jerry Brown is trying to move ahead with the project at the same time he is pushing a $35 billion tax increase ($7 billion a year for five years).

In my new commentary I argue that it is time to face reality on this boondoggle of a project and end it before California pours billions of dollars down a rat hole. Below is an excerpt of the article.

Even under optimistic scenarios, the CHSRA has identified only about 15 percent of the funding necessary to build the project. The other $85 billion or so is supposed to somehow come like manna from heaven, primarily from the federal government, which is engulfed in an even greater fiscal crisis than California (not to mention the fact that Congress has repeatedly indicated it is not going to support any additional high-speed rail funding any time soon—see here, here, and here). The CHSRA also claims some of the funding will from the private sector, which has shown no interest in investing in a project with poor prospects, an unrealistic business plan and massively inflated ridership predictions.

Earlier this month, the California High-Speed Rail Authority’s own Peer Review Group even recommended that the legislature not approve bond sales for the project, concluding, “We cannot overemphasize the fact that moving ahead on the HSR project without credible sources of adequate funding, without a definitive business model, without a strategy to maximize the independent utility and value to the State, and without the appropriate management resources, represents an immense financial risk on the part of the State of California.”

Nevertheless, “We’re pushing forward,” Gov. Brown said recently of the administration’s plans for the high-speed rail system. Added Brown, “We’re going to build, we’re going to invest, and California is going to stay among the great states and the great political jurisdictions of the world.”

Not if we keep spending money we don’t have on boondoggle projects, we won’t, Gov. Brown. He then reiterated his support for the project in his 2012 State of the State address and called on the legislature to approve the appropriation of bond proceeds for the first segment of the project.

This is like your neighbor, who let’s say is an average Joe struggling to get by during the ongoing economic malaise, announcing that he is going to buy an expensive Tesla Roadster (gotta support “green jobs” and all that), even though he already has a car and is having trouble paying the rent and utility bills as it is. Complicating matters are the facts that he does not know just how high the price of the car will be (it has already more than doubled since last year) and he probably won’t be using it very much anyway. Oh, and you and a whole bunch of other people who haven’t agreed to it yet will be paying for almost all of it. This is the insanity of the California high-speed rail project.

See the full article here.

Related Research and Commentary:

» The California High-Speed Rail Proposal: A Due Diligence Report

» "California High-Speed Rail: The Next Stop is Bankruptcy"

» "State Voters Were Railroaded"