For Release Sunday, August 8, 2010
Citiwire.net
I will show my age when I say that I remember the last of the streetcars being ripped up to make way for the automobile. Fifty some odd years latter, it seems every city in America is betting its economic future on new light rail systems. Therein lies the story of the modern American experience with transit.
After throwing transit away, we now want it back. We just don’t want to pay for it.
Public transit — bus and rail — has experienced its first decade-long ridership expansion in over half a century. With people moving into older neighborhoods, with auto use growing ever more expensive, we seemed to be stumbling toward national support for transit.
But national political and economic trends are pointing toward a potentially grim future for the nation’s transit systems. At the operating level, 90 percent of all transit systems report flat or declining local financial support. Ninety percent of transit systems indicate state support for their systems was flat or declining. Costs, in the form of petroleum and electric power, are continuing to rise. Transit ridership for this most recent 12 months has declined by 4.5 percent, not really too bad considering the 10 percent unemployment rate, but still a decline in revenues. The net result is that 84 percent of all transit systems report that they reduced routes or raised fares in the last year.
Nationally, revenue into the Highway Trust Fund, which helps support the nation’s transit systems as well as roads, is experiencing a continued decline. The trust fund’s revenue comes from an 18.7 cents per gallon gas tax. Because cars and trucks are getting more fuel efficient, there is less revenue coming into the fund. In addition, the total vehicle miles of travel in the U.S. for this calendar year seems to be down slightly, compounding the trust fund’s revenue problems. Congress has dodged the problem of declining revenues, instead choosing to pump general fund revenues into the fund to keep it afloat, now to the tune of $70 billion.
The surprise for Congress has been the lack of pressure to raise revenue for the road and transit programs. The authorization for these transportation programs expired last October and have been on a series of life support extensions ever since. The old magic of expanding the programs with larger authorizations and heavy infusions of earmarked projects (pork to us) has collapsed. The current House transportation reauthorization bill envisions a massive expansion in the program, but has no way to pay for it. The result is that there is no movement on reauthorizing these two programs and no way to expand the existing revenues. It is certain that there will not be a bill this year, and almost as much certainty there’ll be none next year. There may not be a real reauthorization bill until 2013.
Lest we label the Congress as the sole culprit here, the White House has been totally disengaged on this set of issues. It just insists there will be no tax increases for transportation. It’s even rejected a study of the vehicle miles of travel tax issue. The administration story is that the necessary financing for transportation will come thru public private partnerships (the ghost of the George Bush position).
Why does this matter to transit? The outcome of this gridlock is that there will not be any addition revenue going to highways and transit, and that the gap will once again be filled with general fund appropriations for FY 2011. If there is no new revenue coming into the trust fund and there is tremendous pressure on reducing the deficit, there is a great chance that these programs will have to shrink in FY2012 to live within lower appropriations level (perhaps a 20 percent reduction).
The reality of this struck the highway industry with a mild sense of panic. Some highway leaders have begun to talk openly about one solution to this dilemma: to have the current gas tax pay solely for the traditional highway programs, while transit and some other smaller programs would be pushed out of the trust fund and into the general fund. That move might cover the next five or six years of highway funding and keep its contract authority intact.
It would also fully expose transit to the pressures that the entire general fund budget is going to be facing in the next five years. At a time of growing long-term transit ridership and demands for new investment, it would be an unmitigated disaster. There would no longer be the flexibility to shift funds from highways to transit. There would no longer be contract authority for transit to enter into multi-year projects, and there would be the unmistakable message that highway projects are more important than transit projects.
There was a hope that a climate change bill would be able to create a funding source for transit, since transit has so many energy benefits. But the climate bill seems to be as dead as the highway bill.
Any move by the highway industry to push transit out the door would destroy 40 years of an urban/rural alliance that supported both highways and transit. It would also ignore the nation’s newfound interest in building new transit systems and capacity.
The terrible thing here is that the transit industry does not seem to recognize the dire threat before it. Congress appears incapable of negotiating a solution to this crisis and the administration, which should be at the front of this debate, is too distracted by other issues to take any action at all. This is like watch a train wreck in slow motion.
Tom Downs is chairman of the North American Board of Veolia Transportation and a former president of Amtrak. His e-mail is tmdowns1@aol.com.
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5 Comments
An accurate analysis of where we are and where we are headed. However, “pushing transit out” of the Highway Trust Fund and funding it with general fund appropriations would not be an “unmitigated disaster” as my friend Tom Downs fears. Virtually every other federal program is funded with annual appropriations out of general revenues. What is more, there is nothing that prevents Congress from appropriating general fund budget authority for multi-year transit projects for several years in advance. And why should transit be exempt from the pressures that all the other programs in the entire general fund budget will be facing in the years ahead?
Having transit supported by highway users has always been something of an anomaly. As long as the Trust Fund was growing this was tolerated in the name of “multi-modalism.” But now, that the Trust Fund is teetering on the verge of insolvency, there is no sense in transit dragging it even further into bankrupcy.
Mr Orski’s suggested approach doesn’t consider that transit and highways together make up workable urban transportation systems. The “Highway Trust Fund” needs to be fixed and transit and highways need to be planned, coordinated and supported from a newly formulated “Transportation Trust Fund.”
Tom’s comments are excellent, but there are some added facts and viewpoints possible: For example, bad old diesel buses return a higher percent of their operating costs at the farebox than other forms of public transit, yet many transit entities are in love with heavy and light rail, which cost more and can’t change routes. States are in love with dreamy high speed rail projects, which are extremely expensive, and suck out money from Congress that could be used for more practical people movement. Some transit entities, such as WMATA in the DC area, don’t have dedicated funding sources, so have to go begging for funds from Maryland and Virginia every year. This is a regional problem. Whereas for Bay Area Rapid Transit, people in the San Francisco Bay Area voted to tax themselves through additional sales taxes to pay for BART.
Ken’s statement, “Having transit supported by highway users has always been something of an anomaly,” is an old canard. Road users have never paid the entire cost of the externalities they create in form of environmental and health damage, for example. Transit users damage life less, and so should be rewarded with public support. Increasing public transit will also reduce congestion, and save us all money in the form of time.
Surface transportation bills are the biggest Christmas trees around, and always have tons of earmarks to benefit many parties and interests. The issues are much bigger than the old-fashioned highway trust fund.
One of these days, our “friends” like Chavez and Saudi Arabia won’t sell us any more oil. If we are not prepared with a lot of efficient and electrically propelled transportation, we will be up the creek without a paddle. Now is the time to start converting America away from aviation and highway, to rail and electric systems. The best way to pay for it is fuel taxes on ALL transportation modes. Let the most energy efficient win!
There are reasons to have mixed feelings about funding transit from gas tax money, but from 50 years of watching how the system works, I’ve seen that transit is expected to carry numerous social burdens that streets and roads do not. How many seniors get to drive at half-price on the highway network? These burdens have largely been created by the massive expansion of our street and road network over the past three generations, so it seems fair for the highway users to help to pay for the people that they do not serve.
Transit costs created by the funding of an ever-expanding road network include subsidies needed to provide basic services to teenagers, seniors, low-income persons who are located further and further from the locations where services are available. They include operating costs steadily being driven upward by zig-zag routes needed to get into areas isolated by limited access roadways. They include operating costs being driven upward by urban design features that add mileage and/or delays to bus and light rail services. They include overhead costs for elaborate park-n-Ride lots that provide little benefit for non-auto riders, but are a critical part of the peak-hour highway system capacity.
These operating cost increases apply to whoever is driving the bus or train — the public-private argument is not the issue — and have foreclosed the likelihood of many neighborhoods ever having walk-distance service.
Perhaps the highway user funds transfered to public transit should be labeled “reparations” to be most accurate in describing their justification.