FTA Cost-Effectiveness Rule

As if projects such as the Honolulu rail line aren’t a big enough waste of money, Secretary of Immobility Ray LaHood is seeking to change the Federal Transit Administration’s process for evaluating grant proposals for rail projects. As if to illustrate the slow and cumbersome nature of federal programs, LaHood originally proposed to revise these rules more than two years ago, and now we are only at the stage of having a first draft for public comment.

In any case, the Antiplanner submitted comments arguing that LaHood’s proposal violates the law in three ways. First, the law requires that transit agencies evaluate the cost effectiveness of transit projects by comparing them with a full range of alternatives. But the proposed rules only require that the cost effectiveness of proposed projects be compared with a “no action” alternative. If no other alternatives are considered, no one will know if a project is truly the most cost-effective way of improving transit.

Second, the law requires that projects be judged based on their ability to improve mobility and reduce congestion. Yet the proposed rules actually reward transit agencies for increasing congestion. While the existing rules require that cost effectiveness be calculated in terms of the cost of saving people’s time, including the time of auto users as well as transit riders, the new rules base cost effectiveness solely on the cost of gaining new transit riders. This means that a project that increases congestion, leading some people to ride transit to escape traffic, will actually be scored higher than one that does not increase congestion.

Finally, the proposed rules also allow the FTA to make grants based on environmental benefits, operating efficiencies, and transit-supportive land-use policies. But to this list the proposed rules add several more criteria, including livability, environmental justice, and multimodal connectivity. The law does not authorize the Department of Transportation to make grants based on these criteria.

The Antiplanner concludes that the FTA should scrap its proposed rules and either stick with the current ones or revise the rules in a way that requires transit agencies to assess the cost-effectiveness of a full range of alternatives and then pick the one that is most cost effective at saving people time. Comments on the proposed rules are due March 26 and can be made on line.

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16 thoughts on “FTA Cost-Effectiveness Rule

  1. Sandy Teal

    The Antiplanner doesn’t understand that you have to destroy commuting by congestion in order to save it with subsidized transit.

    the highwayman Reply:

    Wow, that was a paradox!

  2. C. P. Zilliacus

    The Antiplanner wrote:

    In any case, the Antiplanner submitted comments arguing that LaHood’s proposal violates the law in three ways.

    I got a 404 when I tried to read the comments you submitted.

    FrancisKing Reply:

    The comments document should have a .docx extension. Even then, my browser cannot see the file. Error 404.

  3. bennett

    “While the existing rules require that cost effectiveness be calculated in terms of the cost of saving people’s time, including the time of auto users as well as transit riders, the new rules base cost effectiveness solely on the cost of gaining new transit riders. This means that a project that increases congestion, leading some people to ride transit to escape traffic, will actually be scored higher than one that does not increase congestion.”

    I’m not quite sure what your getting at here. Are you suggesting that the “intent” is to increase congestion to gain transit riders? I can tell you that no transit agency I know of is that dubious or ballsy. Some transit projects may have negative impacts on congestion (mostly on the capital side not operations) but that isn’t the intent.

    Although this statement is subtle, it has a fragrance of ideological hyperbole. Say it aint so.

  4. LazyReader

    Wouldn’t the best way to compare cost effectiveness be to compare revenue generated via fares versus revenue via subsidies and government infusions. The New York City subway is the most cost effective transit system in America, still it’s rather costly and the century old system is in need of a significant overhaul not including various new expansion proposals like the Second Avenue line (As of 2012, Phase one, consisting of two miles of tunnel and 3 stations, is under construction). The total cost of the 8.5 mile line is expected to be over 17 billion dollars. The Antiplanner mentioned in a previous article regarding the Port Authority to enact bridge tolls or congestion charges that some thought would be used to boost the badly needed funds to finish line construction or enact repairs of the aging subway lines so once again auto drivers are forced to put up with traffic jams while their money will go towards something they are not using.

    the highwayman Reply:

    Roads would still there even if there were no automobiles.

  5. Andrew

    IMHO … The current rules were written specifically to benefit Republican leaning areas, as can be readily seen by their results support all manner of dubious projects in places like Salt Lake City, Denver, Orlando, Phoenix, Dallas, Minneapolis, etc., but rejecting equally dubious projects in Democrat leaning areas like Albuquerque. They also magically seemed to prevent justifying any project extending one of the large old transit/rail systems except NYC, despite these being the places with the heaviest ridership and least developed freeway systems.

    I think the results speak for themselves as to the non-objectivity of the rules that are being scrapped.

    MJ Reply:

    Except that Albuquerque did receive funds to build one of the least cost-effective rail projects to date, just a few years back.

    As for “Republican-leaning areas” receiving special treatment, the states that those cities are in might be right-leaning (I question whether Colorado and Minnesota fit that description), but the cities where those projects are located are not. The reality is that the current rules are written so as to be permissive enough to allow just about any project to get funded without being subject to any serious economic analysis.

    I also question whether NYC is really getting short-changed. New York MTA alone received over $3 billion in federal capital funds in 2010. Adding in the LIRR and Metro-North railroads pushes this number to about $4 billion.

    bennett Reply:

    I was going to mention the “republican leaning” thing but MJ beat me to it. Denver republican leaning?!?!?!? Actually, most major urban areas tends to vote blue, Dallas, PHX and Orlando included. In Texas almost all of our state reps are republican set aside a few serving Dallas, Houston, Austin and San Antonio (and a handful down in the valley).

    the highwayman Reply:

    That isn’t surprising that urban areas and rural areas have different issues.

    Andrew Reply:

    MJ:

    Albuquerque’s Rail Runner did not receive New Start funds.

    Metro Minneapolis (Northstar – Michele Bachman’s district), Metro Salt Lake (Front Runner – Ogden to Provo), Metro Denver (FasTracks – Tom Tancredo’s district), and Metro Orlando (SunRail – John Mica!), etc. are all Republican leaning suburban areas and these systems were heavily pushed by then in power Republican office holders. I agree the central cities are not, but the systems built with New Starts recently are mostly suburban commuter rail and light rail.

    I also question whether NYC is really getting short-changed

    Well, that isn’t what I said at all. I said other older city systems are like Philadelphia, Boston, Chicago. NYC has never had trouble getting lots of FedBucks could not qualify under the program.

    bennett:

    I was going to mention the “republican leaning” thing but MJ beat me to it. Denver republican leaning?!?!?!?

    The missteps of the Republican party since 2005 have cost them dearly in many of those areas, but at the time the programs were being started and approved shortly after the Bush Administration changed the funding rules, they were generally more Republican than they are now. CO-07, for example (part of suburban Denver) was represented by Bob Beauprez and CO-06 (south suburban Denver) is still a Republican district. Same goes for AZ-05 Confusion over the political leanings of areas due to the result of the 2006 and 2008 elections should not cloud the original politics behind the decisions.

    the highwayman Reply:

    Suburban trains are not anti-suburban.

    Though we already know O’Toole is a fraud.

    MJ Reply:

    Bachmann’s district covers only a small portion of the northern Twin Cities area, and while it technically runs through part of her district, she was never a proponent of the project, much less the driving force behind it.

    Likewise, Denver area Republicans were not the ones pushing for FasTracks. That was the brainchild of former Denver mayor Federico Pena (a Democrat), Clinton’s transportation secretary. In order to buy the support of suburban legislators for his light rail agenda, Pena threw a few pork hocks to them in exchange for allowing the sales tax to be collected in their district.

    Well, that isn’t what I said at all. I said other older city systems are like Philadelphia, Boston, Chicago. NYC has never had trouble getting lots of FedBucks could not qualify under the program.

    Nor have any of the other cities you mentioned. The reason they don’t get a lot of New Starts projects is because, well, there aren’t a lot of “new starts” to be had there. The systems in those cities are already pretty well built out, and the only new projects that are being considered are insanely expensive pipe dreams like the 2nd Ave. Subway.

  6. Matt Young

    The issue is incomprehensableness. This has little to do with reality and a lot more to do with just writing crazy stuff down to get budgets voted through. Given the deficit problem, the downturn, the generally low opinion of anything the Senate does, the desperation of politicians and huge entitlment shortfalls; put all that together, and you will never ba able to get sense out of DC at the moment, it is mainly just muddling through.

    We have the same thin with Choo Choo in California, the project is barely hanging on, the politicians are very redfaced, and to keep the thing, California will have to lay off bunches of teachers. We are in the boondogle collapse period, when fakery and face saving result in any old rubbish being written as law. Few of these projects will ever see the finish line.

  7. ChooseMyOwnPath

    I just reviewed your comments at http://ti.org/CatoFTAComments2012.doc (replace the.dox with doc) and agree with what Antiplanner states. This current administration is implementing several requirements and conditions holding transportation funding hostage to implement “social justice” to deteriorating urban cities across America. The purpose of the gas tax was to support interstate travel and commerce, period. To arbitrarily make changes through changes in policies does not negate the need to follow the law, Congress has yet to pass changes to law to fund these “livibality”, “sustainability” principles but apparently DOT has been given the authority to ignore existing laws.

    I hope Antiplanner and similar organizations are commenting on the MAP-21 fiasco as well. If urban cities want to rebuild their inner core and attract transit investments then they can collect their own taxes for such purposes – draining the trust fund to pay for LOCAL projects is why bridges collapse and there are critical safety deficiencies on Interstates. If rebuilding inner cities is such a National priority then why hasn’t congress developed a way to pay for it without raiding the gas tax for new starts program? Continually diverting “interstate commerce” related funding to a select group of cities is not fiscally sustainable and some would argue it is out of the scope of the Federal governments taxing authority. Explain to me how a modern street car has any impact on interstate commerce?

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