LA transit lessons for Houston?
From Peter Gordon, an urban planning and economics professor at USC (a.k.a. soon-to-be-losers of the 2006 National Championship Rose Bowl).L.A. county now has five recently-completed fixed guideway lines in operation. They include a $4.7 billion subway that carries slightly over 115,000 riders each day, three light-rail lines that cost almost $1-billion each just to build and between them serve 125,000 riders per day, and a recently opened busway that cost upwards of $350-million to build and carries approximately 10,600 riders per day.LA has perfect pedestrian/transit weather and more than twice the population density of Houston, yet can't make rail get even close to fiscal rationality. How are we going to?
These are all pathetically low numbers. The county's population is 10-million and the average person takes about four trips per day
My students and I recently applied a standard cost-benefit template to the five projects mentioned and found that, all things considered -- including generous assumptions about auto trips diverted and externality costs avoided, these five lines have a net cost to society of $560 million per year.
It takes a court order (and a lawsuit by the NCAAP and a group called the Bus Riders Union) to tell the MTA to add express bus service.
Tom Rubin reports that all of the MTAs routes could now be served by express buses -- had the money not been wasted on rail.
And what do local planners and politicians want to keep on doing? You guessed it.
Well, we're going to try by spending a whole lot less than LA - only around $2B, half from the Feds - so I guess that helps limit the potential downside. And we are doing quite a bit of rapid bus service, which is certainly more cost effective than rail. But I hope somebody at Metro is giving these numbers from other cities a really hard look to make sure we're not making the same mistakes, especially when it comes to the heavy rail commuter lines. And if that involves getting our Congressional delegation to beat up on the Federal Transit Authority bureaucracy to approve and fund more flexible and cost-effective options, then so be it (somebody at the Urban Land Institute conference in The Woodlands today told me the FTA can't handle modeling and funding of more flexible bus-based rapid transit systems).
(thanks to Out of Control for the tip)
posted by Tory Gattis @ 8:30 PM
26 Comments:
Let's try and recall Mayor Bob's Caution about Light Rail:
(Houston Metropolitan Magazine, November 1990, page 49) about one year after he resigned as Chairman of the METRO Board:
"First they [rail's supporters] say, `It's cheaper.' When you show it
costs more, they say, ` It's faster.' When you show it's slower, they
say, `It serves more riders.' When you show there are fewer riders,
they say, `It brings economic development.' When you show no economic
development, they say, `It helps the image.' When you say you don't
want to spend that much money on image, they say, `It will solve the
pollution problem.' When you show it won't help pollution, they say,
finally, `It will take time for rail to do some good.'
Two things that I absolutely do not comprehend about the anti-tax, anti-pork barrel, anti-mass transit crowd.
1) Rail is just a money pit? Hmmm...LA, 115,000 per day at $1 a person 365 days a year that's about $42M in revenue. Doesn't come close to paying for itself. True. Gulf Freeway, Katy Freeway, Southwest Freeway, Revenue??? Paying for itself??? Actually, freeways incur millions of dollars of expenses annually for repairs, police patrols, EMS services, fire services, etc... Freeways do NOT pay for themselves either!
If Freeways paid for themselves, why wouldn't private investors want to get in on the action? Why? Because Freeways do NOT pay for themselves!!
2) Why do people think of Toll roads as extra taxes? Do you think that "Free"ways were rolled out by Paul Bunyan and his Blue Ox. Tolls are a more economically efficient method to pay for roads because use is correlated to costs. The same sheep that ate all the grass in the "Tragedy of the Commons" are the cars that cram the freeways today.
If you truly proport to be a free-market lover and a believer in modern economics you would definitely not support freeways, probably not support light rail, and only mildly disdain toll roads.
1) All roads - inc. freeways - are mostly covered by user taxes via the gas tax. Transit is paid for out of non-user taxes like the sales tax.
2) Govt should be focused on transportation that moves the most people for the least cost. Freeways and buses stack up well; rail usually does not.
3) I am a big supporter of toll roads now that we have EZ Tag technology. Before that, the toll booth cost and hassle factor was problematic for widespread application.
"Tolls are a more economically efficient method to pay for roads because use is correlated to costs."
Toll roads are not more efficient because they have much higher transaction/overhead costs. First, construction cost is up to 20% higher (based on reports for convering SH 121 in Dallas to a tollway). Second, there is substantial cost of enforcement and administrative overhead. Credit card companies get a cut of the action. Third, most toll facilities are underutilized (except perhaps at rush hour) due to high cost. This means motorists are taking other less efficient routes, polluting more and wasting their time. It also means the effective cost per vehicle is much higher in comparison to a pooled resource (eg a freeway). Of course, the trade-off is that the pooled resource may be overutilized at certain times. Fourth, the push towards privatized, for-profit toll roads will cause an even higher cost to be imposed on society so the private firms can make a profit.
Overall, toll roads represent a much less efficent way to provide transportation infrastructure. But the current political leaders in charge (ie the Republicans) couldn't care less how inefficient something is, they just view it as a huge source of revenue since it is a "fee" and not a tax.
LA's %s should go up as more housing is built near the train stations. I saw a stat recently saying that LA is projected to add more people to transit-accessible development than any other city over the next 20 years...
"All roads - inc. freeways - are mostly covered by user taxes via the gas tax. Transit is paid for out of non-user taxes like the sales tax."
Well, the gas tax isn't really a "user tax" for the people who pay disproportionately more in gas taxes relative to the amount of gallons of gas they burn out there on the freeway...
So a well-known anti-rail academic from USC does a study that's (gasp) critical of rail? Stop the presses!!
Seriously, though: it could be argued that all transportation is subsidized. Gas taxes do not fully cover the cost of building and maintaining highways (and do not go at all toward the cost of building and maintaining local roads), landing fees do not fully cover the cost of maintaining airports, etc. The issue is that public transportation generally requires a much larger subsidy, as a percentage, than other forms of transportation. And rail transit represents a hugh capital expenditure for something that is already highly subsidized.
That's why I'm looking forward to the implementation of BRT technology in Houston: it will provide a level of service similar to that of rail with less of a capital expenditure. I think people will be pleasantly surprised.
(And Tory: please don't tell me that a self-respecting Rice alum like yourself would actually be cheering for *Texas* in the Rose Bowl!)
I have to disagree with this comment below.
Tory Gattis said...
1) All roads - inc. freeways - are mostly covered by user taxes via the gas tax. Transit is paid for out of non-user taxes like the sales tax.
I looked this up a while back so I won't claim it as fact until I can refind the website. I recall that the state budget for transportation was 25%. Total gas tax revenues for the state amounted to about 4%. If you include local expenditures on roads, gas taxes only cover about 10% of the costs of roads.
** "So a well-known anti-rail academic from USC does a study that's (gasp) critical of rail? Stop the presses!! **
Always have that filter on in these parts... or whenever you see the names Kotkin or O'Toole.
> (And Tory: please don't tell me that a self-respecting Rice alum like yourself would actually be cheering for *Texas* in the Rose Bowl!)
Sorry. Both my step-daughters are Longhorns, even if they aren't big football followers.
Gas taxes don't need to cover all road costs. A basic road network must exist no matter what to support freight, ambulance, police, garbage collection, and firefighting services - so paying for for some out of property or other taxes is reasonable. Even if you never drive, you're getting the benefits of that network with those government services. I believe gas taxes cover a substantial majority percentage of road costs, but I can't find good stats.
Why does METRO need to look at LA and its unique parameters when it can look at its own costs in Houston? And since we're looking at ridiculous costs, what are we getting for our $2.8 Billion spent on the Katy Freeway? Maybe 40,000 vehicles in extra capacity? Those are worse than LA's rail numbers, aren't they?
The fact is, transportation in any form is expensive. It takes lots of tax money to build and maintain. And no one form of transit is the solution. Rail has its place, just as freeways and busses do. And the flexible argument is a red herring. No one is suggesting we run rail lines out to areas that have no residents yet. And what is flexible about a 20 lane freeway, anyway?
OK, found some stats from a USA Today article:
http://www.usatoday.com/news/
nation/2005-03-31-gas-taxes_x.htm
Nationwide, the gas tax generated $34.6 billion for state and local governments in 2004 — about 3.5% of all tax collections, according to the Census Bureau. The federal government gave states an additional $30 billion for transportation projects, mostly from the 18.4-cent-per-gallon federal gas tax.
Overall, gas tax collections cover about half of the $120 billion state and local governments spend annually on roads.
Gas tax collections have grown modestly compared with income, sales and property tax collections. Gas tax collections have risen an average of 3% a year in the past decade. That's about 1 percentage point faster than inflation or gas consumption.
> what are we getting for our $2.8 Billion spent on the Katy Freeway? Maybe 40,000 vehicles in extra capacity? Those are worse than LA's rail numbers, aren't they?
I don't know the exact numbers, but we're doubling capacity from 3 lanes each direction to 6 (2 of which are tolled). And the Katy was getting old and in need of replacement one way or another - so it wasn't a choice between $2.8B and nothing.
> And what is flexible about a 20 lane freeway, anyway?
It carries cars, freight, buses, vanpools, police, fire, ambulance - all of which are flexible in their ultimate starting and ending points. Flexible carriage and flexible destinations without transfers, all at sustained speeds far higher than rail.
"Even if you never drive, you're getting the benefits of that network with those government services."
I could make a similar case for transit subsidies that is just as convincing.
I always wonder whether advocates of express bus service actually ever ride transit. If you had to stand in a packed rush hour express bus, I don't think you would be quite as fond of it.
Of course, it is easier to hide behind numbers than to actually consider the opinions of transit users. I would be interested to hear of a former bus rider who feels half as fondly about a bus as a former streetcar rider feels about streetcars.
And, now that you've already pegged me as a bleeding heart, I'd like to mention evironmental issues. Government also has a responsibility to make up for the free market's inability to consider future consequences of its actions. Scientific consensus holds that global climate change is caused by fossil fuel emissions. Transit will always be more fuel-efficient than private autos because it encourages walking.
I now have another source that, when everything is totalled up, gas taxes and user fees add up to about 80% of road costs.
>> "Even if you never drive, you're getting the benefits of that network with those government services."
> I could make a similar case for transit subsidies that is just as convincing.
I suppose you might get a very slight benefit from others having transit mobility, but I have a hard time seeing it. Even if there is an argument for subsidizing transit somewhat (and I believe there is), it would be for the most cost-effective form, which is buses.
On user preferences: I would agree that people prefer rail over bus between any two points, but if the bus is express point-to-point within managed lanes, and the rail involves transfers and is slower, I think the bus will win for most people. And unlike rail, there is no standing on an express bus - people must be seated for safety at that speed.
According to this FHWA spreadsheet, gas and vehicle taxes accounted for 51.2 percent of all roadway expenditures across all levels of government in 2003. If you limit roadway expenditures to federal and state projects, the percentage climbs to over 80 percent:
http://www.fhwa.dot.gov/policy/ohim/hs03/htm/hf10.htm
“I don't know the exact numbers, but we're doubling capacity from 3 lanes each direction to 6 (2 of which are tolled). And the Katy was getting old and in need of replacement one way or another - so it wasn't a choice between $2.8B and nothing.”
I remember it being something like 280,000 veh/day, but I’m afraid I can’t find a source for it (you think it’d be on the katryfreeway.org website!). And there’s no question that the freeway needed to be replaced. It was obsolete and had reached the end of its design life. Of course, whether $2.8 billion needed to be spent on its reconstruction is a completely different argument.
"Sorry. Both my step-daughters are Longhorns, even if they aren't big football followers."
I know. I just had to rib you on that one! :-)
On the subject of funding, keep in mind that 25% of receipts from the 20 cent per gallon Texas fuel tax goes to education.
At the national level, about 20 to 25% of the 18.4 cent per gallon fuel tax is used for mass transit.
So in these cases, the gasoline tax is actually subsidizing non-highway activities. As the other posts indicate, funds from other sources help fund mainly local street construction. In most places very little non-fuel tax funds go to state and federal highways.
"As the other posts indicate, funds from other sources help fund mainly local street construction. In most places very little non-fuel tax funds go to state and federal highways."
So if I'm understanding this correctly, local street construction is paid for mainly from sources other than the gas tax?
Not to sidetrack this thread, but could I make a request to have a discussion or brainstorming session on building some sort of Icon for Houston, a la Golden Gate Bridge, Statue of Liberty, etc...? (Preferably privately financed, of course :) )
Also, does anyone know anything new about the Houston Pavilions project?
Finally found my links:
http://www.cpa.state.tx.us/taxbud/revenue.html
Gas tax is 4.5% of tax revenue for the state of Texas.
http://www.cpa.state.tx.us/taxbud/expend.html
Transportation expenses are 10.3% of the budget.
Local governments get no gas tax revenue, but must contribute to state and federal highway projects.
My earlier recollection was a little off.
http://www.taxpolicycenter.org/TaxFacts/TFDB/Content/Excel/gas_rev_2003.xls
Federal Government brought in 32.2B is gas tax revenue in 2003
and spent 30.9B
http://www.bts.gov/publications/government_transportation_financial_statistics/2003/html/table_02c.html
Federal government mildly subsidizes other transportation modes through gas tax. State and local significantly subsidize highway spending with non gas tax money.
> So if I'm understanding this correctly, local street construction is paid for mainly from sources other than the gas tax?
Yes. The local street grid is not optional and therefore is paid for out of general taxes. Every house must be connected to police, firefighters, ambulance, garbage pickup, freight deliveries, service trucks, etc. whether or not the owners of the house drive.
So if I'm understanding this correctly, a person who only drives on regular roads (or who drives on regular roads a smaller % of the time than the % of gas tax that goes towards freeway construction) is basically subsidizing suburban drivers and the trucking industry?
**We will NEVER has a taxing system in place where we only pay for what we use of government services.**
...and that's mostly a good thing!
Great post, KJB -- really puts all of the anti-transit whining and gnashing of teeth into perspective, doesn't it?
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