Rant & Rave

It is time for a Moderator whine fest. I get one once in a great while.

• I was in D.C. recently and met with a senior person in the Department of Transportation. In the course of our conversation this person said that the toughest part of the DOT's job is convincing people that the United State's transportation network no longer is the best in the world. This person said that the United States no longer is a center of innovation in the planning, delivery and operation of transportation systems. This person said the complacency and cowardliness of the transportation professionals and politicians this person has encountered while working for DOT has been quite discouraging.

• While other cities are implementing or considering the implementation of pricing measures (i.e., tolls) as a way to manage heavily congested highway systems, there is little or no indication that Illinois is considering tolling as a traffic management tool or revenue raising measure (or both). We'd rather have people stand in line for "free" roads than use tolling to spread demand more effectively. And just how is the State's refusal to use an effective tool of highway management going to make it more competitive in the world economy?

• With the completion of the I-355 extension, it appears that the Illinois Toll Highway has nothing new or interesting on its plate despite its inherent ability to fund new transportation projects through relatively modest toll increases and its evident ability to deliver projects in a timely way.

• IDOT can't get a bridge built over the Mississippi River in St. Louis. The hangup appears to be this State's refusal to consider tolling. Apparently, we would rather slow the flow of people and commerce in southern Illinois than charge people a couple of bucks to travel over a major, costly and presumably useful new bridge.

• When IDOT is presented with projects like the Elgin/O'Hare Expressway--O'Hare By-Pass that will generate substantial economic and mobility benefits, it temporizes by using years of studies and analysis in a futile attempt to placate relatively few local opponents. Meanwhile, the benefits from the expansion of O'Hare are diminished for lack of a highway/transit infrastructure that will serve the expansion.
  

• The Regional Transportation Authority, the Chicago Transit Authority, Metra and Pace face yet another doomsday with the recent defeat of a transit funding bill, this time featuring a diversion of the sales tax on gas sold in the six-county RTA region from the GRF to transit. The service boards brought on the current financial crisis by overextending their service levels beyond their financial means. Under the bailout plans so far, the very financial oversight agency that stood by while they did so, and then approved an unbalanced FY 2007 budget using a plug number for hoped-for new State funds, gets even more authority. Huh?

• Metra's STAR Line, whose western leg would be on a rail line designed to avoid population centers and whose eastern leg would run down an expensive interstate highway ROW, can't seem to get out of the station. While Metra undoubtedly will someday produce studies showing robust projected ridership levels, few people will believe them, and certainly not the federal government, which has been burned by overly optimistic ridership projections on other new start rail projects.

• The proposed State capital plan--Illinois Works--allocates a much smaller percentage of new capital money to transit than past State capital bills. This presumably means continued deterioration in the CTA system. Metra will finally join the CTA in being starved for capital, which is no consolation at all.

• The Chicago area continues to sprawl, which presumably means greater dependence on foreign oil and thus an larger outflow of dollars from the region. The auto-centric suburbs suck people out of the center area of the region, where population densities are high enough to support transit. There appears to be no way to brake this sprawl and no real interest is doing so. Before you know it Dunkin Donuts/Baskin Robbins outlets will be sprouting along the Prairie Parkway. Just what we need.

Rant over. I feel a bit better. Pardon my bile. It is a temporary thing, I hope. I'm just discouraged.

Should The Metropolitan Planning Council Just Fold Up Shop?

The Chicago Tribune recently published an article by Charles Leroux and Patrick Reardon entitled "Leaps of Faith Drive Ever-Expanding 'Burbs." The article explores why people are migrating to the so-called exurbs at the edge of the Chicago metropolitan region.

The answer is a familiar one. People get more house and lawn for their money. They get something new rather than a tired building decades old. They get to be part of a growing and dynamic community with lots of new faces and energy. The downsides, including long commutes on a highway system choking on they and their exurban compatriots, are not enough for most folks to opt for a smaller, more expensive house in a denser, transit-oriented urban area.

The article builds on the work of Loyola University-Chicago professor Kenneth Johnson. Professor Johnson in his paper entitled "Demographic Trends in Metropolitan Chicago at Mid-Decade" found that Chicago and suburban Cook County lost population (62,000 (-2.1%) and 27,000 (-1.1%) respectively) during the 2000-06 period, while the population on the suburban fringe (stretching from Northwest Indiana to southeast Wisconsin) increased by 500,000 (12.7%).

Johnson suggests that the population increases experienced by Chicago and suburban Cook County in the 1990s may have been a temporary pause in the decades-long migration of the region's population to the exurbs. Even in the 1990s, however, the growth rates of Chicago (4.0%) and suburban Cook County (6.9%) paled beside the growth rate in the suburban fringe (20.6%).

The current difficulties in securing an increase in operating subsidies for the Regional Transportation Authority, the Chicago Transit Authority, Metra and Pace may be in part attributed to a reluctance to increase the public investment in a transportation system whose market base appears to be weakening. This despite service board efforts to attract more riders by rolling out more service than they could afford, as the Auditor General found.

Another indication of public transit's relatively weak market position is found in the Illinois Policy Institute's recent analysis of the CTA, summarized in yesterday's post. This analysis found that the CTA is generating fewer riders per employee and per dollar of public subsidy than it has in the past. It is understandable why some public officials might be reluctant to increase public investment in a system that is not performing well.

As for the Metropolitan Planning Council, the Tribune article has the following:

"There's a joke in my profession that Rockford will be the next suburb," said John LaMotte, a land-use planner whose clients include developers and municipalities. "Now look at how close the edge is getting to Rockford. It's already out to Marengo."

Scott Goldstein, housing expert for the Chicago-based Metropolitan Planning Council, said he believes Rockford won't be the last stop. "I absolutely think it's going to expand for many, many more miles," he said. "It certainly goes to Indiana and Wisconsin. Are we going to approach the Iowa state line?"

If the Metropolitan Planning Council, that paragon of good planning, public transit and compact, transit-oriented development, has given up on taming sprawl then maybe it should just shut its doors and stop using its newsletters and seminars to prick the consciences of those who still believe that paving over paradise is not such a good thing.

More Money For The CTA: Hold On Says IPI Study

From reading his column I have always imagined that Dennis Byrne, the Chicago Tribune columnist, channels the spirits of Lenora Helmsley and George Wallace. Yet, Byrne's column in today's Tribune lambasting the Chicago Transit Authority does us a real service by pointing us to a new analysis of CTA spending and operations by the Illinois Policy Institute.

We have recently compared the CTA's bus system's performance to the performance of Pace's bus system and found that Pace's system appeared to be more cost effective on every measure examined except public subsidy per passenger. The IPI analysis compares the CTA's performance today to its past performance. Here are some of the key findings:

• Rail ridership is up 25%, from 152 million to 190 million since 1979.

• Bus ridership has plummeted by 45%, from 552 million to 304 million since 1979 and overall ridership is down 23% since 1969/70. Bus operations are a key area ripe for improvement.

• The average CTA employee today is less productive than the average CTA employee in 1969 or even 1979. This is illustrated in a number of ways. Spending (cost) per rider is up 41% from $1.55 to $2.19 since 1969/70 and up 31% (from $1.67) since 1979. Correspondingly, riders per employee are down, from 56,299 per employee to 45,292 since 1979. The bottom line is that today’s CTA spends more to deliver a rider and each employee delivers fewer per year on average. This is a root cause of the CTA financial crisis and most of it rests within the bus operations.

• By achieving the 1979 spending benchmark alone ($1.67 per rider), the CTA would save $257 million and more than close the funding gap without having to ask the taxpayers for more.

• By achieving the 1969/70 spending benchmark ($1.55 per rider), the CTA would save $316 million per year.

• The CTA is earning more system (non-subsidized) revenue per rider today than it was in 1979, $1.13 versus $.88, an increase of 28% and certainly a step in the right direction.

• Advertising and concession revenue are up 478%, from $4.3 million to $25 million.

• The public subsidy per rider is up 35% since 1979, from $.79 to $1.07. The taxpayers are more than doing their part in subsidizing the CTA’s operation.

• This 35% increase in the public subsidy on a per rider basis illustrates the fallacy of the CTA public relations and budget document claims that the CTA’s pubic subsidy has not kept pace with inflation. While that fact is true in total dollars, it is a misleading fact since the key data point is the subsidy per rider. In fact, one could make the case that the subsidy is excessive by $138 million ([$1.07 - $.79] x 494 million riders for 2007).

• Bus operations are a key area for improvement. While ridership is down 45% since 1979, total miles driven per year is only down 14%, from 83.5 million to 71.9 million. Further, the total route miles covered (the aggregate miles of the route map) has more than doubled, from 1,042 route miles to 2,529 route miles in 2007. This is unsustainable and the underlying reasons for this must be addressed.

• Today the CTA runs 154 bus routes versus 134 in 1979, an increase in routes and corresponding expense of 15% while ridership fell 45%.

• The bus operations data indicate that in 1979 the CTA operated a tightly focused, more market sensitive route map with more traffic per bus per route operated and bus run made. Today, with the route miles up 143%, it appears the CTA is running too many route miles for too few riders, making the bus system inefficient.

The IPI then makes a series of recommendations that it claims can save the CTA more than the $158 million deficit it faces in 2008.

IPI's short and cogent analysis is well worth a read. It challenges the conventional wisdom that a series of unfortunate events has overwhelmed the CTA, Metra and Pace, necessitating greater public subsidies. Instead, the analysis suggests that the bailouts past and present have allowed the CTA to avoid taking the steps necessary to prudently manage its business.

SB 572 Revenue Measures Abandoned

SB 572 and its combination of an additional 0.25% Regional Transportation Authority sales tax and an increase in the real estate transfer tax in the City of Chicago appears to be dead. In a letter co-authored by House Speaker Michael Madigan and Representative Julie Hamos, the moving force behind SB 572, they indicated that they would support the approach contained in HB 4161, namely, a transfer of most of the sales tax revenue on fuel collected in the six-county RTA region from the State General Fund to transit.

The slightly revised version of HB 4161 that they will put forth will retain--as does HB 4161--the "reform components of Senate Bill 572, which include substantial pension and benefit concessions from transit unions and other requirements to protect the best interests of taxpayers and transit riders."

The fact sheet attached to the letter states that SB 572 would have raised $530 million of new money. HB 4161 and the Madigan/Hamos alternative plan will raise $440 million in new money. It is unclear if the difference is to be made up by a fare increase, which some support, or is money not absolutely needed by the Chicago Transit Authority, Metra and Pace in the first place to maintain current fares and service levels.

It is way too soon for transit supporters to break out the champagne, however. Representatives from both parties, primarily from Downstate, have held up action on a transit funding package because they want a capital program for highways and schools. If the Madigan/Hamos bill comes up for a vote on Wednesday, as scheduled, and there is no such capital program in place, then it is quite possible that the successor of SB 572 could be voted down, just as was SB 572 in early September.

I bet those grunts in the Department of Revenue and elsewhere who are responsible for protecting the State's fisc are tearing their hair out at this development. Under SB 572 the State would be putting up $150 million in new money. Under the HB 4161 approach the State will have to come up with $385 million in new money for transit.

Stay tuned.

ARTBA's Concrete Vision For The Future

The American Road and Transportation Builders Association ("ARTBA") has released a major report entitled "A New Vision & Mission for American's Federal Surface Transportation Program: ARTBA Recommendations for SAFETEA-LU Reauthorization." Not surprisingly, the report concludes that the nation's needs to increase its investment in transportation infrastructure.

The report lays out why traffic congestion levels have increased across the country over the past 25 years. Here are the relevant percentage increases during the 1982-2006 period:

Populations: 28.4%
Drivers: 36.2%
Vehicles: 52.4%
Vehicle Miles Traveled: 94.5%
New Lanes Miles: 6.6%
Hours of Delay: 171.4%

Not surprisingly, when you almost double VMT while increasing road capacity only 6.6 percent increased delays are inevitable. (The fact that congestion is not worse may even suggest that the nation had excess road capacity in the 1970s and 1980s.) The report states that over the next 30 years the U.S. population is expected to grow by 100 million and highway traffic will double again. If road capacity does not increase at a faster rate, then by 2035 "Americans can expect to spend 160 hours--four work weeks--each year in traffic congestion."

The ARTBA report states that the United States is falling behind Europe, China and India in terms of adding highway infrastructure. The projected new miles of interstate quality highways to be constructed between 2000 and 2020 are as follows:

China: 42,000
India: 25,000
Europe: 2,980
U.S.: 1,130

Freight tonnage shipped on roadways by truck in the U.S. is projected to double by 2035, putting even more pressure on the road system.

If that is not enough, the federal Highway Trust Fund is running out of money. Highway crashes in the U.S. alone kill 43,000 people and injure three million annually at a cost of $230 billion, which is more than two percent of the nation's GDP.

In response, among other things, the report recommends a $0.10 increase in the federal gas tax and indexing the tax thereafter at the rate of inflation. The successor bill to SAFETEA-LU should begin the transition from the flat motor fuels tax to a fee-based system based on the amount of miles traveled by vehicle. It argues that road tolling should be encouraged and expanded, as should the use of public-private partnerships to roll out new transportation investments. Further, the current 80:20 ratio of highway to transit investment should be maintained.

The report recommends that states be held more accountable when it comes to capital investment in transportation infrastructure. Among other things, earmarked funds would have to be expended during the life of the successor bill to SAFETEA-LU and increased federal funding would be contingent on states maintaining a minimum level of capital investment necessary to preserve its existing transportation infrastructure.

Finally, the report recommends that the federal government enact a "Critical Commerce Corridors" program to help ensure the safe and efficient transport of freight across the country. The 3C components would include trade corridors, international gateways, access routes to ports and airports, projects to eliminate freight congestion points, and the like. The report recommends that the 3C program be financed through user fees, and lays out a menu of such fees.

This is not a complete summary of the ARTBA report. The report is worth a look to see how a major industry group is staking out its position in what is sure to be a long, and protracted battle over the reauthorization of the federal transportation bill relatively early in the next presidential administration.

Todd Litman: Smart (Growth) Fellow

Todd Litman, the head of the Victoria Transport Policy Institute (here), has posted an article in Planetizen entitled "Smart Growth Safety Benefits." After perusing some of his work and from what I could tell about his presentation at the recent Lipinski Symposium, I'm just about convinced that the transportation and land use agencies in northeastern Illinois should just give him the keys, dictatorial powers, and a few billion dollars to spend and step back. He's my candidate to be the reborn Robert Moses of the smart growth/smart transportation set.

"Smart Growth Safety Benefits" looks at the safety consequences of the increased vehicular traffic in less densely populated areas dependent almost entirely on the private auto for transportation. His thesis is that "traffic safety is one of the most important benefits of smart growth and smart growth is one of the most effective ways to reduce traffic risk."

Litman first compares the traffic fatality rates in ten densely populated area with the rates in ten counties that he characterizes as "dumb growth" counties. He finds that accident rates are much (5x to 10x) higher in dumb growth areas, where per capita vehicle mileage is high.

Litman then establishes that traffic safety tends to increase significantly the more a community relies on non-auto forms of transport such as bicycles and transit. He notes in passing the health and environmental benefits associated with smart growth policies that complement the traffic safety benefits of such development.

Finally, Litman points out a flaw in our method of measuring traffic safety. According to Litman, while accidents per mile driven have dropped, the benefits have been almost entirely offset by the increase in the per capita vehicle miles traveled as a result of the dumb growth policies in place throughout most of North America. Consequently, the per capita accident rate has dropped only slightly over the past 40 years.

None of these conclusions are novel. In his typical fashion, however, Litman lays out his points crisply and in a nice commonsense manner. He doesn't scare anyone with his rhetoric and his writing doesn't drip with elitism.

I talked to him recently about his proposal for taxing parking spaces, which has been implemented successfully elsewhere, but was shot down without a fair hearing in this area. Litman was remarkably equanimous. Rather than making some caustic remarks about the Brezhnevian nature of our region's approach to transportation, he just said that good ideas take awhile to get established and aren't for all regions.

It would be great if Litman were a fixture here, rather than stuck in rainy Victoria coming up with good ideas. UIC's Urban Transportation Center or DePaul's Chaddick Institute could use a shot of fresh thinking that Litman would bring.

SB 572 Meets The Alternative

In many quarters, including editorial boards, the notion that there is any alternative to SB 572 and its regional sales tax increase is treated dismissively. There is an alternative, however, and that is HB 4161, which was introduced by Representative Saviano, is co-sponsored by seven Republican colleagues, and appears to supported by Governor Blagojevich. HB 4161 uses a portion of the sales tax collected on gasoline sold in the six-county area that makes up the jurisdiction of the Regional Transportation Authority to fund public transit operations at the Chicago Transit Authority, Metra and Pace. At first glance, HB 4161 appears to contain many if not most of the so-called reforms of the RTA that are contained in SB 572.

The best description of HB 4161 I've seen is this letter to the editor in today's edition of the Lake County News-Sun from Representative Sandy Cole, reprinted in full below in the interest of giving a full hearing to an alternative to SB 572:

Equitable funding for mass transit

November 23, 2007

As a chief co-sponsor of House Bill 4161 (Regional Transportation Support Fund), I would like to take this opportunity to clarify an erroneous assumption made by your Nov. 20 editorial about the proposed redirection of the state sales tax on gasoline to mass transit ("Political dallying").

New construction for Lake County roads would not be impacted, as was concluded. There is a gross misconception by both the media and the public that the gasoline sales tax and the motor fuel tax are one and the same. They are not. As with all appropriation legislation, the devil is in the details.

In Illinois, gasoline and diesel are subject to a sales tax at a rate of 6.25 percent. The state retains 5 percent of the collected revenues and the remaining 1.25 percent is disbursed to local governments. The state's portion of sales tax revenue is generally deposited into the General Revenue Fund and used toward general government expenses.

HB4161 would redirect the state's portion (5 percent) of the tax revenues to a proposed Regional Transportation Support Fund. According to the Illinois Department of Revenue, that portion will be approximately $385 million in 2008. The difference left in the General Revenue Fund by this redirection of funds would be bolstered by other new revenue sources, such as additional gaming positions at existing casinos or closing corporate loopholes.

In addition, the state imposes a Motor Fuel Tax (19 cents per gallon of gasoline, 21.5 cents per gallon of diesel). This is a tax for state roads and the proceeds go toward road building projects, including those in Lake County.

In 2006, the state collected about $1.4 billion in Motor Fuel Tax revenues. All Motor Fuel Tax revenue is deposited in the Motor Fuel Tax Fund and is distributed per a formula set in state statute.

Combined with modest fare increases, the provisions of HB4161 offer the same level of funding as Senate Bill 572 without tax increases. HB4161 has proposed fare increases (10 percent in 2008 to generate $73 million and another 5 percent in 2009 to generate $50 million) that are both minimal and reasonable.

Between 2001 and 2006, the price of gasoline has increased 68 percent, but CTA cash fares have only increased 15 percent. It is fair to expect riders to pay for increased fares, just like motorists have to pay more for gasoline.

SB572 did not include a fare increase because it relied on tax increases. HB4161 is based on the premise that those who use the service should help pay for it. Of course, they cannot be expected to pay all of the costs of maintaining the mass transit system, but transit riders should pay a fair share.

Without a doubt, I support increased mass transit funding and believe that the gas sales tax proposal is a more responsible alternative for resolving the mass transit funding crisis than raising taxes on families and seniors. Raising taxes should always be our last priority, not our first.

Chicago Mayor Says Think Different

The Mayor of Chicago has challenged the State to be "creative" when it comes to solving the public transit funding problem. Fresh from raising property taxes in Chicago, the Mayor also criticized the Governor for his opposition to increasing sales taxes in the six-county Regional Transportation Authority region So, let's get modestly creative and suggest that the following provisions be included in the final transit bill:

1. Indexed Fare Increases. Index fares to some reasonable measure such as the Consumer Price Index, perhaps capping increases at 4% annually to avoid sudden spikes. This provision will address the concerns of certain parties that a fare increase be part of a funding solution and allow the service boards--Chicago Transit Authority, Metra, Pace--to avoid the counter-productive cycles of putting off fare increases too long and then raising them too sharply. Indexing public transit fares provides a nice precedent for using a similar index to periodically increase the state gas tax to help protect its yield in real dollars.

2. Direct State Role In RTA . Take a board member from each of the three RTA subregions--City of Chicago, suburban Cook County and the collar counties--and make them gubernatorial appointments subject to Senate approval. Make the RTA Chairman a gubernatorial appointment. This State role is commensurate to the State's financial contribution to the public transit system in northeastern Illinois and the important role of that system in the State's transportation system.

3. Hold RTA Accountable. Currently, the RTA can reject service board budgets that do not meet the statutory requirements. The service board then suffers a financial penalty, namely, loss of their share of Public Transportation Fund monies from the State. The RTA, however, suffers no financial penalty if it is derlict in its duties by, for example, allowing service levels to grow faster than revenues over an extended period (as the Auditor General found) or approving unbalanced budgets with plug numbers for hoped-for contributions from the State to cover major deficits (as the RTA did in FY 2007). Some portion of the RTA's funding for its own administration should be subject to being withdrawn if the RTA fails to perform. This provision would apply only if the RTA remained as just a financial oversight agency. (See #5 below.)

4. Tie Transit To Land Use. Explicitly tie transit investments to land use. Write in the RTA Act a requirement that the RTA prioritize transit investment and service to regions and communities that support transit oriented development. (This is not necessarily a gimme for Chicago. Its embrace of big box retailing and minimum parking space requirements for new residential construction, for example, might put it below some suburban communities that are trying to build TOD developments around Metra stations.)

5. Restructure The RTA And The Service Boards. Combine CTA bus operations and Pace mainline bus operations into one operating unit. Pace's paratransit, vanpool and demand response service becomes another unit. CTA rail and Metra become their own units. These become purely operating units tucked into the RTA. This means that the separate boards of directors of the service boards would be abolished. Rather, the RTA and its board would have ultimate operating responsibility for public transit in the region.

Find a funding source, pass these provisions and be done with it. There certainly are more creative ideas--e.g., emergency oversight agency; combining RTA, IDOT District 1 and the Tollway; and heavy investment in alternative automobile technology (e.g., plug in hybrids)--but these provisions with the exception of #5 could be tucked into SB 572 or its successor pretty easily.

CTA Cost Structure: Background

The previous post outlined how the Chicago Transit Authority's bus operations appears to be significantly less cost-effective than Pace's bus operations in terms of the cost of putting vehicles on the streets (because of its higher ridership the CTA does better on a per passenger cost basis).

This extensively researched article by Stacy Warden in Chi-Town Daily News outlines how the CTA's high pension costs and wages contribute to its overall high cost structure and the series of events that resulted in the CTA's unmanageable pension costs. This article briefly outlines the five year labor agreement that is embedded in SB 572 and attempts to address pension costs.

Pace Laps The CTA On Cost Effectiveness Of Bus Operations: Implications For Transit Funding Crisis

A recent post indicated that Pace's financial situation is more dire than the Chicago Transit Authority's financial situation according to some basic measures such as unfunded operating deficit as percentage of revenue.

There is another side to the Pace story, however, and that is the relative cost effectiveness of its bus service. According to the Federal Transit Administration's National Transit Database 2006 reports for Pace and the CTA the "service efficiency" figures covering Pace and CTA bus service are as follows:

Operating Expense Per Vehicle Revenue Mile
Pace: $6.37
CTA: $12.50

CTA 96.2% higher

Operating Expense Per Vehicle Revenue Hour
Pace: $89.28
CTA: $123.17

CTA 40% higher

Operating Expenses Per Passenger Mile
Pace: $0.58
CTA: $1.11

CTA 91.4% higher

Operating Expenses Per Unlinked Passenger Trip
Pace: $3.87
CTA: $2.77

Pace 39.7% higher

Unlinked Passenger Trips Per Vehicle Revenue Mile
Pace: 1.65
CTA: 4.51

CTA 173.3% higher

Unlinked Passenger Trips Per Vehicle Revenue Hour
Pace: 23.07
CTA: 44.39

CTA 92.4% higher

Ignoring for a moment the costs associated with putting a bus on the street, CTA bus service is more effective than Pace's bus service because CTA buses carry more passengers per hour of operation and mile traveled. The greater number of CTA bus passengers per vehicle hour and per bus trip means that the CTA's operating expense per passenger ($2.77) is less than Pace's operating expense per passenger ($3.87).

Pace, however, is much more cost effective than the CTA in putting buses on the street. Its operating expense per vehicle mile and per passenger mile are only slightly more than half of the CTA's operating expense according to these measures. The CTA's operating expense per vehicle revenue hour is 40 percent higher than Pace's.

These results might be skewed in Pace's favor for at least two reasons. First, Pace's operating environment--suburban streets and highways--and lighter passenger loads result in fewer stops and starts that eat up fuel and equipment. Second, the CTA's bus fleet is older than Pace's bus fleet, so the CTA incurs higher repair costs because of the greater frequency of mechanical breakdowns.

So let's assume that Pace's bus service is 19.1 percent more cost effective than the CTA's bus service in terms of putting buses on the street. This 19.1 percent figure is conservative, representing less than half the lowest cost-effectiveness advantage that the FTA data shows that Pace has over the CTA.

Now apply this 19.1 percent cost savings figure to the 2006 operating expense for CTA bus service that the CTA reported to the FTA ($828,100,714). That yields $158.2 million, the very amount of the CTA's projected FY 2008 unfunded operating deficit that is behind the push to pass SB 572 and the many months of machinations connected therewith. In other words, if the CTA's bus service were as cost effective as Pace's bus service it appears there would be no unfunded CTA operating deficit.

Those opposing SB 572 might focus on finding a way to apply Pace's cost structure for its bus operations to the CTA's bus operations. Those supporting SB 572 might reflect on how the relative cost ineffectiveness of CTA bus operations compared to another public transit agency providing bus service in same metropolitan area dampens the appetite for a sales tax increase, and modify their legislative strategy accordingly.

Pace has already taken on ADA paratransit operations for the six-county region that makes up the Regional Transportation Authority's service area. Is there a way for that to happen for mainline bus service while preserving Pace's lower cost structure?

Grass Roots Anti-SB 572 Efforts

The Moving Beyond Congestion/SB 572 effort has attracted the support of a variety of interest groups, ranging from the genteel (e.g., Metropolitan Planning Council) to those that position themselves more in the community activist mode (e.g., Campaign for Better Transit). These groups have sponsored rallies and email campaigns intended to push for passage of SB 572.

The Illinois Policy Institute, a think tank whose slogan is "free enterprise and limited government for a better Illinois," apparently has been engaged in a grass-roots effort against SB 572. According to a blog post in the Chicago Daily Observer entitled "Kiss that CTA Bailout Goodbye...For Now," the Institute did the following:

The Institute targeted state representatives who were being pressured to vote for the tax increase and called more than 30,000 voters in their districts to urge them to contact their legislators.
* We spread the word to leaders of Americans for Tax Reform, who contacted key members of the Transportation Committee to oppose the tax hike.
* We also notified our friends at the National Taxpayers Union, who subsequently sent out 16,000 emails to their Illinois membership urging their members to oppose this tax increase.
* Our team drafted and placed two op-eds explaining the impending tax hike and its implications.
* We informed both the State Republican Party and House Minority Leader Tom Cross on our strategies to educate policymakers, the public and the press on the threat this tax posed.
* Finally, we hit the airwaves on one of Chicago’s most popular talk radio stations, WLS. Both CEO John Tillman (you can hear his interview here) and President Greg Blankenship went on the air to flesh out the real issues behind the tax hike and to expose its inconsistencies and flaws.

* * *
What other interest groups, if any, have joined the Institute in fighting against the SB 572 and a "bailout" of public transit in northeastern Illinois?

$1.9 Billion I-94 Expansion Announced

Wisconsin transportation officials have announced a $1.9 billion plan to reconstruct I-94 from Mitchell Airport in Milwaukee to the Wisconsin/Illinois state line and to add a fourth lane in each direction. In Illinois, the Illinois Tollway is expanding I-94 south of the Wisconsin border (the North Tri-State) to four lanes in each direction.

At the same time, the Wisconsin legislature recently killed a rental car tax increase that would have funded a Kenosha/Racine/Milwaukee commuter rail line (dated website here) that would be linked to Metra's North Line. That project would cost about $250 million to build according to news reports (e.g., here). Metra's financial troubles are well known.

This commentator questions whether it makes sense for Wisconsin (and by extension Illinois) to be pumping public investment capital into highways--with their adverse environmental effects--while neglecting alternatives such as commuter rail. This commentator takes the position that the transportation networks and economies of northeastern Illinois and southeastern Wisconsin need to be better integrated and urges that both the highway and rail projects go forth.

Is there a ready-made solution: Toll the entire I-94 corridor from Chicago to Milwaukee and use a portion of the proceeds to upgrade both direct rail service (Amtrak) and commuter rail service (KRM and Metra)? With the heavy daily traffic volumes it would not be hard to generate plenty of revenue to fund such alternatives.

More On The Budget Holes: Metra

Metra has adopted its 2008 budget and sent it to the RTA for its approval. (Reports here, here and here.) A $40 million projected 2008 deficit is prompting Metra to increase fares by 10 percent, commencing February 1, 2008.

The final version of Metra's 2008 is not yet available on Metra's website. An earlier draft, however, is available (here) and allows us to complete the analysis of the deficits of the three service boards, the Chicago Transit Authority, Pace and Metra.

Not surprisingly, the data (see below) show that Metra's deficit is less severe than the CTA and Pace deficits when measured as a percentage of revenue and operating expense. Metra's per trip unfunded deficit ($0.49) is between the CTA's per trip unfunded deficit ($0.32) and Pace's per trip unfunded deficit ($0.85). Note that the service board ridership data appear to define "trip" as an unlinked trip (e.g., getting on and off a bus/train) rather than the full journey, including transfers, between the customer's origin and destination. Metra's customers probably are more likely to take one ride to their destinations than Pace and, especially, CTA customers. Thus, if "trip" is defined as the travel necessary for a customer to get from their origin to their destination the Pace and CTA per trip unfunded deficit figures would likely rise more than the Metra unfunded per trip deficit figure.

CTA
Unfunded 2008 Deficit: $158,000,000
2007 Expenses $1,079,052,000
2007 Revenue: $541,800,000
2007 Ridership: 493,600,000

Unfunded deficit as a percentage of expenses: 14.6%
Unfunded deficit as a percentage of revenue: 29.2%
Per trip unfunded deficit: $0.32

Metra

Unfunded 2008 Deficit: $40,000,000
2007 Expenses $553,980,000
2007 Revenue: $285,060,000
2007 Ridership: 82,000,000

Unfunded deficit as a percentage of expenses: 7.2%
Unfunded deficit as a percentage of revenue: 14.0%
Per trip unfunded deficit: $0.49

Pace
Unfunded 2008 Deficit: $32,900,000
2007 Expenses: $164,757,000
2007 Revenue: $56,435,000
2007 Ridership: 38,900,000

Unfunded deficit as a percentage of expenses: 20.0%
Unfunded deficit as a percentage of revenue: 58.3%
Per trip unfunded deficit: $0.85

Sheriff Wyatt Yawp Rides High In Kane County

The Daily Herald reported the recent comments of Kane County Board member Bill Wyatt. According to the report, Wyatt "railed" on the Chicago Transit Authority as a "brother that you can't control" at the expense of its suburban siblings Metra and Pace.

Wyatt went on to say: "'People in the suburbs, in my opinion, need to know that Pace is not the problem. Metra is not the problem. The problem's in the city of Chicago,'" Wyatt, an Aurora Republican, said at Tuesday's Kane County Board meeting."

Wyatt's assessment that "Pace is not the problem" doesn't bear scrutiny. By any measure except raw dollars, Pace is in a much deeper in the financial hole than the CTA:

CTA
Unfunded 2008 Deficit: $158,000,000
2007 Expenses $1,079,052,000
2007 Revenue: $541,800,000
2007 Ridership: 493,600,000

Unfunded deficit as a percentage of expenses: 14.6%
Unfunded deficit as a percentage of revenue: 29.2%
Per trip unfunded deficit: $0.32

Pace
Unfunded 2008 Deficit: $32,900,000
2007 Expenses: $164,757,000
2007 Revenue: $56,435,000
2007 Ridership: 38,900,000

Unfunded deficit as a percentage of expenses: 20.0%
Unfunded deficit as a percentage of revenue: 58.3%
Per trip unfunded deficit: $0.85

In other words, Pace's unfunded 2008 deficit is much larger than the CTA's unfunded deficit when measured as a percentage of operating expense or revenue or on a per trip basis.

By way of comparison, if the CTA's unfunded deficit percentages were the same as Pace's unfunded deficit percentages then the CTA's unfunded operating deficit would range from $215,474,000 (% of revenue measure) to $417,466,000 (unfunded deficit per ride measure.)

Note that Pace's funded operating deficit is higher on a percentage basis than the CTA's funded operating deficit as well. Pace is only required to generate about 40 percent of its revenue from its operations while the CTA (like Metra) has to generate over 50 percent of its revenue from operations. In other words, big brother CTA and little sibling Metra are subsidizing Pace even in the best of times.

Wyatt's comments came at a Kane County Board meeting attended by Metra and Pace representatives, but apparently not the CTA. There is no indication from the report that the Metra or Pace representatives stood up for their CTA "sibling" in the face of Wyatt's verbal onslaught.

Wyatt's apparently unchallenged statements are yet another reason why the RTA (but not CMAP) should be scaled back to possibly two counties (Cook, DuPage) and no more than four counties (add Lake and Will) that have the interest and political will to support a regional transportation system. Once cut loose from the RTA, Kane, McHenry and perhaps other counties could contract with the RTA for service (e.g., Metra service to Elburn) and/or put together self-made and self-funded transit systems on their own. In a time of financial distress, why shouldn't the RTA be scaled back to its core service area, sparing it the potshots and endless yawping from knuckleheads in Kane and McHenry Counties.

Shifting Population Landscape: Implications

While the Chicago region's population as a whole is expected to grow at a decent rate over the next 20 years, this general growth masks population shifts within the region that have important implications for the region's transportation system.

This article indicates that the congressional districts represented by Representatives Jan Schakowsky and Rahm Emanuel are among the ten districts in the nation with the fastest shirking populations in the 2000-05 period. Schakowsky's district lost 51,906 (7.9%) of its population during that period, the third greatest decrease in the nation. Emanuel's district lost 33,260 (5.1%) of its population during that period, the eighth largest decrease in the nation.

The national map (here) based on Almanac of American Politics (site) data showing population changes indicates that the 1st, 3rd, 4th and 7th congressional districts also lost population during the 2000-05 period. All of these districts cover the City of Chicago and nearby suburbs.

These congressional districts have the highest population and employment density in the region. For the most part they embody the kind of transit-oriented development so prized these days as an antidote to everything from obesity to global warming. The current level of transit investment and infrastructure in these districts is higher than in the congressional districts farther out from Chicago.

The shift in population away from these high-density, transit-friendly areas to the urban fringe does not bode well for public transit (or the environment) in this region. The loss of population in the urban core cuts away at the sales tax funding base for the Chicago Transit Authority. Transit is harder and more expensive to provide in sprawling exurbs. It also is harder to make the business case for heavy new capital investment in transit when the ridership base of the CTA, which still carries about 80% of the region's transit customers, is shrinking.

Could the current difficulties in finding increased capital and operating funding for the Chicago Transit Authority, Metra and Pace be driven in part by an almost unconscious recognition that the demographic trends in this region are pointing us in the direction of becoming a sprawling, auto-centric region like Detroit (but with a more vibrant downtown) instead of a city like London or Paris with a strong public transit system?

Speaking of which, are there any provisions in SB 572, the long-stalled bill to provide more operating funding for the service boards and "reform" the Regional Transportation Authority, that will help counteract the centrifugal forces that are pulling this region into a development pattern largely inhospitable to transit?

Setting STAR Line?

Crain's reports that a group of suburban municipalities is gearing up to oppose the Canadian National Railway's purchase of the Elgin, Joliet & Eastern Railway's line that stretches in a giant circle from Waukegan to Gary. CN is going to use this line to reroute freight trains that currently have to travel through the City of Chicago. This will allow railroad properties in the City to be developed for other uses. As anyone who had taken Metra's Aurora and Geneva lines to Chicago can observe, railroad property in Chicago has been extensively developed with relatively high density housing.

As previously reported, Metra has designs on part of the EJ&E line for the western branch of its much-anticipated STAR Line. Metra will find it much harder and certainly more expensive to acquire this right of way if CN proceeds with transforming it into a key link in the nation's rail transportation network. It will be interesting to see if Metra gives aid and comfort to the suburban NIMBY group (meant only to be descriptive in this case). According to the article, the opponents of the CN move are unlikely to be able to block CN's acquisition of the EJ&E line.

The juxtaposition of a group of suburban municipalities with low density/auto-centric development patterns opposing the expansion of a rail line that will free up space for higher density, more transit-friendly development elsewhere in the region is instructive. It does not appear that there is any public body--be it the RTA or the Chicago Metropolitan Agency for Planning--whose job it is to weigh the cost and benefits of the CN takeover from a regional perspective. In terms of CO2 emission reduction, for example, which will do more--build the STAR Line in areas that are mostly sprawling and auto-centric or build walkable, transit friendly development is an area already comparatively well served by transit (at least until the 1/20/08 Doomsday).

Even if the STAR Line wins that contest, is it time for Metra to put the STAR Line to rest anyway? Metra seems to be having a hard time developing believable projected ridership numbers that would support such a major new capital investment. The fact that the proposed State capital plan has a 10:1 highway/transit funding ratio (compared to a 2:1 ratio in the last capital bill) certainly does not indicate strong support for the STAR Line specifically and public transit generally. Metra can't pay its bills now without raiding its capital funds. Adding a new line that will surely operate at a substantial operating loss would only make its financial position worse.

Put these all together--a weak business case, lack of public/political support for the STAR Line in the State capital bill, Metra's operating funding challenges, and arguably other transit investments that will do more to reduce congestion and auto travel than the STAR Line--and maybe it is time for the STAR Line to be mothballed.

I-355 South Extension Opens: Cause For Celebration Or Mourning?

The South Extension of I-355 opens tomorrow after today's festivities. The South Extension runs about 13 miles from I-55 to I-80 in New Lenox, mostly in Will County. While much of the corridor is still rural in character, subdivisions are replacing cornfields and there is much commercial development along the corridor, including at least two developments of around two million square feet apiece. In short, the Chicago metropolitan region is sprawling some more.

From all accounts, Will County residents are generally in favor of the South Extension. A Sierra Club lawsuit stopped construction in the mid-1990s, but no environmental group filed such a challenge this time. (Timeline here.)

Should we view the South Extension as a welcome addition to the region's transportation system or is it an investment in auto transportation that is a reckless gamble when oil prices are continuing their climb to $100/barrel and beyond? Is the increase in convenience for Will County residents outweighed by the environmental costs associated with ramming an expressway through a rural area and the sprawl-type development that will inevitably result? Why did the Sierra Club (and other such groups) take a pass on challenging the South Extension this time around?

Final question: The South Extension cost about $750 million. Is the region better off with this investment or would the money have been better used on fixing the region's public transportation system?

The Regional Distribution Of IDOT's Highway Capital Dollars

Introduction

This post looks at the allocation of highway capital dollars by the Illinois Department of Transportation throughout the State of Illinois, using factors such as population, highway miles, and daily vehicle miles traveled in each IDOT district. Likely to no one's surprise, it shows that District 1, which encompasses the six counties of northeastern Illinois, receives less than any other district on a vehicle miles traveled basis and is second lowest on a per capita basis, although it tops the State in terms of investment on a per highway mile basis. This analysis indicates that northeastern Illinois subsidizes highway capital investment in the rest of the State, a fact that may have some relevance in the ongoing debates over the "bailout" of the public transit agencies operating in District 1.

Methodology

The Illinois Department of Transportation has posted its FY 2008-2013 Proposed Highway Improvement Program (here). Such detailed capital program documents were long shrouded in bureaucratic secrecy by IDOT. Governor Blagojevich's administration should get some credit for posting the Program in the public domain and, in general, making more information about IDOT and its programs publicly available.

The Program allocates capital dollars for highway improvements among each of IDOT's nine districts (district map here). District 1 covers the same six counties in northeastern Illinois that make up the service area for the Regional Transportation Authority and its three service boards--Chicago Transit Authority, Metra, and Pace. The remaining districts are Downstate. Generally speaking, the higher the district number the further south the district.

I pulled highway miles, daily vehicle miles traveled, and FY 2008-2013 capital investment data from the Program. I aggregated 2000 Census data for each Illinois county into district population figures. Then, I utilized my primitive Excel skills and went to town.

Summary Results

Per Capita Highway Investment

District 1 $382.44
District 2 $917.26
District 3 $1,649.3
District 4 $1,058.47
District 5 $600.11
District 6 $313.74
District 7 $1,011.16
District 8 $1,175.02
District 9 $1,425.75

Statewide Average $621.75
Downstate Average $935.20

Investment Per Highway Mile

District 1 $918,623.88
District 2 $387,403.45
District 3 $446,224.26
District 4 $350,153.85
District 5 $206,870.80
District 6 $147,072.82
District 7 $241,463.41
District 8 $466,703.66
District 9 $344,217.69

Statewide: $432,536.06
Downstate: $322,941.53

Investment Per Daily Mile Traveled

District 1 $26.96
District 2 $52.16
District 3 $66.67
District 4 $60.53
District 5 $28.85
District 6 $29.71
District 7 $43.04
District 8 $54.26
District 9 $58.84

Statewide Average: $37.42
Downstate Average: $49.83

Analysis

This summary lends itself to two related conclusions. First, it appears from both the per capita and vehicle miles traveled data that the denser land-use patterns in District 1 lend themselves to more cost-effective highway transportation than in the less densely populated areas Downstate. This was a bit of surprise to me, given the higher land acquisition and construction costs in an urban area, but it makes sense when one considers the higher level of use of urban roadways.

Second, because of that higher level of cost-efficiency, IDOT is able to shift money from Northeastern Illinois to fund Downstate highway projects. District 1, after all, accounts for 63.52% of the population and 54.24% of the daily vehicle miles traveled in Illinois, yet it will receive only 39.07% of IDOT's highway capital dollars under the Program. Presumably, the percentage of vehicle miles traveled in a district approximates that district's contribution of gas taxes and other revenues for IDOT's highway program. The major difference between District 1's revenue contribution and its return in the form of IDOT highway capital investment is highly significant.

Some caveats. First, this analysis does not consider IDOT's investment in other transportation modes such as airports and public transit. When IDOT's investments in those other modes are factored in--something I hope to do down the line--District 1 may not be such a heavy donor region after all. Second, the Illinois Tollway system, which is centered in District 1 and is completely funded by user fees--frees up District 1 money for use Downstate. It is quite possible that these two effects cancel each other, leaving District 1 as a major donor region.

Third, it is possible that the distribution of IDOT's capital investment reflects a certain ebb and flow among the districts. Maybe the 2008-13 period is a down period for District 1 and that it might even become a donee district at some point in the future when it finally undertakes expensive new projects like the Western O'Hare Bypass. Finally, this analysis does not consider the value of the products being carried on the highway in each district. It is possible, although I don't think it is likely, that the value of goods carried on Downstate highways is higher than the value of goods carried on District 1 highways.

The purpose of this analysis is not to incite more Chicago vs. Downstate antagonism. Every great urban region, after all, needs to be linked effectively to its hinterland. The notion that "Chicago" is soaking up a disproportionate share of the State's transportation dollars, however, appears to be a myth.

Detailed Results

District 1
Population 7,261,176 63.52%
Highway Miles 3,023 18.40%
Daily Vehicle Miles 103,000,000 54.24%
FY 2008-13 Investment $2,777,000,000 39.07%
Per Capita Investment $382.44
Per Mile Investment $918,623.88
Per VMT Investment $26.96

District 2
Population 710,814 6.22%
Highway Miles 1,683 10.24%
Daily Vehicle Miles 12,500,000 6.58%
FY 2008-13 Investment $652,000,000 9.17%
Per Capita Investment $917.26
Per Mile Investment $387,403.45
Per VMT Investment $52.16

District 3
Population 472,901 4.14%
Highway Miles 1,748 10.64%
Daily Vehicle Miles 11,700,000 6.16%
FY 2008-13 Investment $780,000,000 10.98%
Per Capita Investment $1,649.39
Per Mile Investment $446,224.26
Per VMT Investment $66.67

District 4
Population 537,568 4.70%
Highway Miles 1,625 9.89%
Daily Vehicle Miles 9,400,000 4.95%
FY 2008-13 Investment $569,000,000 8.01%
Per Capita Investment $1,058.47
Per Mile Investment $350,153.85
Per VMT Investment $60.53

District 5
Population 461,585 4.04%
Highway Miles 1,339 8.15%
Daily Vehicle Miles 9,600,000 5.06%
FY 2008-13 Investment $277,000,000 3.90%
Per Capita Investment $600.11
Per Mile Investment $206,870.80
Per VMT Investment $28.85

District 6
Population 984,879 8.62%
Highway Miles 2,101 12.79%
Daily Vehicle Miles 10,400,000 5.48%
FY 2008-13 Investment $309,000,000 4.35%
Per Capita Investment $313.74
Per Mile Investment $147,072.82
Per VMT Investment $29.71

District 7
Population 391,631 3.43%
Highway Miles 1,640 9.98%
Daily Vehicle Miles 9,200,000 4.84%
FY 2008-13 Investment $396,000,000 5.57%
Per Capita Investment $1,011.16
Per Mile Investment $241,463.41
Per VMT Investment $43.04

District 8
Population 715,734 6.26%
Highway Miles 1,802 10.97%
Daily Vehicle Miles 15,500,000 8.16%
FY 2008-13 Investment $841,000,000 11.83%
Per Capita Investment $1,175.02
Per Mile Investment $466,703.66
Per VMT Investment $54.26

District 9
Population 354,901 3.10%
Highway Miles 1,470 8.95%
Daily Vehicle Miles 8,600,000 4.53%
FY 2008-13 Investment $506,000,000 7.12%
Per Capita Investment $1,425.75
Per Mile Investment $344,217.69
Per VMT Investment $58.84

CTA Doomsday Clock Reset

January 20, 2008.

Tick, tock. . . .

Voters And Transit Funding: Why Is This Region So Skittish?

The notion of asking voters in the six county area to approve a regional tax increase to fund public transit seems anathema to transit supporters in this region. Presumably, transit supporters fear that voters will turn down such a tax increase and believe that public transit will fare better in Springfield in the General Assembly. The doomsday cycles of the last few years and the success of transit funding referenda across the country should prompt a re-evaluation of that assumption.

The Center for Transportation Excellence tracks the success of transit funding ballot measures and has found an approval rate of over 50 percent nationwide. The elections earlier this week were no exception. Of the 19 transit funding measures on the ballot 13 were approved by the voters.

The biggest wins for transit came in San Francisco, where voters approved a measure that will increase funding and allow reforms of Muni, and in Charlotte, North Carolina, where voters rejected a repeal of the existing sales tax for transit.

The biggest loss came in Seattle, where voters rejected a measure that would have increased taxes to fund 50 miles of new rail transit and 186 miles of new road lanes. According to this article, however, the defeat might have been because the measure was insufficiently supportive of public transit and thus did not do enough to address global warning. Indeed, the Sierra Club opposed the measure.

Given the tough sledding in Springfield and the national success rate for transit funding referenda, why are transit officials and regional leaders here reluctant to proceed with a transit funding referendum to provide additional funds to the RTA and the three service boards, Chicago Transit Authority, Metra and Pace? After all, public transit has a larger market share here than in most if not all of the areas that have approved transit funding referenda over the past decade.

I suspect that there are two answers. First, transit supporters fear that voters won't agree that the additional funding necessary to stave off doomsday and provide sufficient capital is worth the congestion relief and other benefits from public transit. Second, they fear that the State would not increase its Public Transportation Fund match of the new revenue generated regionally if the referendum did pass.

What would be the result if SB 572 were packaged into a regional referendum? How would you vote?

What's Got Into IDOT?

The Illinois Department of Transportation has announced a series of public hearings on its Illinois State Transportation Plan. You can get a draft of the Plan here.

The Plan has some bad news. Vehicle miles traveled in Illinois continue to grow faster than the rate of population. Yet, IDOT has no money to expand the transportation system, spending 95 percent of its money on maintaining the current system. Existing funding sources like the gas tax are expected to show anemic growth in the years ahead. If that is not bad enough, construction costs in the Chicago area are growing significantly faster than the already robust rate of increase nationally. In short it looks like more of the same Soviet-style management of our limited road capacity lies ahead, namely, long, slow lines of cars on busy highways inching through the roadway chokepoints.

Yet, there are some glimmers of hope in the Plan. Might IDOT be ready to emerge from an extended slumber that has kept it well behind innovative departments of transportations in other states? Several examples:

-- Intelligent Transportation Systems: The Plan tips its hat toward intelligent transportation technologies that increase highway capacity without increasing lane miles and improve safety.

-- Congestion Pricing: Despite indications that the Governor opposes congestion pricing, the Plan treats congestion pricing as a viable transportation system option and calls for "explor[ing] the effectiveness of congestion pricing as a to reduce congestion." Wow.

-- Public/Private Partnerships: The Plan states that a goal is to "support joint public-private partnership and private sector initiatives to provide transportation facilities and services where public expenditures can be reduced and the quality, quantity and long-term stability of service is maintained."

-- User Fees/tolling: More IDOT surprise goals: "Extend user-pay financing to new technologies [and] . . . explore toll opportunities and innovative financing methods, including value capture pricing, to fund transportation facilities and services."

Maybe IDOT is learning from its recent loss of an Urban Partnership Program grant because of its failure to embrace congestion pricing and other such transportation management techniques. Or is this just window dressing to keep civic groups focused on Chicago area public transit--a tiny part of the State's transportation system--while IDOT and the roadbuilders go to town slinging asphalt Downstate?

I prefer to be optimistic and hope that members of the transportation, business and environmental communities press IDOT to make good on the innovations hinted at in this draft Plan.

SB 572: Hope Springs Eternal For Representative Hamos

Representative Julie Hamos has circulated a newsletter discussing SB 572 and the transit funding situation. She describes why SB 572 failed to advance out of the Illinois House as follows:

The House of Representatives returned to Springfield last Thursday with the expectation that there would be a vote on SB 572, our comprehensive transit plan. However, the House Republicans again held firm that they were unwilling to support transit legislation without a capital infrastructure bill. Since transit is a truly regional, bipartisan issue that deserves bipartisan support, it was impossible to pass the transit bill with hardly any Republican support.

The newsletter goes on to note that the Governor and three of the four legislative leaders have pledged to work hard over the next two weeks to craft a long-term transit funding solution by coming up with a state-wide capital plan. (You can access the letters through the Hamos newsletter.) The lone holdout is Senate Minority Leader Frank Watson, perhaps smarting over the less than complete description of SB 572 contained in a letter he received from the RTA recently.

In any event, Representative Hamos closes her newsletter with the following: "I remain hopeful that the leaders will fashion a capital infrastructure bill that will pave the way for a successful vote on SB 572 in the next two weeks."

What, if any, of SB 572 will survive the legislative back and forth over the next days or weeks?

Is transit funding the only issue that needs to be resolved by the Governor and the legislative leaders or are the RTA "reform" provisions also up in the air?

Will the CTA unions agree to honor their concessions if a solution is not enacted before 2008? Are greater concessions possible in 2008 if the CTA's 2008 doomsday is even worse than the 2007 doomsday that was just averted?

Is the Governor or any of the legislative leaders inclined to radically reform the Chicago area public transit system by, for example, combining the Chicago Transit Authority, Metra and Pace into the RTA as operating units of the RTA?

Will enough of SB 572 pass so that Representative Hamos can feel like the effort she has put into this issue has been worthwhile?

Shake Your Spunky Bottoms For The WRDA!

It is easy to forget in the welter of highways and railroad tracks that water transportation was the key to the economic development of Illinois. William Cronon in the book Nature’s Metropolis and others have argued that Chicago’s rise was on account of its perch between the Great Lakes and Mississippi River watersheds that was ably exploited via the I & M Canal. Water transportation of bulk goods is still a significant part of the Illinois transportation network.

Congress recently passed the $23 billion Water Resources Development Act. (Summaries here and here.) The WRDA provides about $3.6 billion for navigational improvements and ecosystem restoration projects in the Upper Mississippi River region. Here’s a description from the Conference Report:

Upper Mississippi River and Illinois Waterway System

The upper Mississippi River and Illinois Waterway system is an important waterway, used to ship grain, predominantly from the heartland, all across the country. The conference report will:

Authorize $256 million for near-term navigation improvements and ecosystem restoration along the system;
Authorize $1.95 billion for new locks;
Authorize the Army Corps to address the cumulative environmental impacts of operation of the system and improve the ecological integrity of the Upper Mississippi River and Illinois River through a $1.7 billion program; and
Create an advisory panel to provide independent guidance in the development of environmental and navigation improvements.

Illinois appears to be a big beneficiary of these dollars. According to a weekend story in the Peoria Journal Star $2 billion of this money will be used to rebuild locks on the Illinois River in Peoria and LaGrange. The bill also authorizes $16 million to build three islands from 1 1/2 million cubic yards of dredged sediment along East Peoria's banks of the Lower Peoria Lake, which is filling with silt. Beardstown’s marina, which has been silt-choked since the Sangamon River’s course was changed the last time such a bill was passed, will see another revamping of the river’s course, which may enhance the prospects for marine recreation in this city on Route 67.

The full list of authorized Illinois projects in the WRDA is as follows:

Sec. 3058. Beardstown Community Boat Harbor, Beardstown, Illinois.
Sec. 3059. Cache River Levee, Illinois.
Sec. 3060. Chicago River, Illinois.
Sec. 3061. Chicago Sanitary and Ship Canal dispersal barriers project, Illinois.
Sec. 3062. Emiquon, Illinois.
Sec. 3063. Lasalle, Illinois.
Sec. 3064. Spunky Bottoms, Illinois.

The Chicago Sanitary and Ship Canal dispersal barriers are the barriers designed to prevent the Asian carp and other non-native species from traveling from the Mississippi River watershed to the Great Lakes.

The $7.5 million Spunky Bottoms project is for production of a series of aquatic exercise videos of the same name for the federal anti-obesity program using the generously proportioned men and women of that area. No, really, it is a very cool 2000 acre wetlands restoration project on the Illinois River.

President Bush barely had a chance to sheath his veto pen after vetoing a bill that would provide hundreds of thousands of uninsured kids health care before he used it to veto the WRDA on Friday. Bush may have been responding to criticisms that the WRDA is full of “pork.” Urged on by the National Corn Growers Association, the Illinois Farm Bureau and other supporters of the transport of goods by barge, Congress is expected to override the President’s veto soon, since the House voted 381-40 and the Senate voted 81-12 in favor of the WRDA.

The likelihood of a veto override has prompted some observers to suggest that the President used the veto as a publicity stunt to portray a sense of fiscal discipline without interfering with the transfer of such “pork” as we roll into an election year. Indeed, the President signaled that he was "fine" with the veto override.

While we wait for the veto override, shake those spunky bottoms!
.

The Farebox Recovery Ratio, Senator Watson And RTA Candor

Section 4.09(g) of RTA Act contains a requirement that the service boards--Chicago Transit Authority, Metra and Pace--recover half of their operating costs from fares and other system generated revenue. The three service boards must generate sufficient revenue to meet 50 percent of their operating expenses. This is the so-called farebox recovery ratio. Because of existing exceptions already written into the RTA Act, the actual farebox recovery ratio is significantly lower than 50 percent. That is, public subsidies--i.e., tax revenue--cover significantly more than 50 percent of the cost of operating the RTA system and customer fares (and other system-generated revenue) cover significantly less than 50 percent of those costs.

The purpose of the farebox recovery ratio is to require the RTA and the service boards to step up and raise fares when necessary to keep the public subsidy of the public transit system at roughly 50 percent of the cost of providing the service. It is meant to provide an objective standard upon which the service boards can rely when going through the difficult and unpopular task of raising fares. The recovery ratio reflects the General Assembly's public policy judgment about how much public support the transit system in northeastern Illinois deserves and how much should be paid by the public transit customers.

Senate Minority leader Frank Watson has indicated that he views fare increases by the service boards as a necessary part of the solution to the transit funding problems that have occupied so much time and attention over the past year. He sent a letter to that effect to Jim Reilly, the head of the RTA, about a week ago.

Reilly's reply, available through the Capital Fax Blog (here) or upon request, urges Senator Watson to support SB 572. Reilly responds to Watson's request for a fare increase as follows:

You suggest that a moderate fare increase might be part of the solution. Certainly if the Governor and four leaders agree on that approach we would most definitely implement it but again the Auditor General's report makes it clear that a fare increase alone does not come close to solving the problem. SB 572 does continue the requirement that 50% of the costs of operating transit be received from the farebox so there will be a requirement for fare increases over time.

This statement is incomplete under even the most charitable interpretation of the letter. The RTA, speaking through its Chairman, seems to be telling Senator Watson that SB 572 retains the 50% farebox recovery ratio requirement of the current RTA Act and thus preserves the General Assembly's current policy balance between fares and public subsidies for the support of transit operations.

What the RTA failed to tell Senator Watson is that the current version of SB 572 contains major new exemptions that will mean in practice the actual farebox recovery ratio will fall even farther below the 50 percent farebox recovery ratio that will remain on the statute books. (See pages 206-08 of the bill.)

• First, in calculating the farebox recovery ratio, the CTA and Metra (which SB 572 authorizes to issue up to $1 billion in debt) can exempt debt service from their operating expenses for purposes of calculating the farebox recovery ratio.
  
• Second, SB 572 provides that all passenger security expenses can be exempted from operating expenses, removing the current $5 million cap.
  
• Third, Pace can exclude from revenue grants it receives from the Suburban Community Mobility Fund, which should average $20 million each year under section 4.03.3(c)(i) of SB 572.
• Fourth, SB 572 lops off $200 million in costs from the calculation of the farebox recovery ratio in 2008. This amount of excluded costs reduces by $20 million a year over the next decade (e.g., $180 million in FY 2009).

The combined effect of these exclusions is to make even more illusory the notion that public subsidies and fares will provide equal measures of support for the region's public transit system. These new exclusions also will reduce the pressure on the service boards to raise fares in step with rising costs.

While the RTA may have been technically correct in telling Senator Watson that SB 572 retains the 50 percent farebox recovery ratio, it did its reputation for candor no service by failing to inform him of these major new exclusions and their effect on the proportion of public transit operations paid for by fare-paying customers and the proportion covered by public subsidies via regional and State tax revenue.

Smart One: Doomsday Averted Once Again

Just as the first doomsday was set to arrive for the Chicago Transit Authority and Pace, transit apocalypse was averted when the State of Illinois and the federal government found a way to free up $27 million to keep Pace and the CTA afloat at current service/fare levels until at least the end of the year. From published reports (e.g., here), I hesitate to attempt to describe how the solution works. It appears that the FTA authorized the use of $27 million of federal capital funds for transit operating purposes. The State agreed to step up with $27 million of its capital dollars to fill the resulting hole. Essentially, this solution exploits the more liberal rules governing the use of federal capital funds for transit operations compared to State rules on the use of capital funds, a neat bit of arbitrage.

This last minute fix has all the earmarks of some smart person being creative and thinking outside of the proverbial box. It was a solution no one had discussed and "seemed to appear out of nowhere." Despite plenty of fulminating (here and here) about how the RTA no longer should accept short-term funding bailouts, the RTA and the service boards wasted no time in embracing this solution once the federal government gave the green light.

Who can we thank for this creative solution? Let's hope they get a raise and the opportunity to use that creativity on the many other challenges facing the Chicago area transit system even if a long-term operating and capital funding solution is enacted over the next few months. Of course, using capital dollars to fund operations is like eating your seed corn and is not sustainable in the long term. Nonetheless, the simple elegance of this latest short-term fix should be recognized.

Post-Doomsday: Will The Equity Questions Reemerge?

The Metropolitan Planning Council is alerting public-spirited folks with time on their hands next Monday to attend the following:

Chicago Transit Authority Press Event

What: A press event to highlight the impact of the cuts and fare increases

When: Monday, Nov. 5, 11 a.m.

Where: Ogilvie Station, at Jefferson and Madison streets

This press event could be a real hoot if doomsday arrives on schedule. CTA management and its customers will be reeling from their first work day post-doomsday. They will be camped outside Ogilvie Station, from which puzzled Metra commuters will emerge wondering what the fuss is all about. After all, unlike Pace and the CTA, Metra is neither cutting service nor raising fares in this first doomsday. As for the second doomsday in January, when the CTA will truly gut its bus system and Pace becomes a shadow of its former self, Metra will raise its fares all of 10 percent and increase its unlimited ride weekend ticket from $5 to--you better sit down--$7.

The juxtaposition of the CTA folks standing in the street outside a Metra station highlighting the impact of the cuts and fare increases that affect everyone but Metra and its customers is striking. Maybe, just maybe, at this press event someone in attendance will raise the question, where is the fairness in that only two of the three service boards have to go through the first doomsday? Who was responsible for the financial oversight of the region's public transit system and how did they allow doomsday to fall so unevenly on the service boards? How is it that the service board with the most prosperous ridership base was spared the first doomsday round of service cuts and fare increases while the service boards serving the most transit-dependent populations must feel the pain? And when one looks at the racial composition of the customers served by the three service boards, which racial groups are bearing the brunt of the first doomsday cuts and fare increases and which are not?

Both the Moving Beyond Congestion effort and the SB 572 process were designed to steer clear of these kinds of questions. If they fail and doomsday does descend on two of three service boards, then maybe it is time to start asking those equity/justice questions.

SB 572 Sallies Forth Again

The House Mass Transit Committee has approved a revised version of the SB 572, in the form of Amendment No. 10 (here).

Please post in comments any significant changes you find in Amendment No. 10.

Gas Tax vs. Sales Tax: Which Wins?

In his statement today concerning public transit the Governor Blagojevich outlined his preferred plan to increase the level of transit funding:

The plan that I prefer would redirect – not increase – revenue from the existing sales tax on gas in Cook and the collar counties for the RTA. That’s money that is already collected from drivers who contribute to congested roads and air pollution in our region. It makes sense to dedicate that revenue to mass transit, and it also helps reduce congestion and air pollution.

The remaining hole in the state budget can then be filled with revenue from an expansion of gaming in Illinois – an expansion that every one of the legislative leaders has already agreed needs to get done to fund a statewide infrastructure plan.

There are some things to like about this approach, which appears to have the support of the Republican leaders and perhaps Senator Jones. The Governor recognizes that linking the gas tax (or more precisely the sales tax on gas) to transit makes good public policy. Drivers who create congestion, who benefit from the congestion relief benefits of public transit, and who contribute a large measure of air pollution, including greenhouse gases, properly are called upon to subsidize transit service. Those who drive the most tend to pay the most, which creates a bit of an economic incentive against sprawl.

While the Governor appears unwilling to increase the gas tax (or embrace congestion pricing for that matter) to reduce the congestion and pollution resulting from excessive private auto use relative to road capacity, linking transit funding to the gas tax is something that his successor can build on to start pricing auto travel in a way that promotes the most efficient use of the Chicago region's highway and transit systems.

The Governor's gas tax plan takes existing gas tax revenue from the six-county Northeastern Illinois region and applies ("diverts" in some eyes no doubt) that revenue to the region's public transit system. Filling the resulting hole in the State budget becomes someone else's problem while the RTA, the Chicago Transit Authority, Metra and Pace spend their new money. This is not a bad scenario if you are a transit supporter.

The Governor recommends that revenue from expanded gambling can fill the hole in the State budget created by the application of the gas tax monies to transit. There is something to like here as well, especially if you live in northeastern Illinois. A fair amount of that revenue will be generated from people from outside northeastern Illinois or even Illinois itself who gamble when visiting Chicago or other Illinois gambling facilities. The burden of transit funding thus is spread outside of the six-county region, another nice benefit for that region. The region gets the gas tax revenue for its public transit system but is not completely on the hook to fill the resulting hole in the State budget.

Using gambling revenue to replace the gas tax monies used for transit could put the City of Chicago is a difficult spot, however. On the one hand, the City presumably wants to find a source of funding for CTA and Metra service that serves the City. On the other hand, if that source of money requires the City to give up proceeds from a Chicago casino that would otherwise go to the City, then transit doomsday might not look so bad to the City.

In contrast, the sales tax built into SB 572 is not as directly tied to transit or driving. Charging a bit higher sales tax on a big screen TV, for example, is not likely to prompt anyone to change their driving habits. The sales tax has proved insufficient to keep up with transit agency costs, so it is a matter of time--likely only a few years--before the proposed sales tax increase in SB 572 proves inadequate for the transit agencies to maintain their current service levels. The increased reliance on the sales tax does not help the RTA diversify its funding base, even though such diversification is key to the long-term financial health of the public transit system.

When it comes to the predictability of revenue the sales tax wins. One virtue of the sales tax is that is does not vary that much from year to year. In contrast, a sales tax on gasoline sales is likely to bounce around with the changes gas prices.

On balance, however, taxing driving to pay for transit is at least as good an alternative as the sales tax to provide funding for transit. In many respects, a gas tax is superior.

Surely it is possible to amend SB 572 to swap out the sales tax increase in favor of the redirection of the sales tax revenue on gas, leaving in the CTA union concessions and the much ballyhooed RTA reforms. Hopefully, someone is work on that right now.