Red Light for Red, Yellow Light for Purple

Maryland Governor Larry Hogan announced Thursday that he was cancelling Baltimore’s Red light-rail line while approving suburban Washington’s Purple Line. However, that approval comes with a caveat that could still mean the wasteful transit project will never be built.

The latest cost estimate for the Purple Line is nearly $2.5 billion for a project that, if done with buses, would cost less than 2 percent as much. The Purple Line finance plan calls for the federal government to put up $900 million, the state to immediately add $738 million, and then for the state to borrow another $810 million.

Instead, Governor Hogan says Maryland will contribute only $168 million to the project, and that local governments–meaning, mainly, Montgomery County but also Prince Georges County–will have to come up with the rest. It isn’t clear from press reports whether Hogan is willing to commit Maryland taxpayers to repay $810 million worth of loans, but it is clear that local taxpayers will have to pay at least half a billion dollars more than they were expecting.

Local Purple Line advocates claim that the line will pay for itself by increasing property values along the route and therefore property tax revenues. In fact, this is a zero-sum game: any increases along the route would be matched by decreases in property values elsewhere in the county. But, from the rhetoric, it seems likely that they want to use tax-increment financing–which takes all of the tax revenues from increased property values–to pay the counties shares of the Purple Line. But that may not be enough to cover the cost, especially if the state won’t help pay back the $810 million in loans.

So it is possible that the Purple Line will never get built. That would be a win for Maryland taxpayers; a win for commuters, because the Purple Line is predicted to increase traffic congestion; and a win for transit riders, because the Purple Line is so expensive it will almost certain force Maryland Transit to cut bus service.

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Thanks to declining bus fares and increasing bus vehicle revenue miles (VRM) of service, trips grew rapidly for Phoenix-area buses (including Glendale, Scottsdale, and Tempe buses) between 2000 and 2008. Trips peaked in fiscal year 2009, the year the light-rail line opened. Since then, for every light-rail rider the system has gained, it has lost more than one bus rider. Part of the reason for the decline is the recession, but the 47 percent increase in average bus fares from 2008 to 2010 and the 18 percent decrease in bus service between 2009 and 2013 were major contributors.

Recessions are inevitable, and rail systems are more vulnerable to recessions because of the huge amount of money that must be spent servicing the debt and, later, maintaining the rail lines. If Phoenix hadn’t borrowed a half a billion dollars or so to build the light rail, it probably wouldn’t have needed to cut bus service or raise fares. As I mentioned before, the sad result of light rail for Phoenix transit has been a 9 percent decline in per capita ridership and a 15 percent decline in per-worker ridership.

Ofsevit is correct that light-rail operating costs per rider are lower than for buses. But when capital and maintenance costs are added, they are higher. Moreover, comparing the Phoenix-Tempe light-rail line with the average bus in the region is apples-to-oranges. Though Valley Metro offers over 100 bus lines, just 11 carry half of all the region’s transit rides. If it hadn’t been replaced by light rail, the Phoenix-Tempe bus probably would have been one of those. The cost per rider for those lines would be very low, and some might even have made a profit.

This pattern–light rail opens, bus fares increase, bus service declines, overall ridership declines or loses market share–has been repeated in many urban areas including Denver, Portland, San Jose, and (for heavy rail) Atlanta and San Francisco. It is likely to happen in Maryland if it builds the Purple Line, which by itself is a good enough reason not to build it.