A recent article in the Washington Post highlights new tensions within the transit industry. Most federal transit grants are legally dedicated to capital improvements, but the recession has left most transit agencies short of operating funds, so they have been lobbying Congress to allow them to use more federal funds for operating subsidies.
The main opposition to such legislation, it turns out, comes from what the Post describes as “the biggest transit agencies, such as New York’s MTA and Washington’s Metro.” The Post explains that “The big transit systems argue that letting them use federal funds for their basic operations would reduce their leverage — unions would invoke the funds to seek bigger raises, transit advocates would argue against service cuts, and local and state lawmakers might limit their share of transit funding.”
In reality, this isn’t a tension between big and small agencies; it is a tension between agencies with older rail systems — meaning Boston, Chicago, New York, Philadelphia, San Francisco, and Washington — and agencies with newer or no rail systems. The agencies with older rail systems desperately need money to bring their systems up to a state of good repair. Since such maintenance is included in the FTA’s definition of capital improvements, they are happy to have federal monies dedicated to capital.
You would think they wouldn’t object to more flexibility, but the transit unions have them over a barrel: under federal law, agencies can’t get federal transit grants without union approval. This has allowed the unions to obtain absurd and arcane concessions. For example, in New York’s rail system, a driver of an electric locomotive who switches to a Diesel locomotive in the same day gets a day’s pay for each locomotive. More than 8,000 New York City transit employees, most of them union workers, were paid more than $100,000 last year.
With more flexibility, the unions can demand that a lot of the capital funds be diverted to operations so the agencies don’t have to cut union jobs while they are bringing their systems up to a state of good repair. The agencies want state and local taxpayers to pay for operations because they know it will be very hard to get them to pay for maintenance. If the feds pay for operations, the states will be off the hook and the agencies will have no money to maintain their systems.
The Metropolitan Atlanta Rapid Transit Authority (MARTA) is one agency that supports more flexibility, yet parts of its rail system are more than 30 years old. MARTA has apparently kept its system in a state of good repair by cannibalizing its bus system. In 2005, for example, MARTA cut bus miles by 15 percent, but increased train miles by 4 percent. From 1985 through 2008, the population of the Atlanta urban area grew by more than 120 percent, and the tax base supporting transit grew by at least that much. Yet bus miles grew by only 8 percent. Although rail service grew by 138 percent, total transit ridership grew by less than 4 percent.
Barely a third of Atlanta’s current rail system is more than 30 years old. Agencies in New York, Boston, and Chicago have far more rail miles and nearly all of them are more than 30 years old. Even if they completely sacrificed all bus services, it wouldn’t be enough to bring their rail lines up to a state of good repair.
The one thing the agencies seem to agree upon is that Congress should cough up $2 billion out of nowhere to supplement their operations on top of the regular transit grants. In a growing economy, it always seems easy to resolve conflicts by making the pie bigger. It is a lot harder to find more pie when the economy is staggering.
Even if Congress finds $2 billion, that won’t last long. MARTA’s general manager bitterly says that the older rail agencies shouldn’t resist flexibility simply because they can’t deal with the unions, and there is some justification to that. But these tensions say more about the bankruptcy of the socialized transit model than about big vs. small transit agencies.
Transit, especially rail transit, has been like an expensive toy for cities. They all want one because it makes them feel like a “world-class city” or green or something. In a healthy economy, we can afford the toy, especially since hardly anyone really uses it so it doesn’t cost a lot of money. But when the economy stumbles, we can’t afford the toy anymore. The problem is that the people who rely on the toy — mainly the people who operate it — are politically powerful and want their money no matter what it costs everyone else.
By focusing on capital costs, Congress is giving transit agencies incentives to use their “free federal money” to buy things they don’t really need: overly large buses, little-used transit or multi-modal centers; expensive rail lines where buses would do. From that standpoint, it makes sense to let agencies use more federal money for operations. But really, why does it make sense to spend federal money on what is essentially a local problem? A true user-fee funded transportation system would eliminate the need for any federal involvement in transit and, for that matter, most other forms of transportation.
From a transportation viewpoint, most cities are lucky that transit is functionally irrelevant. Imagine if more cities were like New York City, where more than half of all workers, not to mention lots of school children, rely on an expensive form of transportation that the city can’t afford to maintain even in the good years, much less a recession. Of course, if smart-growth advocates and urban planners had their way, a lot more cities would be in this fix.