FasTracks off the Track?

According to Kevin Flynn of the Rocky Mountain News, Denver’s Regional Transit District (RTD) has admitted that it can’t build the FasTracks system that it promised when it asked voters for a tax increase in 2004. Even after cost-cutting measures, such as smaller stations and less security, the agency has previously admitted that the project that was supposed to cost $4.7 billion will actually cost $6.1 billion.

But Flynn expects the latest estimates, due to be made public next month, will be “substantially” higher. On top of that, the sale tax revenues that were expected to pay for FasTracks are coming in well short of predictions. As a result, RTD says it will have to either ask voters for more money, take more time to build the system, or cut back on the length of some of the lines.

Another alternative is simply to not build one of the lines. The FasTracks program was supposed to be six new rail lines (some light rail, others commuter rail) and one bus-rapid transit line. But the bus-rapid transit line is in the same corridor as one of the rail lines. Why not just drop rail in that corridor?

The answer, alluded to in Flynn’s story, is that RTD gained the support of all the major city councils in the region by promising that all of the lines would be built simultaneously. The cities knew that, if they were built sequentially, cost overruns would probably mean that the last line or two would never be built. RTD no doubt fears that if it proposes to cut or substantially delay one line, the cities on that line would revolt against the entire project.

The real solution is to drop all of the expensive rail lines and just run bus-rapid transit in every corridor. This would cost less, do more to relieve congestion (especially if the BRT went on HOT lanes), and service could start a lot sooner than 2013 (when the first FasTracks rail lines are supposed to start running).

RTD’s director, Cal Marsella, likes to insist that the cost overruns and revenue shortfalls are not his fault and “no one could have predicted” them. In fact, during the 2004 FasTracks campaign, Wendell Cox predicted the cost overruns and the Antiplanner predicted the revenue shortfalls.

In the meantime, just to pay its current operating costs, RTD is contemplating fare increases and charging for parking at light-rail station. Transit ridership is supposed to be up by 10 percent, but that’s not enough to cover higher fuel costs and declining sales taxes.
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Here are a few points the Antiplanner has made in the past but deserve to be repeated until everyone from Cal Marsella (one of the highest paid government officials in Colorado) on down understand them:

1. Transit agencies may be able to run bus service but cannot build rail lines because rail construction requires impossibly accurate long-run forecasts of revenues and costs.

2. Transit services funded mainly out of sales taxes or other taxes will always be more vulnerable to recessions than services funded mainly out of user fees.

3. People who respond to high gas prices by riding transit are not saving energy, they are merely making someone else pay their energy costs.

4. Not that many people are responding to high gas prices by riding transit anyway. Most of the decline in auto driving is due to people changing something else about their lives, not people riding transit.

5. The cost of providing transit service that is competitive with automobiles throughout an urban area would be outrageously high. While Americans spend about 9 percent of their incomes on autos, Wendell Cox estimates that competitive bus service would cost about 22 percent of income and competitive rail service more than 100 percent. In short, transit only works at all because most people don’t use it and can afford to subsidize it.

6. Real transit improvements will come not when we build new rail lines or other new modes of transit but when we reform the current transit model that requires gigantic subsidies that mainly go to support construction companies, unions, and transit bureaucracies.

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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.

17 Responses to FasTracks off the Track?

  1. hkelly1 says:

    “While Americans spend about 9 percent of their incomes on autos, Wendell Cox estimates that competitive bus service would cost about 22 percent of income and competitive rail service more than 100 percent. In short, transit only works at all because most people don’t use it and can afford to subsidize it.”

    Not true in NYC – according to MTA, fare box revenue accounts for 58% of the operating costs on the subways. That means that the $2 standard fare should really be $3.45 if it wasn’t supported by taxes. I find it hard to believe that that $2.90 difference per day (assuming 2 trips, and that’s without buying a weekly/monthly pass like most people do) would price people out of transit.

    Also – 9% of income spent on autos? That’s insanely low, even for car advocates For a 2006 median household income of $48,201, across the US, that’s only $4,338 – is that supposed to cover the cost of two cars’ worth of purchase costs, running costs, insurance costs, and gas?

    Here’s a much different picture: http://htaindex.cnt.org/ If you open and go to Houston, you see that the majority of folks in the Houston metro area spend 20 to 28% of their income on transportation costs, with a few higher. Even inside the I-610 loop, the numbers only dip to 15% for virtually all locations.

    Which picture is right? The Wendell Cox picture or the Brookings Institute picture?

  2. Kevyn Miller says:

    You can add the Bureau of Labor Statistics’ Consumer Expenditure Survey to hkelly1’s Houston data. The BLS tables include age groups, income groups, municipal population groups, household size. Frankly, the only consumers who acheive Wendel’s 9% are those over 75 years old! Almost every other consumer entity grouping manages between 15% and 19%.
    http://www.bls.gov/cex/#tables

    Hopefully AP will fix the links so we see how Wendel calculated his 9%.

  3. hkelly1 – Are you pretending that transit has no capital costs, or did you just forget? New York is spending $2.1 billion per mile to build a new subway line. Fares cover none of that. New York has spent billions rehabilitating existing lines and interest alone on the debt for such rehab amounts to more than $1 billion a year. Fares cover none of that.

    hkelly1 and Kevyn Miller – BLS data are hypothetical. For real data, go to the Bureau of Economic Analysis. The 9 percent comes from it, not from Wendell Cox. Go to Personal Incomes and Outlays and compare table 2.1 (income) with 2.5.5 (outlays), line 69 (user operated transportation). My 2003 analysis explains how I calculated these numbers and also responds to some of the BLS numbers.

  4. prk166 says:

    I’ve long been wondering if the political move with Fastracks to place a cap on spending, IIRC $7.2billion, while seen as a victory by those worried about the project having a limitless budget wasn’t actually something RTD was behind the scenes going “yes! yes!” because politically it essentially meant that whatever the told the public it would cost didn’t matter as long as they kept things under $7.2 billion.

    This project’s been a mess since day one.
    A) Originally little if any federal funding.
    Why? Because they could go ahead and build the lines faster than getting bogged down in that process. More so, if they apply for federal funding they need to meet federal standards. For example, it seems unlikely that the Feds would approve political carrots such as the Boulder to Longmont heavy rail line which is projected to only carry a few thousand people.
    B) Piss Pour Cost Estimates and Controls
    Despite a 15 year project essentially nothing was done from the start to mitigate risks for construction. They ignored construction inflation increases which were in fact outpacing consumer inflation with a couple years of the Asian financial crisis. If that wasn’t bad enough, even with massive re-budgeting twice in the last 2 years, a Colorado state Audit found they they’re still underestimating the cost of 1/3 of their items.
    C) Crap Route Choices
    The largest employment center in metro Denver is the the SE Corridor, what we commonly refer to as “the Tech Center”. This shouldn’t be confused with the actual Denver Tech Center, a business park with over 11 million sq ft of office space and, IIRC, 4,000 residents. The SE Corridor has @1/3 of the office space in the entire metro and – surprise, surprise – @1/3 of all the jobs. More so it’s employment and population are projected to have the largest gains. Despite this Fastracks barely throws anything in it’s direction. No east-west routes to serve DTC. Nothing along the increasingly congested C470. Just a couple more stops added to an existing light rail line. Or look at the Pena/Airport corridor. IIRC 30% of the job growth in the metro over the next 20 years will likely be there. Yet it’s going to be served by a single line. In the meantime, downtown Denver which has no more jobs than it did 25-30 years ago and has seen about as many people move there as the town of Brush (woo-hoo!), downtown which is already very well served with buses and a couple of LRT lines, will get another 6. In the meantime, places like Brighton, Castle Rock, Parker, and others that have added more residents in the last decade than Denver and other older cities get a big fat goose egg from Fastracks. The routes were about politics more than building a metro that made more use of transit.

  5. hkelly1 says:

    Antiplanner –>
    ” hkelly1 – Are you pretending that transit has no capital costs, or did you just forget? New York is spending $2.1 billion per mile to build a new subway line. Fares cover none of that. New York has spent billions rehabilitating existing lines and interest alone on the debt for such rehab amounts to more than $1 billion a year. Fares cover none of that.

    hkelly1 and Kevyn Miller – BLS data are hypothetical. For real data, go to the Bureau of Economic Analysis. The 9 percent comes from it, not from Wendell Cox. Go to Personal Incomes and Outlays and compare table 2.1 (income) with 2.5.5 (outlays), line 69 (user operated transportation). My 2003 analysis explains how I calculated these numbers and also responds to some of the BLS numbers.”

    You are right, there are capital costs. I’m not savvy on the fact-finding – can you show us where the MTA allocates its revenues? Also – imagine trying to build a highway that would carry the equivalent amount of passengers down Second Avenue – the real estate costs alone would be incalculable, and certainly could not be paid for by “auto user fees”.

    What about the Brookings Institute’s data – is that just a throwaway “hypothetical” as well?

    Also – your data is interesting, for one because it’s 5 years old already, and the cost of gas is around 3x higher now. The BoEA data also only shows full year 2006… so the costs used there are also outdated. The percentages must be higher now.

    Finally, I can’t imagine a family of two working adults even making $80,000 affording to buy, maintain, insure, and operate 2 cars for only $7,200. $3,600 a year per car – let’s deliberately low-ball it and say you have a $150/month lease on a small car, that’s $1,200. Another $700 to insure it, and $100 for oil changes and other maintenance. You’re already at $2,000, and barring any other issues, and ignoring inspection fees and other costs associated with car ownership, you only have $1,600 for gas, or about $31 a week. At $4 a gallon, you’re not even getting 8 gallons for the week, which with a car at about 30 MPG would be 240 miles a week, or 12,480 miles for the year. Your own numbers show 13,150 miles per car (26,300 total) per year.

    So yes – if you can imagine a family doing relatively well for themselves driving Ford Foci with excellent leases, no issues, no breakdowns, and they happen to live in a suburbia where their commute is extremely short, they can just eke out 9% of their income toward car ownership. Surely that’s how the majority of Americans live.

  6. John Dewey says:

    prk166: “A)Originally little if any federal funding; B)B) Piss Poor Cost Estimates and Controls; C) Crap Route Choices”

    I wonder if every light rail project faces those same issues. Certainly Dallas’s LRT received only small amounts of federal funds and was plagued with huge cost overruns.

    DART’s route choices may have made sense 25 years ago, when the Dallas-Fort Worth area was a fraction of today’s size. Despite all the propaganda DART and Dallas Morning News spew about transit-oriented development, the majority of residential and office development in the Dallas metro area has not been near the original DART LRT lines. So the original routes planned 30 years ago and voted on 25 years ago are for the most part poor choices. DART’s Red Line which parallels North Central Expressway is the one exception.

  7. John Dewey says:

    hkelly1: ” I can’t imagine a family of two working adults even making $80,000 affording to buy, maintain, insure, and operate 2 cars for only $7,200. $3,600 a year per car”

    My wife drives her Honda Accords 7 years, and then sells them for about half her original purchase price. Her average annual auto expense for the last one – including maintenance, fuel, insurance, and licenses – was certainly less than $3600 a year. If she bought a Civic instead of an Accord, the cost would be even lower. If she lived in a smaller metro area instead of Dallas, her insurance cost would be lower still.

    Drivers who buy used cars spend even less for their personal automobiles. Such buyers are not burdened with all of that first year depreciation.

    I think it’s very likely the average income married household spends only 9 percent on personal transportation.

  8. D4P says:

    Hmmm…I’m guessing that people who own cars have higher incomes than people who use transit. As a result, the denominator of the following fraction

    $ spend on transportation / income

    is likely to vary across transportation modes, making the fraction not very meaningful for this discussion. I’d like to know something about the numerator in the fraction, i.e. the dollar amount people spend on transit vs. the amount they spend on autos, particularly when controlling for the amount of distance they have to travel.

    Even if it’s true that the average American spends 9% of their income on auto use, that doesn’t mean that we could convert all transit users to auto users and find that they spend only 9% of their income on auto use. It should be obvious that low income Americans (who are presumably? the most likely to rely on transit) would end up spending a higher % of their income on autos, simply because the denominator in their fraction is smaller.

    I’m guessing the average figure for auto users includes many VERY high (i.e. multi-million dollar) salaries, while the average figure for transit probably doesn’t.

  9. TexanOkie says:

    I don’t understand why transit agencies don’t build rail lines or any other kind of mass transit lines adjacent or parallel to freeways. Especially in areas largely settled and grown after suburban development became the norm. Everyone uses the freeways to get around anyway.

  10. the highwayman says:

    Well for that matter the 2nd Ave line that NYC is building has been long delayed and is really a restoration of a rail line that was once above ground.

    This is like the accounting tricks that Tom Rubin does, he’ll complain about the rail lines in LA, but he won’t so much as admit that this isn’t new work, but restoration of what was private sector bulit infrastructure that the government trashed in the first place.

  11. the highwayman says:

    Part II

    What’s missing is an accounting of the loss of the rail line over time, along with the costs to replace it.

  12. John Dewey says:

    D4P: “I’m guessing the average figure for auto users includes many VERY high (i.e. multi-million dollar) salaries, while the average figure for transit probably doesn’t.”

    I would guess that the average salary for rail transit riders would be higher than the average salary for auto users. Rail transit rider averages for the nation should be weighted heavily by the ridership in high cost cities of New York, Boston, Washington, and San Francisco. Auto users would include millions of workers in small towns such towns as: Union Springs. AL (median HH income $18K); Zwolle, LA (median HH income $16K); and Black Rock, NM (median HH income $16K).

  13. John Dewey says:

    “I don’t understand why transit agencies don’t build rail lines or any other kind of mass transit lines adjacent or parallel to freeways.”

    I think they do sometimes. DART’s north-south Red Line runs alongside Dallas’ North Central Expressway. DART’s Green Line will run parallel to Interstate 35. The Trinity Railway Express, a commuter line connecting Dallas and Fort Worth, is parallel to east west freeways I-30 and Highway 183. But the number of riders using the completed train routes are only a tiny fraction of the commuters on the freeways they parallel.

  14. Unowho says:

    Denver RTD sold $600 million of bonds in 2006 under the most favorable of conditions, which is not likely to happen again within any time frame that matters. Debt service and no train is a hangover without the party.

    As for NYC’s transit (subway and bus) farebox operating ratio, it is reported to be the highest of any transit sytem in the nation at slightly over 57%. It is based on operating expenses only. That ratio will soon be a matter of history without a fare hike, as the MTA is facing an operating deficit of over $500 million, along with a a very quiet downgrade of it’s bonds about a month ago. The farebox recovery ratio, which includes estimates of certain capital-related expenses, is about 47% and is a complete fantasy. The Authority had to cut about $2.5 billion on crucial current capital projects and is facing a shortfall of upwards of $11 billion in its next capital plan, which is in such disarray that the Governor had to appoint an independent commission as the the Authority’s overseer. So much for the downtown Manhattan–JFK airport rail link.

    In terms of the auto/public transit comparison, at least in the five counties of New York City it certainly it is far cheaper to ride the train than drive. The second iron law of economics is that things are cheaper when someone else pays for them.

  15. C. P. Zilliacus says:

    John Dewey wrote in #6:

    I wonder if every light rail project faces those same issues. Certainly Dallas’s LRT received only small amounts of federal funds and was plagued with huge cost overruns.

    Washington’s Metrorail (heavy rail, not light rail) was projected to cost $2.55 billion to build and be completed in the early 1980’s when ground was broken in 1969. The real cost to complete the system was over $10 billion – and – in my opinion, the system is still not complete since it is not capable of handling 8-car train consists on 2 minute headways, due to a shortage of railcars and due to deliberate undersizing of the traction power stations during construction of the system in order to “save money.”

    DART’s route choices may have made sense 25 years ago, when the Dallas-Fort Worth area was a fraction of today’s size. Despite all the propaganda DART and Dallas Morning News spew about transit-oriented development, the majority of residential and office development in the Dallas metro area has not been near the original DART LRT lines. So the original routes planned 30 years ago and voted on 25 years ago are for the most part poor choices. DART’s Red Line which parallels North Central Expressway is the one exception.

    Same story with Washington’s Metrorail. The region long ago leapfrogged far beyond the ends of the suburban Metro stations, Metro does not serve Tysons Corner (though it will if the multi-billion dollar Silver Line rail extension is built), and Metrorail does not really serve circumferential travel at all.

  16. John Dewey says:

    “Washington’s Metrorail (heavy rail, not light rail) was projected to cost $2.55 billion to build and be completed in the early 1980’s when ground was broken in 1969. The real cost to complete the system was over $10 billion”

    My first cousin, Richard, was a construction manager of some sort in the mid-70’s for one of the Metrorail’s station projects. If I see him at Christmas, I’ll remember to ask him about those overruns.

    A heavy rail system such as Metrorail would probably require $50 billion to build today, wouldn’t it? I guess that’s why none are proposed. At least those on heavy rail can travel faster than freeway commuters. DART’s few light rail and commuter rail passengers increased their total commute times by 20% to 50% when they left the freeways.

  17. John Dewey says:

    “Metrorail does not really serve circumferential travel at all. “

    DART doesn’t either, Pat. When DART’s lines were planned 30 years ago, the central business district accounted for most of Dallas’s big office employment. Las Colinas and norht Dallas edge cities were still in early development. Today Dallas, like other large cities, has a far different geographic footprint than it did back then. Offices have moved to the far suburbs, and the CBD hub and spoke model is just obsolete. But it’s far too late to adapt DART’s design to the new pattern of development.

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