News Flash: Kane County Not Mad At The CTA

The Aurora Beacon News reports that:

Kane County officials want it understood they are not against more state funding for the Chicago Transit Authority.

They just want it to be fair.

Great news. I can almost hear a sigh of relief from the CTA and the many people who depend on the CTA that Kane County isn't mad at the CTA. Who wants to be on Kane County's bad side after all?

There are many legitimate issues that folks in the collar counties have with the current public transit system. Some counties appear to be addressing these issues thoughtfully. Others, like Kane and McHenry, seem caught between the old Chicago baiting days and the present day emphasis on regionalism. The tension between their nativistic emotions and their need to put on a positive, regionalist face along with their more populous neighbors in Lake and DuPage counties is putting a strain on these folks. It shows in their veering from attacks on the Moving Beyond Congestion project to going public with a "we don't hate the CTA" message.

Kane County, after all, is in the proverbial glass house when it complains about "fairness" in transit funding. Kane County contributes less than 2.2% of the regional sales tax revenue to the RTA. Yet, it is served by multiple Metra lines as well as some Pace service. One of the rail lines was recently extended to Elburn in the heart of Kane County at a cost of several hundred million dollars.

In light of this level of public transit serving Kane County, the County would be hard pressed to show that its relatively measly $15 million annual contribution (pg. 144 of 146) to the RTA system covers the cost of that service. Indeed, if we applied the same farebox recovery ratio and per trip subsidy levels that the CTA and Metra must meet, then bus service and likely some of the Metra rail service would disappear in the County.

The article has one interesting tidbit. It reports that the Kane County officials were predicting that increased funding for the CTA "could include another penny on the sales tax in suburban parts of the RTA." The article did not indicate any opposition to that prospect. Given Kane County's interest in reviving bus service that Pace no doubt abandoned as uneconomical because of poor ridership, it is heartening that Kane County appears resigned to that increase.

Kane County: "Exasperated" And "Exacerbated"!

Bill Wyatt is a state representative from Aurora. He is a Republican. Over the past few years Wyatt and his Republican colleagues have blocked the Governor's efforts to pass capital spending bills that would have increased funding for highway (and transit) projects. The results, predictably, have been a deterioration in the condition of our highway and transit systems and a steeply rising price for getting those systems back into a state of good repair.

Nevertheless, according to a recent article in the Kane County Chronicle, Wyatt, in his capacity as head of Kane County's Legislative Committee, drafted a letter to the Governor complaining about the poor condition of the area's roads and the low level of highway funding in the Governor's proposed FY 2008 Capital Budget. According to the article, the letter states "the level of state road funding could make Illinois 'a national laughingstock.'”

Another article, this one in the Daily Herald, quotes Wyatt as saying “for too many years we have suffered from the state’s failure to invest in its own road system.” The Daily Herald failed to note the key role Wyatt and his political party have played in that failure to invest in our transit system.

Wyatt's bottom line was reported as follows: “Their own state system here in Kane County is really being neglected and the budget is going to further exasperate that problem.”

We voters might be "exasperated" that Wyatt and his party "exacerbated" the road system problems by blocking State capital investments in that system over the past several years yet now have the gall to complain publicly about the poor condition of the roads.

It is also troubling that Wyatt would use the terminology "their own state system" as if he -- a member of the General Assembly -- had no responsibility for the State's road system. Last I checked, with the possible exception of the Prairie Parkway there are no Democratic, Republican or Green Party roads, only roads. Wyatt and his party have a responsibility to all of us to protect and improve the State's transportation system. That is not "their" problem. It is Representative Wyatt's problem and it is ours.

New RTA Board Member Has CIA Ties!

William R. Coulson, a resident of Glenview, will be joining the RTA Board in April. He replaces Mary Donald, who served on the RTA Board since 1995, as a suburban Cook County representative on the Board.

Coulson is a name partner in the law firm of Gold and Coulson, a Chicago law firm that specializes in class actions and other litigation on behalf of plaintiffs. Indeed, the firm's website describes Mr. Coulson and his colleagues as "Warriors for Justice":

We are warriors who use the tools of trial lawyers to obtain justice.

We're out to protect medical providers who have been taken advantage of by insurance companies, we're out to protect patients who have been taken advantage of by insurance companies.

We're out to protect artists and writers who have been taken advantage of by recording and publishing companies, and we're out to protect accident victims against corporate America.

It will be interesting to see how this Warrior for Justice will approach questions of distributive justice, such as the statutory formula for distributing much of the RTA's operating funding to the service boards.

Coulson does not bring a profession transit background to his new position. The RTA press release announcing his appointment states that Coulson "has had a long personal interest in public transportation" and takes transit in Chicago and while traveling. That describes a sizable percentage of people in the six-county area. Likewise, Coulson's impressive resume on his firm's website discloses no professional involvement in transportation issues.

However, it is tough to quibble about the qualifications of a Warrior for Justice. With good judgment, careful preparation, and a willingness to go beyond managerial platitudes to address core issues, a board member can make a big difference. Coulson's experience dueling with multi-billion dollar insurance companies likely is good preparation for his stint on the RTA Board.

Coulson also may bring a unique skill set to the RTA Board. He is a founding member of the Office of Strategic Services Society, a group devoted to celebrating the historical accomplishments of the OSS. The OSS is the predecessor of today's CIA and the historical and cultural links between the two groups run deep. Coulson looks to be way too young to have served in the OSS. However, perhaps through his work with the Society he has learned spying, counter-intelligence and other such skills from Society members affiliated with the CIA and other intelligence agencies. These skills may be what is necessary if the RTA is push its Moving Beyond Congestion agenda through the General Assembly and past the Governor.

So, if you see a man in a trench coat and sunglasses in late May in Springfield--watch out!

Transportation Investment Decisions: A New Approach?

In a recent opinion piece, Michael McLaughlin, the new, hard charging transportation director for the Metropolitan Planning Council, makes a strong pitch that having greater transparency in the way the State prioritizes its transportation capital investment decisions will increase the prospects for increased capital funding:

It's time for a dose of sunshine. Taxpayers deserve to know why Illinois is choosing to invest where, and an answer to the question: What will we get for our money? That's why state. Reps. David Miller (D-Dolton) and Michael Tryon (R-Crystal Lake) and state. Sen. Susan Garrett (D-Highwood) have introduced the Illinois Capital Investment Accountability Act (HB 801 and SB 1582). The bill would institute an accountable, transparent selection process that relies on regional input to determine which transportation projects receive funding.
. . .

The governor and the state Legislature must begin work on a multibillion dollar state capital investment package this year. But any plan for more funding for roads, rails and bridges must be paired with a process like the one proposed in the Illinois Capital Investment Accountability Act. Without one, it will not be a surprise if taxpayers in Illinois refuse to support a new capital investment proposal and our transportation system continues to slide into a worse state of disrepair.

The current version Capital Investment Accountability Act to which McLaughlin refers can be found here. The bill is directed at capital investment decision making by the Illinois Department of Transportation. IDOT would be required to establish and coordinate a Statewide Prioritization Committee and Prioritization Committees in the nine IDOT districts.

Within each IDOT district the District Prioritization Committee will prioritize transportation investments in the area not covered by a metropolitan planning organization. The metropolitan planning agencies within each district will prioritize projects within their jurisdiction. The Statewide Prioritization Committee will prioritize transportation investments for "statewide projects," defined as:

"Statewide projects" means traffic control improvements procured by the Department on a statewide basis, weigh stations, state park projects, contract maintenance performed by non-state forces, emergency road and bridge repairs, and federally authorized Equal Employment Opportunity training programs and support services.

By March 2008 the Statewide Prioritization Committee will do the following:

(1) Establish uniform statewide evaluation criteria
for project prioritization derived from the State
transportation goals. The Statewide Prioritization
Committee shall establish no fewer than 5 and no more than
10 criteria;

(2) Establish a uniform statewide process for
calculating a project's benefit/per-capita cost; and

(3) Determine the process by which it will evaluate and
prioritize Committee and MPO proposed projects in order to
develop the comprehensive project prioritization plan. . . .

By May 1, 2008 the metropolitan planning agencies and District Prioritization Committees will review the evaluation criteria established by the Statewide Prioritization Committee and establish within a specified range the weight to be given each criterion.

The Prioritization Committees and MPOs will then kick into high gear. They will each develop a prioritized list of proposed transportation investments within their jurisdictions using the evaluation criteria and forward this list to the Statewide Prioritization Committee.

The Statewide Prioritization Committee will then develop a comprehensive and prioritized list of all the projects submitted by the MPOs and District Prioritization Committees. This comprehensive list will serve as IDOT's annual project program for highways, mass transit and railroad systems. The list will also guide the development of the State Transportation Improvement Plan, Master Plan (yes, Virginia, there really is one!) and Five Year Project Program.

IDOT will submit this comprehensive list of prioritized projects to the Governor and the General Assembly in January of each year. The Governor's proposed capital budget then will be scrutinized against the comprehensive list:

The Chairpersons of the House and Senate committees having jurisdiction over transportation matters shall, within 14 days after the Governor's submission of the proposed capital budget, convene a joint subject matter hearing to consider the comprehensive project prioritization plan and the impact of the proposed capital budget on the State's implementation of projects contained therein.

It is very interesting that while the Governor's proposed capital budget is to be reviewed against the comprehensive list of prioritized projects, the General Assembly's enactment of the transportation budget is not. Thus, the Governor could follow the comprehensive list of prioritized projects exactly, but the General Assembly could reject that approach in favor of "pork barrel" earmarks to favored projects of dubious merit and not be held accountable under this bill.

The meetings of the MPO and the Prioritization Committees are subject to the Open Meetings Act. There are requirements that the public be allowed to review and comment on proposed prioritization plans, but membership on the various committees is limited to public officials.

The lack of meaningful capital investment prioritization is a common criticism of the RTA. That criticism should also extend to the Chicagoland Area Transportation Study, now part of Chicago Metropolitan Agency for Planning, which likewise failed to prioritize transportation projects in northeastern Illinois.

The bill has another important weakness in addition to letting the General Assembly off the hook with respect to its adherence, or lack thereof, to the carefully prioritized list of transportation projects. That additional weakness is the bill's failure to provide any direction with respect to what criteria the MPOs and various prioritization committees should use in ranking proposed transportation investments.

Maybe this lack of specificity is designed to avoid alienating any interest group and their political representatives. It is hard to be against "good planning." But it is very easy to oppose a bill, for example, that gives public transportation projects a higher priority than highway expansions, all else being equal. Or maybe the bill's lack of specificity concerning evaluation criteria is out of respect for the transportation professionals. Well, that's not likely since the transportation professionals at the RTA and CATS have failed to evaluate and rank the proposed transportation investments under their authority and IDOT is hardly a model of transparent decision making when it comes to how it selects transportation projects.

So, in the end, the bill would be stronger if it told IDOT and the public what principles the General Assembly believe should guide which transportation projects should get funded, in what order, and in what amounts. Nonetheless, it is heartening that these legislators are focused on the serious problem that McLaughlin identified in his article, namely, the public's unwillingness to support major new transportation investments unless they have some assurance that the money is going to be spent in an efficient manner on projects that will do the most good (however that is defined).

The public has read all too much how at the federal level transportation money is being spent on Alaskan style bridges to nowhere. They don't want to pony up more money at the state level until they are convinced that the same won't happen here.

The Illinois Capital Investment Accountability Act is sponsored in the Illinois House by Representatives David Miller, Michael Tryon, John Fritchey, Kathleen Ryg and William Davis, and in the Illinois Senate by Senator Susan Garrett.

The Proposed FY 2008 State Capital Budget: More Coal in the RTA's Stocking

A earlier post outlined how the Governor's proposed FY 2008 Operating Budget reflected gubernatorial rejection of the entreaties by the RTA and the Moving Beyond Congestion proponents to add $400 million in new annual operating subsidies for the public transit system in northeastern Illinois.

The Governor's proposed FY 2008 Capital Budget underscores that the Governor doesn't appear to be buying what the RTA is selling, namely, an additional $2 billion a year in capital funding for public transit in the six-county RTA region. Instead, the Governor proposes that the State provide the following capital investments in the RTA system (pg. 43 of 162):

FY 2008: $200 million
FY 2009: $110 million
FY 2010: $115 million

The three-year total--$425 million--is a mere 7.1% of the $6 billion that the RTA seeks over the same period.

There is a small silver lining, however. The RTA's 2007 Budget (pg. 120 of 146) notes that the State had programmed no capital money for public transit in its FY 2007 Capital Budget. Accordingly, the RTA assumed in its Five-Year Capital Program that it would not be getting any State capital money.

This means that the $425 million that is in the Governor's proposed budget is found money for the RTA and the service boards. Perhaps they can use this additional money to serve as a local match for additional capital dollars from the federal government. The State's capital investment over the next three years certainly won't generate anywhere close to the $2 billion a year in new capital funding that the RTA seeks, but it is better than nothing.

But not much more than nothing. Finding $4 on the street, while pleasant, is not as much fun as having $60 in the bank. That's the same scale of the difference between what the RTA will get over the next three years under the Governor's proposed Capital Budget and what it seeks.

The Governor's proposed FY 2008 Capital Budget illustrates that the RTA's Moving Beyond Congestion effort has yet to gain traction in Springfield. But hope no doubt springs eternal as the Moving Beyond Congestion proponents get ready for the legislative home stretch.

The CTA's Transit Platform

A commentator took me gently to task for suggesting in an earlier post that the City and Cook County have failed to match the collar counties, who have come together on a set of principles that they argue should guide the revamping of the region's public transit system.

The commentator pointed out that the CTA set out its "Five Core Principles for Regional Transit Solutions" in March 2005, when the CTA was seeking a legislative reworking of public transit funding in the face of opposition from the RTA, Pace and Metra. The Five Core Principles are:

1. Public transit is an essential regional resource and the entire Northeastern Illinois region needs more operating and capital funding now.

2. No transit service board in the region should gain at the expense of the others.

3. A healthy transit system curbs traffic congestion and pollution while improving mobility, economic competitiveness and the quality of life for all the people in the region.

4. Funding should keep pace with steadily increasing demands on transit, including population and job growth, the end of federal operating support, unfunded federal mandates for paratransit and rising security costs.

5. Future funding solutions should reflect the spirit of bipartisanship and regional consensus.

These principles are certainly praiseworthy, but they seem strangely dated. Principle #1 is front and center in the RTA's Moving Beyond Congestion program. Principle #2 appears to be a plea to grow the funding pie so the region can avoid a battle over how to reslice that pie. The notion that no service board should gain at the expense of another does, however, does have a more radical implication. That implication is that if a service board gains more than another service board through application of the statutory funding formula for the distribution of operating funds, then there should be a redistribution of operating money from the favored service board to the less favored service board until their positions are equalized.

Principle #3 is a bromide. Principle #4 is a refreshing acknowledgment that the growth of population and jobs, primarily in the collar counties, puts real strains on the transit funding system that must be addressed. The relative lack of density in the collar counties and their preference for heavily subsidized Metra rail and demand response services over traditional bus service make transit service throughout those areas very expensive on a per trip basis compared to service provided by the CTA in its denser service area.

Principle #5 is another bromide.

The 2005 Core Principles build on a more pointed September 2004 CTA Board Resolution that addressed the then current funding problem. According to the CTA's press release describing the Resolution:

The resolution seeks support from the RTA and the General Assembly for increased funding and changes in state statute to provide the RTA greater policy discretion to allocate funding in a manner that more effectively:

Reduces traffic congestion and urban sprawl.

Increases transit ridership by basing funding in part on each Service Board’s ridership performance.

Improves air quality thereby lowering asthma rates, ozone levels and improving the general health and welfare of the entire region.

Induces and rewards efficient and cost-effective transit subsidies.

Ensures that operating funds are distributed fairly to minority and non-minority residents as required under Title VI of the Civil Rights Act of 1964.

This Resolution is significantly more pro-CTA on its face. It lays out why the region should focus the bulk of its transit effort on the urban core, which is where most transit riders continue to live and will continue to do so for the foreseeable future. A viable urban core with good public transit will be a counterweight to the centrifugal force of sprawl. If, for example, it takes a $2.00 public subsidy to provide a CTA ride, an $8.00 subsidy for a Metra trip and a $24 subsidy for a demand response trip, the argument goes, why shouldn't the region focus limited resources on areas likely to generate the most transit trips for the least cost?

The 2005 Resolution also hits on issues that have largely if not entirely dropped out of the rhetoric used by the RTA in the Moving Beyond Congestion effort. The Resolution refers to asthma rates, which are unusually high in the urban core that gets the brunt of air pollution from heavily traveled expressways and arterial streets. The Resolution's reference to Title VI even more directly hits on the issue of race; namely, how the RTA's funding formula and its pro-Metra capital investment policy amounts to discrimination against minorities, who are forced to rely upon underfunded CTA service.

It is very helpful that this commentator brought these statements to our attention. These statements do not undermine my fundamental point, however. The political leaders in the collar counties have outlined their vision of how the RTA's Moving Beyond Congestion effort should play itself out. The political leaders in Cook County and the City of Chicago have not.

It would be useful to hear those political voices. Is Todd Stroger, for example, content to see the CTA go through the same budget cutting process that he went through with his own budget recently? Does the Mayor of Chicago see public transit as an expensive distraction or is it at the core of his vision for the City? Are they satisfied with the levels and quality of transit service in Cook County or, like their collar county counterparts, do they think that it is past time for the service boards to update their operating models? What criteria do they think should guide the allocation of operating dollars? How do they think that capital investment decisions should be made, and by whom? Should some of the transit services be privatized?

Who the heck knows, which is a shame since over 90% of transit riders in the region live in the City of Chicago or the Cook County suburbs.

The Demand for Demand Response Service

A noteworthy feature of the recent testimony of various suburban officials to the House Mass Transit Committee was the emphasis on demand-response service. Two of the speakers, Mary Keating, the Administrator of Ride DuPage, and an unnamed person representing the Kane County Paratransit Coordination Council, devoted their remarks exclusively to suburban demand response service.

Other collar county speakers spoke favorably of such service. Marty Buehler, the Lake County Director of Transportation, for example, stated that during Lake County's transportation planning process over the past few years expanded paratransit service--both in terms of eligibility and service coverage--was an issue that came up at every meeting. He continued that paratransit and reverse commuting--

are rapidly growing non-traditional transit service markets that need to be addressed not only in Lake County by regionally. It is our opinion that the future of transit service in the suburbs is to be found in these "non-traditional" markets; fixed route bus service in the collar counties requires a complete restructuring. (Pg. 15 of 22)

It is no wonder that the collar counties are dissatisfied with Pace. Pace carries fewer passengers than it did in 1985 despite the heavy increase in population and jobs in the collar counties. The message from the collar county representatives to the Mass Transit Committee was that for the most part fixed route service is ineffective and needs to be replaced by feeder service to Metra stations and demand response service elsewhere.

Current demand response--often called "dial-a-ride"--services in the collar counties provide point-to-point transportation to targeted populations that include more people than just those eligible for ADA paratransit service. For example, veterans may get rides to and from their homes to the regional veterans hospital. Or senior citizens living in a municipality may get rides to and from destinations within and even outside their municipality. Rides may be supplied by Pace vans, taxi services or other transportation services.

The sponsoring agency pays the ride provider a subsidy for providing the ride to "their" rider. Riders tend to be billed by distance. The kicker is that the fares paid by riders appear to cover only between 10-20 percent of the cost of the ride. This is a farebox recovery ratio half of Pace's current farebox recovery ratio, which itself is significantly lower than the farebox recovery ratio of the CTA and Metra. The RTA Act imposes a 50 percent farebox recovery ratio for the transit system as a whole.

The existing demand response services in the collar counties are funded through a hodgepodge of grants from local governments, federal grants funneled through the RTA, and monies kicked in by "community service partners" such as senior citizen centers. The thrust of the testimony from the collar county representatives is that the RTA should provide a larger and steadier funding stream so that demand response service can be expanded throughout the suburbs.

This approach poses a real challenge to the RTA. Fully funding an operation that has a 10-20 percent farebox recovery ratio can put a big dent in an operating budget really quickly. However, rather than taking over full responsibility for funding demand response service, perhaps the RTA could pledge a steady funding stream that would cover some of the cost of the demand response service. Local authorities could then continue to cobble together money from other sources to keep these small, but significant demand response operations going. It appears from the testimony that collar county leaders may be willing to trade some of the current fixed-route Pace bus service for such a steady funding stream.

One can argue that if transit-oriented development policies are enacted and enforced even the suburbs can develop sufficient density to support traditional fixed-route bus service. Subsidizing demand response service, the argument goes, is counterproductive because it allows the collar counties to lose sight of the importance of TOD development.

The more persuasive argument, however, is that the higher cost of demand response service on a per ride basis will provide a stronger incentive for the collar counties to grow relatively dense, pedestrian-friendly and accessible environments that are attractive to seniors and the disabled and will reduce the demnd for demand response service.

It is also true that the demand response services utilize eligibility criteria that the collar counties can use to channel non-rail transit service to targeted populations like seniors and the disabled. Where Pace service and its associated subsidies are consumed by everyone regardless of income or transportation alternatives, demand response service can be limited to the "truly needy." Thus, one can argue, demand response service is more efficient because it targets transit funds to those who don't have alternatives to the private auto.

If this recent testimony is any indication, we will be hearing more from the collar counties about demand reponse service in the transit debates over the next few months.

The Collar County Transit Platform

Suburban representatives had an opportunity to testify before the House Mass Transit Committee, which is chaired by Representative Julie Hamos, earlier this month. That testimony has been posted on her website and provides some insight into the question what do the collar counties want from the Moving Beyond Congestion process.

The clearest answer to that question comes from a one-page statement entitled "Collar County RTA Principles" signed by the Chairs of all five collar counties. The statement is divided into the following subject areas:

• Structure: Population and job growth in the collar counties "demand a re-evaluation of the powers of the RTA and the three service boards in order to spur a regional transit solution to the significant changes in travel patterns, the phenomenon of reverse commute, the expanding demand for paratransit services and the suburb to suburb commute need." The statement urges greater region-wide planning coordination, tighter budgetary oversight of the service boards and the use of consistent performance measures for the RTA and the service boards.

• Project Evaluation: All transit projects should be "similarly evaluated to ensure a process that is equitable, transparent, market driven and inclusive of local stakeholders." The RTA should play a "large role in the prioritization of funding for all projects."

• Paratransit: Paratransit service should be increased and funded equitably throughout the region.

• Funding: The RTA's funding formula "must be equitable to maintain not only current levels of service, but also targeted on unmet service needs, as indicated by market factors such as population and job growth." The CTA's pension problem should be addressed outside of the transit funding arena. While the collar counties pledge to work with the General Assembly on funding, "any transit solution must be linked to an equitable and comprehensive solution to our local roadway infrastructure needs."

What the statement boils down to is something like this: The collar counties are willing to pitch in with more revenue (e.g., through in increase in the RTA sales tax rate in the collar counties) if (a) the RTA's powers are expanded, (b) there is an increased investment in collar county transit to reflect the population and job growth in the collar counties, and (c) any funding increase and expansion program for transit in the collar counties should be tied to improvements in their highway system.

One can envision allowing the collar counties to spend ("flex") some of the extra revenue from an increase in the RTA sales tax to support their highways. This would be a politically astute move to attract public support for such an increase.

Thankfully, the statement is not riddled with anti-Chicago rhetoric. Kudos to the leadership of the collar counties for putting together this statement of principles. If only the City of Chicago and Cook County would be so deliberate.

Race, Class and the Transportation for Illinois Coalition

The Transportation for Illinois Coalition's recent press conference calling for $5 billion a year in new transportation funding over the next five years without proposing a funding source attracted some additional media coverage. ( e.g., here)

The Governor, in the meantime, made clear in response that his priority issues--health care and education--have to be dealt with before he is willing to discuss significant increases in transit and highway funding. The Governor is stumping hard in minority communities trying to build support for his package. No leader in the General Assembly has yet stepped up to lead the charge for a significant increase in transportation funding.

The Chamber of Commerce, the co-leader (with the AFL-CIO) of the TFIC, has just unveiled a new website entitled "Largest Tax Increase Ever" dedicated to blocking the so called "mother of all tax increases" the Governor has proposed. The website states that: "The Illinois Chamber of Commerce is committed to stopping Governor Rod Blagojevich's proposed tax increase - a reckless and irresponsible affront to every employer and worker in Illinois." Yet, one searches in vain on this website for any constructive suggestions for how the State can deal with its fiscal problems and/or funding the $25 billion five-year transportation program the TFIC is proposing. Nor does the Chamber--or the TFIC--acknowledge the importance of the investment in human capital that the Governor's health care and education initiatives represent.

Likewise, the Governor has not acknowledged the importance of the transportation system to the Illinois economy. It is as if the two sides--a populist Governor and the establishment Chamber of Commerce--are blind to the legitimacy of each other's program. The Governor at least deserves points for laying out a funding plan, unlike the Chamber, which is doing its hypocritical best to undermine the prospects for a tax increase of any sort without making any concrete proposal for how to fund its plan, much less any other initiative.

These developments suggest that a major race/class political divide is emerging. The wealthy and predominantly white Chamber pushes a jobs and economic development transportation package that will help sustain their business interests. The Governor and his rainbow coalition of "little people" push for health care and education, two things that will help the members of this constituency compete more effectively in the global marketplace and avoid the problems associated with no health care (e.g., ill health from delayed treatment, bankruptcy).

Public transit funding is a big part (almost 50%) of the the TFIC transportation proposal and, of course, is the whole of the Moving Beyond Congestion's $12 billion program. Public transit riders on average tend to be less prosperous and less white than those who travel by private auto. What is noteworthy is the lack of strong support from these riders and their community leaders for major increases in transit funding. Instead, it appears that the Governor's health care and education proposals resonant much more with these folks than the serious problems facing the region's public transit system.

It has been striking to me how white and prosperous (looking) are the advocates for the public transit funding program. The transit cognoscenti who have frequented the transportation fora I've attended these past few months are quite unrepresentative of those who actually ride the system. The executive directors of all three transit agencies and the RTA are all white men. Representative Julie Hamos, the most prominent member of the General Assembly focused on transit issues, represents a district in the northern suburbs, not the inner city where transit use is heaviest. When transportation, including public transit, has all the trappings of an elitist issue, it is tough to generate a groundswell of widespread support for more transit funding in the face of issues like health care and education that have a much more populist appeal.

On a personal note, I understand the appeal of the health care issue and why folks might prefer a few more potholes and less frequent bus service if that means they don't have the worry that a serious illness may mean their financial ruin. At church last Sunday I learned that one family of four, with a Dad suffering eye problems with a family history of detached retinas, has no health insurance. Thus, Dad is delaying treatment as long as possible, putting his eyesight at risk. I learned that another family of three, with mom suffering from chronic arthritis, has no health insurance either. The sense of shame and frustration these people--who all read as middle class in dress and speech--expressed at being unable to afford basic health care, is not something that I will forget.

In light of the human cost of doing nothing to address the health care problem, the Chamber's description of the Governor's effort to address the problem as "reckless and irresponsible" is truly deplorable. That the RTA and the Moving Beyond Congestion folks would join themselves at the hip with the Chamber in the face of this rhetoric makes it no surprise that the public transit issue has not ignited widespread public interest or concern thus far.

Every time Jim Reilly, the RTA's Chairman, shares a press conference with the same Chamber of Commerce that is working hard to derail the Governor's tax, health care and education initiatives, he further alienates the very community of lower income and minority public transit riders who are a natural constituency for a broad-based effort to increase public transit funding. This is not a smart thing to do with a populist governor in a blue state who is pushing two issues of more importance to most of the "little people" in this State.

The alternative is to make public transit a social justice issue like health care and education. That kind of rhetoric is notably lacking from the RTA and its Moving Beyond Congestion proponents. By defining transit as a social justice issue transit will be situated as next in line after health care and education get addressed. But by yoking transit to the anti-tax, anti-Governor bandwagon that the Chamber of Commerce represents, the RTA and the Moving Beyond Congestion proponents are much more likely to gain little or nothing this legislative session.

Where's George Lakoff when the RTA needs him to reframe its rhetoric.

Chamber of Commerce Hypocrisy and Transportation Funding

We shouldn't expect too much intellectual rigor or honesty from special interest groups like the Illinois Chamber of Commerce. Nevertheless, the Chamber's role in the transportation funding debate is hypocritical to an unusual degree.

The Chamber is co-sponsor, with AFSCME, of the Transportation for Illinois Coalition (TFIC). TFIC advocates for increased funding for Illinois' transportation infrastructure. It has proposed increasing transportation funding by $5 billion a year over the next 5 years and organized a Springfield rally in support of that cause. So far, so good.

TFIC recently assembled a distinguished group of local public officials--Bob Shillerstrom, the Chairman of the DuPage County Board; Suzi Schmidt, the Chairman of the Lake County Board; Gerald Bennett, Mayor of Palos Hills; and Jeff Schielke, Mayor of Batavia--for a press conference on the issue of transit funding. According to the accompanying press release, the group "called on legislators and the Governor to make comprehensive funding for Illinois transportation a priority this year."

Crain's covered the event and its article noted that the TFIC was unwilling to propose how the State of Illinois was going raise $25 billion over five years to pay for the TFIC plan:

While officials from Lake County, Palos Hills, Batavia and elsewhere lined up at a downtown Chicago news conference Tuesday to press their cases for more transit funds, which they said would foster economic and job growth, none would recommend where that money should come from.

The officials seem content to leave that decision in the hands of Gov. Rod Blagojevich and the General Assembly.

That a special interest group pushes for increased funding without identifying a funding source is hardly news either. Yet, the Chamber's role is much more troubling, even pernicious. Unlike its captive TFIC special interest group, which won't go on record with a recommendation for how to raise new revenue, the Governor has publicly proposed a sizeable new tax, the gross receipts tax.

At the very time it is browbeating the Governor and the General Assembly to put $25 billion of new money into transportation, the Chamber is pulling out all the stops to defeat the gross receipts tax. A media report of yesterday's speech by Doug Whitley, the head of the Chamber, gives some idea of how strongly the Chamber is mobilizing against the Governor's tax plan:

Halting what would be the nation's largest state tax increase in a decade was the battle cry as local business owners gathered at the Naperville Area Chamber of Commerce luncheon Monday.

Illinois Chamber of Commerce President Doug Whitley called Gov. Blagojevich's proposed gross receipts tax "highly risky" and "a threat to the future of business opportunities in the state of Illinois."

"The tax would be onerous to businesses, would cause businesses to reassess their involvement in the state of Illinois," Whitley said. "Raising billions and billions of dollars through a gross receipts tax is highly suspect and a questionable policy for our state to pursue."

So, on the one hand the Chamber through its transportation lobbying arm pushes for $5 billion annually in new transportation funding. This amount, incidentally, would eat up over 80 percent of the projected amount in net revenue from the imposition of the gross receipts tax and repeal of the corporate income tax.

On the other hand, the Chamber aggressively whips up the business community against the gross receipts tax, without proposing any alternative method for funding transportation initiatives--or any other important initiatives like healthcare or education. This anti-tax fervor will make it all the more difficult for the General Assembly to pass the gross receipts tax or some other revenue generating measure.

This kind of hypocritical behavior certainly is unlikely to endear TFIC and its transportation agenda to the Governor and the General Assembly. It makes one want to pick up the populist cudgel and apply it firmly to the Chamber and its allies. Unfortunately, transportation funding could well be the first casualty of the battle over the gross receipts tax that the Chamber is fomenting.

Response to Comment on Transit Pricing

An earlier post advocating peak period and distance-based pricing on transit prompted a thoughtful comment. Here's my response to the comment:

• Transit has often shied away from peak pricing for a number of valid reasons, mostly because the public does not view transit as a separate market from roads. If you think transit is a congestion relief mechanism for the road system, and that transit should be subsidized according to the congestion relief benefits it provides, then you face the peculiar situation where transit fares should actually go down as road congestion goes up. Even if transit ridership is flat, the value of that ridership can increase purely because road congestion worsens.

A: Transit is in part a congestion relief mechanism. But that said, peak pricing for transit can increase the efficiency of the transit system as a congestion relief tool. Peak pricing during the rush hour period encourages people to defer less important trips to the non-peak period. By reducing demand somewhat during the rush hour periods transit systems can run more smoothly during those peak periods, as anyone whose trip has been delayed by people fighting to get on and off packed vehicles will attest. Transit is a more viable alternative to the private car for work trips to the extent it can operate more smoothly and with fewer delays.

• If peak pricing on roadways ever really happens, transit will be seen as the fallback alternative to those who are priced off of the roads. Establishing peak pricing on transit in that situation will be a nigh impossible political sell. In fact, a peak transit discount might be the only way to package road congestion pricing.

A: Giving away highway space may have been a great social good (if you ignore environmental consequences) when there was ample capacity. That pricing strategy is counterproductive today, when demand for road space is outstripping supply. Electronic toll collection systems (e.g., I-PASS) have advanced sufficiently that highway tolling can be done without forcing people to stop at tollbooths. London and other cities that have implemented highway pricing systems point the way.

In this region highway pricing could be implemented relatively easily, at least from a technical perspective, using a few key points on the expressways as collection points. Alternatively, the bridges over the Chicago, Des Plaines and Fox Rivers could be tolled. The revenue generated could subsidize transit service and perhaps transit fares could be kept steady or actually reduced in peak periods.

There is a better approach, however, in a road pricing environment that would enhance the efficiency of the transit system and address the equity concerns that you mention. That is to have peak period pricing on both the highway and transit systems. This peak pricing would help push non-essential highway and transit trips to the non-peak periods. At the same time, the electronic toll collection and transit fare card accounts provide a way to target rewards to low-income transit users or all users who travel on transit in particularly congested corridors.

• Peak pricing will indeed encourage peak shifting from on- to off-peak, but the peak price will fall heaviest on those who have no flexibility in their arrival and departure times – highway or transit. To the extent that lower-income people have less flexible hours for jobs, this could be socially destructive and is the impetus behind sloganeering about "Lexus lanes." By contrast, some researchers think that lower-income people will actually benefit from congestion pricing by avoiding late fees from day care, etc.

A: It is hard to generalize who has more flexibility in hours, the rich or the poor. I believe there is credible research concerning high occupancy toll lanes in San Diego that finds a high level of satisfaction across income levels.

It is also important to recognize that one key benefit of congestion pricing is faster and more reliable transit service. This is a direct benefit to public transit users, who on the whole tend to have lower incomes than those who use automobiles.

• Transit “peak” pricing ideally should not be based on distance traveled (à la WMATA). Theoretically, transit should be priced at the point where the marginal operating or capital costs are actually incurred by the agency – the peak load point on a rail line or bus route. For example, say that the CTA’s Red Line’s peak load point in the AM is southbound at Grand station – the CTA sets their peak-of-the-peak schedules, and plans their fleets and signal systems based on the frequency required to meet that load. The passenger that boards at Howard and gets off at Addison at 8:15am has a marginal cost to the CTA of zero. In fact, only the passengers onboard the train at Grand should be allocated peak costs, because if the load at Grand were to decrease, the CTA could save a train. In serving the peak load point at Grand, the CTA would be providing the Howard-to-Addison capacity anyways, so that passenger should pay no peak charge. However, explaining true marginal cost pricing like this to normal passengers would be exceedingly difficult. Distance-based fares are a much easier sell. My point is only that peak pricing on transit isn’t as clear-cut as peak pricing on roads, and that transit’s substitutability to auto travel might actually require the opposite of peak pricing in a political package.
  

A: I'm not sure I understand the difference. In your example the heavy load of Grand station passengers challenges the capacity of the transit system as surely as a choke point in an expressway (e.g., Eisenhower from Oak Park to I-88). One potential advantage of congestion pricing on highways is the ability to set up a toll point at the choke point and use variable pricing to maintain traffic flow.

Given the relatively high cost of providing transit service, I'm not sure that there is much political will to "require the opposite of peak pricing in a political package" involving transit. The Auditor General's recent report (pg. 10) indicates that it costs the taxpayers about $2 per transit trip in the six-county RTA area in operating subsidies alone. On the capital side, transit eats up a much larger share of public capital dollars than the highways relative to its market share.

• Last, is it really fair to ask transit riders to pay more efficient prices and leave prices so misguided and distorted on the auto side? I say, fix the price of auto travel first – this would stimulate demand for transit-friendly urban development, and who knows, as you say, we might even get the revenues from a road congestion pricing scheme dedicated to building more transit.

A: I'm not so sure that prices are "misguided and distorted" on the auto side. Private auto owners already are bearing much of the cost of the highway system. They pay the cost of owning and operating their vehicles, including the fuel taxes that fund road construction and maintenance. Lets say that these costs are $.50 a mile. Thus, drivers who take a 4 mile trip are paying the same as the straphanger who pays $2.00 to ride the bus the same distance. That same transit rider also gets a $2.00 subsidy. Maybe transit pricing is just as "misguided and distorted" as auto pricing in that transit riders pay far less than the full cost of their rides.

Even though drivers already pay a significant price for auto travel demand for highway space exceeds supply because auto travel is perceived to be much superior to travel by public transit by the vast majority of people for the vast majority of trips. I agree that there is room for using congestion pricing to better manage that demand and perhaps generate revenue for other transportation projects. I also agree that higher highway prices plus decent alternatives to auto travel--transit, walking, biking--can lead to a virtuous cycle that will reduce our dependence on the auto at least a bit in at least some areas.

However, your assumptions that auto owners somehow pay less than transit riders or that transit pricing is "efficient" while auto pricing is "distorted" likely are incorrect. Transit pricing would be more efficient if it were distance based and used peak period pricing. Moreover, the strong demand for rail travel and the continuing erosion of the market for bus travel in the region suggest that rail and bus trips should be priced differently.

Simple Failure--The Audit and the RTA

The recently released audit of the RTA and its three service boards (CTA, Metra, and Pace) by Auditor General William Holland (executive summary here) has no blockbuster findings and is quite even-tempered in tone. Indeed, in a fine example of PR spin, the RTA issued a press release all but saying that the Auditor General had endorsed its Moving Beyond Congestion effort to obtain an additional $12 billion for the region's public transit system over the next five years. (Which is untrue, as an upcoming post will detail.)

In fact, the audit illustrates the profound failure of the RTA to exercise its existing statutory powers and perform its financial oversight responsibilities with respect to the service boards. For example, the audit found that "RTA revenues are insufficient to pay the continuing cost of programs or funding new services." (Executive Summary at 4). It found that "operating costs for the Service Boards have increased over the past five years at 6.5 percent annually while operating revenues have increased only 2.2 percent annually." (Id.) The report found that during the past five years the CTA (pg. 35) and Metra (pg. 36) have been adding service despite virtually no growth in their RTA sales tax revenue base. Pace's current service level is "not sustainable with current revenues." (Pg. 37).

Yet, section 4.11(b)(2)(ii) of the RTA Act provides that the RTA Board will not accept a proposed service board budget unless:

(ii) such budget and plan show a balance between (A) anticipated revenues from all sources including operating subsidies and (B) the costs of providing the services specified and of funding any operating deficits or encumbrances incurred in prior periods, including provision for payment when due of principal and interest on outstanding indebtedness.

If that power was not enough for the RTA to have put the brakes on the service boards spending beyond their means, the current RTA Act provides the RTA more powers to impose and enforce prudent financial measures on the service boards before accepting their budgets. Section 4.11(b)(2)(v) - (vii) of the RTA Act provides that the RTA can insist that the service boards meet financial requirements imposed by the RTA before approving their annual budgets:

The Board shall approve the [service board] budget and plan if:

. . .

(v) such budget and plan are based upon and employ assumptions and projections which are reasonable and prudent;

(vi) such budget and plan have been prepared in accordance with sound financial practices as determined by the Board; and

(vii) such budget and plan meet such other financial, budgetary, or fiscal requirements that the Board may by rule or regulation establish.

As the audit makes clear, for at least the past five years the RTA failed to use these existing statutory powers to stop the service boards from spending beyond their means. Indeed, this year, under a new administration, the RTA nonetheless approved service boards budgets with a $226 million unfunded operating deficit. This gimmick may support the RTA's marketing effort for the Moving Beyond Congestion effort, but it represents a profound failure by the RTA to perform its statutory responsibilities.

The RTA should have rejected service board budgets that were imprudent because they showed spending in excess of available revenue. This may have necessitated painful decisions--e.g., fare increases and service reductions--but it would have avoided the full-blown funding crisis that now confronts the region. As the Auditor General noted in his brief public statement: "To make matters worse, these problems were not adequately disclosed in the annual [RTA] financial budgeting and capital programming process."

Let there be no mistake. The RTA's failure to exercise its existing statutory authority over service board operating budgets is at the root of the current "crisis." What wisdom is there in vesting more powers in an agency that has been so derelict in performing its existing statutory responsibilities?

Finally Here: Auditor General's Reports

Auditor General William Holland has posted his audits of the RTA and the service boards. You can access them here. It will take time to digest the reports, but I bet they ignite a renewed round of publicity and discussion about the performance of the RTA and the service boards and their future. That is a very good thing.

Congestion Pricing: Overcoming Obstacles to Implementation

In a recent article entitled "The Political Calculus of Congestion Pricing," Professors David King, Michael Manville, and Donald Shoup of the UCLA Department of Urban Planning ponder a issue related to the old adage "if you are so smart how come you ain't rich?" The issue discussed in the article boils down to "if congestion pricing on crowded highways is such a good idea then how come it is so infrequently implemented?"

The good professors have some fun at the expense of themselves and their academic colleagues, who are confounded by such a question. After all, as nearly any economist will tell you, congestion pricing--i.e., forcing people to pay to drive on a highway when and/or where demand is high--is the most efficient way to ration a valuable resource, namely, limited amounts of highway capacity during peak travel periods. Congestion pricing reduces the amount of auto travel, thereby reducing both congestion and air pollution. Less congestion makes public transit more efficient and hence a more attractive alternative to the private auto. Congestion pricing also generates revenue that can be invested in improving the transportation system or for other uses. Yet, confound it, people stubbornly resist what appears to be so good for them.

The authors attempt to explain why. They argue that congestion pricing has widely distributed costs (e.g., toll payers) and widely distributed benefits (e.g., drivers who enjoy less congestion). What congestion pricing lacks is a motivated constituency that can get politicians and the public over the perception that congestion pricing is a burdensome new charge with few tangible benefits.

The authors suggest that congestion pricing revenue be distributed to local governments in the vicinity of a tolled highway rather than kept by the tolling agency or a central transportation authority. They believe that the promise of such revenue will encourage local governments, which wield considerable political clout, to become advocates for congestion pricing.

In its Moving Beyond Congestion Final Report, the RTA advances congestion pricing as one means to raise revenue for the region's public transit system. It appears that the RTA contemplates that such revenue would go to the RTA, which would funnel it to the three service boards, the CTA, Metra and Pace.

The three professors suggest this approach is unlikely to garner sufficient political support to win acceptance:

Freeways have regional benefits, so it might seem sensible to allocate the money to some regional authority--a public transportation or highway agency, for example.

. . . [W]hile there are some good argument for giving the toll revenue to regional agencies, they are not political arguments. A regional agency would be hard-pressed to produce a public servcie that the region's residents considered a reasonable compensation for the loss of free access to the freeways. Even spending the revenue on regional transit improvements may do little to improve the prospects for pricing. In the United States a political weak and unorganized minority rides public transit, which dims the chance of effective political support.

(Pg. 2). Indeed, congestion pricing has been successfully implemented only in cities like London and Stockholm where transit riders make a up a majority of the commuters in the affected areas and presumably have some political strength.

The article suggests that to garner sufficient support for a system of congestion pricing, the revenue should be distributed to the local governments that are in the vicinity of the tolled roads. The authors argue that few restrictions should be placed on local government use of this revenue, but a broad limitation that it be used for transportation purposes--roads, transit, bikeways, etc.--should not dampen local government support for a system of congestion pricing very much. Maybe such a system would create a virtuous cycle--less congestion making transit more efficient generating revenue that local governments can use to improve the transportation system--including local transit--from the ground up.

Professor Shoup, by the way, is the author of a recent book entitled "High Cost of Free Parking," an analysis of the baleful effects of free parking, that has created a buzz in certain planning circles.

Short Hiatus

I'll be back by no later than Friday.

Please check back then.

What's So Special About The MTA?

In recent remarks Steve Schlickman (RTA Executive Director) held up the Metropolitan Transportation Authority in New York as the model for the way this region should roll out its public transit. Schlickman was referring specifically to the MTA's well-funded and regularly repeated five-year capital plans, which have vastly improved the New York transit system over the past 30 years and resulted in significant ridership gains. He contrasted the New York approach to capital investment in pubic transit to the Illinois approach, which he described as a five-year plan followed by five years planning for the next five-year plan.

The purpose of this post is to summarize some of the other ways the MTA is different from the RTA and the service boards. Understanding these differences between the MTA, with its operating agencies consolidated under a single board of directors answerable to the State of New York, may point the way to move beyond the current weak oversight model that characterizes the RTA and the three service boards (CTA, Metra and Pace), each of which have their own boards of directors whose members are selected locally for the most part.

Organization: The MTA has seven operating agencies. These operating agencies include central city bus/rail (NYC Transit), commuter rail (Long Island Rail Road, Metro-North Railroad), suburban and outer borough bus service (Long Island Bus, Bus Company), an agency responsible for certain bridges and tunnels serving Manhattan (Bridges and Tunnels) and an agency responsible for capital construction (Capital Construction).

All of these agencies report directly to the MTA board. Managers in each agency thus have a clear line of reporting to a single board of directors. There are no separate boards covering each or some of these operating units. There is no permanent oversight agency over the MTA. When there are disputes between the agencies, the MTA board is the the unquestioned and final arbiter.

In contrast, in this region every service board has its own board of directors. Service board managers are primarily accountable to the board of their agency rather than the regional transportation authority. The RTA is neither empowered nor inclined to be the final arbiter of disputes between the service boards. Those disputes tend to linger and fester in the politicized environment in which the RTA and the service boards operate.

Governance: The MTA is governed by a 17-member Board. Members are nominated by the Governor, with four recommended by New York City's mayor and one each by the county executives of Nassau, Suffolk, Westchester, Dutchess, Orange, Rockland, and Putnam counties (the members representing the latter four cast one collective vote). Nominees are confirmed by the State Senate. This arrangement gives the State of New York, and especially the Governor, a great deal of influence over the MTA. At least in theory, this influence should allow the State to align the MTA with State transportation, land-use and environmental policies.

In contrast, the State of Illinois plays almost no role in the governance of the public transit system in northeastern Illinois. The State does not appoint any members of the RTA, Metra or Pace boards. The State's only appointment powers are with respect to three of the seven CTA board members. Where appointments to the MTA are from the top (e.g., Governor) down, the appointments to the boards of the RTA and the service boards are from the bottom (e.g., mayors and county chairmen) up. Given the inevitably more parochial orientation of the folks who appoint the directors on these boards, it is not surprising that cooperation within the RTA family has been somewhat elusive.

Funding Streams: The MTA has a variety of funding streams. These funding streams include statutory percentage shares of a variety of state taxes and fees, including petroleum business taxes, motor fuel excise taxes, motor vehicle registration fees and drivers license fees. Other revenue sources include regional mortgage recording taxes, a real estate transfer tax, and state and local subsidies. (See here at pages 84-86 of 128). Another significant revenue stream is revenue from the bridges and tunnels controlled by the MTA, which account for 12 percent of the MTA's revenue. (Here at pg. 8-128). Tax and fee rates appear to be uniform through the MTA's service region, although more research needs to be done.

In contrast, the RTA must rely on one primary funding source, the RTA sales tax plus the 25 percent State of Illinois match through the Public Transportation Fund. State funding, including the additional grants for reduced fare reimbursement and paratransit, must be appropriated. The RTA sales tax rate in not uniform, but varies with political geography. In Cook County the rate is 1.0 percent and in the collar counties the rate is 0.25 percent.

Funding Allocation: It appears that the MTA is not bound by any statutory allocation formulas when it comes to the distribution of capital and operating dollars. In contrast, the RTA Act imposes a rigid geographic formula for how RTA sales tax revenue is divided between the three service boards and the RTA. This formula produces anomalies (e.g., Metra gets no money from the City of Chicago despite substantial service in the City and the CTA gets a disproportionately small share of suburban Cook County dollars relative to its service share in that region) and hard feelings as some service boards do better than others under the formula. If there ever was any link between the funding formula and transit needs, that link is obscured today as a result of all the demographic changes in the region since 1983.

Capital Projects: The MTA has a Capital Construction agency devoted to managing the MTA's major capital expansion and Downtown Manhattan transit infrastructure projects. It appears that the other MTA agencies continue to do more routine capital projects (e.g., rail line rehabilitations and acquisition of rolling stock). Responsibility for deciding which capital projects get funded and in what order are made by the MTA board.

In contrast, in this region all three service boards develop capital construction and system expansion programs on their own. The RTA even has its own capital program, most notably the failed personal rapid transit (PRT) prototype system that chewed up millions of dollars before it was finally cancelled in 2000.

The RTA does no ranking of these capital projects in terms of their cost effectiveness and overall benefit to the region's transportation system. CATS, the region's federally-chartered metropolitan planning agency, has been equally supine. The region follows a "you eat what you kill" approach, where the service boards compete--often with each other--to chase down federal grant money for their projects. The RTA then dutifully approves them. In addition, for years the RTA has imposed a fixed allocation of capital dollars that gives one service board (Metra) a much larger share of capital dollars relative to ridership share.

Cross-Modal: The MTA's Bridges and Tunnel agency gives the MTA some control over auto traffic accessing the central urban core via congestion pricing and control over the bridge and tunnel capacity. Through pricing and capacity limits the MTA can drive customers to transit (and vice-versa). Likewise, the MTA has the ability to coordinate prices on certain roads and rail lines serving the same corridors.

In contrast, the RTA has no equivalent control over roadways even though it runs in crowded highway corridors such as the Dan Ryan, Eisenhower and Kennedy Expressways. Even if IDOT implemented high occupancy toll lanes in these expressways or the City of Chicago implemented cordon style highway pricing around the Loop, the RTA and the service boards would neither share in the revenue nor be in a position to coordinate road and transit pricing.

* * *
Steve Schlickman got a wistful look in his eyes when talking about the willingness of the New York to increase and sustain the State's investment in public transit. Maybe the New York legislature's willingness to do so is directly related to the choice New York made when the MTA was formed in 1968, a decade before the first incarnation of the RTA. New York chose a single entity incorporating multiple operating units under the single board whose members are selected by the State to secure the State's interest in the New York public transit system. Over the years that approach has been successful enough to persuade the New York legislature to step up and continue to provide sufficient funding for the MTA system. (Indeed, in some years the MTA has run budget surpluses!)

In contrast, Illinois chose a decentralized and balkanized public transit system with a weak oversight agency. That choice reflected the bitter city vs. suburban partisan politics of the time, when figures like Pate Phillip and Harold Washington were ascendant. While the General Assembly's choice of the current model may have made sense at the time, over the years it has not proven to be as successful as the MTA model. This is evident from the widespread dissatisfaction with the performance of the transit system, soon to be crystallized in the final draft of the Auditor General's performance audit. The Governor's proposed FY 2008 budget, which decisively rejected the RTA's Moving Beyond Congestion operating funding plan, is yet another signal that the State of Illinois is unwilling to step up its financial support so long as public transit in northeastern Illinois is organized and delivered in its current form.

This assessment is not meant to denigrate the efforts of the management and employees of the RTA and the service boards to try to deliver quality transit services. But just as good people sometimes find themselves in bad relationships, the RTA and service boards find themselves in a sub-par organizational structure, as the MTA's relative success only illustrates.

It appears that public transit issues are not at the top of the agenda of any of the key Illinois political leaders. Who, then, is going to step up with a package of true reforms that will result in a unitary public transit system for northeastern Illinois headed by a board that is aligned with State priorities and engenders the confidence of the Governor and the General Assembly such that they are willing to support an increased level of investment in public transit?

Moving Beyond the RTA Oversight Model

Representative Hamos' bill to vest the RTA with limited additional authority and responsibilities begs the question whether it is time to reexamine the current model of having a permanent oversight agency like the RTA over the separately managed service boards that operate the region's public transit system. The Governor's rejection of the Moving Beyond Congestion initiative in his proposed FY 2008 budget gives this question added urgency. If the experience of other major transit systems is any indication, it is time to give serious consideration to moving beyond the current permanent oversight model.

An oversight agency can offer a fresh and broader perspective on the problems facing the agencies it oversees. If properly empowered it can take hard and unpopular, but necessary, measures to restore the agencies under its purview. An earlier post outlined these benefits and suggested that an emergency oversight agency of limited duration and broad powers might be a useful tool to improve the financial condition and operational performance of the region's public transit system before transitioning to a more permanent new operating and governance structure.

There are major disadvantages to the oversight model, however, that emerge and are exacerbated the longer a separate oversight agency is in place over operating agencies:

Personnel: An oversight agency like the RTA is unlikely to have control over hiring and firing of key personnel in the operating agencies. Good people are the key to accountability and and strong operating performance, yet the RTA has no control over personnel at the service boards.

Divided Loyalties and Lines of Communication: There is an inherent problem of serving two masters that confronts the employees of the operating agencies being overseen. For example, the employees of the three service boards have a reporting structure that goes up to their board of directors. The RTA and its board of directors is placed on top of this reporting structure, but the fit is uncomfortable. Employees of a service board are likely much more responsive to their agency's board of directors, with whom they interact on a regular basis, than to the RTA and its board, which are much more distant and not involved in their day-to-day operations.

Oversight Agency Accountability: Emergency oversight agencies often have the benefit of clear statutory direction, a limited time frame to accomplish their tasks, and a sense of urgency stemming from the problems prompting the establishment of the oversight agency. The emergency oversight agency is held accountable according to some definite standard (e.g., has the school's budget been brought back into balance). The longer the oversight agency is in place, the harder it is to hold it accountable.

The service boards are accountable to the RTA for a few important things, like approval of their capital programs and operating plans. To whom is the RTA accountable? Under the RTA Act, the RTA supplies certain information to key State of Illinois officials (e.g., Section 4.13) The State can cut off the operating subsidies paid to the RTA (i.e., the Public Transportation Fund match of the RTA sales tax receipts) if the RTA fails to approve balanced budgets in a timely fashion. (Section 4.09(b)(2))

Short of the extreme remedy of cutting off funding for transit operations, the State of Illinois has few tools to hold the RTA accountable for its performance. The State has no power to appoint even one RTA board member, even though the State provides hundreds of millions of dollars in operating subsidies each year. Under the current RTA Act neither the Governor nor the General Assembly can remove incompetent RTA leadership.

Expertise: There is the inherent problem of having a long-term oversight agency over transit agencies that operate complex systems with lots of technology in the face of daunting operational and political challenges. At best, the oversight agency, which has no operating responsibilities and limited or no transit operations expertise, lacks the credibility with the operating agencies to prompt them to make operational improvements. At worst, the oversight agency meddles in transit operations in an unproductive and duplicative fashion. The RTA's failure over the last 25 years to deliver a universal fare card allowing travel on all public transit services in the region is a perfect illustration of this problem.

These inherent problems in the areas of expertise, accountability, divided loyalties, and personnel limit the long-term effectiveness of oversight agencies. It appears that most metropolitan areas in the country have rejected the oversight model that the RTA, its Moving Beyond Congestion proponents and even well-intentioned legislators like Representative Hamos seem determined to perpetrate.

In most major metropolitan areas the operating entities (i.e., service boards) are consolidated within one agency under one board of directors. There are no separate operating agencies with their own boards of directors acting under an oversight agency with its own board of directors. Here is a sampling of such transit agencies: MBTA (Boston); NY MTA (New York City); SEPTA (Philadelphia); WMATA (Washington D.C.); LA-Metro (Los Angeles).

There are a few exceptions. The most notable one is in the Bay Area, which is served by a set of transit agencies (e.g., BART, SF-Muni) that are separately chartered and operated under separate boards. However, as we will discuss in a later post, the oversight agency in the Bay Area has a much more substantial role than the RTA.

Representative Hamos' bill represents an incremental step towards empowering the RTA. Maybe the time for such incremental steps has passed. Instead, what the region may need is to abolish the RTA and consolidate the CTA, Metra and Pace into a single new agency with a single board of directors and full operational responsibilities for public transit in the region. Why inch towards a transit agency that consolidates operating responsibilities and governance in one organization, which is the situation in most metropolitian areas, when the times call for bold step in that direction?

Governor's Proposed Budget: Lean Times For Public Transit

Governor Blagojevich announced his proposed FY 2008 budget today. It is evident that the RTA's Moving Beyond Congestion initiative did not make a positive impression on the Governor and his staff.

The proposed amounts for the RTA system are listed (pgs. 356-58 of 488) with the previous year's enactment in parentheses:

FY 2008 Proposed Amounts For RTA System (in thousands)

Reduced fare reimbursement: $37,318.1 (no change from FY 2007)
Paratransit: $54,251.1 (no change)
RTA Debt Service: $135,000.3 (no change)
RTA Operating Assistance: $193,000.0 ($186,900.0 in FY 2007)
Total: $419,869.7 ($413,769.7 in FY 2007)

Recall that in the Moving Beyond Congestion Final Report RTA asks for an additional $400 million in new operating subsidies, an increase of almost 100 percent. What the RTA is getting in the Governor's proposed budget is just a 1.5 percent increase.

The State support for the RTA in the FY 2008 proposed budget is only 2.7 percent higher than in FY 2006, but it is 12.9 percent higher than the FY 2005 budget. This because in FY 2006 the State for the first time made a contribution against the cost of providing paratransit service in northeastern Illinois. The contribution level--$54,251,600--stayed the same in FY 2007 and no increase is proposed in FY 2008.

The RTA's proposed allocation of almost $414 million to public transportation in the six-county region represents almost one-fifth of IDOT's total operating budget for the entire state.

Maybe the signal being sent by the Governor's proposed budget to the RTA and the service boards is this: Shrink the system to fit the RTA sales tax income stream or come to the General Assembly with a plan to radically revamp the way the region does transit and that gets the Governor and the General Assembly excited about increasing the State's investment in the region's public transit system.

The Moving Beyond Congestion effort was no doubt well-intended and folks worked desperately hard on the strategic plan. The fact that the Plan did not move the Governor to increase support of public transit indicates that it is time to put the Plan aside. It is no longer credible to push for huge amounts of new transit funding without a commitment to make major changes in the way the region's public transit system is organized and operated.

The Governor's proposed capital budget will be released separately. Maybe transit will fare better there. Stay tuned.

Waiting For The Dough: Today's Public Transit Panel Discussion

The panel discussion this morning at the Union League Club featured Representative Julie Hamos, DuPage County Chairman Robert Schillerstrom, Crain's Chicago Business reporter Greg Hinz and Steve Schlickman, the RTA's Executive Director.

In their opening remarks, both Representative Hamos and Greg Hinz described the current situation in Springfield as "surreal." By surreal, they meant that huge new spending and revenue proposals (e.g., universal health care, gross receipts tax) are emerging and yet regional transit problems do not yet have priority status.

Representative Hamos suggested that the current funding problems will be handled incrementally. The transit system's capital needs will be addressed in the State's capital program. Costs for paratransit and related van pool services are growing rapidly and should be dealt with on their own. Likewise, the CTA's pension system woes will be dealt with separately. These incremental measures will leave a much smaller and more manageable operating deficit figure for mainline transit service for the General Assembly to face.

Greg Hinz stressed that the regional transit system may miss out on a "once in a lifetime" opportunity in the General Assembly to secure increased funding and structural reforms. His view is the Mayor of Chicago is the key to pushing through a transit agenda. Hinz described the Mayor as "AWOL on transit issues," even speculating that the Mayor's perceived "lack of a visceral interest in transit" is due to his upbringing on the transit-poor southwest side of Chicago.

Chairman Schillerstrom stressed the importance of reforming the RTA so that it is an effective regional transit agency with the power, for example, to tell the service boards where to put routes. If the RTA is so reconstituted, and if the RTA recognizes the need for expanded transit service to the burgeoning population and job centers in the suburbs, then increased funding for regional public transit is possible.

Steve Schlickman in his remarks did not discount the need for reforming the RTA, but stressed that we cannot let debate over the particulars of the RTA's statutory duties and responsibilities obscure the fact that the service boards have major and immediate funding needs. His view is that RTA reform will do little to close that funding gap.

The questions from the crowd were pretty unimpressive, but did generate some interesting comments by the panelists:

• Chairman Schillerstrom signaled that the suburban county chairman would support closing the gap between the 1 percent RTA sales tax in Cook County and the 0.25 percent sales tax in the collar counties if, and only if, that increase would lead to substantially more public transit service in the collar counties.

• The RTA's Chairman, Jim Reilly, is personally involved in negotiations between the CTA and its unions concerning ways to help resolve the CTA's pension funding crisis and this has been his top priority since joining the RTA.

• The Chicago Mayor's Office is resisting even Representative Hamos' modest package of RTA reforms. (She seemed none too happy to hear this.)

• The issue of RTA governance is a very hot potato. Chairman Schillerstrom did state that he (and presumably at least some of his suburban colleagues) are comfortable with the current arrangement, where supermajority vote requirements for major RTA decisions require City/suburban consensus. Representative Hamos said that her RTA bill avoided the governance issue precisely to avoid stirring up political passions. Several people faulted the regional transit task force several years ago chaired by former congressman William Lipinski for focusing too much on the question of governance.

• The panel refused to get drawn into the old city vs. suburbs dynamic despite an audience question to the effect that the suburbs feel like they are being taken advantage of under the current RTA governance system and funding structure. Greg Hinz reminded the questioner that the relatively low density in many suburban areas, which is a result of the land-use policies implemented by suburban governments, makes public transit service in the suburbs more difficult and more expensive to provide than transit service in more densely settled areas such as Chicago. Steve Schlickman stressed that all three service boards are facing operating deficits, not just the CTA. Chairman Schillerstrom emphasized that some suburban areas, especially his DuPage County, have increased population and employment density that make them far better suited to transit than they were 30 years ago, when most commuting was to jobs in downtown Chicago.

• Steve Schlickman sharply criticized his predecessors at the RTA for having failed to put together a strategic plan since the RTA took on its current form in 1983. He indicated that it was the RTA's failure to have a strategic plan in place that delayed the RTA's push more transit funding until this year.

• Schlickman also pointed to the Metropolitan Transportation Authority in New York City as a model. The MTA has seen a continuous series of 5-year multi-billion dollar capital plans that has rebuilt the transit system in that region. Schlickman contrasted that disciplined approach to capital investment with the Illinois approach, which he described as "a five-year plan followed by five years planning for the next five-year plan." (Interestingly, there is no RTA-like oversight agency overseeing New York's transit providers; rather, the service agencies are consolidated within the MTA. We'll explore the need to move beyond the RTA oversight model in an upcoming post.)

• Greg Hinz suggested that the responsibility for capital planning should be vested in the RTA to avoid unseemly competition between the service boards for capital dollars. (This approach will be explored in an upcoming post as well.)
  

The pervasive theme running throughout the panel session was waiting. Waiting for the 600-700 page audit report by Auditor General William Holland, which will be released any day. Waiting for the Governor's proposed budget. Waiting for the Mayor of Chicago to make a strong pitch for transit--or not. Waiting for transit issues to capture the attention of the public and the legislative leaders. Waiting for the dough necessary to operate and maybe even expand the region's public transit system.

Slow Byrne

Dennis Byrne, the Chicago Tribune columnist, is the kind of guy who gives dyspepsia a bad name. The ascerbic and put-upon tone of his columns bring to mind a suburbanite hunkered down in a bomb shelter plastered with Goldwater posters, convinced that the city is the den of all evils.

Byrne's March 5th column is entitled "Transit 'Reform,' Yet Again." The theme of the column is that the City of Chicago has stood in the way of meaningful reform of the region's transit system and that "there is no one willing to crack down on the CTA--the main source of the RTA's problems--because no one dares take on the city's power, meaning Richard M. Daley's power."

Byrne is never one to let the facts, such as years of underfunding of the CTA's capital needs relative to Metra and the much higher capital and operating subsidies supporting Metra and Pace riders--mostly suburbanites--relative to CTA riders, stand in the way of a good jeremiad.

Nor does Byrne acknowledge that the CTA has been able to increase its ridership since 1995 even though the population in its service area has dropped, while Pace has lost ridership during the same period even though the population growth in its collar county service area has grown substantially. (See here at pg. 45 of 50) So much for the CTA's purported incompetence in running a transit system relative to the other service boards.

Simply put, the CTA is the "main source" of the RTA's problems because the CTA still carries almost 80 percent of the public transit customers in the region. The CTA does have serious labor cost problems, among other huge challenges, but to single out the CTA and pummel it as Byrne has done is just grandstanding for Byrne's hoped-for suburban readership constitutency.

Byrne's assessment is important, however, not because it is based on the facts but because it reflects a powerful strain of nativist suburban opinion that will be just as big an obstacle to meaningful change in the regional transportation system by the General Assembly as the purported greediness of the City of the Chicago:

This is more than a matter of rivalries between agencies. It is a reflection of the deeper political divisions that drive the agencies' actions and inactions. There is no one willing to crack down on the CTA--the main source of the RTA's problems--because no one dares take on the city's power, meaning Richard M. Daley's power.

And Daley can't reform, even if he wanted to, the CTA, as he claims to have done with the schools and the housing authority, without the legislature's help, meaning our money. But the state isn't in any better shape with Gov. Rod Blagojevich's extravagant and utopian promises for other pet projects. The pressure is on.

There'll be a lot of talk about giving the RTA a stronger hand, to improve coordination and so forth. But will it be all talk? More important, will a Democratic governor and a Democratic legislature really be willing to step over the line and crack down on the CTA, especially in light of Daley's landslide re-election?

Or will the legislature again just reshuffle the organization chart to make it look like something has happened, while continuing business as usual?

Let's hope that the divisive spirit of Pate Phillips that Bryne conjures up with his column does not return to haunt the General Assembly and prevent meaningful change to how the region funds, operates and governs its public transit system.

All Star Panel On Transit Issues Tuesday Morning

An all star panel will be speaking at the Union League Club of Chicago Tuesday morning on public transit issues. There is food at 7:30 a.m. and the program runs from 8 a.m. to 9:30 a.m.

There is a $20 admission fee. Here's the link to registration and more information:

http://www.65west.org/upcoming.asp

Here's the blub:

"Keeping Mass Transit on Track--Can it be Done?"

Tuesday, March 6

The Public Affairs Committee invites you to attend the fourth program in the 2006-2007 "Breakfast @ 65 West" series, which will offer an in-depth examination of mass transit in the Chicago region.

The program focuses on the formidable challenges facing mass transit systems in the Chicago region, including aging infrastructure and obtaining adequate funding to sustain their operations. Examples include the CTA, which faces an estimated $5.8 billion in repair costs and has $200 million in unfunded pension obligations. The Regional Transportation Authority (RTA) is also seeking increased mass-transit funding and a multiyear state capital-improvement program. How will lawmakers in Springfield respond to these needs? How can we best balance the mass transit interests of city vs. suburban residents?

Please join us to hear our expert panelists address these questions. They include:

• State Representative Julie Hamos, Chair of the Illinois House Mass Transit Committee
• Greg Hinz, Senior Columnist for Crain's Chicago Business
• Steve Schlickman, Executive Director, Regional Transportation Authority (RTA)
• Bob Schillerstrom, Chairman, DuPage County Board

Bring your Metra, CTA or Pace pass (or all three--thanks, RTA) and fight through the crowd for autographs.