Thursday, June 28, 2007

Jim Reilly Goes "PTFffffffffff"

It has to be frustrating as all get out to be Jim Reilly, the RTA's Chairman. Your staff puts together a glossy, comprehensive funding plan that makes a credible case for public transit. You hold together a somewhat dysfunctional family of service boards. You build a regional consensus for increases in transit funding coupled with enhancements to your agency's powers. The editorial boards line up in your favor. You help broker an unprecedented five-year labor agreement at the CTA that removes the biggest regional stumbling block to your plan.

And then, week after week, you go down to Springfield to talk sense to members of the General Assembly and the Governor. Your reasonable arguments and pleas to avoid service cuts and fare hikes don't yield the action you want and think you deserve. The Governor says he will veto the regional tax hikes that the House has passed. The Governor's alternative, which appears to amount to looking for spare change in the back of the couch, fails to provide the stable funding increase you want. The other leaders seem content to stand pat on a limited increase in funding for public transit.

With the demise of the gross receipts tax plan there is no plan on the table that will generate the kind of revenue necessary to fund transit increases along with increases for education and health care that are higher priorities for some or all of the Springfield leaders. No one seems to get along. And no one wants to hear how much public transit needs new money.

At today's RTA Board meeting, where the RTA adopted the "doomsday" budgets of the service boards, Reilly let his frustration show. According to this article in Crains, Reilly stated:

“What’s keeping things from happening is a deadlock between the governor and the (top four legislative) leaders,” James Reilly said. “That deadlock may continue” for another four years, he said.

Mr. Reilly seemed almost certain that, barring action this year, movement next year would be nearly impossible.

“It would require a miracle for the Legislature to take action in an election year,” he said. Mr. Reilly spoke during an RTA board meeting and a subsequent news conference.

It is rarely a good thing when the leader of a legislative initiative publicly expresses such pessimism, which only starts a spiral of diminished expectations. His remarks also could be viewed as a pointed criticism of the very deadlocked people he needs to come through for transit when the current budget situation is finally addressed.

Perhaps, after months of putting a postive spin on the political deadlock in Springfield, Reilly believed that he might inspire the public to start pressuring "Springfield" if he was so pessimistic. I'm not so sure that was the right call, especially since yesterday's CTA labor deal gave him a great opportunity to proclaim a new day and try to create a self-fulfilling prophecy that the RTA and the service boards have done all that they can and are truly deserving. Or maybe he was just tired and emotionally exhausted.

Perhaps more significant than Reilly's new tone was an amendment to the fiscal note to House Amendment No. 2 to Senate Bill 572, which authorizes increases in the RTA sales tax rates and a new real estate transfer tax in the City of Chicago, both to provide more funding for the RTA and the service boards. The fiscal note and amended fiscal notes are as follows:

Original Fiscal Note, House Amendment No. 2 (Dept. of Revenue)

SB 572 (S-AM 2) would increase revenues by approximately $348 to $447 million per year. The Retailers' Occupation Tax rate increases would generate approximately $348 million per year and the Real Estate Transfer Tax would generate up to approximately $99 million per year.

Revised Fiscal Note, House Amendment No. 2 (Dept. of Revenue)

SB 572 (S-AM 2) would reduce moneys in the General Revenue Fund by approximately $131.4 million per year. Additionally, Senate Amendment 2 would increase local revenues by approximately $451 million per year. The local Retailers' Occupation Tax rate increases would generate approximately $352 million per year in local sales tax revenues and the Real Estate Transfer Tax would generate approximately $99 million per year.

Note what changed between the first and second fiscal note is the conclusion that the SB 572 "would reduce moneys in the General Revenue Fund by approximately $131.4 million per year." This extra drain on the General Revenue Fund presumably is the Public Transportation Fund match of the increased amount raised in the six-county region through new and RTA increased taxes.

The Governor opposes the increase in the RTA taxes because of his opposition to new sales and income taxes. His Revenue Department may oppose the SB 572 funding package for a more practical reason, namely, because of its impact on a General Revenue Fund that is already stretched to the limit and beyond. With no new revenue source on the horizon and unfunded priorities (e.g., healthcare, education) ahead of public transit why would they want to accept an additional $131.4 million hit on the General Revenue Fund? They also may view continued opposition to the SB 572 transit funding package as giving the Governor bargaining leverage with those legislators who favor the package.

This is all rank speculation, but why would the Revenue Department go to such trouble to prepare the amendment showing that the SB 572 package will have a major hit on the General Revenue Fund?

Does this mean that Representative Hamos and the other proponents of the public transit funding package need to go back to the drawing board and consider a plan that does not require the State to chip in? Or maybe it will soon be "we'll take what we can get" time, where the RTA and the transit funding proponents embrace what the Governor proposes with the understanding that they will seek more from the legislative leaders and hope they can get veto-proof majorities behind that additional funding.


Wednesday, June 27, 2007

One Month Temporary Budget & Transit

House Bill 3920 is the one-month temporary budget passed by the Illinois House that will allow the State to keep running through July. The Senate has yet to pass the bill.

How does transit fare? Here's a quick look. Appreciate any help from readers. It looks like the RTA is getting its full-year allocations in the first month of the year.

-- $37,318,100 for reduced fare reimbursement
-- $186,900,000 appropriated from the Public Transportation Fund to IDOT for the purposes set out in Section 4.09 of the RTA Act (Is this new money or just the funding of the State's 25% PTF match?)
-- $40,000,000 in "additional State assistance" (funds for bond repayment)
-- $95,300,000 from the Public Transportation FUnd to IDOT for "Additional Financial Assistance" (bond funds)
-- $54,251,555 for ADA paratransit funding

Again, appreciate any analysis of these numbers.

Got to catch the bus!

CTA Labor Agreement

The big news of the day is the the CTA and its unions reached a five-year labor agreement that covers both wages and pension contributions. This agreement is a huge boost for at least the CTA's funding prospects because it takes the steam out of the argument "why bail out the CTA when we don't know whether the money is going for transit or pensions." The agreement should give the legislators some comfort that the CTA is addressing its labor cost challenges and is in a position to to make good use of more subsidies to improve service.


Under terms of the deal, the CTA’s contract with two units of the Amalgamated Transit Union that represent about 10,000 workers will be extended for five years. Workers who now don’t have a payroll deduction for health care will be required to contribute 3% of their pay for health benefits, and contributions toward pensions will double to 6% of pay from 3%.

CTA pension contributions also will double, to 12% of payroll, but part of that money will be used to pay debt service on a proposed $1.5-billion bond issue that will be used to shore up an existing CTA pension plan that has been facing insolvency.

In addition, newly hired employees will be required to work until at least age 64 to retire with full benefits, up from age 55 now. And Illinois Auditor General Bill Holland will be added as an independent voice to the boards that supervise pension and health plans.


CTA President Ron Huberman said the transit agency needs about $200 million in the coming year to help cover operating and employee pension expenses, and a sustainable source of funding that would increase that figure by 3 percent a year.

If the state provides the money, heavy service cuts that have been proposed would be averted and there would be no fare increase in the coming year, he said.

Under the proposed contract, state approval also would be needed to issue pension obligation bonds. The Illinois Auditor General would get a seat on the transit authority's pension trust. Meanwhile, a health care trust would be created to manage health care benefits.


It calls for 10,200 unionized employees represented by 17 unions to receive 3 percent pay raises during the first three years and 3.5 percent in the final two years. The CTA has also agreed to double its pension fund contribution — from 6 percent of payroll to 12 percent.

In exchange for those pay raises and a no-layoff clause, active employees will contribute 3 percent toward retiree health care and double — from 3 percent to 6 percent — -their current pension contribution.

* * *

The bottom line for CTA unions is an agreement that would force bus drivers and motormen to lose money during the first year, break even in the second and finally start making money in the third year.

Even so, Darrell Jefferson, president of the Amalgamated Transit Union Local 241, believes he can sell it to his members.

“When you look at what’s going on throughout the country — we’re living in a time now when pension plans are being crashed instead of being brought back to life. And I think we’ve done a remarkable thing here,” Jefferson said.

CTA Press Release:

The contract affects 10,200 CTA employees who make up 88 percent of the CTA workforce. The agreement covers the period of January 1, 2007 through December 31, 2011. The provisions of the award, including pension and healthcare reforms, are contingent on action from the state legislature.

Conditioning the agreement on positive action by the General Assembly is a great way to pressure the legislature into action.

Tuesday, June 26, 2007

Scotty, Bean Kirk Back To D.C.

U.S. Representatives Mark Kirk and Melissa Bean rolled their Suburban Transportation Commission into Chicago recently. The tone of the meeting can be discerned from Representative Kirk's press release, entitled "Kirk: A Suburban Tax Increase Should Not Be Used to Bail Out the CTA."

The Daily Herald's article reported: "Federal lawmakers from the suburbs railed against the Chicago Transit Authority Monday, while also calling on the governor to find cash to expand Metra."

According to Kirk's numbers, the collar counties will contribute $130 million (32.5%) of the new regional sales tax money dedicated to transit. Together Metra and Pace would receive 43.6% of this new money, which is more than double their share of transit riders and more than their current share of operating subsidies.

The RTA sales tax rate dedicated to transit in the suburbs after the increase (0.50%) will remain less than half the tax rate in Cook County (1.25%). (Under SB 572 the collar counties would pay an additional 0.25% that they could use for highway or transit purposes.) This despite the fact that transit trips in the collar counties soak up far more public subsidies on average than transit trips in the urban core of this region.

In his press release Representative Kirk harped away at the CTA pension problems:

Under proposed legislation, the State of Illinois would increase taxes on collar county families,” Congressman Kirk said. “Half the suburban revenue would go to the RTA and half would return to each county. Of the $400 million in new suburban tax revenue going to the RTA, 60 percent would be spent on the CTA’s pension deficit. The plan would provide no funds for Metra’s STAR line – leaving federal funding unclaimed – while bailing out the CTA’s pension fund.

Of course, a somewhat charitable view of the CTA's pension problems is that the CTA raided its pension funding as a last ditch effort to provide the most cost-effective service on a per trip basis in the region to the most disadvantaged people of this region during a period when its share of operating and capital funding was kept well below its trip share by the RTA.

I'm sure outraged by the facts marshaled by Representative Kirk, but perhaps not in the way the Suburban Transportation Commission intended.

The Commission also made much of the Auditor General's report to beat up on the CTA: "Congressman Kirk and the Commission also questioned CTA President Ron Huberman regarding the implementation of Auditor General recommendations to address wasteful spending practices and boost system efficiency."

Yet, in strongly advocating that the State match federal funding set aside for the STAR Line the Commission ignored the Auditor General's recommendations that the RTA and the service boards should concentrate on restoring and upgrading the current system before undertaking major new system expansions like the STAR Line.

Maybe we need someone to set up an Urban Transportation Commission and hold hearings in the collar counties to beat up Metra and Pace for focusing on new and expensive capital projects like the STAR Line when they lack the resources to maintain their existing systems. When Representative Emanuel gets done filleting V.P. Cheney maybe he can start asking some hard questions of suburban officials about (1) just how many rides per million of capital dollars will the STAR line generate, (2) how much it will cost to operate the STAR line, and (3) why proponents of the STAR Line are so willing to ignore the Auditor General's recommendations to shelve system expansion projects until the current system is back in order?

Monday, June 25, 2007

Bus Transit Energy Efficiency: Local Data

A previous post suggested that transit buses may not be all that energy efficient, especially as average passenger loads have decreased over time. This undercuts the oft-made argument that heavy public investment in transit will help solve the energy crisis or combat global warming.

Today's article by Jon Hilkevitch entitled "Cutting Cost of Hybrids" provides some local data on that question. It reports that CTA's standard buses get 3.4 miles per gallon of diesel fuel.

The CTA's 2005 report for the National Transit Database states that the CTA bus system had 781,977,753 annual passenger miles and 66,811,532 annual vehicle miles. Simple division indicates that the CTA was averaging 11.7 passengers per bus.

3.4 miles per gallon times 11.7 passengers equals 39.78 miles per gallon per passenger. That level of fuel efficiency is met if not exceeded by existing hybrids such as the Toyota Prius and the Honda Civic hybrid. If two people travel in a vehicle that gets 20 miles to a gallon, their trip consumes less fuel on a per passenger basis than if they ride the bus.

If and when the CTA switches to hybrid technology, its mileage will increase to "more than 5 miles per gallon" according to the article. Let's be optimistic and assume that at some point in the next 15 year bus replacement cycle the CTA's bus fleet's fuel efficiency will double, so that buses will go 80 miles per gallon per passenger.

That level of fuel efficiency is likely to be matched by at least some of the hybrids and all-electric vehicles zipping through the congestion pricing cordons in the region 15 years from now. To the extent that more than one person occupies each private vehicle, the per passenger energy efficiency of private vehicles may exceed that of the bus even if their gas mileage is less than that of the bus (e.g., 2 people times 40 miles per gallon equals 80 miles per gallon per person).

This slicing and dicing of the data likely understates transit's potential contribution to energy efficiency. First, if the CTA can increase average bus passenger loads its energy efficiency will go up accordingly. As suggested in yesterday's post, the CTA might be able to increase passenger loads and reduce costs without inconveniencing customers by running fewer buses but supplying customers good bus arrival time information through a system like TriMet's Transit Tracker.

Second, bus transit helps support high-density transit-oriented development. Such development encourages people to take trips by non-motorized means, by walking or biking, which increases overall energy efficiency.

Third, the energy required to manufacture, market, store and repair private autos is likely higher on a per person basis than the energy required to procure and operate a transit bus.

In short, bus transit's energy efficiency currently and in the foreseeable future is nothing to write home about compared to the energy efficiency of private vehicles. Transit's biggest contribution may be in fostering communities that are not auto centric and consume less energy than the suburban communities where all transportation is by car.

Sunday, June 24, 2007

It's Coming Up Roses: Can Good Information Trump Short Headways?

I've passed through Portland, Oregon, the Rose City, in recent travels. Tri-Met, the local transit system, is quite impressive. (Fact sheet here.) The Tri-Met rail system is growing steadily. Ridership has been increasing over the years. It appears that a payroll tax levied in the three-county area served by Tri-Met, has provided a solid funding base, so that transit fares provide under 25 percent of Tri-Met's operating income.

What really impressed me, however, was the quality of customer service. Tri-Met has done a good job of supplying its customers with accurate next bus/next train information through its Transit Tracker system.

From your desktop you navigate to your bus or train line and then to the stop nearest you. Transit Tracker will give you the real arrival time for the next two vehicles. You can even get a countdown in a pop-up box. Simple, neat, fast and, in my limited experience, accurate. No clunky maps. Just information.

Tri-Met does just as well for its customers in the field. Each of its bus stops has a number. Many of these bus stops have bus shelters with a nice easy-to-read schedule and route map. Some others have poles with schedules in a compressed format. But Tri-Met does not stop with posted schedules. Simply call a phone number listed on all bus stop signs and punch in the bus stop number at the prompt. Within seconds a recorded voice will tell you when the next vehicle will arrive.

It is a very cool system. Once I was dawdling at the hotel and found that a bus I wanted was arriving a block away in two minutes. I dashed out of the hotel and high-tailed it to the bus stop, arriving just in time for the bus. When shopping one rainy day I took note of the bus stop number nearest the store. When I was wrapping up on the shopping I called in the bus stop number and timed it so I had to stand outside in the rain for under a minute.

It appears that the private sector may be getting involved. I noted one establishment next to a streetcar line had a scrolling sign showing next train arrival information in a location easily seen by its customers. What a great convenience for transit customers, and it probably didn't cost Tri-Met a penny.

In a past post I've suggested that accurate next vehicle arrival data is more important to customers than service frequency. In many cases, customers can plan around a 20-60 minute headway if they know with certainty when the next vehicle will arrive. They will be infuriated, however, if they just miss a bus and have no idea when the next one will be arriving even if the scheduled headway is less than 20 minutes.

It remains to be seen if the new CTA administration and the possibly "reformed" RTA will be willing to roll out a similarly customer-friendly transit tracker system in this region. Will they make the data and their application(s) open source so that third-parties can develop custom-friendly applications (e.g., next vehicle arrival screensavers and widgets)?

Would you trade say a 10 percent reduction in service on your bus or train line if you had easy access to next vehicle arrival time information like that available to the good folks of Portland?

Thursday, June 21, 2007

Chicago Congestion Fee: Some Initial Reactions

Alderman Burke's proposal to study the imposition of a London-style congestion fee system in Chicago is probably the most interesting thing to have emerged from the seemingly endless Moving Beyond Congestion effort to raise more money for transit in this region.

The Alderman didn't help the cause of the congestion fee system by taking the bait of the reporters setting up yet another Chicago vs. suburbs battle:

And what about those who consider a congestion fee a back-door city income tax on suburbanites who work in Chicago?

"One could argue that, since they're using our streets and not paying the wheel tax that Chicago residents pay, that it would be a fair way of spreading around the responsibility for funding some of our expenses," the alderman said.

This provoked Dennis Bryne to emerge from his suburban bunker and fire a blast at the concept of congestion fees:

If nicking suburbanites for the costs of clogged downtown streets is the real purpose of Burke's proposed ordinance, why not go all the way: Impose a whopping toll or fine only on anyone who drives into downtown without a City of Chicago sticker? That way Burke would get the huge revenue stream he wants for the money-sucking CTA, and Chicagoans themselves would get to enjoy a less congested downtown, without having to pay a toll. Except that such a scheme probably would be illegal, because (A) public streets by law are equally public, and (B) the taxes of every motorist in Illinois help pay for city streets.

Byrne allows that there is "something appealing" about a congestion fee because those that are using a scare resource (highway space) and imposing costs on others (congestion/air pollution) are paying at least some of these costs.

Nevertheless, he comes down against congestion fees in the end. His argument is that congestion is the product of the dense urban environment at the core of the region. That dense urban environment no longer is necessary in his opinion for people to carry on most businesses:

Maybe a vehicle congestion tax isn't such a good idea after all. If congestion is the real problem with downtown, then maybe we should rethink what downtowns should look like.

Today's downtown is a hand-me-down from the late 19th Century, when technology forced people into more face-to-face communications. You could use the telegraph (assuming you wanted to wait for the messenger) or a novelty called a telephone, which wasn't so grand because the person you wanted to speak with didn't always have one. Sellers, buyers, suppliers, traders, lawyers, clerks -- they all had to communicate with each other, and that meant they had to be near each other, if not face-to-face. Also, people couldn't commute long distances; they could live no farther than the end of the horse-drawn streetcar line. Thus, skyscrapers and high downtown densities.

But those densities might be obsolete thanks to the telecommunications revolution. You can go through an entire day at the office without actually seeing a seller, buyer, supplier, trader or lawyer. It's why Sears could move its giant merchandise group out, over the horizon, to Hoffman Estates. It's as if congestion is the price we pay so some people can "do lunch" together.

Byrne thus asks why are we subsidizing a congested downtown through mass transit subsidies and the like when most business activity can be done in a less dense environment. He concludes that congestion fees address a problem of the government's own making through a variety of subsidies of downtown businesses, including transit subsidies.

Byrne's piece thus poses the fundamental question whether disinvestment in public transit serving downtown Chicago will have a harmful effect on the overall Chicago economy. Contrast Byrne's sanguine view that businesses will shift to less dense areas suitable for today's electronic-based functions conflicts with that of the Metropolis 2020 folks, who warned recently that keep public transit funding at current levels will be an "unmitigated disaster for the economy of northeastern Illinois." (See also warning that cuts in SEPTA service would harm Philadelphia economy.)

Some quick thoughts:

1. Byrne is almost certainly wrong that today's businesses no longer need face-to-face interactions and thus do not need high-density working environments. While it is true that runners, messengers and the like have been replaced by electronic data transmission, face-to-face interaction is still the key to creativity and high-level business work. Bryne's dismissive statement that "it's as if congestion is the price we pay so some people can 'do lunch' together" shows a profound lack of appreciation for the kinds of environments that generate long-term, high-quality economic growth. As one who has worked in both center city and suburban environments, I can attest to the dulling effect of suburban isolation on business creativity.

2. Byrne may be wrong that the government is more heavily subsidizing congestion than it is subsidizing sprawl. A recent study by a group called Good Jobs First funded by the Ford Foundation found that State of Illinois job subsidies were targeted to suburban businesses rather than businesses in the urban core. While this is but one type of subsidy it may be indicative of heavier public financial support for suburban sprawl than Byrne is willing to acknowledge.

3. An interesting question is whether congestion fees, by speeding auto traffic in the Chicago central area, would make the area less pedestrian-friendly and ultimately lead to lower densities. Hopefully, the City would not succumb to the siren sound of the traffic engineers who would want to repeat stunts like reducing pedestrian crossings across Lake Shore Drive in an effort to increase traffic speed, volume and hence revenue.

4. Byrne and an occasional poster to this blog appear to share the view that downtown property interests are benefiting from the existence of a public transit system centered on Chicago's Loop without paying their fair share. The poster suggests some kind of a fee or tax be imposed on property holders that benefit directly and substantially from the transit system. If the downtown interests oppose a congestion fee, as is likely, then does a revenue raise from the property interests for transit purposes makes some sense?

Wednesday, June 20, 2007

Slugfest Over Sprawl and Transit-Oriented Development

There is a week-long "Brawl Over Sprawl" going on in this week's L.A. Times. (Access round one here.) One contestant is Gloria Ohland, Vice-President for Communications for Reconnecting America: The Center for Transit-Oriented Development. Ohland co-edited and co-wrote "The New Transit Town," and “Hidden in Plain Sight: Capturing the Demand for Housing Near Transit,” and is writing a book on streetcars and development.

In the other corner is Chicago's own Robert Bruegmann. Bruegmann is a professor of Art History, Urban Planning and Architecture at UIC and is the author of "Sprawl: A Compact History" (great title).

The debate thus far is a good short introduction to the issues of sprawl and transit. Ohland describes sprawl as a sort of cancer on the landscape. She prescribes a big dose of transit-oriented development. In her view demographic trends, such as the rising percentage of non-traditional households, and economic trends, such as rising land prices that are making urban in-fill developments more popular, are pushing us to more transit-oriented development. She argues that increased investment in public transit will yield more rail stations that will stimulate more transit use and more transit-oriented development--a sort of virtuous cycle.

Pish-posh says Bruegmann. He points out that cities have sprawled for centuries and this generally is a good thing, reflecting both rising affluence and technological developments that give the common person more mobility. He acknowledges the trends Ohland identifies but argues that the relative low densities of the suburbs are likely to be the predominant form of urban growth. Bruegmann says that given public transit's relatively low ridership share investing large sums in public transit as a way to address the environmental problems associated with sprawl is a bad investment. Instead, he argues, we should be investing in greener transportation technologies that will preserve the speed and privacy benefits of the private auto, but with a lighter environmental footprint.

A new round in the debate comes each day. A fight worth watching.

A side note: It is surprising and disappointing that the UIC Urban Transportation Center, or even individuals associated with the Center, have not been active participants in the debate over the Moving Beyond Congestion initiative. (Bruegmann is not listed as being affiliated with the Center.) If there have been research papers, editorials and the like from those associated with the Center, please link them in the comments.

Re-Entry: Julie Hamos Update

Still out of town but now in a place with reliable internet and an inspiring transit system. Will start substantive posting soon.

Here is the latest update from Representative Julie Hamos. Note the promise of more amendments to her "transit reform" bill:

Update on Comprehensive Transit Legislation

As the spring legislative session winds down, you will notice from media accounts that the issue of transit is now on the radar of the Governor, legislative leaders and legislators. This is an update on where we stand, as of today.

Last Friday, both Metra and Pace announced fare hikes and service cuts if no new revenues are forthcoming. This is on top of previous announcements of drastic fare increases and service cuts for CTA riders. All three agencies also would be forced to use capital dollars that are set aside for maintenance, just to plug their operating budgets. The transit agencies aren't bluffing, and the problem won't go away.

The Governor has announced that he would like to see $100 million added to the fiscal year 2008 budget for the CTA. This is a problem for four reasons: (1) this issue isn't just about the CTA, but the entire regional transit system; (2) it requires a long-term solution, not just a one-year bailout, because the revenue stream that was adopted 24 years ago is simply not keeping pace with transit expenses; (3) the CTA deficit will double (or worse) by next fiscal year when it will need to add significantly to pensions and retiree healthcare, especially if there are no reforms; and (4) there's no reason now, after 24 years, to shift responsibility for transit from regional taxes to the state budget – which already has its own problems.

On May 31, the House Mass Transit Committee adopted House Amendments #1 and #2 to Senate Bill 572. Amendment #1 deals with comprehensive RTA reforms related to regional planning and coordination, fiscal oversight and accountability. Amendment #2 is the funding package that proposes an expanded regional sales tax of 0.25 percent as well as a small increase in the Chicago real estate transfer tax. In addition, an 0.25 percent sales tax would be added in the collar counties for their own local transportation projects. The sales tax increase would mean an extra 25 cents on each $100 purchase. The real estate transfer tax would mean an extra 1/10 th of 1 percent of the sales price of the property, paid by the seller -- often only once or twice in a lifetime.

We are currently negotiating other amendments to complete the comprehensive transit legislation. These include reforms of CTA pension and retiree healthcare benefits; creation of a Suburban Community Mobility Fund for flexible paratransit services for seniors and the disabled in the suburbs; possible changes in governance; possible funding for downstate transit; and responses to other issues being raised. We hope to add these amendments to the bill within the next two weeks. For an immediate effective date, the bill will require 3/5 ths vote in both the House and Senate – in other words, bipartisan support from the region and downstate.

We hope the Governor will support the bill by the time it arrives on his desk. After all, there is no Plan B. We wish there was a fallback position or a halfway measure, but actually the funding problem will be magnified by next year and every other year. This legislation presents the only long-term regional solution, including a steady stream of revenues, accountability and reforms, to make the needed investments in a quality transit system for the next decade. Why would we vote for anything less?

Stay in touch through my website at and contact your legislators! You can make a difference.

Rep. Julie Hamos
Chair, House Mass Transit Committee

Thursday, June 14, 2007

Just When It Is Getting Interesting

I'm out of town until near the end of June so posting will be sporadic until then. And just when things get interesting:

-- The Governor is talking to the CTA about a $100 million bailout, raising suburban fears of the CTA-only bailout that would leave Metra and Pace to the proverbial wolves.

-- The more significant story is Alderman Burke's proposal to convene a hearing on congestion pricing for Chicago. (Here, here and here.)

The Mayor comments were not promising:

Mayor Richard Daley said he has an open mind on the congestion-fee concept. But he also has reservations.

With their narrow streets and absence of alleys, London and New York are "completely different" from Chicago, he said.

"Are you going to put [the fee] on all the aldermen who drive every day?" Daley asked. "What about all the trucks coming downtown? What do you do with them?"

"Let's not rush to that and scare everybody off," the mayor declared. "We are trying to keep businesses here and ... move businesses into the city."

The Mayor's concerns about whether congestion pricing is physically feasible in Chicago are misplaced.

First, the readers used to collect vehicle information via an onboard transponder or photograph of the license plate are not prohibitively expensive and can be deployed in large numbers.

Second, there are some natural barriers that would assist in CBD tolling. For example, the bridges over the Chicago River could be toll points that would capture all of the traffic from the north and west to the Loop.

Third, electronic tolling is flexible enough that you don't have to think of tolling as a sort of gate to a medieval fortress. Rather, tolling points could be placed throughout the CBD in sufficient number that it would be almost inevitable that a driver would go through at least one toll point. At the same time, the system would be programmed so that if you drove through more than one collection point toll collection point in a day you would only be charged once. Sure, a few people might zig-zag around through alleys and back streets to avoid toll points, but most people would not give up the chance to travel on main streets.

Nor were the comments of two local transportation experts very encouraging:

Siim Soot:

“I think it’s a risky proposition,” said Siim Sööt, former director of the Urban Transportation Center at University of Illinois-Chicago. “I think one has to proceed very cautiously with a proposal such as this. We want as many people to come down as possible to shop and work. I think this would hurt the city of Chicago.”

David Schultz:

Alderman Burke pointed to similar fees levied in London, Stockholm and Amsterdam as successful models for such a charge, but overseas drivers pay far more in gas than U.S. counterparts, said David Schulz, director of the Infrastructure Technology Institute at Northwestern University.

“I’m glad Alderman Burke is looking at it, but we have to be careful,” Mr. Schulz said. “To do it for a particular region is going to run the risk of chasing people away.”

A common theme in all these comments is that congestion pricing would chase people away from the Chicago CBD. Yet, congestion pricing has the potential to make the CBD more attractive. Many individuals and businesses will trade money for a faster, smoother trip in the CBD. It certainly would be worth it to Federal Express, for example, to pay $10 per truck per day if deliveries in the CBD could go 10% faster because of reduced congestion. How many potential visitors to Chicago who now stay away because of "crazy traffic" might take a chance on a visit if they knew that $10 (for example) would mean a much smoother ride.

Consider also the beneficial impact of congestion pricing for folks using public transit assuming, of course, that the congestion pricing net revenue would be used to support public transit. Aren't there the elements of a win-win here: A better environment for drivers of all kind and a better transit system? Far from driving people away, a well-designed congestion pricing program could make Chicago a more attractive place for businesses, commuters and visitors.

-- Finally, here is the backstory on the Governor's effort to get some appointments on the CMAP board. It doesn't seem so crazy in principle that the governor would have some direct representation on the board of this region's MPO, which covers two-thirds of the population and likely more of the GDP of the state. Nevertheless, this "power play" has the suburbanites in another tizzy. Perhaps they don't remember the many years when suburban interests controlled the Governor's mansion. Giving the Governor CMAP appointment power might be a gift that keeps on giving for many years for suburban interests, just not over the next few years.

Tuesday, June 12, 2007

Opportunity Urbanism

Joel Kotkin has published a paean to Houston entitled "Opportunity Urbanism: An Emerging Paradigm for the 21st Century."

In this article Kotkin favorably contrasts the rapidly growing Sunbelt cities such as Houston, Dallas and Phoenix with "superstar" cities such as New York, San Francisco and even Chicago. Superstar cities in Kotkin's view revolve around the rich and the creative class that largely services them. There is little place for the middle class, in part because of stratospheric housing pricing and in part because of lack of economic opportunity. Advancement is difficult for the middle class in the stratified business and cultural environment of superstar cities.

In contrast, cities like Houston embody "opportunity urbanism." In Kotkin's view such cities encourage innovation and reward hard work by regular folk. Like Chicago a century ago, such cities are often reviled as uncouth and filled with money grubbers. As Kotkin slices the data, however, such cities offer relatively low housing costs and high quality educational systems. Taxes are lower and regulations less burdensome than in the superstar cities.

According to Kotkin, cities that exemplify opportunity urbanism are competing well against the superstar cities for corporate headquarters, cultural institutions and even members of the creative class. He seems to believe that such cities are in a relatively early stage of their development and will mature into superstar cities. He doesn't talk about what will happen to the superstar cities--perhaps they will become Venice-like temples of urban form lacking real economic substance.

Kotkin says that one characteristic of opportunity urbanism is a high level of public investment in humble but important infrastructure--transportation, schools, sewers, and the like. Interestingly, most of the cities Kotkin identifies as examples of opportunity urbanism have relatively weak public transit systems compared to the public transit systems of the superstar cities. Kotkin briefly acknowledges the challenge that sprawl development poses to poor people getting access to jobs. His suggestion is that the most effective way to give the poor access to the job market is not to expand the transit system to try to network all of the outlying areas. Rather, Kotkin suggests the more effective approach is to equip the poor with cars so they can have the same access to employment centers as anyone else (pg. 35 of 43).

Note that Kotkin reports (pg. 34 of 43) that:

Houston officials recently announced plans to double investment in new transportation infrastructure to $77.3 billion by 2025. Dallas-Forth Worth, El Paso, and other Texas cities are also preparing massive new transportation infrastructure.

Kotkin argues that there is a direct link between such investments and the kind of economic and social dynamism that characterizes opportunity urbanism.

One interesting and slightly paranoid implication from this argument is that this region's reluctance to make substantial new transportation investments reflects the desire of the local elites to maintain the status quo. In other words, they prefer stable slow growth that keeps existing arrangements in place over faster growth and its associated social upheaval that may displace them with nouveau riche.

Kotkin's analysis is a somewhat refreshing populist antidote to those urbanists who prioritize the trappings of wealth--e.g., high real estate prices, elevated per-capita consumption of sushi, rarefied cultural attractions--and downplay the role of the city in propelling people of modest circumstances into the middle class and beyond.

One gets the sense that Kotkin's description of Houston as an energetic, entrepreneurial city might have fit Chicago a century ago. Today the mantle of "superstar city" does not fit comfortably on this region's civic head. It's like a crown that is too big for the head of the king. Yet, by the measures Kotkin uses, Chicago isn't an exemplar of opportunity urbanism either.

I suspect Kotkin's article may fit the data to support his love letter to Houston. Nevertheless, it is an interesting read.

Monday, June 11, 2007

Urban Partnership Loss: Misery Loves Company

This region's failure to score even a semi-finalist spot in the DOT's Urban Partnership Program got no mention in the local press. DOT's rejection of Los Angeles' application did get some media attention. The article's description of the weakness in the Los Angeles application sounds like the obituary for this region's application:

Despite being known as one of the nation's worst repositories for transportation gridlock, the Los Angeles area managed Thursday to miss out on qualifying for hundreds of millions of federal dollars for traffic-busting programs.

Although no official would say so on the record, several suggested privately that Southern California transit agencies and the elected officials who oversee them lost out because the grant required communities to offer some type of "congestion pricing": tolls that politicians know voters hate.

Instead, the application submitted by the Los Angeles County Metropolitan Transportation Authority on behalf of local agencies requested money only to help pay for a study of congestion pricing.

A respondent to an earlier post on this subject said the Governor was to blame for the lack of a solid tolling/congestion pricing component in this region's Urban Partnership application. Does anyone else have information on that subject or the more general question of what institutional obstacles are in the way of an effective congestion pricing program in this region?

T.O.D. = M.I.A.

Transit-oriented development is key to getting people out of their cars and on to transit. There are as many definitions of transit-oriented development as there are academics, land-use planners, developers and the like trafficking in the concept. It appears, however, the TOD consisted of high-density, mixed-use, pedestrian-friendly development that is well-served by transit. Truly effective TOD makes it possible for people to live without owning a car, a major cost-savings for households.

Representative Hamos' RTA reform bill (Amendment #1 to S.B. 572) does little or nothing to advance the cause of TOD in this region. This may be understandable from a political perspective. Local governments tend to want low-density development because that kind of development reads "gentry" (or maybe "white") but then complain bitterly when they don't get much transit service.

The hands-off approach towards land use, however, is unacceptable from a public policy perspective. The RTA and its Moving Beyond Congestion allies seek $3 billion or so a year in public investment for public transit in this region. TOD is key to ensuring that this money is well spent by providing demographic conditions that are favorable to transit.

Other transit agencies aren't so passive when it comes to land-use. In Denver, for example, the local transit agency plays an active role in encouraging TOD around rail and BRT stations. It has adopted a TOD policy and files annual reports on TOD as it relates to the transit system. There appears to be a movement to build vertically around rail stations.

Certainly, the governance and funding issues involved in Representative Hamos' legislation are important. Her bill's neglect of how the region develops its land around transit stations and in transit corridors is most unfortunate.

Saturday, June 9, 2007

"I Have No Damn Idea"

That was RTA Chairman Jim Reilly's assessment of what will happen in the the General Assembly and with the Governor with respect to the RTA's transit funding package, the operating funding portion of which is embodied in Amendment #2 to S.B. 572. He was speaking at the Friday meeting of the Business Leaders for Transportation, sharing the stage with Ron Huberman, the CTA's new President. There were precious few business leaders in attendance, leaving the transit aficionados hovering about tsk-tsking at the Governor's rash promise to veto any bill providing for a sales tax increase for transit, even if that increase is confined to the six counties that make up the RTA region.

Huberman opened and laid out just how grave is the CTA's financial position. According to a SWAT team of financial experts that Huberman engaged when he arrived at the CTA, the CTA "won't be able to meet payroll in October unless something is done now."

He strongly emphasized that the CTA needs to get its pension system fixed. If the legislative changes the CTA is seeking--e.g., reduced benefits for new employees and taking pensions out of the collective bargaining process--are put in place, it appears possible that the CTA can live within the operating funding that will be available if the RTA's operating funding package is passed. If not, the CTA will soon be running major deficits despite the new infusion of operating funding if S.B. 572 becomes law.

Huberman next outlined the CTA's proposed fare increases, service cuts, and other measures designed to close the $110 million hole in its 2007 budget. He revealed that the CTA has made $5-6 million more in cost cuts on top of the much ballyhooed $12.5 million in initial cuts.

Reilly said the current legislative session is the "most bizarre" he has seen in 30 years. He mourned the "deafening silence" concerning transit needs that has plagued the Moving Beyond Congestion initiative. According the Reilly, legislators and others (e.g., Tribune editorial) are beginning to get engaged.

Reilly pointed out that the Auditor General's audit report and, specifically its conclusion that the region's public transit system is underfunded relative to current service levels, did the transit agencies a big favor. Since the General Assembly commissioned the audit report, its members cannot now say that they lacked notice from a highly credible source that transit funding was a serious problem.

Neither Huberman nor Reilly focused much on the $10 billion capital component of the Moving Beyond Congestion initiative. It is likely that at this point the RTA and the service boards will be happy with whatever they can get.

Here are some other points of interest:

-- Huberman said that the CTA supports the 60% (CTA), 30% (Metra) and 10% (Pace) split of operating subsidies. He pointed out that the CTA provides 82% of transit trips and deserves a bigger share, but that the CTA recognizes that its 60% share tracks historical norms and the CTA believes it important to support the funding initiative.

-- Reilly said that on a percentage of total budget basis Pace's operating deficit is worse than the CTA's operating deficit. He indicated that without more operating subsidies Pace will have to cut its service almost in half.

-- Huberman turned out to be a strong advocate of regionalism. He stated that customers care about moving from point A to point B conveniently and do not particularly care who provides the service. He indicated a willingness to have Pace take over routes from the CTA if that makes economic and service sense. Could he be signaling that we should consider having one agency provide bus service for the region, just as ADA paratransit responsibilities were recently consolidated into Pace? At a minimum, it looks like the CTA might be willing to work with the RTA and Pace to eliminate service overlaps and the like if and when the RTA gets and exercise its expanded powers. (Amendment #1 to S.B. 572.)

-- Huberman reported that the CTA has investigated distanced-based pricing. Converting its system to such a pricing system would cost the CTA $280 million, so is not a near-term solution. He said that going forward the CTA will build into its infrastructure the flexibility to switch to distance-base pricing, which he thought is a "great" idea.

-- When asked about the every elusive universal fare card, which made a quick appearance this spring and then was consigned to oblivion once again, Reilly smiled knowingly and launched into a riff about how we will all be paying for tolls, transit, parking and hot dogs with a "private card" of some sort. Glad to see it soon will be easy to transfer from service run by one service board to service run by another! So much for Phil Pagano's promise not long ago that we would see the universal fare card in 30 days.

Thursday, June 7, 2007

Big Loss For Our Local Transportation Team

This region's transportation team took a big hit today.

The federal Department of Transportation is putting $1.1 billion into an Urban Partnership Program that is the centerpiece of the federal effort to fight highway congestion. The program is looking for large, innovative congestion-relief programs that can be implemented in three years. Under the program DOT:

plans to partner with certain metropolitan areas or ‘‘Urban Partners’’ in order to demonstrate strategies with proven effectiveness in reducing traffic congestion. Under a UPA, the Department and its Urban Partners would agree to pursue four strategies with a combined track record of effectiveness in reducing traffic congestion, collectively referred to as the ‘‘Four Ts:’’

• Tolling: Implementing a broad congestion pricing or variable toll demonstration;
• Transit: Creating or expanding express bus services or bus rapid transit (BRT), which will benefit from the free flow traffic conditions generated by congestion pricing or variable tolling;
• Telecommuting: Securing agreements from major area employers to establish or expand telecommuting and flex scheduling programs; and
• Technology & operations: Utilizing cutting edge technological and operational approaches to improve system performance.

To the maximum extent possible, USDOT will support its Urban Partners with financial resources (including some combination of grants, loans, and borrowing authority), regulatory flexibility, and dedicated expertise and personnel.

The Chicago area with its large population, high level of congestion and and huge and heterogeneous transportation network was a natural candidate to become one of the urban partners. This would allow the region to tap into a couple hundred million dollars or so of new federal transportation dollars.

It appears that DOT provided a special briefing on the program tailored to the region's transportation public officials. An alphabet soup of local entities-- CMAP, RTA, CTA, ISHTA, IDOT, City of Chicago, COEMC, and Pace--then collaborated on an application. IDOT took the lead and submitted this region's application in mid-April.

By all accounts, this region's application (which is not yet publicly posted but available by FOIA from IDOT) was mishmash of proposals. Despite DOT's direction that the Urban Partnership projects should be implemented in three years, this region's application was filled with concepts and studies and lots of "down-the-roadisms."

Even though tolling was number one on DOT's list, the congestion pricing portion of the application reportedly was particularly weak. A grand total of one paragraph was developed to London-style cordon pricing in Chicago, and that to indicate that the region would think about the concept. No concrete plans were offered to extend highway tolling from the existing tollways to another highway. No concrete plans were offered to implement congestion pricing on the roads that already are tolled.

This was clearly the wrong approach, especially since Mary Peters, the Secretary of Transportation, is the queen of congestion pricing.

Not surprisingly, when the DOT announced today the nine semi-finalists for the program, Chicago was not among then. DOT will announce the finalists in August. Here are links to stories describing several of the urban partnership proposals that DOT chose instead of the Chicago proposal. The contrast between the gauzy nature of this region's application and the bold, concrete plans of some of the successful candidates is revealing:

New York: Mary Peters was in New York City with Mayor Bloomberg and Governor Spitzer to help push for New York City's congestion pricing program in Manhattan, which will help alleviate traffic congestion and generate several hundred million dollars each year that can be used for transit. We've described this plan in a previous post. New York might get up to $500 million.

Seattle: The Seattle area is rolling out a road pricing system using an innovative onboard tracking device. People will be charged by the miles they drive regardless of whether the highway is a tollway or not. Time of day pricing s also possible using this technology. Seattle is also implementing high-occupancy toll lanes.

Denver: Denver is tolling new lanes on U.S. 36 between Denver and Colorado and no doubt would use some of the Urban Partnership money to support its ambitious 140-mile expansion of its light rail and bus rapid transit system.

Lacking a credible congestion pricing component, this region's application had little chance of making even the first cut. (The fact that we're in a blue state might also have something to do with the lack of success.) That is too bad. Congestion pricing on the express lanes of the Kennedy and Dan Ryan, for example, could generate revenue to help keep the Blue and Red lines in a state of good repair. Much of the money would be paid by folks passing through the city. And if they don't travel through the city they would pay tolls on the tollways. Either way, the region's transportation system would have a stronger funding base and the ability to use congestion pricing to manage traffic flows.

There is strong federal support for congestion pricing. Other cities in the United States, most notably New York, seem to be embracing congestion pricing, following the lead of European and Asian cities. It certainly makes common sense that if you give away something valuable--roadway space--for free you inevitably are going to have over-consumption--in this case traffic congestion of the wasteful stop-and-start kind.

The loss of potentially several hundred million federal dollars and other benefits because of the failed Urban Partnership application should serve as a wake-up call to the region's transportation team. Unfortunately, there aren't any natural institutional candidates for bold leadership on this issue. IDOT has a sad history of leaving federal money from innovative programs (e.g., TIFFIA, existing congestion relief programs) on the table and by reputation is at low ebb in terms of morale, expertise and innovation--to say nothing of money. The City is resistant to congestion pricing, overlooking the fact that many non-residents would be paying these tolls as they pass through the city and that the toll revenue could finance highway and transit projects and operations. ISTHA lacks the authority to extend its I-PASS system to highways off its system and seems too timid to implement true congestion pricing or to reach out and be an effective partner with other agencies. Neither the Governor nor the legislative leaders seem particularly interested in transportation issues.

The region's transportation team no doubt is discouraged as a result its big loss today. I mean, if Chicago can't place itself at the front of the pack when it comes to transportation issues, given the region's long history as a transportation hub, then that reflects extremely poorly on our transportation professionals and our politicians.

Let's hope we all learn from today's sad lesson.

Tough Timing Department: Pace

The Daily Herald reports that Pace's board has approved the construction of a new $13.7 million headquarters for the agency. You can just envision the wince on Pace Chairman Richard Kwasneski's face during the following exchange:

Pace leaders say replacing their current, rundown headquarters is too critical to put off. They also say it will cost more to keep the old building than to build a new one, and that a $7.7 million federal grant could be lost if they don’t act quickly.

Yet, even Pace Chairman Richard Kwasneski conceded the public may frown on the move as the suburban bus agency struggles with a $23 million shortfall and calls for higher sales taxes.

“Is it the politically correct time to do this? Probably not,” Kwasneski said. “Is it the practical time to do it? It probably was five years ago. This is something that we have held off for as long as we possibly could.”

You would think that after five years of procrastination Pace could wait one more month, until after the General Assembly (hopefully) completes its budget, to announce its plans to build yet another suburban public agency "Taj Mahal." Now, people are going to wonder why Pace is crying poor when it is building a new headquarters.

Pace's current headquarters is a dump. It is a shame that public agencies are so gun shy about doing the right and cost-effective thing for fear of adverse publicity. If the business case for the new Pace HQ is solid, Pace's board should have moved ahead years ago. Pace must have been really desperate if it had to act this month, with the public transit funding initiative still hanging in the balance.

Wednesday, June 6, 2007

Huberman/Reilly: What Were They Thinking?

Sometimes the news from the transit front just makes you scratch you head in wonder. What were these guys thinking?


The CTA has started public hearings on its plan for the fare increases and service cuts that will be necessary if the General Assembly does not fill the CTA's $226 million budget hole. Last night was the first public hearing. The Tribune reported the comments of new CTA President Ron Huberman, the CTA's new President at the first hearing:

CTA President Ron Huberman, who took office May 1, opened the hearing by saying that he hopes state lawmakers come through with extra funding so the changes won't have to be made.

"We don't want to raise fares by a penny," he told the group. "We don't want to cut one single bus route."

These statements seem incredible at a time when the General Assembly is having great difficulty in putting together a budget, the Governor threatens a veto of any sales tax increase, and there seems to be little legislative support to increase the State's support of public transit from the State's general fund.

Huberman's statement that the CTA "hopes state lawmakers come through with extra funding so changes won't have to be made" feeds into the generalized suburban suspicion that the CTA seeks a State bailout so that it can perpetuate its failed business model. That failed business model, as the Auditor General documented in his Report, includes rolling out more new service than the CTA can afford, a misplaced set capital priorities and failure to control labor costs.

In his early statements upon taking the CTA's helm Huberman signaled that he was going to be a different kind of leader, a tough talker who would carefully manage the CTA's finances. He's still new enough to enjoy the benefits of a honeymoon and thus he was positioned to take some chances. Instead, he sounded like yet another CTA apparatchik mouthing the party line that the CTA's funding problems are someone else's problems.

Huberman had the golden opportunity to say something like this:

The CTA is fighting hard to obtain more funding. If we succeed in that effort I will work hard to make sure all of that money is used to improve service. If we don't succeed we will have no choice other than implementing the painful service cuts and fare increases that we are discussing tonight.

I will tell you, however, the things cannot and will not be the same at the CTA. Even if we get more subsidies from Springfield, a fare increase will be necessary to pay for the many service improvements we have put in place in recent years. The only question is how much that fare increase will be.

Some service cuts will be necessary as well, even if we succeed in Springfield. We must put the CTA on solid financial footing. That means living within our means, after years of not doing so. I will do everything I can to minimize these cuts, but they will happen and the CTA and its customers will be better for them in the long-term. These recurring financial crises are good for no one.

It is clear that the Governor and the General Assembly expect the CTA and the other service boards to use a large measure of self-help to fix our problems before they make any major new financial commitments to the RTA, CTA, Metra and Pace. I understand and respect that. The legislature and the Governor must know that the CTA and its customers will make the necessary sacrifices to build a better, more financially sound system.

I will not sugarcoat what is necessary for you to know. I ask that you join with me in supporting the CTA system. Ride it. Give us your feedback. Get your friends and family on board.

Am I missing something or is a CTA message of "we don't want to raise fares, we don't want to cut routes" just about the most counterproductive message you can imagine at this point in the legislative cycle?

Jim Reilly

In the meantime, wily Jim Reilly, the Chairman of the RTA, was visiting the DuPage County Board trying to line up support for the RTA's funding plan, which is embodied in Amendment #2 to S.B. 572. That funding plan contemplates a tripling of the RTA sales tax rate in the collar counties, from 0.25% to 0.75%. Half of the collar county increase (i.e., 0.25%, approximately $121 million), would be dedicated to transit. The other half of the increase would be allocated to the collar counties to be spent as they wish on road and/or transit projects. DuPage County's share of this approximately $242 million collar county tax increase would be approximately $95 million.

The Daily Herald reports that the spirit of Pate Phillip was working the County Board meeting room:

Numerous suburban lawmakers fear the measure will burden their constituents and enrich the CTA, an attitude several DuPage officials shared.

“I and other board members are fairly skeptical of any plan that increases the sales tax by a half percent and then sends tens of millions of dollars to Chicago,” Legislative Committee Chairman Brien Sheahan said.

That stance certainly is unremarkable. The suburbs feel they are being asked to bail out the CTA, an urban transit system that they perceive as not benefitting the suburbs. They view the CTA riders and the City of Chicago as not doing enough to support the CTA, a perception unfortunately reinforced in a big way by Huberman's remarks discussed above. What was remarkable, however, was Reilly's response:

RTA Chairman Jim Reilly argued that the bill gives his agency more oversight concerning the CTA.

If the bill passes, “the winner is Metra. The CTA will be made whole but they’d have to swallow the fact they’ve lost control,” he said.

Say again? Throughout the Moving Beyond Congestion process the RTA has diligently tried to avoid igniting battles between the service boards or creating the impression that the effort was a zero sum game in which there would be winners and losers among the service boards.

What are the CTA and its political allies to make of Reilly's remarks? Recall that for years the RTA allocation formula for capital dollars has favored Metra. Metra's suburban rail projects get the lion's share of "enhancement" and "expansion" capital dollars in the RTA's proposed capital plan. $1.1 billion dollars of CTA capital needs were mysteriously unaccounted for in the RTA's Moving Beyond Congestion Plan.

In light of Reilly's remarks, all these things, plus the failure to remove the RTA board seat reallocation requirement from the RTA Act, now start to look more sinister. Likewise, in view of Reilly's comments the reform bill's vesting of new powers in the RTA no longer looks like a pure "good government" development. Instead, it appears to be a way to force the CTA to "lose control" of the RTA and to make Metra the "winner."

Not only are Reilly's remarks impolitic (at best), the notion that the CTA has "control" over the RTA and the region's public transit system is poppycock. The RTA currently is vested with ample budgetary oversight powers. There are only five Chicago and CTA representatives on the 13 member RTA board. These representatives obviously are not enough to push items through the RTA board. Indeed, there are not enough "Chicago" representatives to block RTA action that requires a simple majority vote. To block important RTA board actions that require a supermajority vote, the "Chicago" representatives must stick together as a bloc with not a vote to spare. And lurking in the RTA Act is the reapportionment requirement that a suburban/downstate majority in the General Assembly can someday use to drop the number of Chicago representatives down to four, when they could not even block RTA actions that require a supermajority vote.

* * *
Very disappointing performances by our two fearless leaders. The head of the CTA feeds into suburban fears of a wayward CTA while pandering to his customers. The head of the RTA feeds into Chicago fears of a suburban hijacking of a public transit system that still serves primarily the high-density urban core of this region while pandering to the RTA's suburban allies. It is almost if they were trying to build a coalition against a State bailout of their funding problems, although I'm sure that was not their intentions.

Tuesday, June 5, 2007

Time For An Open Source Model for Public Transit?

Background: The "Natural Monopoly" Model

Public transit systems operate on a sort of "natural monopoly" business model. That is the notion that due to the high capital costs of a public transit system there must be a large customer base to help pay those costs. Provisions in the RTA Act (e.g., 70 ILCS 3615/3A.08 (giving Pace jurisdiction over "any public transportation by bus" in the six-county region except for CTA service)) and municipal franchise agreements give the service boards the exclusive right to provide public transit service in this region. This gives them the ability to keep their customer base intact. (Would someone kindly send me a copy of the Chicago-CTA franchise agreement.)

The great fear of the service boards, like that of any monopolist, is that competitors will emerge and "cherry pick" the profitable parts of their business and leave them with the large capital investment requirements but only the most unprofitable operations.

The downsides of natural monopolies are lack of customer choice and lack of innovation. (Higher prices--"monopoly rents"-- are not an issue when it comes to transit since fares are kept well below cost through public subsidies.) We see this when it comes to alternatives to the private auto in this region. At the one end, taxis offer point-to-point service for individuals or small groups. At the other end of the spectrum the service boards offer big buses running down major streets and railcars running on dedicated rights of way. Except for ADA paratransit service, which is available to only a limited segment of the population, there is nothing the public transit system offers in between--no shuttle services, no jitney vans, no mini-buses and the like to fill the market gap between the taxi and the standard transit vehicle. (Pace's van pool program is a limited but notable exception.)

Over the past 150 years urban transit transitioned from a private enterprise model to the current public transit model. (Link to short historical overview here.) In recent decades, however, some seeming natural monopolies in other areas of the economy--e.g., airlines, telecommunications--have transitioned to a private enterprise model. Internationally, that change has been most pronounced in the former Soviet bloc, where many state-owned enterprises have been privatized. In Europe and Asia major transportation facilities such as expressways have been privatized. Closer to home, the long-term leases of the Indiana Toll Road and the Chicago Skyway illustrate this transition from the notion that the government is the only viable provider of transportation services.

If the RTA and the service boards secure a bailout from the General Assembly then they have no incentive to change their current business model. If, however, there is no bailout and they have to go through a painful round of service cuts and fare increases, maybe they will see this as an opportunity to shift to a "open source" business model for transit in this region and away from the natural monopoly model now in place.

The "Open Source" Model

By open source model I mean an approach to providing transit service that is the flip-side of the current natural monopoly model. I have in mind the kind of productive collarboration among many parties directed at a common product or task, perhaps best exemplified by the Linux operating system and Wikipedia. (See Wikipedia entry here.) Here are some elements of an open source model as it applies to transit:

1. Multiple Service Providers: The public mission would shift from directly providing all public transit service to maximizing non-auto transportation options for the region. This means that many new private (and even public) transportation providers would be allowed--indeed welcomed--to provide transit service.

2. Common Technology Platform: Public transit agencies would aggressively push out their technology such as the CTA bus tracker system so that all vehicles providing public transportation in the region would be on the same information network. This means that customers would be able to easily discern when the next vehicle would be in their area regardless of whether it was a CTA bus or a private van. Likewise, all transit vehicles would be plugged into the same fare collection system, which would allow customers to transfer easily between vehicles run by different operators.

3. Information Sharing: The common technology platform would allow transportation providers to share information that would help them give better service and make reasonable pricing decisions. This information would include ridership data, fares collected, demographic data, on-time performance data, and other information currently maintained and closely guarded by transit agency planning departments.

4. Customer Service Quality Standards: The service providers, whether public or private, would have to meet some basic requirements, such as vehicle safety standards and minimum levels of insurance. The key here would be ensure that these requirements are not so onerous as to pose a high barrier to entry into this market. This is a real risk, especially in a highly politicized environment.

5. Equity Issues: The open source model would address social equity issues on the demand side rather than the supply side. Currently, we say that we need a large and expensive public transit system in large part because we need to provide transit options for the poor. Yet, that expensive system serves far more people than the poor. A more effective approach would be to subsidize travel only for the poor. That targeted approach would be less costly and more precise, thus doing more good. Technology such as the Chicago Card and I-PASS customer accounts allow the targeting of transit subsidies.

The Impact of an Open Source Model

An "open source" transportation system would be far more dynamic than today's public transit system. There would be more kinds of vehicles, new kinds of service, and many service providers. Everyone would work off of, and contribute to, a common technology platform. Customers would be directly involved, by tapping into the information network to obtain next vehicle information, reserve trips in advance, organize travel groups to present to service providers for price quotes, and provide customer service feedback. Innovation would be encouraged and the one-size-fits-all approach to public transit that prevails today would fade away.

Pricing would be more varied than today. People likely would have to pay more for custom service--e.g., a guaranteed spot on a Wi-Fi equipped van with comfortable seats. Door to door service would cost more than area to area service. Time of day pricing would be encouraged, which could well result in higher prices during the rush hour and overnight periods. Yet, some service, such as large buses down key arteries during rush hour and train service generally, likely would continue to be run by public transit agencies, at least for a time, at current fare levels. On the whole, however, it is quite possible that people would be paying somewhat more than they do today.

In return for higher average cost, customers would get more service and, hopefully, better service. Customers would have more options. These might include jitney services that travel up and down major streets at times and at frequencies that public transit agencies using big buses cannot afford. Other options include subscription van services that would provide door-to-door service from home to work and back, feeder buses supporting major train stations, van pool aggregators that would use internet technology to provide service to similarly situated customers and brokers who would link people to a variety of bus/van/taxi options via a sort of Travelocity for local travel.

Under this model the government would not to wash its hands of transit responsibilities. Government would still be actively engaged in transit, but in a new role as coordinator and facilitator rather than as transit provider. Government would encourage innovation and competition, provide a set of common technical and safety standards, and kick in financial support through aid to the poorest travelers or subsidies for service in particular areas or at particular times. Government might be able to assist through mass procurements of vehicles and technology at lower prices than private operators could obtain on their own.

All this turns the current natural monopoly model on its head. Instead of trying to take on the massive task of providing a public transit system, government works to get the private sector to take on as much of that work as possible. Government focuses on what it can do well--establish basic service requirements and an open technology platform, provide a clearinghouse for information, provide targeted subsidies--and leave the actual transportation work to the transportation professionals.

If this sounds a bit like what happened when the Chicago Housing Authority got out of the business of operating huge housing complexes, that analogy might not be all bad. Most people give the CHA credit for its transformation. Who misses Robert Taylor homes? Maybe something as dramatic needs to happen on the public transit front.

It is always frightening to make a fundamental shift in your business model. Giving up control is especially hard for governments to do. While privatization and deregulation are far from perfect solutions, in many industries we have seen improvements when they moved away from the natural monopoly model. As the article cited above indicates, urban transit once made a wrenching transition from private to public ownership and operation. Maybe it is time to embrace a different business model yet again, an "open source" approach to transit operations that will leverage Internet technology and the private sector to provide better transit service at lower cost to the government.


Even if the RTA secures more funding after its herculean Moving Beyond Congestion effort, does anyone really believe that the transit funding problem will have been fixed? A somewhat different cast of characters will be crawling over Springfield 5-10 years from now warning of a transit "crisis" and seeking more public subsidies. Maybe the problem is not with the funding, but rather with the public transit business model itself. Maybe transit is an area where government can be more productive as a facilitator, a standards setter, and a standards enforcer, while leaving the details of service to mostly, but not probably not exclusively, private transportation providers.

Monday, June 4, 2007

Amendment #2: Where's Money Coming From?

According to descriptions by the RTA (here) and Representative Hamos (here) Amendment #2 to S.B. 572 could deliver as much as $453 million in new money for transit in the RTA region. In addition, Amendment #2 contemplates a 0.25% surcharge in the collar counties that would generate an additional $121 million. The collar counties could "flex" this surcharge money between highway and transit projects, which means the maximum potential amount of new money for transit from Amendment #2 is $574 million.

Who pays?

The RTA and Hamos pieces do not fully break out which source pays what towards the $574 million in new money. Here's a rough estimate using the 2005 sales tax shares for Cook County and the City to discern their contributions of new tax dollars. (RTA 2007 Budget Book at pg. 144 of 146.) We know from the background materials that a 0.25% tax increase in the collar counties will raise $121 million.

City of Chicago -- $100 million (sale tax increase plus real estate transfer tax)
Suburban Cook County -- $100 million (sales tax increase)
Collar Counties -- $121 million (transit only sales tax)
State -- $131 million-$81 million (PTF match of sales tax/real estate transfer tax) plus $50 million (PTF match increase from 25% to 30%)

Here's how the new transit money sources look on a percentage basis:

New Money Shares (w/out Collar County flex)
Chicago -- 22.1%
Suburban Cook -- 22.1%
Collar Counties -- 26.8%
State -- 29%

If the additional collar county 0.25% tax increase for $121 million of highway/transit flex money is included, the percentage shares of the new money sources are roughly as follows:

New Money Shares (with Collar County flex)
Chicago -- 17.5%
Suburban Cook -- 17.5%
Collar Counties -- 42.2%
State -- 22.9%

Compare these new money percentages with the current tax contributions for operating funding from the various sources. These are rough numbers (note: no fare revenue included):

Current Operating Funding Tax Contributions
Chicago -- $220 million (22.2%)
Suburban Cook -- $384 million (38.8%)
Collar Counties -- $116 million (11.7%)
State--$271 million (27.3%)

Source: RTA 2007 Budget Book (pg. 21 of 146) (using 2005 sale tax percentage splits).

If we add the new money to the existing contributions we get something like this (without including the collar county highway/transit flex money):

Operating Funding Tax Contributions Post Amendment #2 (w/out Collar County Flex)
Chicago -- $320 million (22.2%)
Suburban Cook -- $484 million (33.5%)
Collar Counties -- $237 million (16.4%)
State -- $402 million (27.9%)

Note that the Chicago and State shares post-Amendment #2 (and not considering the Collar County flex) are similar to their current shares. In contrast, the suburban Cook County share declines significantly and the collar counties share rises significantly.

When the collar county highway/transit flex tax money is included in the analysis the numbers are as follows:

Operating Funding Tax Contributions Post Amendment #2 (with Collar County Flex)
Chicago -- $320 million (20.5%)
Suburban Cook -- $484 million (30.9%)
Collar Counties -- $358 million (22.9%)
State--$402 million (25.7%)

Recall that the Auditor General in his Report (pgs. 327-330 of 450) and the Mass Transit Committee in its preliminary 2005 report (unfortunately now pulled from Rep. Hamos' website--email me if you want a copy) concluded that suburban Cook County was subsidizing service in Chicago and, to a lesser extent, the collar counties. The funding formula in Amendment #2 seems to redress this subsidization with respect to the collar counties but not with respect to Chicago.

I stress that these are rough numbers. Hopefully, they give some indication of the sources of the new transit funding if Amendment #2 ever becomes law. That's a big "if" even with the positive vote in the Mass Transit Committee.

Pave Over The Blue Line?

Just for sport I thought that I would post this piece entitled "Chicago Should Eject Inefficient Rail From Expressway Medians for Toll Express Lanes."

Have at it. And while doing so consider why the transit/highway/planning agencies in this area have largely ignored the revenue generation and congestion mitigation opportunities offered by electronic toll collection technology. After all, there are maybe 2 million cars in the region already equipped with a toll collection device (the I-PASS) that allows relatively painless toll collection.

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June 3, 2007

Timothy W Martin secretary of the Illinois Department of Transportation 2003-2007, now a senior VP of CTE/Aecom said at a conference recently that Chicago doesn't need toll express lanes because it has something better - passenger rail lines in expressway medians. They carry far more people than the same space devoted to highway lanes, he claimed.

This is nonsense, but it's commonly held nonsense. An urban myth.

I went up to Martin afterwards and said: "You've got it wrong about the trains in the expressways. A lane of buses can carry more people than a rail line."

He scoffed saying I should look at the numbers.

I have. Wherever you crunch the numbers rail simply doesn't compete in hourly capacity with express buses. But here are the numbers for Chicago's Blue Line between O'Hare and the Loop which takes up a valuable 10m (33ft) down the middle of the Kennedy Expressway.

Chicago Transit Authority's (CTA) latest "Rail Ridership by Branch and Entrance" p5 shows 64.7k riders boarding or 32.4k riders in one direction on the average weekday in March. CTA's schedule shows they run 186 trains each weekday. They run a train about every 5 minutes in six peak hours and every 6 or 7 minutes in the middle of the day and about every 8 minutes in the evenings. 32,400 riders/186 trains is an average of 174 people on a Blue Line train. Maybe its 250 people per train in the rush hour and with 12 trains some 3,000 carried in the hour.

Cars can do that. An expressway lane with cars can carry 2,400 vehicles/hour and with a typical vehicle occupancy of 1.25 persons per car that's your same 3,000 persons per hour as the Blue line train. The darned train line is totally empty most of the time.

With pavement rather than rails you can do a lot better than just cars if you're in a corridor like the Blue Line between O'Hare Airport and downtown Chicago where there's a substantial demand for transit. Because both ends have large volumes of dense origins and destinations there's a demand for transit. But rail is a hopelessly inefficient form of transit. The 3,000 people per peak hour presently in a dozen trains could be carried comfortably in 100 buses.

100 buses per hour use about one eighth of the capacity of a highway lane. A bus lane can run 800 buses per hour. They've been doing something like that every weekday morning since 1971 in the Exclusive Bus Lane in the central tube of the PANYNJ's Lincoln Tunnel. And they collect tolls from all of them!

Over 3 3/4 hours in the morning peak they run an average 2,700 buses or 720/hour. That fits with the notion of a bus being the equivalent of about 3 cars. It matches up with expressway lanes all over the place capable of running 2,000 to 2,500 cars/hour.

Why do highways have so much more capacity than rail?

Two words: headway and passing.

The Blue Line is an inefficient rail line with headways of 5 minutes between trains. But nowhere are trains operated at closer than about 90 second headways. By contrast manually driven buses can operate comfortably at average headways of 4 or 5 seconds. 720 buses in an hour or 3,600 seconds is an average headway of 5 seconds. Rubber on asphalt provides so much better acceleration and braking than steel on steel. Indeed the limiting factor for road vehicles is not even acceleration/braking but human reaction time.

Lower headways and hence much higher throughput are likely in the future with driver assistance technology that can sense changes in closing rates with the vehicle ahead and adjust the brakes or accelerator - automated highway/intelligent vehicle systems. The advantage of highways over rail lines in capacity, already several fold, is only going to widen the gap further in the future.

The second reason roadway lanes are so much more efficient than rail lines is ease of passing. Dumb rail trains stop at so many more stations than express buses, so their average speed over a trip is a third or so lower than free flowing buses. The Blue Line train from O'Hare stops 14 times before it gets to the Loop downtown. Busway stops can be offline so only buses needing to stop pull off and stop, and others roll by. Railways with those clumsy mechanical switches can't afford express operation, so each train has to follow along behind the other, and stop at all the stops.

Buses in lanes managed for free flow would be more attractive than trains out of O'Hare and should attract more riders. That's because waiting times would be less. They would depart more often. And then they would get riders to their destinations faster because of the ability to run express bypassing stations. They could be routed more directly to their destinations by going offline into surface streets providing closer to door to door service.

Best of all, since the modest ridership of Blue Line trains transferred to buses would only occupy about one eighth of the capacity of a highway lane, seven-eighths of that capacity would be new capacity - available to be used by taxis, vans, trucks and ordinary motorists willing to pay a toll for a guaranteed free flow trip. You'd get 7/8ths of an express toll lane where at present there is many minutes of unused rail line between each train.

Chicago is hardly unique in having a wasteful, obsolete, inefficient rail system that absorbs vast amounts of taxpayer subsidies and does little for mobility. It is unusual in the amount of its rail system that runs in the median of major expressways. Long distances of median of the Kennedy, Eisenhower and Dan Ryan Expressways have median occupied by rail lines.

Removal of the rail equipment and replacement with managed toll express lanes would be a win-win proposition. Transit riders would get improved service. Motorists would get extra capacity after the small fraction of the lane needed for replacement buses was accounted for. And managed lanes would probably make money for the city instead of costing money - as rail invariably does.

The Loop rail lines should of course be kept for their historic value and as a tourist attraction. Serious transportation however is rubber tire on pavement.

We've invited Timothy Martin to respond.

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Crackpot or realist?