Subways Going Down the Tubes

Rail advocates sometimes claim that we can ignore the high cost of building rail lines, because “once they are built, they are there forever.” Yes, forever, or about 30 to 40 years, whichever comes first.

Which is why the San Francisco Bay Area Rapid Transit District (BART), Washington Metro, and Chicago Transit authority are all looking at roughly $10 billion each in rehabilitation expenses in the next few years, little of which is funded. Of the three, BART is in the best shape, saying it needs $11 billion for rehab, slightly less than half of which is funded. The remaining $5.8 billion is still a lot of money just to keep the system going.

The Washington Metrorail system needs $12 billion to rehabilitate its system over the next decade. Transit officials admit to having virtually no hope of raising that amount unless the federal government comes riding to the rescue. In the meantime, they are begging local governments to cobble together a $1.5 billion fund to just repair the system’s worst problems.

The latest is from the Chicago Transit Authority, which is supposed to be on the verge of collapse. The system is so poorly maintained that some trains are restricted to as little as six miles per hour. As if to one up BART and Metrorail, CTA says it needs $16.1 billion over the next decade to put it back in a “good state of repair.”

Meanwhile, the New York and Boston transit authorities say they have kept their systems up. But New York MTA is looking at spending nearly $2 billion a year on debt service on the money it has borrowed to maintain the system (see page II-2 of this 2.7MB pdf). Boston’s MBTA is spending one third of its operating budget on interest on its $5 billion debt (scroll to end of article).

You might think that government officials wouldn’t like to admit they are such poor managers that they have failed to keep up with system maintenance. In fact, they know that, when they screw up, they will be “punished” with larger budgets to fix the problems they created.

I suspect they particularly have an incentive to highlight their problems now due to the Minneapolis bridge collapse. Members of Congress responded to this by falling all over themselves with proposals to raise taxes for infrastructure.

Transit officials know that a large portion of that infrastructure money is likely to be dedicated to transit, especially if Democrats take both Congress and the White House in the next election. So the agencies are each trying to get their bid in for “their fair share” (meaning more than their fair share) of the take.

The lesson for other cities that are building or considering rail transit is still valid: rail transit is a pay-now, pay-later program. It costs a lot to build and a lot to maintain (and those who say it is cheaper to operate than buses are full of you-know-what). Once you have it, no more than 1, 2, or at the very most (unless you are New York City) 3 percent of all passenger travel will use it, but that 1 to 3 percent will be vocal while the 97 to 99 percent of people who rarely or never use it will have to pay for it.

Transit’s and Rail Transit’s Share
of Passenger Travel in Urban
Areas with Subways/Elevateds

.   Urban Area    Transit    Rail
.   New York        9.7%     7.4%
Lovers running away  buy cipla viagra to Leh When a Muslim decides to marry a Buddhist or vice versa, communities do not take it too well. These are a few reasons  cialis online cheapest why you and other drivers safe. This is not a complete list of side effects and ensure intake of sufficient nutrients to increase sexual power and ability.  discount levitra Some of them are regenerating psychological needs, such as the need of chiropractors in los angeles.The study's conclusion noted, "The viagra without buy prescription bought that onset of the symptoms following the patient's fall on her head; the immediate reduction in symptoms correlating with the initiation proper care; along with the most in-demand antibiotics, Male impotence capsules, diuretics, health professional prescribed, and also non-prescription drug treatments. .   Los Angeles     1.8%     0.5%
.   Chicago         3.7%     2.7%
.   Washington      4.1%     2.9%
.   San Francisco   4.2%     2.9%
.   Boston          3.1%     2.5%
.   Philadelphia    2.6%     1.6%
.   Miami           1.0%     0.0%
.   Atlanta         1.1%     0.6%
.   Baltimore       1.4%     0.3%
.   Cleveland       1.4%     0.3%

Source: Calculations based on National Transit Database and Highway Statistics. Rail transit’s share includes all forms of rail transit.

The Engineering News Record, which is no doubt eager to open the floodgates of infrastructure pork, points out that “many transit do not raise sufficient revenue to cover all capital expenses and operations.” That’s an understatement, especially if by “revenue” they mean “farebox revenue.”

With the exception of a few commuter bus lines in the Greater New York metro area, no bus or rail agency manages to cover its operating costs, much less its capital costs, with fares. Even if you count local taxes dedicated to transit, most agencies are addicted to federal grants. And even if you count those federal grants, most rail agencies have no plans for where they are going to get funding for periodic rehabilitation of their physical plants.

This is going to come back and bite them in the long run. People don’t like having to pay for things they don’t use. I myself resent the fact that every time I change planes in Portland or Minneapolis, a large share of my landing fee goes to subsidize light-rail systems that produce absolutely no benefits for air travelers who are merely changing planes at those airports. Those landing fees would pay for a lot of taxi fares for the few times that I actually need ground transportation in one of those cities.

By the same token, auto drivers who know that a large share of their gas taxes are being diverted to little-used rail transit systems are going to resist road tolling, even though economists agree that variable-priced tolls are the best hope we have for reducing congestion. What is going to prevent, those drivers will legitimately ask, elected officials from funneling a large share of those tolls into some rail or real-estate scheme? Remember, the twin towers of the World Trade Center probably would not have been more than 70 or 80 stories tall if the top 30 or so stories had not been subsidized by New York City bridge tolls.

It is hard for toll advocates to answer that one except to design institutions that are hard for pork-barreling officials to break into. State tolling authorities don’t have enough insulation to protect them from such funding grabs, which is one reason why the Pennsylvania Turnpike is so poorly managed. One alternative is private toll roads. Another might be regional toll road authorities, like the Harris County Toll Road Authority or the Tampa-Hillsborough Toll Road Authority, that have no job other than to build, operate, and maintain toll roads.

In any case, I expect that Atlanta will soon announce that it, too, has a $10 billion shortfall in its rehabilitation budget. Atlanta opened its first rail line at about the same time as Washington DC, and though it has been pretty much a failure, many people in Atlanta think it is and still support it.

The real question is why taxpayers should pay to cover these deficits when, outside of New York City, the rail systems contribute so little to the well-being of any but an elite handful of urban residents.

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About The Antiplanner

The Antiplanner is a forester and economist with more than fifty years of experience critiquing government land-use and transportation plans.

13 Responses to Subways Going Down the Tubes

  1. mmmarvel says:

    It’s all about the spin – little toy trains are soooo cute. Just ignore all those big, nasty dollar signs and spin things like – TOD’s, additional business investments (that don’t happen without government incentives) and ‘smart-growth’. As long as they don’t show what is behind the ‘curtain’ they get away with it.

    However, thanks for the insight – I wondered why plane tickets cost so much in PDX, now I know. We saved over $200 on our last flight by driving to Seattle and keeping the car in a ‘park and lock’ lot. After adding parking charges and gas, we were still over $200 ahead, now I know why (I was unclear as to why the tickets were so expensive before your article).

  2. davek says:

    and those who say it is cheaper to operate than buses are full of you-know-what

    Yes. I do know what!

  3. Aarne H. Frobom says:

    I love the phrase, “design institutions that are hard for pork-barreling officials to break in to.” Conversion of free highways to toll roads should be permissible only if toll revenues are restricted to use on the roads on which they are collected. I have tried to illustrate this principle by saying that there has to be a fiscal fence around the toll project, analogous to the right-of-way fence that distinguishes the Interstate system and preserves its limited-access nature. Hereafter I will refer to this as the “politician-proof fence” that keeps money in, and politicians out.

  4. prk166 says:

    It’s not just the cost but the convenience. A couple years ago when the Hiawatha line opened up my dad found out the hard way that MSP had dropped using the shuttle buses. He thought parking the econolot would take an extra 20 minutes or so at that time of the morning. But with no shuttle buses he had to wait @25 minutes for the next train & take that back to the main terminal. IIRC adding that tunnel at MSP was @1/3 of the cost of building the Hiawatha line. I doubt it factors in much when it comes to the cost of plain tickets, though. That’s likely due to decades of Minnesota kissing NWA’s hind end.

    I like that you mentioned the cost to operate. It seems that a lot of rail advocates will point out that it’s “cheaper to run”. What they don’t include in those costs are the enormous up front costs to build the thing and the interest that has to be paid on all those bonds. And at that it’s assuming they hit their max ridership projections in 10-20 years so that the PER PASSENGER operating costs seem lower.

  5. Walt Brewer says:

    Maybe “economists agree variable priced tolls are the best hope to reduce congestion”. But objective analysts who look at flow for the whole freeway know they REDUCE total people flow, and add to congestion for the same number of lanes. Promoters of HOV/HOT lanes only mention correctly the special lane carry more people, about 40% more in fact. But such lanes have to operate at 2/3 vehicle capacity thus putting more demand on the GP lanes at peak hours and causing more congestion in them that more than cancels the HOV/HOT advantage. Evaluation of extensive So. California freeways with such lanes prove this.
    Tolls devoted to transit instead of roads is already happening in San Diego. The “successful” HOT installation on I-15 has been supporting a bus to “eliminate congestion” It carried about 100 per day and was cancelled. When GP lanes were added, tollway use dropped so far the local government had to rescue by supplying a grant for that expected for transit. Even more loss to roads. And a recent 40 year transportation plan locks in tolls for transit.
    mmmarvel’s point about toy trains is a good one. Why the great interest nearly a century after they were the BIG THING? I still have my boyhood electric train, and at one time wanted to be a train engineer. Instead I woke up to become an aeronautical engineer!

  6. Actually, Walt, congestion pricing INCREASES total people flow because a freeway lane that is moving 1800 cars an hour at 60 mph is moving far more people than a lane that is moving only 1000 cars an hour at 20 mph. California’s experience is that HOT lanes move more people and reduce congestion on the adjacent free lanes by taking lots of cars off of those lanes.

  7. the highwayman says:

    prk166 said: I like that you mentioned the cost to operate. It seems that a lot of rail advocates will point out that it’s “cheaper to run”. What they don’t include in those costs are the enormous up front costs to build the thing and the interest that has to be paid on all those bonds. And at that it’s assuming they hit their max ridership projections in 10-20 years so that the PER PASSENGER operating costs seem lower.

    THWM: With highways there are enormous up front costs to build them and then there’s interest that has to be paid on all those bonds.

  8. the highwayman says:

    The Antiplanner(sic) said: Actually, Walt, congestion pricing INCREASES total people flow because a freeway lane that is moving 1800 cars an hour at 60 mph is moving far more people than a lane that is moving only 1000 cars an hour at 20 mph. California’s experience is that HOT lanes move more people and reduce congestion on the adjacent free lanes by taking lots of cars off of those lanes.

    THWM: Though you don’t have to build any new road space to do this.

  9. the highwayman says:

    Walt: Why the great interest nearly a century after they were the BIG THING? I still have my boyhood electric train, and at one time wanted to be a train engineer. Instead I woke up to become an aeronautical engineer!

    THWM: Planes have been around for over 100 years too, you maybe educated, but you’re not very bright!

  10. prk166 says:

    THWM: With highways there are enormous up front costs to build them and then there’s interest that has to be paid on all those bonds.

    Yes, that’s true. The comment wasn’t to say that isn’t the case but to point out that it’s a common Enron accounting technique for some groups to not include those costs when calculating operating cost for LRT.

  11. Pingback: Corporatizing Transit » The Antiplanner

  12. the highwayman says:

    prk166 said: Yes, that’s true. The comment wasn’t to say that isn’t the case but to point out that it’s a common Enron accounting technique for some groups to not include those costs when calculating operating cost for LRT.

    THWM: Though it’s cheaper than operating buses.

  13. prk166 says:

    Only when you don’t take into account key capital costs.

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