Sunday, December 31, 2006

Is The MBC's "Invest to Expand" Proposal Worth The Expense?

The relationship between the 2030 Regional Transportation Plan, its 2006 Update, and the RTA's Moving Beyond Congestion outline of proposed capital projects bear close scrutiny.

The RTP sets out and prices five capital investment scenarios:

1. System Commitments: This appears to be maintaining the status quo, including current capital projects, and no more. Cost: $48 billion

2. Service Intensive: "Transportation strategies that improve user benefits under existing management, operations and capacity conditions." Cost: $49.3 billion

3. System Intensive: "Limited capital improvements and operation changes on the existing system." Cost: $52.7 billion

4. System Additions: "Capacity additions to existing major highways and rail facilities." Cost: $66.2 billion

5. System Expansion: "Significant new segments to the region's major highway and passenger rail system. . . they fundamentally change the way travelers use the transportation system, and they have the potential to induce significant land use changes." Cost: $58.9 billion

(Pgs. 57-60, 66 of 219)

The Moving Beyond Congestion proponents have outlined three capital investment scenarios for the region's public transit system:

1. Invest to Maintain: "Preserve our current system and maintain the services we have." Cost: $34 billion

2. Invest to Enhance: "Improve existing service and expand service into new transit markets in the mid-term future." Cost: $39 billion

3. Invest to Expand: "Major expansion projects identified in federal legislation, project concepts proposed by the transit agencies, other government agencies, partners and the public." Cost: $56.9 billion

It appears that the MBC's "Invest to Enhance" scenario combines the "Service Intensive" and "System Intensive" scenarios in the RTP, while its "Invest to Expand" scenario tracks the "System Additions" and "System Expansion" scenarios.

The MBC's "Invest to Expand" scenario will cost $22.9 billion (67 percent) more than its "Invest to Maintain" scenario. The RTP casts some doubt on whether this extra $22.9 billion is a good investment for the region. The RTP contains transportation system performance projections for each of its scenarios. The projections indicate that the MBC's "Invest to Expand" scenario will deliver limited value. The "Invest to Enhance" scenario, however, promises a greater return on investment.

Table 7 (pg. 70 of 219) has the following projections with respect to work trips in 2030 under each of the scenarios:

Scenario/ Transit Share/ Transit Travel Time/ Auto Travel Time

Service Commitments 13% 46.2 minutes 26.5 minutes
Service Intensive 20% 45.3 minutes 26.5 minutes
System Intensive 21% 46.0 minutes 26.8 minutes
System Additions 17% 42.5 minutes 25.6 minutes
System Expansion 19% 41.5 minutes 26.0 minutes

These projections indicate that a relatively modest $5 billion additional investment in the MBC's "Invest to Enhance" scenario--which tracks the "Service Intensive" and "System Intensive" RTP options will do the most to increase transit ridership. Indeed, projected transit ridership drops under the most expensive MBC scenario according to the RTP.

These RTP projections also seem to indicate that an increased investment in public transit will not make a dent in auto work trip travel times. Under any investment scenario, auto travel times for work trips range between 25.6 minutes and 26.8 minutes. This small variance makes one wonder about the veracity of the MBC's claims that increased investment in public transit will yield substantial congestion relief benefits.

It appears that the only significant change that will result from the "Invest to Expand" option will be a roughly 10 percent reduction in the trip times for public transit users. Yet, even with this time savings, transit's market share under this scenario is less than under the less expensive scenarios. To put it another way, is it worth a $17.9 billion investment (in today's dollars) to achieve a 10% reduction in public transit work trip times when that investment does not increase transit's market share?

The RTP's projections in Table 8 (pg. 71 of 219) with respect to all trips--as opposed to just work trips--is just as sobering when it comes to the efficacy of the MBC's "Invest to Expand" scenario.

Scenario/ Transit Share
System Commitments 8%
Service Intensive 11%
System Intensive 11%
System Additions 10%
System Expansion 11%

Again, these projections call into question the notion that building substantial new public transit capacity in the region will increase transit's market share. The more modest "Invest to Enhance" MBC option appears to produce all of the market share gains for public transit.

In a coming posts we will look at other data from the RTP and what it says about the efficacy of investing in a major expansion of the region's public transit system.

Friday, December 29, 2006

"Overinvestment" of Capital Dollars in Public Transit?

The blueprint for future regional highway and public transit investments in the region has been drafted by the Chicago Area Transportation Study ("CATS"), the federally-mandated metropolitan planning organization for northeastern Illinois. CATS' 2030 Regional Transportation Plan: Update to the Capital Element (2006) and its predecessor, the 2030 Regional Transportation Plan (2003), lay out a long list of transportation projects for the region.

What is troublesome in both the RTP and the Update as posted for public consumption is that they do not contain project-specific cost estimates. Nor is there any detailed discussion of the funding sources for the projects. The RTP simply projects that between 2004 and 2030 $61 billion will be available for maintaining and improving the region's transportation system. (Pg. 10 of 124) The RTP states that $47 billion will be needed to maintain the current system in a state of good repair and $5 billion should be allocated to "shared use" facilities, primarily arterial bus, truck, bicycle and pedestrian facilities, leaving $9 billion for the expansion of the highway and rail systems.

The Update increases the projected amount of capital funds available by 2030 to $64.9 billion. (Pg. 11 of 226). Like the RTP, the Update indicates that $47 billion will be needed to maintain the current system and $5 billion to develop shared use facilities. The Update states that there will be $9.4 billion to spend on major system expansions.

Now consider the Moving Beyond Congestion analysis of the capital needs of the just the public transit providers in the region. It projects that over the next 30 years it will take $34 billion just to maintain the current public transit system, $5 billion to enhance the system, and $17.9 billion to expand the system--$56.9 billion in all. (The accuracy of these characterizations will be the subject of another post.)

Compare these numbers to the Update. The update projects $47 billion to maintain the transportation system over 25 years--$1.88 billion/year. The RTA/Moving Beyond Congestion estimate of the cost of maintaining the current public transit system is $34 billion over 30 years--$1.13 billion/year. This indicates that the public transit system will be consuming approximately 60% ($1.13b/$1.88b) of the capital investment being devoted to maintaining the region's transportation system.

Likewise the RTA and its Moving Beyond Congestion allies seek a total of $22.9 billion to enhance and expand the system. This compares to the $14.4 billion that the Update projects will be available for such purposes for all modes of transportation in the region.

Public transit has significant environmental and social benefits. Nonetheless, the RTP projects that in the best case scenario by 2030 only 11 percent of trips in the region will be taken by public transit. (RTP at pg. 71 of 219) Are the benefits of public transit so substantial that investing roughly 60 percent of the region's transportation capital dollars over the next 25 years in a public transit system that will then provide only about 10 percent of the trips in the region makes good sense? Does the Moving Beyond Congestion argument that we invest all or nearly all of transportation system expansion capital dollars in public transit play well with the motoring public who elect the members of the General Assembly?

The burden is on the Moving Beyond Congestion proponents to make the case that increasing the already heavy "over-investment" of transportation capital dollars in the public transit system relative to trip share is the best use of public money to achieve the transportation and environmental benefits necessary to make this region a better place to live and work.

Monday, December 25, 2006

Public Transit and Urban Success

The Moving Beyond Congestion project of the RTA and the public transit service boards (CTA, Metra and Pace) makes the argument that an investment of additional billions of dollars in a "world class" public transit system will improve the region's economy and make it a more attractive place for people and businesses to locate.

A Brookings Institution study authored by Edward Glaeser and Jesse Shapiro entitled "City Growth and the 2000 Census: Which Places Grew and Why" casts some doubt on this sanguine thesis. The study examined various factors accounting for the broad range of population growth rates among cities. One finding (pg. 11 of 14) is that "cities built for cars grew, but cities designed for mass transit and pedestrians tended to shrink."

The study found that the average growth rate in the 1990-2000 period for cities in which more than 10 percent of commuters took public transportation was "nearly zero" while the average growth rate for those cities in which less than 3 percent of commuters used public transportation in 1990 was almost 17 percent.

The authors commented that "there has been a huge shift from the older walking and public transit-oriented cities of the past to the driving cities of today. They did point out that during the 1990-2000 period New York and Chicago were exceptions to the slow/no growth trend for transit-oriented cities, growing by 9.4% and 4.0% respectively.

Another study co-authored by Professor Glaeser for the National Bureau of Economic Research "Sprawl and Urban Growth" documents this transformation to the "driving cities of today." Pg. 21 of 74) In 1960 22% of workers took public transportation or walked. The percentage who walked or took public transportation to work dropped by almost half, to 12%, in 1980. Public transit continues to lose mode share, dropping from 6.4% of work trips in 1980 to 4.7% of work trips in 2000. The share of people commuting by auto (alone or via car pooling) rose from 64% in 1960 to 87.9% in 2000.

The example of New York and Chicago--two transit-friendly regions that grew in the 1990s--strongly suggests that there is no simple causal relationship between heavy investment in public transit and urban decline. Other factors, such as education and income levels and reliance on manufacturing, may have a much stronger impact on the relative success of urban regions.

Nonetheless, just as we may want to avoid a simplistic conclusion that investment in public transit will result in urban decline we need to avoid equally simplistic assumptions that more investment in public transit will necessarily improve the region. For example, the Brookings Study identified human capital--namely, an educated workforce--as a key driver in the growth of urban areas. (Pages 9-10 of 14) Might some or all of the $226 million in extra operating subsidies that the Moving Beyond Congestion folks seek for public transit be better spent on funding scholarships for post-high school education?

Some people (e.g., Wendell Cox) may be too quick to dismiss the benefits of public transit. Their mistakes do not excuse others (e.g., the Moving Beyond Congestion folks) who argue in a vacuum that increased investment in public transit will do wonders for the region. Perhaps in the end right-sizing the region's public transit system will mean funding other more promising drivers of economic growth such as education, health care, and the highway transportation infrastructure that carriers most of the people and goods in the region.

Saturday, December 23, 2006

Capital Investment and Results: Transit vs. Highways

A recent report from the Transportation Research Board entitled "Comparative Review and Analysis of State Transit Funding Programs" contains a wealth of information about state and federal support of public transit. As discussed in yesterday's post, it appears that the State of Illinois has provided substantial and growing support for public transit over the past decade.

The report also sheds light on the efficacy of increased investment in public transit. It shows (pages 52-54 of 103) that in the 1992-2004 period the level of state and federal capital investment and operating subsidies increased significantly in inflation adjusted terms. State and federal capital investment increased in real terms from almost $4 billion in 1992 to almost $11 billion in 2004. The increase in state and federal operating subsidies was less dramatic, but still substantial, rising from almost $4 billion in 1992 to a bit over $6 billion in 2004.

The federal government has increased its commitment to public transit relative to highways during the 1992-2004 period. During that period FTA funding increased from $3.5 billion to $6.2 billion, a 77% increase. All of this increase came on the capital funding side. Federal Highway Administration funding during the same period rose from $17.7 billion to $22.1 billion, a 25% increase. The compound annual growth rates during the 1992-2003 period were approximately 7.6% for FTA spending and 4.9% for FHWA spending.

Despite this increased investment in public transit in both absolute terms and relative to the investment in highways public transit continued to lose market share. The report shows that vehicle miles traveled on the highways grew at approximately 2.2% annually while public transit ridership rose at an annual rate of approximately 1.6%.

This data--increased investment in public transit fails to stem public transit's loss of market share--should make the Illinois General Assembly pause before it accepts the argument of the RTA, CTA, Metra, Pace and their Moving Beyond Congestion allies that major increases in operating subsidies and capital investment will allow public transit to play a bigger role in the region's transportation system.

The disappointing performance of public transit relative to the private auto since 1992 despite the increased financial support of public transit suggests that the congestion relief and environmental benefits that public transit delivers might be achieved more dramatically and more cheaply by methods such as: (i) higher fuel economy requirements; (ii) congestion pricing on roadways; (iii) incentives to prompt people to switch to low emissions vehicles; and (iv) incentives to encourage people to telecommute to their jobs.

Friday, December 22, 2006

State Support of Public Transit: Some Surprising Data

The Moving Beyond Congestion initiative is focused on obtaining more operating subsidies and capital funds from the State of Illinois. Indeed, the RTA and the service boards--CTA, Metra and Pace--have adopted 2007 budgets that have unfunded line items entitled "Additional State Funding." These add up to new State subsidies of over $225 million in 2007. The amount of the hoped-for new subsidies increases rapidly after that.

A recent report from the Transportation Research Board entitled "Comparative Review and Analysis of State Transit Funding Programs" indicates that the State of Illinois already provides financial support for its transit systems comparable to that provided by other state governments. Indeed, on a per capita basis the State of Illinois currently provides more support for public transit than any state outside of the East Coast.

The TRB Report finds that the State of Illinois ranks reasonably high in terms of transit funding. State of Illinois support of public transit in 2004 was $778,700,000, which ranked seventh, behind New York, California, Massachusetts, New Jersey, Maryland and Pennsylvania. (Pg. 13 of 103) Illinois ranked eighth in per capita funding, at $61.25. (Pg. 13 of 103)

The TRB Report broke down the states into five peer groups. (Pg. 19 of 103) Illinois' support of public transit scored in the middle among its peer group (pg. 22 of 103):

Per Capita State Funding (2004)

New Jersey $96.27
New York $94.21
Pennsylvania $63.29
Illinois $61.25
California $36.72
Florida $ 5.55
Texas $ 1.23

Illinois did a little better when it came to per capita federal funding from the Federal Transit Administration:

New York $109.41
New Jersey $60.85
Illinois $40.58
California $34.26
Pennsylvania $33.11
Florida $15.41
Texas $13.81

It is noteworthy that the ratio of state funding for public transit relative to the state's share of federal transit dollars in 2004 was higher in Illinois that the average for its peer states. (Pg. 36 of 103) Historically, Illinois' ratio of state to federal funding has been higher than in most other states. (Pg. 42 of 103) This fact is indicative of a strong State commitment to public transit by the State of Illinois.

It is also highly significant that on an inflation adjusted basis during the 1995-2004 period the compound annual growth rate in the State of Illinois' support for public transit was a bit above 10%, much higher than the 3.9% average among all 50 states. (Pg. 43 of 103) Illinois' CAGR for federal transit funding during the same period was higher than the national average, although by not as much. (Pgs. 43-44 of 103)

In sum, over the past decade the State of Illinois has increased its support of public transit at a CAGR of over 10%. Illinois is now the leading state in the country outside of the East Coast in terms of its per capita support of public transit.

Thursday, December 21, 2006

Transit Oriented Development Rights and Wrongs

Public transit feeds on population density near bus stops and train stations. Dense population supports frequent service. The more frequent the service the more convenient public transit is to the public. The more convenient that public transit is, the more trips the average person will take on transit rather than by private auto. At some point people begin abandoning their cars and become transit dependent. That result, most agree, is a good one.

Metra spent hundreds of millions of dollars on the North Central line, which opened in 1996 and was recently upgraded. This is Metra's only new line since Metra's formation in 1983.

You would have thought that before it invested these capital dollars Metra and/or the RTA would have extracted from the local communities along the line binding agreements under which the local communities would allow and support transit oriented development near the Metra train stations. No such luck.

Ten years after the line opened it appears that the locals are still resisting the kind of transit oriented development that is necessary for the North Central line to realize its potential. A recent news story gives us the news that the village fathers of Buffalo Grove "are resisting a plan to develop the areas around Buffalo Grove's two commuter rail stations as mini-downtowns with multi-unit housing and retail shops."

One of the village trustees explains why Buffalo Grove is resisting relatively high density development around the Village's two Metra stations:

We don't want to promote high-density development," Trustee Jeffrey Braiman said at a board meeting Monday. "People say there is no downtown [in the village]. But we don't want high-density development. We want a place where people can go for dinner.

I wasn't aware that high population density tended to drive out places where people can go for dinner. From my visits to Chicago or even areas around Metra stations in places like Evanston and Oak Park it seems like the opposite is true. Nevertheless, maybe the good trustees of Buffalo Grove have adopted a corollary to Yogi Berra's statement about restaurants--"it's so crowded no one goes there anyone"--namely, downtowns crowded with people drive out restaurants.

More to the point, it is certainly possible that the trustees of nearly all-white and quite prosperous Buffalo Grove interpret the term "high density" to mean "people of color who make less money than we do." But whatever their reasons, the fact remains that nothing prevents the trustees of Buffalo Grove from stopping the kind of development that is necessary to best support the Metra line.

Metra (and the RTA) should not have been surprised that at least some of the localities served by the North Central Line would fail to support appropriate development around the Metra Stations. After all, in 1998 the Federal Transit Administration assigned a "not recommended" rating to then estimated $204 million upgrade project for the just opened North Central Line. The FTA assigned a "Low-Medium" rating in the subcategory "Transit-Supportive Existing Land Use and Future Patterns," stating that this rating "reflects both the moderate to low densities as well as the relatively few transit-supportive policies that currently exist within the proposed corridor." (Emphasis added)

Yet, it appears that Metra and the RTA went ahead and invested over a quarter of a billion dollars into the North Central Line with no guarantees that the localities would adopt the kinds of "transit-supportive policies" that the FTA said were lacking. Their failure to do so is a shame, because their bargaining power was at its height when they were contemplating whether to proceed with the North Central upgrade and where to allocate the improvements.

The failure of Metra and the RTA to secure the kind of transit oriented development necessary to support the North Central Line in Buffalo Grove and elsewhere is a case study in how they have failed the region. Illinois law encourages intergovernmental cooperation but Metra and the RTA chose not to leverage their dollars and political clout to secure agreements with the localities necessary to secure the kind of land use appropriate to support the Metra system. They left on the table some of the congestion relief and environmental benefits associated with a public transit that could have been leveraged from the North Central Line. They viewed public transit as set of capital assets--rails, stations and locomotives--rather than as a system with land use as one of the critical components.

When Metra's enabling act is rewritten this spring, as it surely should be, some provision like the following should be added to help ensure that Metra and the RTA move beyond their ostrich-like approach to land-use:

(a) The General Assembly finds that transit-supportive development around Metra stations is essential to ensuring the long-term financial stability of Metra and obtaining the maximum congestion-relief and environmental benefits from the public's investment in the Metra system.

(b) When allocating capital investment dollars and making service improvements and adjustments, Metra shall give preference to local communities that have adopted and are actively supporting transit-supportive development policies that have resulted in or are reasonably likely to result in high density residential and/or commercial development within no less than a one-half mile radius of Metra stations in such communities.

(c) Metra shall not improve services or facilities in those communities whose land-use policies are not transit-supportive in nature. Before making significant new investments in stations or other facilities in a community or providing improved service to a community, Metra shall enter into a transit-supportive development agreement that sets out the rights and responsibilities of Metra and the local community to provide and improve transit-supportive development around Metra stations. This prohibition shall not apply to improvements necessary to protect the safety of the public.

(d) With the assistance of the Chicago Metropolitan Agency for Planning Metra shall develop and publish standards for transit-supportive development around rail stations that local communities can meet if they wish their communities to participate in new Metra investments and service improvements, provided, however, that no local community will be forced to adopt such transit-supportive development policies.

Tuesday, December 19, 2006

In Your Face!

Judy Barr Topinka, the outgoing (in more ways than one!) State Treasurer, was soundly defeated in her race for Governor. That race was hard fought, and she leveled charges against the incumbent Governor to the effect that the Governor was corrupt and that the State lacked the resources to take on new obligations like the All Kids program.

The RTA's Moving Beyond Congestion effort is pushing the Governor and the General Assembly to take on a new obligation, namely, a new transit subsidy on top of the existing State subsidies to the RTA and ultimately the service boards. This new obligation will amount to almost a quarter of a billion dollars in 2007 and will increase by at least $100 million a year thereafter.

Well, guess who the suburban Cook County members of the Cook County Board picked to fill a seat on the RTA Board? Judy Barr Topinka. It will be very interesting to see how Ms. Topinka squares her campaign trail assessment of the poor state of the State's finances with the RTA's efforts to impose a major new obligation on the State. Is a recently defeated gubernatorial candidate just the person to talk sense to the Governor who just defeated her?

Was Ms. Topinka's appointment a show of defiance by the unrepentant suburban Cook County Republicans? It is obvious that the suburban interests are getting geared up for a battle royale on the transit funding issue. One article reports that Lake County leaders are "digging in" for a "transportation money fight." There are strong hints that the suburban politicos are building a new team at Metra, Pace and on the RTA.

The key question, of course, is which way the suburbanites cut. They could fall back on the old City vs. suburbs dynamic and fight to protect Metra and the relatively low RTA sales tax in the collar counties. Going it alone and trying to cut loose the City of Chicago (and the inner ring of Cook County suburbs) and the CTA must be tempting.

However, it is possible that the changes in personnel on the suburban team will yield a more positive outcome. Perhaps the suburbanites can push develop a more comprehensive regional plan that recognizes that the transportation system in the region is truly interconnected and that highways and transit services must be managed together as one system on governance, funding, pricing and operational levels.

Sunday, December 17, 2006

Hopeful Anticipation

The RTA Act directs the RTA to adopt an annual budget that meets the following criteria:

The budget shall show a balance between anticipated revenues from all sources and anticipated expenses including funding of operating deficits or the discharge of encumbrances incurred in prior periods and payment of principal and interest when due, and shall show cash balances sufficient to pay with reasonable promptness all obligations and expenses as incurred.

70 ILCS 3615/4.01(b).

As the Chicago Tribune reports, however, the RTA Board has adopted a budget with a "a $226 million shortfall that officials hope state lawmakers will address early next year." (The 2007 RTA budget can be accessed here.)

I guess a hoped-for State bailout much larger than the State bailouts of the past two years can technically count as "anticipated revenue" within the meaning of the RTA Act. Nonetheless, I suspect the drafters of the RTA Act had something else in mind, namely, a budget built upon known revenues as opposed to revenue completely subject to the vagaries of Springfield politics for which there is no recent precedent.

Perhaps it would have been reasonable for the RTA to have anticipated receipt of a State bailout in the range of what the State provided in past two years, about $54 million each year. To assume that a bailout over four times as large as past two bailouts will be forthcoming substitutes wishes for reasonable anticipation.

The RTA's failure to confront the financial problems of the service boards in a comprehensive and forthright manner in past years is to blame for this budgeting stratagem. For years the RTA insisted that the financial challenges facing the CTA and Pace could be dealt with within the framework of the current legal and institutional arrangements. How wrong it was.

The RTA's strategy presumably was to put off the day of reckoning for Metra--which appears to be the favored service board in terms of both operating and capital funding--and the collar counties, whose RTA sales tax rate is only one-fourth of the rate in Cook County. Now that control of the State legislature is squarely in the hands of the Democrats, this strategy may backfire big time.

The RTA's failure to seek a solution to the transit funding issue will put a particular strain on riders and the system if the State does not come through with all of the money the RTA and its Moving Beyond Congestion allies seek. That is because the RTA and the service boards will wait until the end of the legislative session to implement whatever service cuts and/or fare increases that are necessary to respond to any shortfall in the State bailout. These adverse consequences thus will be concentrated in the second half of the year as the RTA and the service boards scramble to meet their balanced budget and farebox recovery ratio requirements.

While haste makes waste, the RTA's ostrich-like response over the past five years or so to the financial problems facing the region's public transit system will impose its own costs.

Friday, December 15, 2006

Money and Family Frictions

The immediate pressing goal of the Moving Beyond Congestion project is to secure additional operating subsidies for the service boards so they do not have to cut service and/or raise fares. Given their fractious working relationships, it is a credit to the RTA that it has been able to get the service boards under one tent, however uneasily.

The RTA's 2007 Proposed Budget shows that the needs of the service boards for additional operating funds ("New State Funding") are very different. CTA and Pace are pretty desperate, while Metra is in a much better position. Their unequal shares of new revenue--should it ever arrive--undoubtedly puts strains on the "family" of service boards.

The RTA Budget (pg. 8) states that the mainline services (i.e., not including paratransit) need additional operating funding from the State as follows (in millions):

2007: $143,426
2008: $200,308
2006: $306,152

The service boards will not share equally in this hoped-for New State Funding. The amounts to each service board and their percentages of the New State Funding are as follows:

2007: $110,000 (76.7%)
2008: $169.495 (84.6%)
2008: $270,990 (88.5%)

2007: $10,550 (7.4%)
2008: $4,659 (2.3%)
2009: $4,449 (1.5%)

2007: $22,876 (15.9%)
2008: $26,154 (13.1%)
2009: $55,369 (10.0%)

The ridership shares of the three service boards are roughly: CTA (80%); Metra (14%); Pace (6%). Over the three-year period the New State Funding will be distributed as follows: CTA (84.7%); Metra (3.0%); Pace (12.3%).

Pace thus does especially well on a per rider basis, claiming a share of the New State Funding double its share of riders. CTA starts out a bit below its ridership share, but its voracious appetite for more subsidies yields it more than its share of the New State Funding on a ridership basis.

The RTA's projections for New State Funding underscore that the CTA and Pace are in a financial free fall. Recall, that this New State Funding is on top of the operating subsidies the RTA distributes to the service boards based on the RTA sales tax revenue, the State's 25% match of that revenue (the Public Transportation Fund distributions), the RTA distribution of discretionary operating fund, and contributions from the City of Chicago and Cook County.

For Pace, the New State Funding starts out at almost half of Pace's system generated revenue, and stays at that level through 2009:

2007: 42.8%
2008: 48.1%
2009: 55.4%

2007-2009: 48.8%

At the CTA, the New State Funding grows rapidly as a percentage of the CTA's total system generated revenue:

2007: 19.9%
2008: 30.2%
2009: 47.5%

2007-2009: 32.7%

Metra's share of New State Funding as a percentage of its system generated revenue is much less:

2007: 3.7%
2008: 1.6%
2009: 1.5%

2007-2009: 2.3%

The picture is thus very grim. Over a three-year period the amount of projected New State Funding grows a jaw-dropping 113 percent. There is no indication from the numbers or the budget narrative that the needs of Pace and CTA for New State Funding on top of several layers of subsidies will level off.

Given its size, the CTA's financial problems are clearly the driver for increasing amounts of New State Funding. The RTA Budget Book shows that the CTA's total operating deficit will rise sharply during the next three years:

2007: 16.8%
2008: 12.8%
2009: 17.9%

In contrast, the operating deficits rise during the same period at about 5.4% annually for Pace and 2.9% annually for Metra.

Given these numbers there must be a terrible temptation on Metra's part to try to find a way to go it alone and not be tarred by association with the financial problems at Pace and the CTA. The more the public and the politicians begin to look closely as the RTA's sales tax structure (1% in Cook County but .25% in the collar counties) and distribution formula the more the pressure will mount on Metra and its collar county allies to preserve what has been a very sweet deal under the current RTA Act and governance structure.

Thursday, December 14, 2006

Congestion: It's Enough to Drive You to the Drink

Indiana is just chock full of transportation-related ideas these days. Yesterday came news of Indiana Governor Mitch Daniels taking control of the Illiana Expressway project. Today comes news that Gary's Mayor Rudy Clay wants to establish a hovercraft transit link between Gary and Navy Pier.

The purpose of the hovercraft link is to provide commuters an alternative to the Borman Expressway and other crowded routes into downtown Chicago. I thought the South Shore Line was that alternative, but if the hovercraft service gets off the ground--or rather water--it might point the way to utilizing Lake Michigan as a commuter corridor.

There are many ways to move beyond congestion.

Wednesday, December 13, 2006

Tale of Two Cities

There were two transportation-related developments receiving media coverage today that illustrate the relative fortunes of different players in the regional transportation system.

First, Indiana and Illinois have agreed to collaborate on the so-called Illiana Expressway, which will run from roughly I-94 near Michigan City to I-57 in Illinois. This expressway is intended to divert truck traffic off of the Borman Expressway and around the core of the Chicago urban area. In doing so, there may be congestion relief benefits not just in Indiana, but also throughout the RTA's six-county region. The expressway is also intended to jump start economic development in Northwestern Indiana and Chicago's south suburbs, both areas that could use the boost.

Indiana, under Governor Mitch Daniels' leadership, is clearly taking the lead in the effort. Indiana is developing a design-build-operate model. Under this model one or more private parties will take all or some of the operational and financial risk of building and operating the expressway and be repaid through tolls. As shown by Daniels' successful effort to lease the Indiana Toll Road, it is evident that Daniels now wears the "make no small plans" mantle in the region.

Illinois, by contrast, appears flat-footed. IDOT's public statements about the Illiana are notable for their lack of enthusiasm about the project. IDOT seems unwilling to consider alternative ways to finance and run the expressway. It seems IDOT has its feet firmly planted in the 1950s model of how to finance, build and operate roads. It is a sad day when Indiana outpaces Illinois in creativity and foresight when it comes to transporation issues.

There also is a gap in the natural course of the expressway, between I-57 and I-80. The Illinois Tollway seems the natural candidate to do this stretch, by extending the I-355 South Extension through to I-57. Presumably, the Tollway could do the whole Illinois portion of the project, but more likely IDOT will dither while land acquisition and construction costs go through the roof. Who knows how this will play out.

In any event, there is a real chance of a major new expressway in the region, one that could have congestion relief and other benefits. Those benefits will come at the price of increasing the centrifugal forces of sprawl.

In sharp contrast is recent news at the CTA. Mechanical breakdowns on its rail lines cause major delays. Another article reports that the CTA Board rejected management's recommendation and tabled a contract that would push forward with the scaled-back Airport Express. The Board also expressed frustration over untimely notice of an essential contract proposal, leading to some unseemly finger-pointing.

What a tale of two cities. Momentum builds for a major new transit artery in the "edge city" region. In the central city, the CTA rail system appears to be falling apart and management competence is being questioned by the CTA's own board. Momentum behind a major new transportation initiative for the central city--the so-called Airport Express--appears to be weakening.

Maybe this news is a coincidence or maybe it is a further indication that the RTA's dream of better funding the status quo under the guise of building a "world class" transit system is based on a very dated vision of the dynamics of this region.

Tuesday, December 12, 2006

Congestion and Targeted Investment

Recent studies reach the common conclusion that public transit is most effective when it serves corridors with a high volume of traffic and congestion. For example, the Texas Transportation Institute's 2005 Urban Mobility Report (pg. 5) states that "public transportation improvements are particularly important in congested corridors and to serve major activity centers."

It is no surprise to area commuters that the worse congestion is found during rush hour on the major expressways and arterial streets in the region. Some areas--e.g., I-190 into O'Hare, the Edens Junction, the Eisenhower's "Maywood Mangler"--are spoken of with dread by area motorists.

The Moving Beyond Congestion project places much stock in the congestion relief benefits of public transit as the rationale for pouring billions of additional captital dollars into the region's public transit system. We thus understandably expect that the MBC's proposal for its "world class" transit system for the region would be filled with projects targeted at relieving areas of particularly high congestion.

Unfortunately, that is not seem to be the case. The MBC includes a list of proposed projects that will be funded if the MBC effort yields significant new capital dollars for the RTA and the service boards. This list includes the usual suspects, such as the CTA's Circle Line and Metra's STAR Line.

It is not that any of these projects are bad in and of themselves. It is just that lacking in the MBC materials is any assurance that the RTA and the service boards will employ rigorous congestion relief per dollar invested type metrics to allocate capital dollars to the projects that will do the most good in terms of congestion relief and passenger throughput in heavily traveled corridors.

To make the case for spending tens of billions of additional capital dollars one would expect the MBC to use available data (e.g., the Illinois Department of Transportation's average daily traffic maps) identify the congestion choke points and to prioritize where in the region more public transit will do the most good. Instead, the MBC's projects list merely copies the service board wish lists. It is as if the MBC folks would have us believe that public transportation investment anywhere in the region will benefit the region just as much as if that investment would go somewhere else.

The uncomfortable political fact is that if a true congestion relief metric were to be used, most of the investment in new transit projects would occur in or near the central core of the region. That is a tough sell to suburbanites, who want to see more tangible public transit benefits in their area. Thus, Metra line extensions that do little or nothing to relief congestion in the key regional corridors bump projects in Cook County (e.g., Cicero Avenue transit corridor) that would carry far more people and have a much more beneficial congestion relief effect.

Why should we invest billions more in transit unless we know that investment will deliver the most congestion relief to the region?

Monday, December 11, 2006

Public Transit and Congestion Relief

The Moving Beyond Congestion project's Situation Analysis ("SA") cites traffic congestion relief as one of the primary benefits of public transit. Citing the Texas Transportation Institute's Urban Mobility Index, the SA claims that public transit saves the region $1.6 billion in congestion-related costs. (SA, pg. 4)

The 2005 Urban Mobility Report and Chicago Data Tables indicate that congestion on Chicago-area roads is increasing. This finding is in line with the common experience of every auto commuter. We can all agree that stop-and-go traffic is wasteful and soul deadening. What is not apparent from the TTI's data, however, is how effective a major investment in the region's public transportation system to grow the system will be absent the kind of funding, operational and governance changes that the MBC folks are loathe to embrace, much less even discuss.

First, the real-life fact is that even when motorists encounter congestion and significant delay on their trip, they are still likely to arrive at their destination faster than if they took public transit. The Mobility Report's congestion indices are based on the following assumptions: "Free-flow speeds (60 mph on freeways and 35 mph on principal arterials) are used as the comparison threshold." The Mobility Report (pg. 12) defines the Travel Time Index as follows: "The ratio of the travel time in the peak period to the travel time at free-flow conditions." The Travel Time Index for Chicago is 1.57 (Data Tables pg. 2).

If my math is right, then during rush hour the average commuter on the freeway is averaging about 38.2 mph (60 mph/1.57) and the commuter on the arterial roads are averaging about 22.3 mph (35 mph/1.57). This sounds like a shocking reduction, but how would these people fare on the public transit system? The SA helpfully sets out (pgs. 10-12) the average travel speeds on the region's transit system:

Metra rail: 30 mph
CTA rail: 18.5 mph
Pace bus: 14.1 mph
CTA bus: 9.8 mph

Since the CTA bus system carries roughly half of the public transit passengers in the region, the speed differential between private auto and public transit travel for most people is quite high, over 100%. Metra cannot match the speed on the congested freeways at peak period and Pace buses are 50% slower than traffic on arterial streets during the peak of rush hour.

These differentials actually understate the competitive disadvantage of public transit. Auto drivers typically have easy access to their cars. They neither face the wait at bus stops and train stations nor the kind of uncertainty associated with waiting for the next bus or train. Auto travel offers other conveniences--privacy, the ability to make unscheduled stops, the chance to try out one's singing voice--that public transit cannot offer.

Second, despite the travel time advantages of the private auto, the existing transit system delivers substantial congestion relief benefits. The TTI estimates that the system delivers 22 hours in time savings to peak travelers and saves the region almost $1.6 million in congestion benefits. (Data Tables, pg. 2) These benefits are substantial, are worth preserving and should be extended where feasible.

Third, it will take an unprecedented expansion of the public transit system to deliver significant additional congestion relief benefits. The TTI estimates that it would take an additional 182,000 transit riders going forward just to maintain the existing level of congestion. (Data Tables, pg. 2) This is approximately a 9% increase over current ridership levels. Each year would have to see other large jumps in transit ridership just to keep abreast of increases in population, jobs and travel demand. Obviously, such increases are unrealistic, even if the MBC folks hit a home run in Springfield and bring back an additional $300 million annually in operating subsidies plus more capital money. Certainly, no one expects public transit to carry to full burden of fighting traffic congestion. However, is even a 3% growth rate for public transit ridership feasible in the current environment?

Fourth, if public transit is such an effective congestion relief tool, then why haven't we seen strong gains in public transit ridership during the past two decades, as road congestion in the region has worsened quite substantially according to the TTI. (Data Tables, pg. 6) If transit is such an attractive alternative to congestion plagued driving, then why haven't the service boards been inundated by frustrated motorists sick of the grind of rush hour on the expressways? Indeed, the SA admits (pg. 4) that in recent years, as the travel time index was soaring, transit ridership is up a bit but "auto travel is growing even faster." This was also at a time when the benefits from the Illinois FIRST capital program were being felt, which makes transit's poor performance doubly troubling.

There is thus a real question whether in the current operating/road pricing/institutional environment public transit can play an increased role in providing congestion relief. Indeed, it will be a struggle for them just to maintain their current level of effectiveness.

An upcoming entry we will look at whether the capital plans of the service boards are directed at projects likely to provide the most congestion relief benefits for the region.

Sunday, December 10, 2006

Congestion Pricing as Transit Salvation?

It's Sunday, so it is fitting to think in religious terms like "salvation."

The Partnership for New York City--a sort of Civic Committee for New York City--just published "Growth or Gridlock: The Economic Case for Traffic Relief and Transit Improvement for a Greater New York." It is well worth a look.

The report documents the problem of congestion in New York City and outlines a set of solutions that might help that region address the problem. We will look at this list in more detail.

One of the solutions outlined in the report is are congestion pricing districts, such as those in the central city areas of London and Stockholm, among other cities. Motorists are charged a fee for entering these districts. The congestion pricing has tended to reduce traffic congestion and increase public transit ridership. It appears essential that public transit improvements accompany congestion pricing districts so that the motoring public have realistic public transit options for entering the congestion pricing district. The congestion district charges often provide a funding source for such improvements.

I found the following paragraph from the report to be a good summary of what accounts for much of the congestion on our roads:

Until recently in the U.S., surface transportation operators have largely resisted the application of market principles as a means of managing demand. In the absence of price signals that capture the marginal cost that one's travel imposes on others, travel demand in large metropolitan regions often exceed supply of street, road and highway space, leading to excess traffic congestion. In other words, wherever and whenever motorists are not charged for using scare street space, and roadway capacity is insufficient to meet peak period demand, excess traffic congestion will result."

Might one or more congestion pricing districts in our region be the key (i) to obtaining the money and political will to fund improvements in our transit system and (ii) to providing people with a price incentive to switch from single-occupancy auto travel to public transit.

Friday, December 8, 2006

Moving Beyond Tunnel Vision

The Moving Beyond Congestion project suffers from tunnel vision. Its preliminary report sets out that public transit in the region is in deep financial trouble. The solution proposed focuses on fixing public transit through hefty infusions of new capital and operating dollars.

Missing is any sustained discussion of how the transit system interacts with the highway system, which accounts for the vast majority of the trips in the region. Nor does the MBC literature make a case that the proposed increased investment in public transit will deliver more congestion-relief, environmental and quality of life benefits than other kinds of transportation-related nvestments. It is not hard to make a case that more money will make for a better transit system. It is harder to make the case that more money for public transit is the best way for the region to spend those transportation dollars. The MBC folks don't even try.

The MBC's tunnel vision reflects the silo-like organization of transportation in the region. IDOT and the Illinois Tollway divide up responsibility for major highways. They have different funding sources, bureaucracies, enabling statutes and cultures. A wide variety of local authorities handle local roads. The transit agencies are bundled under the RTA, which has its separate enabling act, funding sources, bureaucracy and culture. It is as if highways and public transit function in different worlds.

This rigid division of labor has real life consequences. IDOT, for example, cannot control prices and train intervals on the Blue Line in order to relieve rush hour congestion on the Kennedy Expressway. Pace and the CTA cannot force local governments to implement a traffic signalization program that would speed buses. And then there is land-use. The CTA lacks the legal levers to, for example, stop the building of a huge parking garage right next to the Merchandise Mart stop on the Brown/Purple line. Consequently, everyone focuses on their little corner of the transportation universe and major opportunities fall through the cracks.

Thus, it was refreshing to read the December 2006 report entitled "The Eddington Transport Study." The Study was prepared for the British government by Sir Rod Eddington, a former airline executive. Given the nationwide scope of the Study, it is not surprising that it focused more comprehensively on the variety of transportation options offered by buses, rail, aircraft and private vehicles.

Like the MBC writings, the Study points out the economic and social benefits of a strong transportation system. It makes some recommendations that should resonate locally. For example, the Study recommends that transportation investment should be focused on the existing transportation system, primarily in large urban areas, and not on new greenfield projects.

Thus, the Study recommends against a proposed new high speed rail system, suggesting that the money might be better spent on upgrading existing rail networks. Echoes of the STAR Line, that billion dollar plus new rail line in the suburbs that has been pushed ahead of other projects (e.g., Cicero Avenue corridor; O'Hare/Midway connector) that are less glamorous but would carry more people and provide more congestion relief.

The Study recommends an aggressive roll-out of a road pricing program, and this recommendation attracted the most press attention. The Study points out that pricing road travel is probably the most cost-effective way to deal with congestion. It cites the example of London's congestion pricing program, which has reduced auto traffic by 15 percent in the affected area. Over half of that displaced traffic has shifted to public transit.

Congestion pricing not only improves traffic flows during peak periods, it reduces the need for expensive additions to the highway system. Road pricing also helps ensure that the owners of private vehicles assume more of the social costs associated with private auto travel (e.g., higher levels of air pollution associated with cars).

The MBC writings are silent on the issue of road pricing. MBC thus overlooks a powerful tool for increasing ridership and funding for the region's public transit system. Customers have to pay when they ride transit. Most roads in the region are free. It is hard for public transit to compete in that price environment. Make auto travel at least as expensive as public transit travel--and especially expensive in congested corridors at peak times--and public transit starts to look like a viable alternative for more people.

We can take some comfort from the fact that Great Britain appears to be vexed with the same silo-like approach to local transportation that faces this region. The Study cites the example of local transit agencies unable to force changes in roadway design that will help improve bus service. Likewise, the RTA's singular focus on public transit renders it powerless to effect changes that could deliver major improvements to public transit service in the region.

Finally, the Study recommends that governments think small and focus their investment in areas where congestion is a problem. "Think small" means paying attention to things like bicycle commuting and pedestrian-friendly intersections, investments that can be important supplements to traditional approaches to increasing the capacity of a transportation network. Focusing investment on congested areas is based on the commonsense notion that congestion signals the presence of economically valuable activities that are being ill-served by the transportation system.

The MBC Report, in contrast, fails to address how the public transit system might be enhanced by initiatives (e.g., bicycle commuting) that fall outside of the purview of the service boards. Nor does it contain any metric for how transportation capital investments should be made. The MBC sets out the service boards' wish lists for capital investments (e.g., STAR line, Circle line) but nowhere addresses how these investments are going to effectively relieve congestion at the various well-known traffic bottlenecks in the region.

Shouldn't we know which of the proposed capital investments are most likely to improve the travel times for the greatest number of people? Can we take seriously any proposal to spend billions of dollars purportedly to provide congestion relief without knowing whether and how notorious bottlenecks like the Eisenhower or the Kennedy will be unclogged as a result of such an investment?

Thursday, December 7, 2006

Transit Environmental Benefits and Investment Priorities

The Moving Beyond Congestion project's Strategic Regional Transportation Plan Situation Analysis Interim Report Summary (that's a mouthful!) makes some assertions about the environmental benefits of public transportation. The Report states that the annual emissions reductions attributable to public transit "are equivalent to those produced by 3 billion auto vehicle miles." (Pg. 6) It also states that "assuming an average fleet fuel efficiency of 20 miles per gallon, the gasoline savings due to the RTA system is 150 million gallons per year." (Pg. 7)

Let's assume that these assertions are accurate. They make some sense because while transit vehicles are larger and burn more fuel than private vehicles, they usually carry multiple passengers (Pace buses sometimes excepted!). The multiple occupancy nature of transit vehicles make them more energy efficient and less polluting on a per passenger mile basis.

The Report seems to be making the suggestion that because on a per passenger mile basis travel on transit is better for the environment than travel in private vehicles investing billions of additional dollars in public transit is one of the best ways to deliver more environmental benefits for the region. Not so fast. Before investing those billions of new dollars into public transit to achieve those benefits, we need to determine if that investment is the best and most efficient way to deliver environmental improvements to the region. Are there alternative strategies that will deliver equal or greater environmental benefits per unit of investment?

Transit's small market share means that only a massive increase in that market share and/or dramatic improvements in the energy efficiency and emissions of transit vehicles will yield a noticeable improvement in the area's air quality. According to IDOT's 2005 Travel Statistics the six counties making up Northeastern Illinois (Cook, Lake, McHenry, Kane, DuPage, Will) generated 59,842,303,000 vehicle miles travelled by road in 2005. (Table FC-4) Let's make a very conservative assumption that every one of the vehicles covering these miles were single occupancy vehicles. This assumption that no car carriers more than one person results in 59,842,303,000 passenger miles by auto in the region. According to the National Transit Database, during 2005 the transit system (including vans and paratransit) generated 3,757,774 passenger miles, 5.9% of the region's passenger miles.

The Report claims that the emissions savings from transit are equal to those produced by 3 billion auto vehicle miles. Three billion vehicle miles equals only 5% of total vehicle miles in the region. Let's assume that we want to generate another 3 billion vehicle miles worth of emissions reduction. If we look to transit to deliver these benefits we will need to to double the number of transit passenger miles, essentially doubling the size of the region's public transit system. This will take levels of capital investment and operating subsidies far larger than those sought by the Moving Beyond Congestion initiative.

Alternatively, we could generate 3 billion vehicle miles of emissions reduction by reducing emissions from private vehicles by only about 5% (i.e., 60 billion annual vehicle miles x 0.05 = 3 billion vehicle miles). Surely, through a combination of regulation (e.g., increase vehicle mileage requirements), incentives (e.g., tax credits for hybrid vehicles) and smart fleet management (e.g., shifting taxis and government vehicles to hybrids) it should be possible to achieve 3 billion vehicle miles of emissions reduction more feasibly and at less cost than by doubling the passenger miles on the public transit system.

The same analysis also goes for fuel economy. The Report claims that the RTA system saves 150 million gallons a fuel each year assuming 20 miles per gallon fuel efficiency level. To derive another 150 million gallons of fuel savings we can shift 3 billion passenger miles from private vehicles to the transit system, which means a near doubling of the size of the current transit system. Alternatively, we can improve the fuel efficiency of the private vehicle fleet by only 5 percent (150 million gallons ÷ 60 billion annual vehicle miles/20 miles per gallon = 150m/3b = 5%). Surely it is possible to raise overall fuel efficiency by 5 percent more feasibly and at less cost than by doubling passenger miles on the public transit system.

Public transit does deliver substantial environmental benefits. But if our goal is to maximize environmental benefits, then focusing scarce capital and operating dollars on public transit may not make as much sense as using those resources to improve the fuel efficiency and reduce the emissions from private vehicles, which account for almost 95 percent of the passenger miles in the region. Even small improvements in those areas will dwarf the environmental benefits obtained from an unprecedented doubling in the size of the public transit system.

New Pace Chairman

Former Lemont Mayor Richard Kwasneski has been named Chairman of Pace. The Pace press release describes Kwasneski's background as follows:

He has been the Southwest Suburban Cook County Pace Board member since 2002. He is also a Commissioner of the Northeastern Illinois Planning Commission (NIPC) and a member of the Chicago Area Transit Study (CATS) Intermodal Task Force.

Kwasneski brings extensive government, transportation and planning background to the position. He is the Executive Director of the Joliet Arsenal Development Authority (JADA) and served the Village of Lemont for 16 years as Mayor and Village trustee. Kwasneski is also a Director of the Will County Center for Economic Development (CED) and a member of its Airport Task Force and the Illinois Brownfield Association’s Government Affairs Committee.

In the past he has also served as Chairman of the Heritage Corridor I-355 Planning Council, Director of the Workforce Development Council of Will County, and Director of the Will County Governmental League where he was also the Chairman of the Government Affairs Committee. His memberships have also included the DuPage Mayors and Managers Conference, the Southwest Council of Local Governments, the Southwest Council of Mayors and the Three Rivers Manufacturers Association Governmental Affairs Committee.

Pace and Metra (Carol Doris) now have new chairpersons. Can the CTA be next?

Monday, December 4, 2006

Public Hearings--Some Questions to Ask

The public hearings for the Moving Beyond Congestion project begin tonight. It is safe to say that 90% or more of the attendees at each hearing will drive to the hearing, a certain delicious (but sad) irony (see previous post).

These public hearings will be well-choreagraphed. There will be an opening program designed to convince the audience of the crucial role of transit in the region and the need for more money--lot's more--to build a "world class" transit system.

Then, there will be a period for public comment. There will be plenty of complaints about poor service, strongly expressed desires for improved service with lower taxes, and the like. A wan free marketeer or two may extol the miracle of a free market solution and an earnest transit geek or two will propose Mag-Lev lines and bicycle paths. Representatives of the massive Moving Beyond Congestion movement will rise and speak eloquently in support of a world class transit system. Then it will be over and time for the MBC public relations folks to spin the assembled media.

It appears that the hearings will consider only "comments" from the public. Thus, there won't be a chance for members of the public to engage in a dialogue with the MBC officials. Too bad. Q & A is often very insightful, but sometimes confrontational, which is why public bodies stay away from Q & A exchanges in public for the most part. The stakes are especially high when the media is about.

Here's my quick list of questions that should be asked if they could:

1. What efforts will be made to cut costs and expand transit services in the region through (i) outsourcing by the service boards and (ii) the encouragement of private sector initiatives such as jitney services?

2. Why should we think that increased levels of capital investment and operating subsidies will reverse the continued decline in public transit's market share?

3. Why should we think that the current governance structure of the RTA and the service boards will yield a greater market share for transit in the next 25 years when that structure has presided over transit's growing marginalization the past 25 years?

4. Can the environmental benefits from public transit be achieved more cheaply by regulatory initiatives that encourage a shift to fuel efficient/low emissions vehicles or roadway pricing strategies that do the same?

5. If public transit's primary function is now to reduce congestion on the area's roadways, then how is the MBC plan targeted at clearing up well-known congestion bottlenecks, most of which are in or at the entrances to the City of Chicago?

6. What steps will the RTA take to reduce labor costs and achieve other efficiencies at the service boards?

7. Why does the State of Illinois have no appointment power to the boards of the RTA, Metra and Pace even though the State contributes hundreds of million of dollars to the system each year?

8. Are there congestion relief mechanisms such as the London congestion pricing program that could be just as effective in reducing congestion as putting more trains/buses on the system and yet be cost neutral or even revenue positive for the region?

9. If the City is generating a smaller share of the RTA's sales tax revenue than it did 25 years ago, should its RTA sales tax rate be increased?

10. Given Pace's failure to grow ridership significantly despite major gains in population and employment in its service area over the years, should Pace be reconstituted as a feeder system to Metra and leave it at that?

11. If the region is unwilling to embrace transit friendly land-use policies then shouldn't we view this as a signal that at most the public transit status quo should be maintained?

Sad But True Department--MBC Calendar Has Street Maps But No Transit Information

The Moving Beyond Congestion project kicks off its public hearings tonight.

The on-line calendar contains a listing of hearing locations and dates. When you click on an entry there is a "See Map" link. That takes you a Yahoo Maps street map showing the exact location of the hearing. This is a real helpful tool if you are driving to the hearing.

But aren't these hearings about public transit? Yet, the map does not show public transit bus or rail routes. The calendar has no information about whether and how to access the hearing site by public transit. There are no maps or schedules for public transit service, in any, in the vicinity of the hearing. There's no link to the RTA's travel planner. There is not one word on the calendar page encouraging people to use transit when they attend the meeting.

This from the agency (RTA) that is asking for billions of new dollars to build a "world class" transit system after presiding over transit's shrinking market share in the region for the past 25 years.

If the RTA cannot be an effective advocate for using public transit to its own public hearings, why should we expect it to be an effective advocate and steward for the region's public transit system generally?

Saturday, December 2, 2006

Raising Kane

The primary local source for transit funding is the RTA sales tax. The tax is 1% in Cook County and 0.25% in the collar counties (Lake, McHenry, Kane, DuPage, Will).

In 2005 Cook County accounted for $587 million of the $700 million in total RTA sales tax collections (83.9%). In contrast, Kane County ponied up a bit over $15 million in RTA sales tax receipts, all of 2.2%. For that money, Kane County gets local Pace bus service plus three Metra lines: (i) BNSF West Line to Aurora; (ii) UP West Line to Elburn; and (iii) Milwaukee District West Line to Elgin. These lines allow the good folks of Kane County to access the entire regional public transit system.

That's not all. Metra recently invested $135 million or so in Kane County to extend the UP from Geneva to Elburn. This extension runs entirely within Kane County. Metra operates the service at a loss because of the relatively low ridership on the extension.

Nonetheless, it appears from a recent article that the elected representatives of Kane County feel that they aren't getting getting enough value from the RTA.

The article indicates that the Kane County officials are "suspicious" about what Kane County will get out of the Moving Beyond Congestion process. They have summoned MBC officials, including Steve Schlickman and Leannne Redden, who are key figures in the MBC effort, for several recent meetings. Schlickman and Redden outlined some Kane County benefits under the MBC plan:

"As part of Moving Beyond Congestion, RTA envisions extending the Milwaukee West Line from Big Timber Road to Huntley and possibly Hampshire, as well as the Burlington Northern Sante Fe line through Aurora to Oswego, and possibly Sugar Grove."

"The plan includes more express and reverse-commute Metra service on the Milwaukee West, Union Pacific and BNSF lines."

"As far as bus service goes, Schlickman said the RTA envisions putting express bus service along Kirk Road and Illinois 25, and expanding the recently added service along Randall Road into what is referred to as the Randall Road Arterial Rapid Transit service."

In addition, Kane County will benefit from the north-south leg of the STAR line, which will run from Joliet to Elign.

I think the Kane County official are suspicious that someone is going to catch on just how a sweet deal Kane County has versus say the good folks of Cook County, who are carrying over 80% of the RTA sales tax burden.

MBC Hearings Start Next Week

The Moving Beyond Congestion project begins a intensive 10-day series of public hearings on Monday, December 4th.

The link to the calendar is here:

This commentator has been hard on the MBC folks thus far for rolling out such an unimaginative preliminary analysis. Nonetheless, it is good to see that the MBC project will be giving the public an opportunity to weigh in on transit issues.

Attend if you can.

Metra and Money and the Case for More Money

Buoyed with per customer capital investment levels far higher that those of the other service boards and an operating budget in the best shape of those of the three service boards, Metra prides itself in its clean, efficient and timely service. I mean, any transit service that has the money, time and people to paint its wheels and undercarriages bright silver must be doing something right.

Yet, an experience this morning makes me doubt Metra's credibility as a key partner in the Moving Beyond Congestion project asking for hundreds of millions of more operating dollars each year for the local service boards.

I was on the North Line train coming into the City. Someone tried to pay the conductor and I heard the conductor explain loudly enough for most of the car to hear that the person got to ride for free because Metra didn't equip him with tickets that morning. I talked to the conductor briefly on my way out. The conductor explained that the regular crew didn't show up so he and his crew came in as a backup. Metra didn't equip the backup crew with tickets, so they collected no cash on the trip. He said this happens to him "pretty often," roughly every six weeks or so, and that it is not all that uncommon on the line.

The money loss isn't the point of this story. It is just that as the service boards launch into a full-court press for money, every free ride they provide undercuts their case for more money. Today, a whole trainload of folks who might otherwise be sympathetic to the MBC effort got the message that Metra doesn't need the money.

Friday, December 1, 2006

Civic Federation Fed Up

Civic Federation Fed Up

The CTA's finance department must be a hardy bunch. Despite recent ridership increases the CTA's financial condition steadily worsens, forcing them to use precious capital funds to pay the bills. The CTA's pension plans is going broke by 2012. Labor costs rise steadily, but the CTA is unable to obtain significant work rule and other money-saving concessions at the bargaining table. The CTA's primary sales tax funding base--the City of Chicago--has been growing under the rate of inflation for years. As a result, the CTA is dependent on RTA discretionary funds, a precarious position both financially and politically. To avoid going insane the good folks in the CTA's finance department probably have to unplug their phones and computers pretty regularly just to stop the flood of bad news for awhile.

The Civic Federation's November 8th report ("Report") on the CTA 2007 Budget is generally pretty positive about the CTA's efforts to stay afloat. The Report notes that the CTA has decent productivity scores and appears to be managing the size of its workforce. The Civic Federation shares the CTA's frustration at the July 10, 2006 labor arbitration award that granted pay raises to the unions but apparently ignored the CTA's request for work rule and pension system changes that would help stabilize the CTA's financial condition. The Report calls for increases in transit funding and a revamping of the RTA's formula for allocating operating subsidies to the service boards, both music to the CTA's ears. In a clear swipe at the RTA, the Report criticizes those who view the RTA formula for distributing operating subsidies as "immutable and should never be changed."

Nonetheless, the Report does fault the CTA for proposing a budget without either a way to plug a $110 million deficit or a contingency plan for cutting costs and service if the hoped-for bailout is not forthcoming. Frank Kruesi must feel he is caught in the Catch 22. Two years ago he was widely criticized for proposing a "doomsday" budget outlining how the CTA would implement $50 million or less in cuts. The criticism was that he was using scare tactics to extract cash from the General Assembly. Two years later he is criticized for not outlining a "double doomsday" budget, this time bridging a budget gap of over $100 million.

The Civic Federation is correct that CTA and the other service boards should fairly and accurately outline the consequences of not closing the service board operating deficits. The public and the General Assembly should know the nature and shape of these impacts. They might find, for example, that a scaled-down regional transit system is preferable to spending ever more in operating subsidies. Alternatively, they might be galvanized to pour money into the regional transit system, without strings attached and without any changes to the current funding, governance or operating practices. This appears to be the goal of the Moving Beyond Congestion project. Ideally, the public and the politicians will reject the MBC's business as usual approach to effect truly significant changes to the way this region does transportation.

It is thus understandable that despite the kind words directed towards the CTA's financial team, the Civic Federation is fed up at the lack of a real budget within the current means available to the CTA. A Springfield bailout on the scale sought by the MBC folks is far from a done deal.

Thursday, November 30, 2006

Operating Costs & Investment Decisions

The National Transit Database provides a wealth of information about our three favor service boards. Let's take a look at the 2005 reports for CTA, Metra and Pace. Transit agencies are supposed to report their financial and other data to the NTD on a consistent basis so that good financial and operational efficiency comparisons can be made between agencies.

The Situation Analysis Interim Report Summary of the Moving Beyond Congestion project concludes that "[o]verall, the Service Boards compare well with their peers." (Pg. 18). How do they compare with each other using the 2005 NTD reports?

Operating Expense Per Passenger Mile

CTA Bus $0.93
Pace Bus $0.55

CTA Rail $0.38
Metra Rail $0.31

Operating Expense Per Unlinked Passenger Trip

CTA Bus $2.39
Pace Bus $3.68

CTA Rail $2.33
Metra Rail $6.97

Operating Expense per Vehicle Revenue Mile

CTA Bus $10.84
Pace Bus $ 6.09

CTA Rail $ 6.32
Metra Rail $12.49

The MBC folks ignore the question of where operating funds should be allocated to maximize the benefits of transit to the region.

The big question is what is the best measure of transit efficiency. Do we focus the cost of moving a passenger over a mile? In this case, Metra is the clear winner. Or is a more relevant measure the cost per trip? In this case, both CTA bus and rail are the clear winners. (Note that because the measure is "unlinked" trips, then a two-transfer ride on the CTA--which may be a single real life trip to the customer--will cost about the same as a Metra trip.)

My opinion is that cost per passenger trip is the best measure of transit efficiency and the best tool for deciding where to allocate both operating and capital dollars. In other words, we should spend transit money where it generates the most passenger trips.

Why is this? Rewarding transit agencies for passenger miles traveled in effect aligns transit agencies with all the social forces that are generating sprawl and the ever longer trips necessary for people to get to work, shop, etc. Indeed, Metra's investment in suburban extensions just helps the spread of sprawl.

A better approach IMO is to reward trip generation regardless of distance. That way the one mile hop from the Loop to North Michigan Avenue is viewed as just as valuable as the 25 mile rail or bus trip elsewhere. Why so? Transit thrives on density and in densely populated areas people walk more, use cars less, and thus generate much less air pollution than those of us whizzing around in cars in the less densely populated suburbs. Rewarding trip generation rather than miles traveled is more likely to reward densely populated areas where transit is likely to pull more people out of cars for more trips.

If the MBC project wants to truly build a world-class transit system it needs to make sure that transit investment is supporting the kind of dense residential and employment areas where people are able to function without near total reliance on the automobile.

Rather than offering a few bromides about the importance of good land-use, the MBC folks need to develop criteria to direct transit dollars to areas and types of services most likely to yield the most transit trips per dollar of investment. This raises difficult political issues no doubt, but if operating and capital funds are truly as limited as the MBC says, then shouldn't investment be where it will do the most good, namely, in those areas that will generate the most trips.

If, for example, it will take $6.97 to get an additional trip on Metra where the same amount of money will generate more than two new trips on the CTA, shouldn't we reward the service that gets more people out of their cars for more trips?

I know that there are powerful counterarguments (e.g., the more miles traveled on transit the more miles not traveled in cars, maximizing anti-pollution benefits of transit). Nonetheless, the RTA (especially) and the service boards need to look carefully to see if transit investments are supporting or undermining the type of land-use patterns that will sustain transit in the long term.

Tuesday, November 28, 2006

CTA: Labor Costs Meltdown?

Transit systems are labor intensive and labor costs are by far their biggest operating cost item.

When private companies are in financial distress reducing labor costs is a top priority if the enterprise is to be rescued. It is obvious that public entities are different. While the Situation Analysis of the Moving Beyond Congestion project ("MBC") makes some slight references to labor costs, thus far the MBC has not made a single proposal for how to better manage labor expense. The MBC, in other words, is focused on increasing revenue and not on realizing cost-saving operational efficiencies. The problem in the MBC's view is lack of money and not the weaknesses of the service boards in managing their labor costs.

The MBC failure to focus on the cost side of public transit operations is not terribly surprising. The region's transit agencies are heavily unionized. Extracting concessions from unions is never easy, especially in the political environment in which public agencies operate. Why undertake this arduous task if you don't have to?

The labor cost situation at the CTA is especially grim. The CTA's 2007 Budget (pg. 61) projects 4 years out from the CTA's 2005 actuals. Labor expenses are as follows:

2005: $714,336
2006: $769,163
2007 $850,332
2008: $915,648
2009: $1,037,780

This represents a 45% increase in labor expense in just 5 years. The labor expense share of the CTA's operating budget during this period rises from 69.9% in 2005 to a whopping 77.3% in 2009.

The CTA advances two explanations for these ballooning labor costs. First, the CTA was on the losing end of a labor arbitration ruling for the contract period ending on 12/31/06. (Pg. 31.) Second, the sharp increases in labor expenses in 2008 and 2009 are due to sharp increases in pension plan contributions mandated by state law. (Id.)

It may take State intervention to put a check on this ruinous rise in CTA labor expense. The General Assembly might consider, for example, outlawing any clauses in service board collective bargaining agreements that bar the service boards from subcontracting out bargaining unit work. More dramatically, the General Assembly might radically reconstitute one or more of the service boards so that collective bargaining agreements can be negotiated from scratch. Surely there are some tools available to financially distressed public entities that allow them to do the kind of labor cost restructuring that is common in the private sector.

The MBC's failure to address the labor cost issue may in the end be harder on its effort than had it wrestled with the labor cost problem from the beginning. Will taxpayers and voters be willing to pony up hundreds of millions of additional money each year when they see that those additional dollars will be used to pay for pensions and higher wages rather than for service improvements?

Monday, November 27, 2006

McCarron Drops The Ball

John McCarron takes a breezy look at the regional transit funding situation in today's Tribune. His article, "Transportation Fixes in the Slow Lane" was inspired by a CTA train delay that resulted in him missing the first inning of a baseball game.

McCarron notes the large and growing service board operating deficits and the shortage of capital funding. He offers no solutions, speculating only that a new tax such as a regional tax on gasoline or the sale of State assets such as the Tollway might be used to generate funds.

He does offer a reminder that personalities matter. In his view Jim Reilly, the head of the RTA, is a coalition builder, while Jeff Ladd, the recently deposed Metra Chairman and Frank Kruesi, the CTA's President, are too combative to build the kind of regional consensus that will be necessary to bail out the local transit system. Indeed, if published reports are to be believed, you could put Ladd (or Kruesi) in a room by himself and he still couldn't build a consensus.

McCarron also notes that suburban interests are beginning to get skittish about even the very modest suggestions in the Moving Beyond Congestion materials that land use issues need to be considered as part of building an improved transit system.

Wouldn't it be something if transit service and/or subsidies were doled out based at least in part on the implementation of transit oriented development principles by local governments? Why shouldn't Metra provide premium express service only to towns that allow high-density housing and commercial uses near train stations? Why shouldn't Pace just say no when towns sprawling across our region ask for bus service? Why shouldn't the CTA pay a price when the City of Chicago ushers in a lower density, auto-centric city through big box developments, strip malls with parking lots in front, and zoning laws that make it difficult to build housing without lots of garage space?

Land use changes may be the political third rail, but it is disappointing that the Moving Beyond Congestion folks failed to articulate some meaningful reforms to land-use practices so that some--but only some--of these reforms could be bargained away in the political hurly burly this spring. Now, there is nothing on the land use front for the MBC to bargain away.

If McCarron's lightweight article is any indication how seriously the local media will be taking the Moving Beyond Congestion process, then we will never know the opportunities for a more efficient and livable region that are being overlooked. McCarron dropped the ball on this one.

Saturday, November 25, 2006

The RTA's Responsibility for Capital Funding Disparities

The recent Situation Analysis Interim Report ("Report") of the RTA's Moving Beyond Congestion initiative outlines the capital shortfall facing the public transit service boards. What the Report fails to address is how the RTA's distribution of capital funds among the service boards over the years has compounded the crisis for the CTA.

The RTA Act includes a complicated distributional formula for sending RTA sales tax revenue to the service boards in the form of operating subsidies. 70 ILCS 3615/4.01(d). There is no such statutorily mandated formula for the RTA's distribution of capital funds. Yet, for years the RTA has distributed federal formula capital funds--the bulk of the capital funds for the service boards--according to a fixed formula. The CTA gets 58%, Metra 34% and Pace 8%. (The CTA got an even smaller share of Illinois FIRST capital funds.)

The RTA's 2007 Budget Book (page 18 of 43) states that the 58%/34%/8% split is based on a "historical distribution." The RTA makes no pretense that it is distributing capital funds to the service boards based on a professional assessment of the capital needs of the service boards or according to a performance-based metric such as obtaining the most transit ridership per dollar of capital investment.

While the basis for the "historical distribution" is unclear, we do know the CTA is shortchanged under the RTA's capital funding formula. For years, the CTA's share of capital investment has run well behind its share of transit customers in the region. The 2006 ridership shares are as follows:

CTA: 80%
Metra: 14%
Pace: 6%

Yet, the RTA's 2007 Budget Book sets the preliminary capital marks for the service boards for the 2007-2011 period as follows:

CTA: 57%
Metra: 36%
Pace: 7%

Not surprisingly, as a result of years of capital investment at levels far less than its ridership share, the CTA's capital stock is in the worse shape. The Report (pgs. 19-22) makes this evident. CTA rail cars have a useful life of 25 years: 78% of its fleet is now 20 years or older. CTA buses have a useful life of 12 years: 55% of its bus fleet is 11 years or older. The average CTA bus garage is 46 years old. The average for Pace is 18 years. In contrast, the Report makes no mention of Metra facing any chronically obsolete railcars or facilities. We can only infer that after many years in which the RTA gave Metra a share of capital funds more than double Metra's ridership share, Metra's capital stock is in much better condition than the CTA's capital stock.

The effects of the RTA's maldistribution of capital funds to the service boards is graphically illustrated by two recent publications. The November 2006 edition of Metra's "On the Bi-Level" has an article on Metra's 2007 budget. The article illustrates the importance of capital investment by citing to Metra's early days in the 1980s, when Metra's "track and equipment was in such poor shape trains had to run slower than 25 mph on about 15 percent of the Metra system."

The second article appeared in the Chicago Tribune on November 15, 2006. In that article John Hilkevitch reported that slow zones have more than doubled on the CTA rail system since July 2005. Almost half of the Howard branch of the Red Line is a slow zone. With limited capital funds, the CTA cannot afford more work crews to reduce the number of slow zones. In other words, Metra's bad old days, in which 15 percent of its system was a slow zone, describes the CTA of today, a system riddled with slow zones.

The responsibility for the disparity in capital funding between Metra and the CTA clearly lies with the RTA. It is unfortunate that despite new leadership, the RTA appears committed to perpetrating the current formula, which will continued to shortchange the CTA of capital funds. Even those who might otherwise be inclined to support the RTA's Moving Beyond Congestion package need to consider whether the RTA's allocation of capital funds according to the "historical distribution" formula makes good sense and leads to the best use of public dollars.

Might it not make better sense to distribute capital funds using professional engineering needs assessments tied to a performance metric such as ridership to be served/geneated per dollar of investment? Why shouldn't capital funds be spent on projects that will do the most good for the most riders rather than distributed unequally using an unwritten formula hammered out years ago in a very different political environment.

Moving Beyond "Moving Beyond Congestion"

The Moving Beyond Congestion ("MBC") initiative of the RTA, CTA, Metra and Pace is finally producing some substantive work, namely the recent Situation Analysis Interim Report.

Sadly, it appears from the Report that the MBC initiative boils down to asking the General Assembly for more money to shore up the status quo. Lacking is a vision for how to improve both the public transit system and the regional transportation system as a whole.


The Report lays out some of the economic and environmental benefits of public transit in Northeastern Illinois. The Report then outlines the current situation of the three service boards. That situation is grim. Despite existing annual operating subsidies that total approximately $900 million, the service boards are facing large and growing operating deficits. The service boards have started using capital funds for operations, hardly a positive business strategy. In 2006 the service boards will be transferring over $100 million in capital funds to help cover their operating costs. At the same time the service boards are diverting capital funds for operating needs, the pool of available capital funds has shrunk markedly because of the expiration of the Illinois FIRST program.

Public transit's market share continues to decline in the region. Fewer trips are being taken today by public transportation in the region than were being taken 30 years ago, when the region's population and job totals substantially smaller. Demographic trends are unfavorable, because the region's population growth and job growth are occurring largely in low density areas ill-suited to traditional public transit service models.

The Report states that the region has a choice: "Invest in, modernize and expand" the region's public transit system or "begin shrinking the transit network and lose the economic and quality of life benefits that accompany it." The Report does not give serious consideration to the options of shrinking existing public transit system or even maintaining the status quo. Rather, the report assumes the conclusion that it makes sense to expand business as usual when it comes to public transit. The Report thus exhorts us to "seize the opportunity to develop a world class transit system." We learn from the RTA's 2007 Budget Book that this means new and rapidly increasing State operating subsidies on top of the existing State subsidies. These additional public subsidies are as follows: 2007--$145 million; 2008--$223 million; 2009--$335 million. (Note the 130% increase over just three years with no signs of leveling off.) On the capital side, we are told that it will take almost $40 billion in new money over 30 years to achieve such a system.


The Report is a disappointment to anyone who truly wants a "world class transit system" in Northeastern Illinois. Despite public transit's declining market share, despite the inability of the RTA and the service boards to live within the means provided by the RTA sales tax and the matching State subsidy, despite continued low density development in much of the region that makes traditional public transit infeasible, the Report boils down to "we need more of the same" -- the same public transit agencies following the same public transit business model under the same legal/administrative structure. This is hardly a compelling case.

Some of the issues the Report fails to address include:

-- Labor Costs make up the lion's share of the operating costs of the transit agencies. When private sector companies approach or enter bankruptcy labor concessions and out-sourcing are often key to remaking the company into a viable enterprise. This is a painful process, yet it happens. What plans do the RTA and the service boards have to reduce labor costs directly and through outsourcing now that they face the public sector equivalent of bankruptcy?

-- Pace is the most heavily subsidized of the three service boards, with over 60% of its operating costs covered by public subsidies. Its operating area in the suburbs has seen steady growth in population and jobs over the past 25 years. Yet, Pace's ridership continues to drop. Why should we assume that Pace will provide "world class" transit with more money when it has been ineffectual with what it has already?

-- Transit systems are supposed to combat sprawl by offering people an alternative to automotive dependence. Then why is Metra concentrating its investment in rail line extensions and the STAR Line? Why, for example, does it make sense to spend hundreds of millions of dollars to run a train line to Elburn when we know that most of the travel done by folks in that region will be by car even if one family member does take the train to work? Why not focus Metra's capital investment on higher density areas where it is much more likely that people will do a higher proportion of their total trips by transit, walking, and other non-auto methods? Wouldn't a Cicero Avenue connector, for example, serve far more people and generate more transit trips per dollar of investment than expensive extensions to places like Elburn, Johnsburg, and Manhattan, which simply make those areas more attractive to sprawl type development?

-- The Report makes no mention of revamping the governance structure for the RTA and the service boards. Does it make sense that the State of Illinois is being asked to provide 50% of the operating subsidies by 2009 yet neither the Governor nor the General Assembly has the power to appoint even a single member of the RTA? Does it make sense to apportion RTA board members based on the population in various counties rather than transit usage in those counties? Is the RTA too weak to do anything positive but just strong enough to be a bureaucratic drag on the service boards? Why should we consider continuing the present RTA/service board structure when it has failed to stem the market share losses faced by public transit?

-- The Report has nothing meaningful to say about how all the money requested is to be raised and distributed. Do the authors really think that the Governor and the General Assembly will step up to provide over $750 million in operating subsidies (by 2009) for transit services operating in only six counties in the state? Is public transit really more important than education and health care? Why is most of the region paying only 0.25% RTA sales tax while Cook County residents must pay 1%?

-- Both Metra and the CTA have raised fares recently without suffering ridership losses. Metra even brags in its annual budget that its fares have risen at far less than the rate of inflation. Does this suggest that higher public transit fares are economically feasible and need to be part of any financing solution?

These and many other questions need to be asked and considered before the State invests many more billions of dollars into transit. This blog is intended to be a place where interested parties can discuss the issues and share information in a creative and responsible fashion.