No matter how disastrous rail transit plans turn out, their advocates can always count on public innumeracy to overlook the problems. Take the case of FasTracks, the plan to build 119 miles of new rail transit in Denver.
When approved by voters in 2004, RTD, the region’s transit agency, estimated it would cost $4.7 billion. Last May, that estimate went up to $6.2 billion, which RTD reluctantly admitted (two months later) it could not afford.
Now, the latest report indicates that the cost will be $7.9 billion. That’s 68 percent above the voter-approved $4.7 billion cost.
Yet the very first comment to the Denver Post story about the latest hike is, “Build it no matter what it costs. It’s only 35% more.” So now, $6.2 billion has become the “approved” standard. (Actually, $7.9 billion is 35 percent more than $5.9 billion — who knows where that came from.) Worse, even one of the opponents (“Mike 8”) uses the 35 percent figure.
Actually, even 68 percent — the increase from $4.7 to $7.9 billion — is wrong. The real decision to build FasTracks rail lines was made in the major investment studies that RTD conducted between 1997 and 2001. These studies all compared the costs and benefits of rail with alternatives including buses, new highway lanes, and HOV lanes. As shown on page 9 of a report the Antiplanner wrote in 2004, every single study found that rail transit was the least cost-effective way to relieve congestion, but every single study nevertheless chose rail as the “locally preferred alternative.”
When added together, the studies estimated that the FasTracks rail lines would cost less than $3 billion (adjusted for inflation — see page 14 of this report). Actually, RTD did not prepare major investment studies for all FasTracks lines, but — in an appendix to the 2004 FasTracks plan — RTD admitted that the original cost estimate for all of the lines together was $2.8 billion, meaning that the costs had risen by about 68 percent by the time they put the issue to the voters.
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The current estimated cost of $7.9 billion is a mere 179 percent more than the original cost. So much for building its lines on budget, which RTD repeated claimed it could and would do during the 2004 campaign.
When rails were estimated to cost $2.8 billion, buses were far more cost effective. Improvements in bus service can also be put into effect almost immediately instead of waiting 9 to 12 years to build rail lines. So what does that say about the cost effectiveness of rail at a $7.9 billion price tag?
On top of this, RTD’s Annual FasTracks evaluation reveals that the agency projects a $2.8 billion tax revenue shortfall (up from a previous projection of a $1 billion shortfall). So FasTracks is going to cost $3.2 billion more than projected and they have $2.8 billion less than projected — which adds up to a total $6.0 billion shortfall.
The problem is that human brains can’t comprehend any numbers larger than 5 or 6 except as abstract ideas. Most people have a pretty good abstract idea of how much a thousand dollars represents. But very few understand a million or a billion. I figure most people think a million is about twice a thousand, and a billion is about twice a million. So, when RTD says “$4.7 billion,” most people figure that’s about 20 times a thousand dollars.
Meanwhile, RTD made the mistake that many people say too many American consumers made in the past few years. It projected its revenues ahead for 30 years (optimistically assuming there would never be a recession during that period), then asked, “How much can we borrow today based on our ability to repay that debt?” Just as people have been accused of spending too much on cars or homes just because someone offered to loan them that much money, RTD planned a system that would consume all of its income and leave very little room for error.
And, by “RTD,” I mean RTD’s board of directors, which is made up of people who are no more numerate than most other Americans. Several of them firmly believe that rail is the most cost effective solution to Denver’s transportation problems despite the evidence in their own documents. (Either that or they are very effective liars, and maybe it is just the softness in my heart that I prefer to believe they are stupid than that they are liars.) In any case, if FasTracks gets built, it will only be because people are so easily confused by large numbers.
Things are tough all over. The same sort of cost increases are also heavily hitting road projects.
See http://www.fhwa.dot.gov/programadmin/contracts/price.cfm.
Infrastructure of any kind is increasingly expensive due to soaring materials costs, particularly steel and concrete–based on higher energy costs and the remarkable competition from China for these key building materials. Given the reality for all transportation projects, I fail to find your point about rail transit warranted any extraordinary comment.
RTD is playing up the construction costs increases. The problem is they didn’t have a clue as to what those would be since they used the CPI. It’s not that the current price increases were unforeseen, they didn’t even try to foresee them by using the CPI. More so, it’s a distraction from how they used an insanely rosey picture for future tax revenues. Yes, these large increases are a problem but Fastracks go far, far beyond just that issue.
What sort of contingency did they have as part of the $4.7 billion? 10% 20%?
Say, Randal, what’s the cost overage for Patriotic American road repair projects on the Front Range? How many repairs are being delayed? How come CDOT wasn’t able to figger out these price increases?
How come you aren’t playing up this incompetence? Too busy with the other fetish to pay attention to the road travesty?
DS
Hey the cost overruns for I-93 in Boston ended up being well over 500%!
Here’s the latest on Portland’s Eastside streetcar line:
http://www.oregonlive.com/news/index.ssf/2008/08/portland_city_council_approves_1.html
City’s going through with planning even though “a federal study of the project’s cost effectiveness found it didn’t meet the transportation agency’s funding requirements.
The Oregon congressional delegation is attempting to bypass the process, while City Commissioner Dan Saltzman says the project is worth the financial risk.”
Sure. In an era of tightening budgets, it’s worth the risk of taxpayer money and bankrupting the city for something completely unnecessary. And if the feds say it’s not cost effective…
A lot of highway projects are just pure pork and we can blame the feds for that too.
Though when it comes to funding from the feds there is still a big double standard between highway and transit projects. The problems are mostly political when we consider that road uses only cover about 20% their costs directly and the rest of the funding comes mostly from income & property taxes.
The problem for transit it is that it has been neglected for such a long time there is a massive backlog of restoration work to be done that gets channled in the “new starts” when in reality, it’s not new at all.
The 2nd Ave line in NYC, is a great example of this. It’s not a new project , so much as a relocation/restoration project that has been delayed for a long time.
road uses only cover about 20% their costs directly and the rest of the funding comes mostly from income & property taxes
Has the Antiplanner explained why it’s OK to force taxpayers to subsidize road construction…?
Mr.O’Toole’s book “The Vanishing Automobile”, is more like a boy cry wolf story than any thing else.
Our political system is very bias in favor of the automobile. Which comes at a great cost and goes against “The Invisible Hand” as described by Adam Smith.
Though to me I’d call it a battle between Karma & Dogma.
highwayman, I would live to see where you found the claim that road uses only cover about 20% their costs directly. The studies I have seen generally suggest that it is reasonable to claim that road uses cover all but 20% their costs directly.
While the current situation is far from ideal it is important to understand how the evolution of the responsibility for road maintenance and improvement got us into this situation.
New Zealand went through the essentially same evolution as the USA. Initially the colony adopted the British tradition of those living along the road doing the maintenance and improvement themselves. The roads were often only roads on the maps. In reality they were more likely to be bridal paths, suitable only for horseback riders. When the government sold land to settlers the profits were often invested in opening new lands for settlement or to pay for the improvement of main roads. Cities and towns generally had councils that levied property taxes (rates in NZ) to pay for roads, boardwalks, gaslights, etc. Rural communities were more self-sufficient. In NZ the first rural councils were called District Roads Boards and they were responsible for the main district roads that carried a lot of foreign traffic. It was common practice to charge tolls on the substantial bridges on these district roads. As county councils were established the work of maintaining and improving roads was transferred to full-time road workers and the cost was met from rates. With only slow moving horse-drawn vehicles this made sense as the road users and landowners were the generally same local people.
The advent of motorised traffic led greater amounts of foreign traffic and greater costs. Thus a petrol tax was introduced to reduce the burden on property owners.
The general concept used to apportion roading expenses between road users and landowners is to determine:
1) whether a particular expense is caused by road users
2) whether a particular benefit accrues to road users or land owners
Consequently road users pay the full cost of State Highways, 60% of the cost of county roads and 40% of the cost of urban roads (to account for footpaths, kerbs, streetlighting which benefit property owners).
Averaged over all roads, autos cause 2% maintenance spending, trucks 33%, old age 65%. To correctly recover these costs trucks pay a 3rd power axleweight mileage tax whereas autos pay a fuel tax. In actuality property owners are paying two-thirds of the old age cost while cars and trucks are paying 98% of the improvement cost. Road users pay 100% of the cost of law enforcement.
In addition NZ has a universal sales tax, the road users share of this more than covers the external costs road users impose on the government health and welfare systems from both crashes and air pollution. This is the one major point of difference from the USA.
You have led D4P to jump to the wrong conclusion. Generally taxpayers don’t subsidise road construction but they do subsidise road maintenance. However there does seem to be an emerging trend in the USA to shift from fuel taxes to general sales taxes for construction of both roads and transit systems. I do believe AP has criticised that on several occassions.
I’m only citing DOT numbers.
You have led D4P to jump to the wrong conclusion. Generally taxpayers don’t subsidise road construction but they do subsidise road maintenance. However there does seem to be an emerging trend in the USA to shift from fuel taxes to general sales taxes for construction of both roads and transit systems. I do believe AP has criticised that on several occassions.
and then
I’m only citing DOT numbers.
The H:
you should cite your source*. A portion of my work – the portion that I present at various conferences – is concerned with road infrastructure longevity, so this is the sort of thing I come across often and I was surprised by your assertion.
IME Kevyn’s numbers are more in line, and there is a growing number of American rural towns who are paving their gravel roads out of the general fund or bond issuance. I used to practice in one, and the old Mayor made his name by paving the roads and maintaining the other ones.
BTW, while looking at the fetishized Houston’s budget numbers, I see that in addition to subsidizing auto traffic as Kevyn states, they also decided to put in street lights along an Interstate, subsidizing furriners easy motoring as well.
DS
* The ideologues making untenable assertions on this site don’t cite sources…
Now this is how Mr.O’Toole and Mr.Cox make their money traveling the world blowing smoke!
Dan, since this is the “Anti-Planner” blog, you just answered your own question.
You can’t get some thing for nothing.
The procedure is that one must have evidence for an assertion. I’d like to see that evidence please. Citation, reference, http://www., any one will do. Thank you in advance.
We know that general funds subsidize roads from county on down. Show us by how much.
DS
What government does for one it should do for all;
What government does not do for all it should do for none.