Los Angeles Rip Off

In 2008, L.A. Mayor Antonio Villaraigosa promised voters that extending the city’s Red Line subway would relieve congestion. Voters believed him and supported a sales tax increase to build the line. Now the environmental impact report finds that the subway line will increase rush-hour traffic speeds on parallel streets by, at most, 0.3 mph (p. 3-34). Not surprisingly, some voters — or at least writers at the LA Weekly — feel ripped off.

LA Metro’s response quibbles about the cost of the project. LA Weekly says “Metro plans to use up to $9 billion in sales taxes” on the project, while Metro says the construction cost will be only $4.0 to $4.4 billion. Metro is being disingenuous as both statements can be correct if (as is likely) Metro borrows enough money to incur $4.5 billion or so in interest and finance charges. (Half of the overall payments on a 30-year loan at 5.3 percent turn out to be interest.)

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Another Rail Project Goes Overbudget

With phase 1 already under construction, planners now say that phase 2 of Washington’s Dulles Airport rail line will cost almost 50 percent more than previously projected. Of course, the bus-rapid transit project that most people wanted could be running today at a fraction of the cost.

One way to save money, planners say, would be to build the terminus of the project so far away from the Dulles Air terminal that hardly anyone will want to walk to or from the rail line. Of course, if no one rides it, that would also mitigate one of the other problems the rail line is going to cause: congestion on the subway route in downtown Washington.

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Highways Safer Than Ever

It’s official: fewer than 34,000 people died in highway accidents in 2009. That is the fewest highway fatalities since 1950 and the lowest fatality rate per billion vehicle miles in automotive history.

In 1910, nearly 450 people died for every billion vehicle miles driven. This declined to 150 by 1930, 72 by 1950, under 50 by 1970, just over 20 by 1990, and around 11 in 2009. Few sectors of our economy have seen such large and continuous improvements in safety.

But the recent decline is a surprise. After falling pretty steadily from a peak of 55,600 deaths in 1972, fatalities leveled off at around 41,000 deaths in 1991. Safety improvements continued, so fatality rates declined, but this was mitigated by increases in driving, so overall fatalities remained constant. As recently as 2007, 41,000 people died on the highways.

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Should Buses Use Alternative Fuels?

Fred Jandt’s rethinking rail article on the Mass Transit web site (discussed here on Monday) offhandedly mentioned “what Foothill Transit did this week” with buses. That was a reference to the introduction of some of the first all-electric buses in the U.S. A mere 10-minute recharge of the batteries on these “ecoliners” is supposed to be enough to allow them to run for 30 miles.

Foothill Transit’s new electric bus.

All over the country, transit agencies are purchasing hybrid-electric buses, natural-gas-powered buses, and other alternatives to Diesels, which have a well-deserved reputation for being dirty. While transit is popularly believed to be environmentally friendly, the truth is that it is not, and this is especially true for buses, which typically use more energy and produce more pollution (at least more of the kinds of pollution that are of greatest concern today, namely CO2, NOx, and particulates), per passenger mile, than autos and even SUVs.

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Trannie Mae: Obama’s New Bank

President Obama’s new “plan“–more of a sketch, really–to “Renew and Expand America’s Roads, Railways and Runways” calls for spending $50 billion rebuilding 150,000 miles of roads, building and maintaining 4,000 miles of rail, and rehabilitating 150 miles of airport runways and installing a modern air traffic control system. Where do these numbers come from? Is $50 billion enough to do it all? Where will the $50 billion come from? The plan provides no answers to these questions.

For example, a new air traffic control system alone is expected to cost at least $20 billion. At $12.5 million a mile, rehabilitating 4,000 miles of passenger rail lines would consume all of the $50 billion. At a conservative $1 million a mile (which won’t do much rebuilding), treating 150,000 miles of roads would cost three times the $50 billion Obama proposes to spend.

Like the $8 billion that Obama proposed to spend on high-speed rail 19 months before his transportation secretary finally admitted that the administration’s high-speed rail plan would cost $500 billion, the $50 billion is obviously just a “down payment” on the plan. In short, someone just made up all these numbers, threw out $50 billion as a starting cost, and then called it a “plan.” (I wonder what the planners who read this blog think of this abuse of their professional title.)

To stretch the $50 billion, the plan calls for creating an “infrastructure bank” that would “leverage private and state and local capital to invest in projects that are most critical to our economic progress.” How would such a Trannie Mae compare with a real bank? A real bank loans money to projects that are likely to cover their costs and repay the loans, but if projects had to cover their costs, no passenger rail project would get a single dime. So Trannie Mae will instead give money away using supposedly “clear, analytical measures of performance” that “will produce the greatest return for American taxpayers.”

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High-Speed Rail Deathwatch

Will a high-speed rail line ever be built from San Francisco to Los Angeles? The California High-Speed Rail Authority (CHSRA) has less than 10 percent of the money it needs to build this line. The plan is increasingly under fire from local and state organizations. On one hand, President Obama’s vague and controversial proposal to spend $50 billion to “rebuild 150,000 miles of roads [and] construct and maintain 4,000 miles of railway” could keep the California project alive. On the other hand, if Republican Meg Whitman is elected state governor this November, she could kill the program.

Can’t afford to build it; can’t afford to run it. Maybe it isn’t needed?

A recent op ed in the San Francisco Chronicle succinctly points out that projected costs have nearly doubled since voters approved the plan, adequate funding is unavailable, and–“with 10 airports and six competing airlines”–the San Francisco-Los Angeles corridor doesn’t need high-speed rail anyway.

Perhaps most important, the measure approved by voters in 2008 forbade any tax subsidies for operations. Yet recent recalculations of ridership projections and costs make it clear that fares will never cover operating costs, so even if they build it, they would not be able to run it (at least, without changing the law and finding money for operating subsidies).

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Your Tax Dollars at Work

The owner of a beauty shop who applied for a loan from a community development fund received a response calling her “one crazy ass bitch” and suggesting that she was under a “delusion that somehow you might be credit worthy.” The author of the letter, who was suspended for a week without pay, later wrote a letter of apology saying she was under a “heightened state of anxiety” and wrote the letter only “for my own personal release,” not to be mailed out.

Other than as a humorous example of bureaucracy at work, why is this of interest to the Antiplanner? It turns out the applicant’s business has been hit hard by light-rail construction, which is preventing customers from accessing her shop. She applied for a loan from the Rainier Valley Community Development Fund, which was created by the City of Seattle and Sound Transit (which is building the light rail) and given $50 million specifically to help businesses survive construction.

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We Want High-Speed Rail, As Long As It Is Free

Americans want high-speed rail, as long as someone else pays for it. States are chuffed upset, for example, because the federal government now says it wants the states to put up 20 percent of the capital cost. The original Federal Railroad Administration grant guidelines issued back in 2008 suggested that the feds might pay all of the costs. Though they added that states that provided matching funds might be more likely to get federal grants, no doubt some states feel betrayed by this change of policy.

Someone is going to say, “but the federal government paid 90 percent of the cost of interstate freeways, so why will it only pay 80 percent of the cost of rail?” The crucial difference is that both the federal and the state shares of the interstates were paid out of gas taxes, in other words, user fees. (Though called a “tax,” the gas tax was a user fee because it was imposed only on purchasers of gasoline–98 percent of which was used for driving–and because state gas taxes from the start, and federal gas taxes after 1956, were dedicated to highways.)

The interstates were also built on a pay-as-you-go basis: no borrowing in anticipation of future federal gas tax revenues. This introduced feedback into the system: if people didn’t drive, there was no money to build roads. That’s why it took longer than expected to complete the systems: not because people didn’t drive on the interstates–they drove on them like crazy–but because neither Congress nor the states indexed gas taxes to inflation.

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Living Lightly in Portland

The New York Times loves to tell stories of people who got off the “work-spend treadmill” by selling off all but about 100 personal items and moving into a 400-square-foot studio apartment in Portland. Even the Wall Street Journal has jumped on board by telling the heartwarming story of someone who bought and remodeled a small bungalow in Portland.

Actually, they didn’t exactly remodel it. Instead, they tore it down and built this 7,600-square-foot house complete with a wine cellar, sauna, and lap pool. But the good news is that the owners feel the home is too ostentatious, so they are selling it and plan to buy a smaller house in Portland. And a house in Hawaii. They are also keeping their condo in San Francisco.

It is good to know that the Antiplanner is not the only one who is skeptical of conspicuous minimalist consumption.

Financial Reform or Social Engineering?

Everyone agrees that, by lowering credit requirements, Fannie Mae and Freddie Mac played an important role in the recent financial crisis. Now the Obama administration has promised to reform those “government-sponsored enterprises” (GSEs).

However, as faithful Antiplanner ally Ron Utt warns, Obama’s idea of reform is more focused on changing American lifestyles than on preventing more financial debacles. Administration officials speak darkly of the “underside to homeownership” and hint that there are some people who should rent, not own. According to Utt, the hidden agenda is to promote more compact cities.

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