Complete Streets Bill Passes--Challenges IDOT To Think Different

Illinois has joined the Complete Streets movement through the adoption of SB 314. The law (pasted in below) provides that "bicycle and pedestrian ways shall be given full consideration in the planning and development of transportation facilities, including the incorporation of such ways into State plans and programs." Within one mile of an urban area, "bicycle and pedestrian ways shall be established in conjunction with the construction, reconstruction, or other change of any State transportation facility."

The new law is an effort to improve pedestrian and bicycle safety and to increase the efficiency of the transportation system by better incorporating walking and biking with vehicular transport. It also challenges the deeply entrenched view in many transportation agencies that bicycles and pedestrians only get in the way of effective vehicular transportation, which they view as their only mission.

The devil thus will be in the details of implementing the new law. The law charges the Illinois Department of Transportation with developing design and construction standards for bicycle and pedestrian ways. IDOT, however, was presumably the moving force behind the Governor's amendatory veto of the bill. If IDOT does oppose the new law, will it be able to muster the creativity and open-mindedness to develop standards that will effectively integrate bicycles and pedestrians into our State transportation system?

Proponents of the complete streets bill such as the Chicagoland Bicycle Federation thus have their work cut out for them during IDOT's standards-setting process.

* * *
(605 ILCS 5/4-220 new)
Sec. 4-220. Bicycle and pedestrian ways.

(a) Bicycle and pedestrian ways shall be given full
consideration in the planning and development of
transportation facilities, including the incorporation of such
ways into State plans and programs.

(b) In or within one mile of an urban area, bicycle and
pedestrian ways shall be established in conjunction with the
construction, reconstruction, or other change of any State
transportation facility except:
(1) in pavement resurfacing projects that do not widen
the existing traveled way or do not provide stabilized
shoulders; or
(2) where approved by the Secretary of Transportation
based upon documented safety issues, excessive cost or
absence of need.

(c) Bicycle and pedestrian ways may be included in pavement
resurfacing projects when local support is evident or bicycling
and walking accommodations can be added within the overall
scope of the original roadwork.

(d) The Department shall establish design and construction
standards for bicycle and pedestrian ways. Beginning July 1,
2007, this Section shall apply to planning and training
purposes only. Beginning July 1, 2008, this Section shall apply
to construction projects.

Report on Hearing on Illinois Works and Transportation

Here is the link to an article in the State Journal Register describing the testimony relating to transportation at the recent hearing on Illinois Works, the proposed capital funding bill (SB 1110).

Representative Hamos Transit Funding Status Report

Below is the latest from Representative Julie Hamos, the leading proponent of SB 572, the transit funding/RTA reform bill, on the transit funding situation. Note the following points she makes:

• The capital funding bill that passed the State Senate (Illinois Works) divides transportation funding 10:1 in favor of roads. The previous capital bill (Illinois First) had a 2:1 ratio.
• The RTA will not accept another short term loan or bailout. (Ed. note--We'll see about that.)

Here is Representative Hamos' update in full:

THE TRANSIT CRISIS: WHERE WE ARE TODAY
Transit Update, October 19, 2007

As you know, the clock is ticking toward the “doomsday” scenario on November 4th when the regional transit system will face the first round of service cuts, fare increases and layoffs. CTA, Pace and Metra will have run out of available funding by that date.

What action needs to be taken by the legislature?

In the Illinois House of Representatives: Senate Bill 572 continues to be the comprehensive solution, coupling long-term funding with accountability and reform. Senate Bill 572 was voted on in the House on September 4th but was defeated by 10 votes (the bill needs a 3/5ths vote, or 71 votes, but received only 61). It is currently on “postponed consideration” and can be called for another vote at any time.

Regretfully, only 5 Republicans supported SB 572, although this bill was crafted through an open, collaborative process by our bipartisan House Mass Transit Committee. Rather than voting for the transit bill on its own merits, the bill was “held hostage” by the House Republicans for another agenda: a public works construction program funded by a major new bond.

In the Illinois Senate: The same comprehensive bill as SB 572, with just a few minor changes, has been introduced in the Senate by Sen. John Cullerton as Senate Amendment #3 to HB 3667. The bill was not called for a vote on September 10 and 11 when the Senate convened in Springfield. Instead, they passed HB 2035, which includes new casinos and gaming revenues to fund a large capital bond program. It also includes a one-time $200 million loan to the regional transit system as a short-term solution to the transit funding crisis. HB 2035 is now pending in the House, but it does not seem likely that we would go along with a one-time loan to fund transit.

The Senate also passed SB 1110 incorporating a $24.6 billion capital budget to fund road programs, school and university construction, early childhood facilities, environmental facilities, local economic development projects, and more. Within SB 1110 is funding for “transit capital”, pegged at $425 million in new state funds – only 1/10th the amount included for roads. This is quite a contrast to the last capital bond program in 1999, when roads received twice as much as transit – not 10 times as much!

A recent public hearing of the House Mass Transit Committee on October 9th reached three conclusions:

(1) The capital bond program passed by the Illinois Senate in SB 1110 is totally inadequate to replace broken-down buses, or fix the CTA “slow zones”, or allow Illinois to compete for federal transit expansion dollars -- even if SB 572 is passed for transit operating budgets.
(2) There are no convenient or easy new funding sources for transit, although increased gasoline taxes or parking space taxes were debated (see testimony of Metropolitan Planning Council with interesting new possibilities). The other funding sources were sufficiently controversial that the modest regional sales tax and Chicago-based real estate transfer tax in SB 572 was validated as the only fair, balanced and regional resolution.
(3) The Regional Transportation Authority will not accept another one-time or short-term loan or bailout. The November 4th “doomsday” deadline is real.

Handouts from the October 9th public hearing are posted on my website:
http://www.juliehamos.org/news/newsitem.aspx?newsitemid=129

In the next few weeks, it seems imperative for the four legislative leaders and the Governor to set aside their differences and agree on a plan to move Illinois forward. The plan ideally should include the comprehensive, long-term solution for transit embodied in SB 572 and HB 3667, and it should include a capital bond program that makes necessary investments in the state’s infrastructure, including transit.

The State of Illinois is in the process of tackling a number of significant, serious needs: education, health care, pensions, public works and transit. But only one issue has a looming deadline -- transit. We need civic and regional leaders, transit riders and community residents to actively work to persuade their own legislators, the four legislative leaders and the Governor to take action to save the mass transit system before November 4th.

Thank you for your interest and support.


Rep. Julie Hamos

Governor Blocking Congestion Pricing In Illinois?

Ed. Note: By now congestion pricing is hardly a new thing, in transportation or in other areas. The basic notion is that you use price to efficiently allocate a high-demand resource. It costs more, for example, to attend a Chicago Symphony Orchestra concert than it does your local school's band concert (unless Frances Parker is your local school!). Utilities price their product higher during peak demand period. You pay more for parking during special events than during off hours.

When demand for highway space exceeds supply, price can serve such an allocative function. Pricing can be set dynamically to maximize traffic throughput and travel time reliability. These benefits are not limited to just the private auto. The service offered by public transit buses using the priced route improves significantly because travel times are both faster and more certain on the route.

The federal Department of Transportation has embraced congestion pricing. (FHWA Congestion Pricing Primer here.) The five recent winners of Urban Partnership Program grants, ranging from from $63 million to $355 million each, all promised prompt implementation of congestion pricing programs. In contrast, this region's application didn't even make it out of the first round of the Urban Partnership Program competition because it lacked any credible congestion pricing plan.

Posted in below is a slightly edited report about the recent Lipinski Symposium from someone who currently works in Springfield. Note the bolded discussion indicating that the Governor opposes congestion pricing. If this opposition holds, then over the next few years congestion pricing efforts on major congested State roads and interstates in the State appear doomed to failure. The State can forget about tapping into future federal programs like the UPP designed to encourage implementation of perhaps the most effective way to counter traffic congestion, namely, congestion pricing.

But who needs a few hundred million dollars of federal money and a steady revenue source for transportation purposes anyway?

* * *
LIPINSKI SYMPOSIUM REPORT

Representatives Coulson, and Nekritz attended part of the Symposium. However, there was not much outreach to the legislators for the Symposium. Peter Skosey from MPC was pleased with the nearly 200 people who attended. Many were transportation policy experts. IDOT sent their chief of staff and their planning director. The service boards were represented, along with rail union and rail government liaisons. Planning agencies were in attendance as were lobbyists. The right people needed to be there.

The political environment in Springfield was somewhat of a sore spot throughout the symposium, with presenters taking gentle jabs at the topic throughout the day, until the last panel. [The last panel included several elected officials.]

It was productive in the sense that programs throughout the United States and even Stockholm, Sweden (congestion pricing through referendum) was discussed. There are some viable options out there if only our leaders would simply step back and consider these noteworthy options to save the crippling infrastructure in the State of Illinois.

I felt that William Lipinski along with Chairman Obsterstar were almost pleading with the audience to make things work in Illinois, for state officials to come together. Millions of dollars are out there in earmarks for the taking only, and only if, the State of Illinois gets its act together and come together on this issue.

I've asked the Chief of Staff at IDOT about congestion pricing in the past. I was told that the Governor does not support congestion pricing.

There was also some discussion to the need for raising the federal motor fuel tax by a minimum of 10 cents, not 5 cents (and this was mentioned in at least 3 of the 4 panels). Obsterstar even supported raising the motor fuel tax by a minimum of 10 cents.

I wouldn't say it was a waste of time necessarily. These ideas needed to be discussed.

However, with transit being held hostage in our current political environment, the Chicago region remains doomed.

The only thing I didn't want to hear was Lake County Chairman [Suzi Schmidt] stating the system needed to shut down. I've heard this in Springfield. If I was on the other side I would definitely start protesting the mass transit crisis facing the region. Say, shut down the system one morning to show everyone the effect of fewer buses on the street, etc.; and not wait until November 4th for the first doomsday and January 6th for the second doomsday.

Here are some links to check out:

http://mobility.tamu.edu
www.brookings.edu/metro - Brookings Institute Metropolitan Policy Program
www.atri-online.org - A May 2007 report regarding motor fuel tax
www.vtpi.org - Victoria Transport Policy Institute

Lipinski Symposium: Materials Online

Here's the link to the presentation materials from the Lipinski Symposium. Those of us who didn't get the coveted invitation or missed parts of the symposium can play catch up.

I'm promised a full-fledged report on the Symposium in the next day or so from a participant who disagrees with the snarky comments posted thus far. In the meantime check out page 3 of 4 of David Horner's presentation. Then consider how likely it is that the description of SB 572 and its sales tax increase as a long-term operating funding solution for public transit will prove to be correct.

Lipinski Symposium: Reactions

The Lipinski Symposium on Transportation was an invitation-only event on Monday designed to encourage Chicago area transportation leaders to think outside the box. Pasted in below are two reports. Add your own in the comments or send them to moderator1stc@yahoo.com and I will post them.

Comment #1

The >Lipinski Symposium was pretty much what I expected. There were exhortations from a couple of politicians, William Lipinski and James Oberstar (someone described them as the "bring home the bacon twins"). The panels of experts covered familiar transportation management techniques (e.g., congestion pricing) as if these things had just appeared on tablets on the mountaintop. There were a couple clunkers (e.g., the fellow who was very excited about logistics). At the end there was a panel of politicians who treaded carefully through questions about the current transit funding crisis.

The audience was pretty passive. There were few politicians there to convert to the "progressive" cause. Those that were, such as Representative Julie Hamos, Lake County Board Chairman Suzi Schmidt and DuPage County Chairman Robert Schillerstrom, weren't biting on the ideas of congestion pricing and a tax on parking spacings that were being discussed.

I thought that some of the day might be spent on breakout sessions with the goal of developing a set of principles/priorities that might be adopted, or at least voted upon, by the group. Instead, we were pretty much pumpkins for the day.

* * *

Comment #2

Moderator--

I don't know if you got in the Lipinski symposium. I strapped on a tie and snuck in for the afternoon session (even got a cookie).

What struck me is how male, pale and stale the group was. This is a highly diverse region, but you would never know it from this group. A large majority were white men over 50. There was a smattering of women, maybe 10% in all, and even fewer minorities.

There were some good ideas thrown out during the day, but this group seemed stuck in a Fifties/Sixties time warp. They clearly are oriented (indoctrinated?) to think that minor changes to existing institutions, lots more money, and some engineering fixes will allow Chicago to continue on its merry way.

Have the well dressed tushes of these fellows ever felt a bike seat for a commute? Have concepts like global warming and reducing the carbon footprint penetrated their consciousness? Are they aware of the potential of ride-sharing programs using a mesh network model?

The pivotal moment came when Todd Litman, who is to transportation what Eric Clapton once was to the electric guitar (i.e., god), was speaking. Litman outlined why reducing vehicle miles traveled is by far the preferred solution to our transportation system woes. This approach generates the most benefits--congestion relief, accident reduction, environmental improvements, etc. Litman then laid out some strategies involving little or no new infrastructure, such as pricing insurance on a VMT basis and a tax on parking spaces, that together could reduce VMT by 20 percent.

The audience was dumbfounded. These guys clearly didn't get it. Their brains were spinning because they can't think outside of what Litman called the reductionist mindset that says that only a transportation solution can solve what is being perceived as a transportation problem. The more cynical among them were probably thinking that Litman's approach will never fly because there are not enough construction contracts involved.

I'm sorry, but all these good ideas were largely wasted on a group that is clearly set in its ways and fighting hard to preserve the status quo. I never realized what such a stodgy group is the public's custodian/advocates for our transportation system. Scary.

The RTA Sales Tax And Its Limits: Lack Of Diversification

The following comment to a recent post on the risks associated with fixing the current transit funding problem with more of the same--namely, a hike in the RTA's sales tax--struck me as right on:

Justin said...

An excellent argument for the inadequacy of the sales tax. Here's another argument against SB572: it puts all the RTA's eggs in one basket.

Practically, any good investor will distribute her capital across a number of stocks or bonds to spread her risk, and transit agencies are no exception. Theoretically, public transportation provides measurable benefits to a variety of beneficiaries, implying that a "rational" or tailored subsidy structure would include a similar variety of revenue sources. Most agencies, like the RTA boards, have some control over their fare revenues, yet depend on others for the rest. To spread the risk of one funding source going sour, transit agencies should seek to derive major revenues from at least two or three different sources, preferably even more.

For instance, the MBTA gets revenues from roughly two sources: state sales taxes, and local assessments which are largely paid from property taxes. Many European transit agencies' funds originate from multiple levels of governmental jurisdictions, many of which share revenues and which are derived from a mix of Value-Added Tax, income tax, and business taxes. New York's operating subsidies come from a wide variety of taxes and jurisdictions ultimately based on the real estate market, businesses, petroleum use, and a sales tax in southern Connecticut, suburban New York State, the outer boroughs, and Manhattan itself. (There's an even an old post on this blog somewhere about the variety of MTA's subsidies, I think). [Old post here.]

By contrast, excessive reliance on a single source for operating subsidies is theoretically less than ideal, and risky and frustrating in practice. By continuing to rely solely on the sales tax, the RTA may soon regressing to doomsday.

Indeed, other robust transit agencies have been able to respond to cutbacks in subsidy from one source by substituting other sources. In Europe, these shifts often took place in the context of political decentralization, where the devolution of fiscal autonomy from central governments to regions appears to have caused an increased level of transit capital funding. U.S. transit agencies have responded to the cutback in federal operating subsidies with gradually higher state and local funds.

To echo Davey's comment, discretionary spending on consumer goods may decline quickly during an economic slowdown, yet cities rely on public transit to provide low-cost mobility even in hard times. In addition, sales taxes tend to be regressive, exacting a higher proportion of income from those least able to pay.

I agree with the Moderator that a long-term funding solution should look beyond the sales tax for theoretical and practical reasons. Taxes on real estate, parking, or (even better), road tolling are the way to go. Or the RTA comes hat in hand in a few years to a populace that won't want to hear it.

Don't Forget The Capital Funding Side

With all the hullabaloo over increasing operating funding for public transit via SB 572 we should not forget the issue of capital funding for transit. Chicago Metropolis 2020 recently sent the General Assembly a letter, co-signed by a group of business/community leaders, focusing attention on the capital funding bill (SB 1110).

The letter states that the proposed capital funding for transit is inadequate. (At today's Lipinski Symposium Representative Julie Hamos said that the ratio of transit to highway capital funding in the bill is a paltry 1:10.) The letter characterizes SB 1110 as a "grab bag" of projects that "lacks a coherent sense of purpose or direction."

Read it here.

Transportation Lessons from Massachusetts: Integration and Accountability v. Diffusion and Chaos

Note: The following is a guest column from Paras Bhayani. Please submit guest columns to moderator1stc@yahoo.com

When thinking about transportation issues in Illinois, it can often be useful to look around the country to see what other American cities are doing to improve their transit systems and how they are working to place transit in the broader context of regional transportation.

Unfortunately, there are only a handful of cities from which Chicago can draw meaningful lessons. The American cities with transit systems like Chicago's—buses and non-surface trains in the city, commuter rail for the suburbs—are New York, Washington, Philadelphia, and Boston. While many readers might be familiar with the excellent networks of New York and D.C., Boston—a city with normal levels of tourism and federal funding—can serve as a more useful model in terms of how it organizes and thinks about transportation.

The Massachusetts Bay Transportation Authority (MBTA) is responsible for all transit in Boston and its suburbs. Much like the CTA, the MBTA operates a subway system in Boston and its inner suburbs—cities like Cambridge, Somerville, Brookline, and Newton. The MBTA also operates commuter rail lines that extend to the limits of the metropolitan region—Worcester, Lowell, and Providence, R.I.—much like Metra does in Chicago. Finally, the MBTA—yes, the same agency—runs buses in many of the suburbs, though the far-flung parts of the metropolitan region (Worcester) have their own bus systems.

Organizationally, Illinois has much to learn from Massachusetts. The latter abolished county governments in late-1990s—for those following the Stroger chronicles, this doesn't sound like a bad idea for Illinois, but I digress—meaning that the composition of the MBTA board of directors is removed from local county boards chiefs and/or blocs of commissioners.

The board of directors, appointed by the governor and serving coterminous with him, ratifies all planning and budget decisions for the MBTA. The board also chooses the general superintendent—the effective czar of the region's transit system. The effect is that the system is highly-centralized, integrated, and accountable; all blame for MBTA's failings can be laid at the feet of the governor and his superintendent.

I would be the first to admit that talent—and not just institutions—matters a great deal. Massachusetts has benefited recently from a reformist, Huberman-like general superintendent who has made substantial capital improvements to the system. But anyone who has taken a serious look at Illinois transit would acknowledge that diffuse authority across the service boards and a lack of accountability—the buck clearly does not stop with either Daley or Blagojevich—have been two key factors in creating the mess that is Chicago transit.

The centrality and cohesiveness of the Massachusetts transportation agencies will be taken to a new level if a plan being crafted by Governor Deval Patrick, a native of Chicago's south side, is enacted. Under Patrick's plan, the boards of both the Mass Pike—the Illinois equivalent of IDOT—and the MBTA would be abolished, and a new "Massachusetts Transportation Authority" would be responsible for all transportation in the state.

Like the MBTA and the Massachusetts Turnpike today, the board of MassTrans would be appointed by the governor. But the new agency would have an exceptionally large mandate (everything that affects how people move on the surface) and exceptionally wide budgetary authority (every dollar spent on transportation). The massive centralization of power within the governor's office has no precedent in the United States.

While the plan is in its early stages, an agency like MassTrans would allow for a great deal more coordination in transit and road construction—projects like the Dan Ryan median could become commonplace—as well as a tighter integration of surface transport with the region's three airports. The new agency would also be able to refinance the Commonwealth's transportation debt at more favorable rates, thereby reducing long-term borrowing costs and making new bonds—and new expansions—less costly.

The bold thinking evidenced by this plan is necessary given that Massachusetts must invest $19 billion over the next 20 years to simple maintain current standards of performance.

If IDOT, which is in better financial shape than the transit system, were merged with the RTA and its three sub-agencies (CTA, Metra, Pace), the sky would be the limit for synergy, greater efficiency, and improved coordination. Such a superagency would not just allow for broader strategic thinking, but could use its fiscal power to focus dollars on the weakest areas of the region's transportation grid. One could imagine a case where tolls or gasoline taxes are used, for the first time, to subsidize transit. And for those of us who would love to see congestion pricing implemented in the Loop, determining what to do with those dollars—and how to reduce the strain on suburban and peripheral city residents—is a job that could only be handled well by an agency with a broad focus and a broad budgetary portfolio.

I want to take care not to glorify too much the state of transit in Massachusetts. To be sure, the region faces challenges, many of them stemming from former Governor Mitt Romney's decision to drop billions of dollars of legacy costs from the "Big Dig"—a project that principally benefited drivers—onto the back of the MBTA. As a result, the MBTA is currently spending 27 percent of its budget, or its entire take from fares, on debt service, and hiked subway fares from $1.25 to $1.70 this past January.

Still, it's worth noting that in a city as expensive as Boston, the subway is still less expensive than in Chicago. And politicians seem to be getting the message: In addition to Patrick's massive reform bill, which has not yet been unveiled, legislators from Cambridge and Somerville are pushing a bill that would make the Commonwealth responsible for $2.9 billion of the MBTA's $5.7 billion in debt—an effort to stave off fare increases and allow more money to be spent on maintenance. The bill has already received the blessing of both legislative leaders and the governor.

Links:
http://news.bostonherald.com/news/regional/politics/view.bg?articleid=1035555
http://www.eot.state.ma.us/downloads/tfc/TFC_Recommendations.pdf
http://www.eot.state.ma.us/downloads/tfc/TFC_Findings.pdf

Paras Bhayani, a native of Palos Heights, Ill., currently lives in Cambridge, Mass. He has long been active with the Illinois and Massachusetts chapters of the Sierra Club, and closely follows transit politics and politics more generally in both states.

Can The RTA Impose A Parking Space Tax?

A meme is starting in the comments to a previous post on a parking space tax to the effect that the RTA already has the authority to impose such a tax. This is based on the recent testimony (pg. 3) of Peter Skosey of the Metropolitan Planning Council that the "RTA has long had the authorization to levy a property tax on commercial parking spaces in the region."

Hold on to your shorts. It appears that Skosey misspoke. The RTA cannot currently impose a parking tax and the parking tax referenced in the RTA Act is not the kind of broad-based tax on non-residential parking spaces that will do the most good from a transit/land use perspective.

Section 4.03(d) of the current RTA Act provides in relevant part as follows:

(d) The Board may impose a motor vehicle parking tax upon the privilege of parking motor vehicles at off‑street parking facilities in the metropolitan region at which a fee is charged, and may provide for reasonable classifications in and exemptions to the tax, for administration and enforcement thereof and for civil penalties and refunds thereunder and may provide criminal penalties thereunder, the maximum penalties not to exceed the maximum criminal penalties provided in the Retailers' Occupation Tax Act.
. . .

As used in this paragraph, the term "parking facility" means a parking area or structure having parking spaces for more than 2 vehicles at which motor vehicles are permitted to park in return for an hourly, daily, or other periodic fee, whether publicly or privately owned, but does not include parking spaces on a public street, the use of which is regulated by parking meters.

First, this provision appears to authorize only a tax on paid parking ("motor vehicle parking tax upon the privilege of parking"), such as the per parking transaction tax already imposed by the City of Chicago. As outlined in the previous post, this kind of tax is much less beneficial than a tax on all non-residential parking spaces, regardless of whether parking fees are charged.

Second, the RTA Act forbids the RTA from imposing the parking tax set out in section 4.03(d). This is because the RTA has imposed its sales tax pursuant to sections 4.03(e) - 4.03(g). Section 4.03(p) of the Act provides as follows:

(p) At no time shall a public transportation tax or motor vehicle parking tax authorized under paragraphs (b), (c) and (d) of this Section be in effect at the same time as any retailers' occupation, use or service occupation tax authorized under paragraphs (e), (f) and (g) of this Section is in effect.

In other words, having imposed the sales tax pursuant to 4.03(e) - 4.03(g) the RTA cannot impose the parking tax provided for in section 4.03(d) or, for that matter, a tax of up 5 percent of the gross receipts from the sale of fuel (4.03(b)).

4.03(p) goes on the provide that once the RTA has opted to adopt a sales tax, it lacks the power to switch back to a parking tax and/or fuel tax:

(p) At no time shall a public transportation tax or motor vehicle parking tax authorized under paragraphs (b), (c) and (d) of this Section be in effect at the same time as any retailers' occupation, use or service occupation tax authorized under paragraphs (e), (f) and (g) of this Section is in effect.

In other words, having imposed its sales tax the RTA cannot now add on a parking (or fuel) tax. Section 4.03(p) goes on to forbid the RTA from switching from a sales tax to parking and fuel taxes:

Once any tax authorized by paragraphs (e), (f) or (g) is imposed the Board may not reimpose taxes as authorized in paragraphs (b), (c) and (d) of the Section unless any tax authorized by paragraphs (e), (f) or (g) of this Section becomes ineffective by means other than an ordinance of the Board.

It would be easy to draft an amendment to the RTA Act to allow the imposition of a tax on all non-residential parking spaces even with the sales tax in place. Proponents of SB 572 seem unwilling to consider such an alternative, unfortunately.

The Puzzling Persistence Of The Sales Tax Increase As The Preferred Funding Solution

Tuesday's apparently desultory hearing by the House Mass Transit Committee into alternatives to an increase in the RTA sales tax and the continued efforts to push for passage of SB 572 with that tax increase in place prompts the question--what is so great about relying on the sales tax as the primary source of transit funding in Northeastern Illinois?

As the CTA points out, its sales tax funding base has failed to keep pace with inflation over the past twenty years:

CTA has grappled with a steep decline in inflation-adjusted funding levels. CTA’s public funding for mainline bus and rail operations trailed inflation by approximately one percent every year. If funding since 1987 had kept even with inflation, the CTA would have received cumulatively $1.6 billion more to operate its buses and trains.

The situation has been deteriorating in recent years:

The CTA’s public funding is growing at a much slower rate than related expenses. Public funding levels only increased by four percent over the past five years and trailed inflation, which increased by 11.3 percent in the same time period. By comparison, CTA has also experienced substantial cost increases in fuel, materials (due to a lack of capital funds) and security.

If that is not enough, the RTA is reducing the CTA's public funding mark for 2008 by $14 million compared to this year's mark, surely a reflection of larger problems with the adequacy of the RTA sales tax as a funding source.

The CTA accounts for about 80 percent of the transit ridership in the region. Pace's financial condition is no better and it is on the path to a doomsday of its own. Even Metra, which for years was living high on the hog with more sales tax money than it could spend on operations, is making dark threats of a 20 percent fare increase and major service reductions. Clearly, the existing sales tax funding base is insufficient to serve the current needs of the transit system.

The inadequacy of the sales tax as the near-exclusive funding base for public transit in this region is illustrated by a simple fact. The RTA system relies on the same sales tax funding base that it did in 1985. Yet, even though that system now carries 20 percent fewer passengers than it did then, it is in a financial crisis. In other words, the same sales tax base cannot support a transit system that is 20 percent smaller than it was 20 years ago.

The inadequacy of the sales tax base is even more dramatic when considering the transit system's market share. Given the growing and sprawling population in the region, transit's market share declined even more sharply than its 20 percent decline in ridership. Clearly, the current sales tax funding base could not support transit's more robust 1987 market share if that market share magically reappeared since it cannot support even today's shrunken market share.

There is nothing wrong in the short term to increasing an already inadequate sales tax. Yet, the same factors that have made the growth in the existing sales tax inadequate will continue to work on the increased sales tax as well. The same cost factors--labor, fuel, pension, security--and possibly a few others that have outpaced the growth in sales tax revenue will almost certainly eat up the sales tax increase before too long. SB 572, if enacted, only postpones the day of reckoning resulting from the region's over reliance on the sales tax to fund public transit.

The real estate transfer tax built in SB 572 is a good starting point to diversifying the public transit funding base. Maybe that tax should be expanded throughout the six-county region under the rationale that travelers and property owners in all counties benefit from the congestion relief and other benefits associated with transit. A parking lot tax, increased auto registration fee, congestion pricing, a gas tax increase, and the like make up a menu of alternatives to a sales tax increase (or supplements to a smaller sales tax increase).

Let's for the moment assume, however, that SB 572 passes as is. How long will it be before the service boards and the RTA eat up the incremental sales tax revenue generated by the tax increase and start rolling out the next set of doomsday scenarios?

Predictions please.

Savage Shove: Is SB 572 A Preemptive Counter-Reformation?

If his recent Tribune column is any indication, Professor Ian Savage of Northwestern University is trying to become to the transportation community what "Savage Love" columnist Dan Savage is for the rest of us--a source of trenchant, iconoclastic and often right-on advice.

Professor Savage's argument distills down to this. The current public transit funding crisis and its proposed solution (SB 572) is much more about preserving the existing institutional structure than it is about maximizing the quality and quantity of transit service in Northeastern Illinois. The SB 572 fight in his view is about preserving the same level of service by the same publicly owned and operated service providers--Chicago Transit Authority, Metra and Pace with the RTA perched precariously (and expensively) in its financial oversight role.

Savage points out how outsourcing some transit service through competitive contracting could yield more transit service at less cost:

The situation in Chicago is not unique. Throughout the developed world, the introduction of transit subsidies in the 1970s was accompanied by a run-up in costs. A political backlash ensued with efforts to introduce competition into the market. In a few places, such as the provincial cities in England, this has taken the extreme form of deregulation and competition on the street. Much more common, and more relevant to Chicago, is a competitive contracting model that was adopted in London in 1985.

If Chicago followed London's model, the existing CTA bus division would be broken up into smaller units, and the assets would be sold to companies in the private sector. These companies would then compete against each other and against existing private sector firms to win the contracts to operate individual bus routes. Typically, the contracts are for three to five years. And if a route isn't making money, bids are decided based on who requires the least amount of subsidy. While operations would be in private hands, the CTA would set the routes, specify how frequently the buses run, what color they are painted, and what fares are charged. The CTA would continue to exist, but as a marketing and procurement organization.

It may surprise many readers to learn that the iconic red buses in Britain's capital have not been owned by the government for more than 10 years. Yet, as visitors will testify, the network is marketed as a seamless system, with electronic fare card options that Chicagoans can only dream of. This form of organization has found favor in Scandinavia, Australasia, South America, and, rather ironically, the former Soviet-bloc countries of Eastern Europe. Large multinational companies have developed to meet this maturing market. Some of these companies are already active in the United States, owning extensive school bus holdings and Greyhound Line Inc.

Another option might be a taxi-like system allowing licensed jitney vans to provide service on routes that CTA and Pace may be abandoning in January if the status quo is not preserved. Such vans would be tied into the nascent real-time bus locator systems. They would be allowed to charge market prices and try alternatives to the CTA's big bus/big street model (e.g., premium priced door-to-door service).

The fact that no transportation agency is giving serious consideration to alternatives to the current transit service delivery and institutional models lends credence to Savage's argument. Rather than being a "liberal" attempt to preserve vital transit service to transit dependent communities, Savage implies that the Moving Beyond Congestion/SB 572 effort is a profoundly conservative effort to preserve a status quo that delivers significantly less transit service than might be obtained using a different operating model that features a trimmed down public transit institutional structure.

For this most troubling and challenging analysis, Professor Savage should stay away from the windows if he attends Monday's Lipinski Symposium on Transportation Policy. He might find himself the victim of a savage shove from one of the ranks of the many who are fighting so hard to preserve the transportation status quo.

Biting The Hand That Feeds You--Republican Sues RTA

The RTA long has been viewed by many as a Republican/suburban preserve. It was foisted on the City of Chicago early in the Harold Washington administration, when the City was divided (and weakened) politically and the CTA was desperate for cash.

The provisions of the RTA Act were stacked in favor of the collar counties and remain so to this day. Three examples. First, RTA Board seats are allocated based on population rather than transit ridership or financial contribution to the system. This approach guarantees collar county representation in excess of their contribution to and consumption of transit. It created no incentive for the collar counties to either adopt land-use policies that would generate transit use more than their default model of transit-hostile sprawl or increase their financial support for the region's transit system.

Second, the RTA sales tax rate in the collar counties was and is only one-quarter the rate in Cook County. Third, the seats on the Metra Board are allocated based on morning boardings, which of course means that the suburban counties control the commuter rail system that is of vital importance to the City of Chicago.

For years, the primary goal of the RTA administrations appeared to be to protect and expand the Metra system. The sales tax funding formula delivered more operating subsidies to Metra than Metra was able to spend, so Metra was able to convert millions of dollars of operating subsidies each year into capital expenditures. The RTA also allocated a disproportionate share of capital dollars to Metra, which has resulted in the CTA system infrastructure being in much worst shape than the Metra system. The CTA also faced a structural funding deficit on the operating side because its sales tax base was not keeping up with inflation. For years, the RTA resisted all efforts to revisit the funding formula, protecting Metra's privileged status.

If critics are to be believed, the RTA itself even was a source of patronage jobs, consulting contracts and RTA Board seats for State and DuPage County Republican allies. It certainly is indicative of the RTA's commitment to public transit that one of its long-standing Board members was a prominent opponent of the formation of the RTA and presumably of the ideals of regional transit.

That was then. Now we have the odd specter of Andy Martin, a Republican candidate for U.S. Senator in 2008, suing the RTA because it accepted the short-term bailout offered by the Governor to stave off transit doomsday until November 4th.

The pro se lawsuit is Martin v. Blagojevich, et al., 2007 MR 001310 (DuPage Cty.). It was filed on September 14, 2007. (Copy sent upon request.)

The bare bones complaint alleges that the Governor engineered the advance of funds "to satisfy the CTA's need for cash," neglecting to mention that Pace especially also has relied on these advanced funds to stave off its doomsday for its suburban riders. The gist of the complaint is as follows:

The governing statute mandates that the RTA operate in a "reasonable and prudent manner." The borrowing of money form [sic] 2007, [sic] to fund deficits in 2007, without nay [sic] assurance of repayment is irrational, illogical and contrary to any concept of reason and prudence, and therefore violative of the governing statute and the Illinois Constitution.

This lawsuit is unlikely to gain any traction, even in the favorable confines of the DuPage County court system. (Readers, please email me any subsequent filings so I can avoid a repeat trek to Wheaton.) Nor does the lawsuit appear to have had much of an impact so far on the court of public opinion.

There is, however, something strangely fascinating, even satisfying, about seeing a Republican sue the RTA. It is like a real life demonstration of biting the hand that feeds you!

Parking Space Tax: Is It Really Such A Bolshevist Fantasy?

It appears that Tuesday's Mass Transit Committee hearing into alternatives to the sales tax increase built into SB 572 was a bust. I wasn't an eyewitness, but it seems the transit agency representatives and other interested parties came to bury rather than praise possible alternatives to an increase in the regressive RTA sales tax, whose limitation as a funding base is as evident as the current transit funding crisis.

Per the Chicago Tribune article, a tax on parking spaces, an idea that had created some buzz in the days leading up to the hearing, lacked an effective advocate and was treated like it was the fevered fantasy of an unreconstructed Bolshevik:

The alternative tax proposals, however, elicited no apparent support from lawmakers or civic groups at the hearing. No sooner was the parking-space tax proposal raised than it drew withering fire from civic groups and organizations representing retail merchants and manufacturers, who labeled it a levy on jobs and an extension of the property tax.

Skeptical lawmakers also raised numerous questions, such as who should pay the tax -- owners or users of property -- and how it would be collected. The questions remained unanswered, largely because such a tax has never been enacted elsewhere, officials said.

Two observations. First, the zeal with which transit funding advocates push a sales tax increase via SB 572 is puzzling. The RTA funding system has been based primarily on a regional sales tax for over two decades. The current funding crisis indicates that such heavy reliance on the sales tax at the exclusion of other funding sources is a bad idea. Raising the RTA sales tax may push off this structural funding problem for a few years, but even with the increase it will be deja vu all over again in the few years with more doomsday scenarios and the like.

Successful transit systems like the New York MTA have much more diversified funding sources. The Governor's opposition to an RTA sales tax increase but professed willingness to consider other options gives transit funding proponents a chance to diversify the public transit funding base in this region. They are squandering that opportunity by holding fast to SB 572 as drafted.

Second, a parking space tax to provide transit funding did not get a fair hearing. The statement by unnamed "officials" that "such a tax has never been enacted elsewhere" was false.

As capably outlined by Todd Litman in an article entitled "Parking Taxes: Evaluating Options and Impacts," a tax on parking spaces has been enacted in Vancouver to help fund its transit agency. Litman outlines parking space taxes in several Australian cities. There also are recent news reports of parking space tax initiatives underway in numerous places in Great Britain. Again, I wasn't at the Committee meeting so I hesitate to point fingers, but it was inaccurate for these "officials" to signal to the Committee that a parking space tax was untested if in fact they did so.

The parking space tax has some merits that bear serious consideration. In his article, Litman outlines two general kinds of parking taxes. The first and more common form of parking tax is imposed on commercial parking, typically a percentage or flat fee tacked on top of parking charges. The City of Chicago has imposed just such a tax. The second and for current purposes more interesting kind of parking tax is imposed on a range of non-residential parking spaces. The determination of the amount of parking spaces subject to tax generally is done as part of the property tax assessment process.

According to Litman the commercial parking tax has at least two undesirable consequences. First, it puts city centers with their paid parking and added-on tax at a competitive disadvantage against outlying areas with free parking and no tax. Second, the tax makes free parking more valuable on a comparative basis and stimulates the creation of more parking spaces in areas where some parking is priced and taxed.

In contrast, a tax on parking spaces that is applied widely to non-residential parking puts all areas in a region on a more level playing field. According to Litman, a per-space parking tax also:

encourages property owners to reduce parking supply (particularly seldom-used spaces) and manage their parking supply more efficiently, and it encourages pricing of parking. As a result, it encourages more compact, accessible, multi-modal land use patters and reduces sprawl. Its cost burden is more evenly distributed.

Free parking offered by employers is a major contributor to travel by car during peak travel periods when traffic congestion is endemic. A tax on parking spaces encourages employers to offer less parking and/or to price parking. Such a tax would also encourage employers to take advantage of existing employer-administered programs that allow employees to get a substantial tax break by purchasing transit tickets using pre-tax wages. These programs (e.g., here, here and here) allow employers to shift employees out of their cars and the now more expensive (because taxed) parking spaces and into the transit system. The revenue from the parking space tax helps fund the increased transit usage. It's a virtuous circle between tax and transit use in a way that the much more broadly based sales tax can never achieve.

Litman's article thus demonstrates that a regional tax on parking spaces is not a crazy Bolshivist idea, as the recent hearing seemed bent on establishing at the expense of both the facts and the putative merits of such a tax. He will be in Chicago on Monday to participate as a panelist in the Lipinksi Symposium on Transportation Policy. Maybe Litman will be prove to be a Gorbachev to our transportation system apparatchiks, whose approach to our transportation system challenges sometimes seems positively Brezhnev-like in nature.

I-70 Project: More Background

Small world department. On Tuesday this blog covered the mid-September announcement by the FHWA that a team consisting of Ohio, Indiana, Illinois and Missouri had won a Corridor of the Future grant to study truck-only lanes on I-70 through these states.

On Friday the Tribune finally covered the story or, to be more accurate, reprints an Associated Press article that relied upon a story in the Indianapolis Star.

The Star article is more complete than the Tribune article, which I guess is appropriate since Indiana not Illinois is the moving force between this project.

Countdown To The Lipinski Symposium

The exclusive, by-invitation-only, hottest-ticket-in-town Lipinski Symposium on Transportation Policy is on Monday. You can download a program and reading list here.

The symposium is supposed to be webcast through a link on the Northwestern University Infrastructure Technology Institute webpage. Such a link is nowhere to be found. But if your taste in entertainment is watching our local transportation elite respond to contemporary transportation management/funding ideas (e.g., red-faced hoots of "Mais Non! No congestion pricing in our town" and vigorous waving of placards "SB 572 or Death") then try to tune in Monday morning. The phone number of the Infrastructure Technology Institute is 847-491-8165. Bug 'em if the webcast link isn't up by then.

Thanks to a kind reader for these links, which are tucked into one of the highly coveted invitations.

Win For Transportation Team

The State's transportation team has been notably unsuccessful in tapping into federal dollars for innovative transportation programs. (Survey here.) That sorry record makes a recent win all the sweeter.

The FHWA recently announced that the proposal by a group consisting of Illinois, Ohio, Indiana and Missouri was one of six winning proposals in the FHWA interstate highway "Corridors of the Future" program. According to the FHWA:

The proposals were selected for their potential to use public and private resources to reduce traffic congestion within the corridors and across the country. The concepts include building new roads and adding lanes to existing roads, building truck-only lanes and bypasses, and integrating real-time traffic technology like lane management that can match available capacity on roads to changing traffic demands.

Illinois et al. will get $5 million to develop a plan for the I-70 corridor. The FHWA describes the plan as follows:

This project proposes dedicated and segregated truck lanes along I-70 from the Interstate 435 beltway on the eastern part of Kansas City, Missouri to the Ohio/West Virginia border near Bridgeport, Ohio/Wheeling, West Virginia.

The concept proposes adding four dedicated truck lanes to the existing infrastructure, two in each direction, with at least one interchange per county providing access to the truck lanes and includes, conceptually, truck staging areas. These lanes present the opportunity to pilot size and weight increases on a facility dedicated to trucks. The dedicated truck lanes are seen as a way to reduce congestion, improve safety, and offset the maintenance costs of general purpose lanes.

One can only hope that the I-70 team consider some innovative approaches, including leveraging the Illinois I-PASS platform to use tolling to raise money to build and maintain the truck-only lanes and, perhaps, even the entire I-70 corridor. One can envision the truck-only lanes being available only to trucks that have advanced safety equipment, such as adaptive cruise control and out-of-lane warning signals. This safety equipment plus dedicated truck lanes might allow higher truck speeds, a money-saving approach for which the trucking industry would be willing to pay a fair price in tolls.

To be fair, it appears from the FHWA's description of the project that Indiana is the lead partner in the I-70 group. It is a sad reflection on this State's transportation team that Illinois has become the "tag-along" state to Indiana of all places when it comes to innovative transportation projects. Nevertheless, a win is a win.

New Funding Sources--Quick Ideas

Representative Hamos has issued a challenge to identify public transit funding sources other than an increase in the regional sales tax that the Governor has pledged to veto. Many of the comments thus far have been of the crackpot "tax the Machine" variety. Here's a few quick ideas before I attend to the chores.

Real Estate Transfer Tax: The Governor's opposition to SB 572 seems focused more on the proposed sale tax increase than on the imposition of a real estate transfer tax in the City of Chicago. The proposed real estate transfer tax covering all of the City of Chicago thus remains. The tax is extended to the collar counties in a limited fashion, applying only to real estate located within one mile of a CTA or Metra train line that is in operation or identified as a project in the FTA's New Starts program (e.g., STAR Line). Such a tax recognizes that public transit rail investments increase property values in the surrounding area and captures a small portion of that increase. Yield: $150 million.

Parking Lot Tax: For reasons that will be covered in a later post, a tax on parking spaces might make good sense. The RTA estimates that a $100/year tax on unpaid commercial parking spaces alone would raise $100 million. There may be better approaches as well. Such a tax promotes more efficient use of parking spaces, which has positive environmental benefits (parking lots have terrible environmental consequences and are empty most of the time). Such a tax encourages employers to provide "Commuter Choice" tax benefits to employees--allowing employees to buy transit using pre-tax dollars at a substantial saving and allowing employers to reduce their investment in parking spaces. Yield: $100 million.

Vehicle Registration Fee: Cars in the six-county region impose a cost that they generally don't elsewhere in the State, namely, they add to congestion that is adversely affecting the region's--and hence the State's--economy. Thus, vehicles in the six county region pay a higher registration fee. According to the RTA, a mere $10 increase raises $50 million. Let's add a $30 fee and raise $150 million. It is a condition of registration that each car in the six-county region have an I-PASS (see below). Yield: $150 million.

Bridge Program: The Illinois State Tollway would be directed to install I-PASS toll collection points on bridges on state highways and the interstates (to the extent allowed by federal law) over major rivers (e.g., Fox, Des Plaines, Chicago). After deducting its fully loaded costs the Tollway would turn the money over to the RTA. The net proceeds would be distributed as follows: (a) one-third goes to a fund dedicated for the repair, rehabilitation and replacement of highway bridges; (b) one-third goes for transit; and (c) one-third goes to the municipality or municipalities in which the bridge is located for local highway or transit (e.g., demand response service) purposes. Local governments could toll other bridges in their jurisdiction if (a) the RTA approved of the toll rate as consistent with regional bridge toll rates and (b) the proceeds were shared as described above.

The bridge program provides a framework for congestion pricing and a steadily increasing revenue stream as more cars over more bridges get tolled. Raising money for bridge repairs is a relatively easy sell these days, after the Minneapolis bridge collapse. The fact that the locals would get a cut of the bridge tolls would help make the program more palatable in the trenches. Yield: Substantial. Potentially several hundred million dollars each year.

These four approaches to raising money are much more closely tied to transportation than a sales tax increase. The real estate transfer tax captures a portion of the value generated by transit investment and service. The parking lot tax passes on to property owners and ultimately drivers the externalities associated with parking lots and, by extension, driving (e.g., runoff from parking lots). The same holds true with an increase in the vehicle registration fee. The bridge tolling program allows the region to develop an infrastructure for congestion pricing, possibly the most effective tool of traffic management, as well as fund key infrastructure, transit, and locally-run transportation programs.

RTA Gamble--RTA Consequences?

In his "Getting Around" column in today's Chicago Tribune Jon Hilkevitch looks ahead to the 2008 doomsday scenario that the CTA will unveil on Wednesday. To set the stage for how the region got to this point, Hilkevitch looks back at the budget the RTA Board almost a year ago:

Early this year, RTA officials ordered the CTA, Metra and Pace to pass 2007 budgets based on the risky assumption that the state would approve $226 million in new operating subsidies for transit. It was a questionable move at the time by the RTA, which is responsible for providing financial oversight.

Today, the RTA's gamble looks much, much worse. Relatively mild service cuts and fare hikes that would have taken place earlier this year to balance transit agency budgets -- if indeed such measures were really necessary to convince state lawmakers of the pending transit meltdown -- will pale in comparison to what may lie ahead.

This "gamble" by the RTA Board was not only risky, it likely was in violation of the RTA Act, which requires the RTA to approve only balanced budgets based on reasonable and prudent assumptions. As noted previously (here and here), section 4.11(b)(2) provides in relevant part that the RTA Board:

shall approve the budget and plan if:
. . .

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

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

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

The RTA Board failed to follow these statutory requirements when it approved a budget with a $226 million plug number for operating subsidies to come from some undetermined State source(s). The RTA gambled that the State would come through with that money and, as Hilkevitch notes, that gamble makes each doomsday scenario worse than its preceding scenario.

(Perhaps someone should submit a FOIA request to the RTA seeking something like "all documents that refer to or relate to the $226 million in additional state funding that is contained in the RTA's 2007 budget, including but not limited to any communications with the Governor or any legislators, or representatives thereof, concerning increased State funding for public transit in the six-county RTA region in 2007." Faced with ever more dire doomsday scenarios, the public deserves to know on what basis--if any--the RTA Board voted to approve its 2007 budget with a sizable uncovered operating deficit.)

Rather than base its budget on a large plug number, the RTA should have fulfilled its fiscal oversight responsibility by prompting the service boards to begin in January 2007 making service cuts, implementing fare increases, and taking other steps necessary for they and the RTA to live within their means. These actions may have prompted a quick resolution of the transit funding situation or by now we would have learned to live with a scaled down transit system. Either way, the RTA would have complied with its statutory responsibilities.

Supporters of increases in public transit funding (e.g., Richard F. Harnish's well done commentary) make much of the fact that the CTA and the other service boards are attracting a growing middle class clientele and no longer should be viewed primarily as a social service provider for the poor. At the same time, the RTA presumably justifies allowing the service boards to provide roughly 10 percent more transit service than they can afford on that ground that such transit service is a vital social service. Which is it?

Even if the RTA has the noblest of intentions in allowing the service boards to continue supplying more transit service than they can afford, the RTA Act does not give the RTA Board the power to exercise financial oversight based on its good intentions. The Act is quite specific that the RTA Board is not allowed to approve budgets that contain an uncovered deficit, which is just what the RTA did here. Clearly, the legislature wanted to get Illinois out of the cycle of rolling out more transit in northeastern Illinois than the service boards could afford, with doomsday scenarios as an inevitable result.

The cuts and fare increases necessary to balance the 2007 budget would have been less severe and less painful if they had been implemented early this year. Certainly, the Auditor General's report in March 2007 finding that the service boards had expanded service levels well beyond their financial means should have galvanized the RTA into action. Instead, the RTA's delay in matching transit service to available financial resources has created the very kind of crisis that the RTA Act was designed to avoid.

When a board fails to follow the spirit if not the letter of its governing law and when its "gamble" results in the creation of the very fiscal crisis that board was charged with preventing what can be done? One option is for the board to resign, allowing for a quick change in leadership. Another option is for other powers to step in and take over via an oversight agency.

It does not appear that the RTA Board is taking any responsibility for gambling away its financial oversight duties. Nor does replacement of the Board through a a temporary oversight agency seem on the horizon.

Why not? Is there such a high degree of confidence in the RTA Board despite this gamble and other missteps and failures to exercise its current oversight powers that holding the Board accountable is unthinkable?

MPC Has The Hottest Ticket In Town

Forget about Cubs playoff game tickets. (And forget about the hapless Cubs.) The real hot ticket in town is to the Metropolitan Planning Council's upcoming "invitation only" event. Transportation aficionados, public officials, academics and transportation industry representatives are all clamoring to get a precious invitation. Rumor has it that folks are lining up at the MPC's door, hoping to obtain a ticket. To escape the shame of not receiving an invitation, others are arranging urgent appointments that require them to leave town that day.

Here's the MPC's description of the event:

On Monday, Oct. 15, decision makers will connect with global, national and regional transportation experts at "Moving the Region in a New Direction: the Inaugural William O. Lipinski Symposium on Transportation Policy," a day-long, invitation-only forum, co-sponsored by McCormick Tribune Foundation, Metropolitan Planning Council, and Northwestern University, to build consensus on new ways to plan, manage and finance metropolitan Chicago's transportation network in the coming decades.

The guest list includes the following:

• Hon. William O. Lipinski, former U.S. Representative and former Ranking Minority Member, Aviation, Rail, and Highways subcommittees

• Rep. James Oberstar (D-Minn.), Chair, U.S. House Committee on Transportation & Infrastructure

• Rep. Julie Hamos (D-Evanston), Illinois House of Representatives and Chair, House Mass Transit Committee

• Randy Blankenhorn, Executive Director, Chicago Metropolitan Agency for Planning

• Edward Hamberger, President & CEO, Association of American Railroads

• Todd Litman, Founder & Executive Director, Victoria Transport Policy Institute

• Timothy J. Lomax, Research Engineer, Texas Transportation Institute

• Hani S. Mahmassani, Professor, Civil and Environmental Engineering, Northwestern University

• Daniel Murray, Vice President of Research, American Transportation Research Institute

• Robert Puentes, Scholar Fellow, The Brookings Institution; Author, Taking the High Road: A Metropolitan Agenda for Transportation Reform

• Robert J. Schillerstrom, Chair, DuPage County Board

• Suzi Schmidt, Chair, Lake County Board

• Gunnar Soderholm, Director, Stockholm, Sweden 's Congestion Charging Program

Hope springs eternal each day as I rummage through the mailbox.

A Resumed Search For Transit Funding Alternatives

This blog urged weeks ago that the proponents of increased transit funding take the Governor's resistance to a sales tax increase seriously and look for other funding options. The House Mass Transit Committee is set to do just that. It has scheduled a public hearing next Tuesday, October 9th, at 10:00 a.m. at the Harold Washington Community College, 11th floor, at Lake and Wabash Streets in Chicago.

In an email to interested parties Representative Julie Hamos, the chair of the Committee, stated that "the subject matter of this hearing is the 'Need for Long-Term Operations and Capital Funding for State Mass Transit Systems'”.

Representative Hamos states that the Committee is looking for alternatives to an increase in the RTA sales tax:

We will welcome specific suggestions for revenues to replace the sales tax increase contained in SB 572 to fund RTA operations for the long-term. As you know, the Governor has taken a public position against the modest 1/4 of 1% sales tax increase in SB 572, which would be added in the 6-county RTA region to the existing regional sales tax that has been in place as the chief revenue base for transit operations for the last 24 years. Any suggestions for a sales tax alternative should meet the following requirements:

• Must generate $280 million in the first year, beginning immediately, with some growth each year

• Must be relatively stable, without great fluctuations from one year to the next

• Must maintain regional balance – without one area of the region bearing disproportionate responsibility for producing the revenues

• Should be generated from within the region – unless it is logical, practical and politically feasible to have downstate or statewide sources support RTA operations

• Should not be subject to the unpredictable state budgeting or appropriations process

Note that one of Representative Hamos' prerequisites is that the funding source "must generate $280 million in the first year, beginning immediately, with some growth each year." It appears that "some growth" is a bit of an understatement. The RTA announced today that the CTA, Metra and Pace are facing a $408 million operating deficit in 2008. This deficit represents 20% of the combined operating budgets of the service boards and is double this year's deficit.

Representative Hamos' invitation to search for funding alternatives is a bit snippy. Note in this regard the statements that the Governor's "public position" is against a "modest" increase in the RTA regional sales tax "that has been in place . . . for the last 24 years." The failure of SB 572 to gain political traction no doubt is very frustrating. Nonetheless, let's take seriously her request for bona fide alternatives to a sales tax increase that is unpopular in some quarters. (Bake sales don't count.) Post your ideas here, send them to Representative Hamos at julie@juliehamos.org and show up at the hearing and testify.

Unlinked Trip: Transit Funding And The Olympics

Proponents of increased transit funding have often linked the success of their effort to the region's selection to host the 2016 Olympics. In their view, an expanded and improved public transit system is as necessary as an Olympic Village.

Peter Ueberroth, the Chairman of the United States Olympic Committee, cut this link between increased public transit funding and the Olympics in a pretty decisive fashion during a recent visit to Chicago. The media generally focused on his assessment that Chicago is running third or fourth behind other cities for the 2016 Olympics. (Here and here.)

That assessment is discouraging enough, but the Sun-Times went on to report this exchange with Ueberroth about the impact of the current public transit funding imbroglio on the region's Olympics prospects:

As for logistics, the USOC chairman insisted that the CTA’s financial crisis—and the possibility of fare hikes and service cuts without a Springfield bailout—would have no impact on Chicago’s chances.

“Any Olympic Games can make the adjustments in its transportation system for a three-week period in order to accommodate the world athletes. There are bigger conventions that come to this town,” he said.

Oooof!

Increased public transit funding and the Olympics may now be an unlinked trip. Certainly paying Laidlaw (now First America) or some other private transit operator for three weeks of premium bus service would be a bit cheaper than the RTA's "Enhance and Expand" option for the next decade.

More Schwieterman On CTA Value Pricing

Professor Joseph Schwieterman graciously submitted a lengthy response to my recent post discussing his Chicago Tribune commentary advocating that the CTA adopt value pricing. In view of the importance of the issue and the thoroughness of the comment, I've reprinted his comment here:

The central message of my Chicago Tribune article is that the CTA has not, despite its rapidly deteriorating financial condition, pursued opportunities to improve its revenues through “value-based” pricing.

You are correct that no major big-city transit system in the U.S. has made the conversion from a flat-fare system to a distance-based system. However, I am unwilling to let the CTA off the hook so easily for its relatively primitive pricing practices. Outside the U.S., nearly all major systems have made the conversion to more sophisticated pricing structures, and as I explain below, other agencies in the U.S. have been more vigorous in pursuing “value-pricing” options than the CTA.

Of course, the CTA’s options for adopting value-based or distance-based pricing are now greatly constrained due to its decision to invest in the present farecard/turnstile system. This huge investment was made in 1997 without, to my knowledge, a serious evaluation of its entire fare system. I have spoken to numerous people, including some transit insiders, who share my view that this was a major mistake.

The recent actions of New York, however, suggest that the CTA still has many viable options. The MTA has a large system of express buses in which prices are set at $5; it also charges a hefty price ($5) for passengers riding its “Air Train” to JFK. Last week, the agency unveiled a proposal to adopt peak/off-peak pricing for the entire system, touting it as an effective way to both raise revenue and smooth out traffic patterns (see link below).

http://www.nytimes.com/2007/09/25/nyregion/25fare.html?ref=todayspaper

The board will apparently vote on this proposal sometime this fall. Why aren’t we seeing a comparable debate in Chicago?

In Los Angeles, the local transit provider (LACMTA) charges a premium of up to $1.20 for bus routes that use local expressways. A study by Matt Smith, a researcher assistant at UIC, shows that many systems around the country have adopted some form of value-based or distance-based pricing. Although I’m not familiar with the measurement criteria that Smith uses, he offers an interesting discussion about the benefits of value pricing that can be accessed via the link below. There is table (pg 16) comparing the status of various pricing strategies in U.S. cities that helps illustrate my point.

http://cta21.utc.uic.edu/Presentations/TransportChicago07/Matt%20Smith.pdf

As the CTA sinks into deeper financial trouble, it is frustrating to me that we are not having a serious debate about creative ways to improve its revenue, outside of draconian “doomsday” budgets. The CTA has far more pricing power than most other transit agencies due to the size and strength of Chicago’s central business district. Plus, we face significant congestion on certain rapid-transit lines at the height of rush hour, which makes providing additional capacity costly.

Value-based pricing is less viable in cities with a smaller rapid transit system, where the price elasticity of demand is higher (partially due to the lower price of downtown parking) and congestion is less severe on trains and buses at peak times. (I did not mention Pace Suburban Bus in my article since I do not believe the agency, with its present route system, has much pricing power.)

This blog raises an excellent point that, even if the infrastructure issues associated with distance-based fares (including the need to install turnstiles that read farecards when passenger exit stations) could be resolved, Chicago’s economic geography makes this type of pricing politically and socially complicated. Some of the poorest neighborhoods, such as Austin and Englewood, are a considerable distance from downtown, which makes the distributional consequences of distance-based fares more than a trivial concern. The economic geography is less problematic in Washington, D.C. or San Francisco, where the poor tend to be concentrated in close-in neighborhoods.

However, the stations that are the farthest out from the city on the CTA “L” system, including O’Hare Airport/River Road, Evanston, and Oak Park/Forest Park, could easily support high fares. (It is my understanding that years ago the CTA dropped its surcharges on several routes, including the Evanston Express, for political rather than economic reasons.) Express bus routes using Lake Shore Drive are also good candidates for higher fares, while short routes in the downtown should probably have lower fares.

It is not clear whether it would be cost-effective for the CTA to modify the present farecard/turnstile system (presumably by installing the previously-discussed exit farecard equipment) at certain stations, such as O’Hare, to allow it to impose higher prices. However, this would be the simplest way to make the fare system more rational. Passenger exiting at these stations would pay a surcharge; those starting their journey at these stations would pay both the basic fare and the surcharge all at once.

Alternatively, the CTA could simply still charge premium prices only for originating passengers at certain stations (while allowing arriving passengers to pay only the basic fare), which would obviate the need for installing new turnstile equipment. I agree that this approach is imperfect, but it would be administratively simple and easy for travelers to understand. (Some highways have different tolls based on the direction of travel).

Moreover, the Chicago Card, introduced in 2000, provides an excellent opportunity for building greater pricing flexibility into the system and could help alleviate the pain of collecting surcharges if the CTA were to reinstitute the practice of collect surcharges on certain routes, such as the Evanston Express (Purple Line) times.

It is true to that value-pricing would result in some travelers either opting for other modes of transportation or traveling less. The assumption behind value-based pricing, however, is that the benefits, in the form of increased financial solvency of the transit provider and less severe “peaking” of demand, exceed the social costs.

It will take a lot of political will for the CTA to adopt value-based pricing in a large-scale way. When evaluating the actions of other cities, I was struck by the propensity for some cities to build new light-rail routes with flat-rate fares. Los Angeles has built an entire light-rail system around a flat-fare system. The cost of riding the Los Angeles-Long Beach Blue Line, which stretches 22 miles, is just $1.25. (It is not surprising that its farebox recovery ratio is so poor!). This seem absurd to me, considering the relative ease of zone-based and time-of-day-based pricing on these systems, which can rely on the “honor system” (with enforcement).

The new light-rail system in Minneapolis has both distance-based and time-of-day based pricing, making it a prototype for other to emulate.

None of this is intended to suggest that distance-based or value-based pricing would be a quick fix. It would probably increase revenues only modestly until a general retrofit of station equipments becomes possible, which is hard to imagine right now. Adopting it system wide would be a long, difficult road. But incremental steps could pay dividends, and give us hope that the CTA is waking up to the need for run itself more like a business.

Elgin X-Way/O'Hare Bypass--Update

Joe Ryan has an article in today's Daily Herald that outlines the long and tangled history behind the non-completion of the Elgin-O'Hare Expressway and the O'Hare Bypass.

The gist of the story is that almost 20 years ago the communities nearest O'Hare, especially Bensenville and Elk Grove, fought off these projects as part of their effort to halt the expansion of O'Hare Airport, perhaps the most important economic asset of this State. At that, IDOT threw up its arms and focused on more important things, such as building airports in places where no one wants to fly (MidAmerica Airport) and not building airports at all (Peotone Airport).

As Ryan recounts:

For the last 17 years, state officials have done nothing to plan for that extension or the connecting western bypass, which would head south from I-90 along the western edge of the airport, creating a ring road with the Elgin-O'Hare.

IDOT apparently hopes to lull the recalcitrant local communities into acceptance of major transportation improvements serving the O'Hare area with years of hearings and public meetings:

Instead of moving right into designing the new routes -- which have been on the books since the 1970s -- state officials have decided to spend the next three years talking to local leaders and coming up with a variety of projects to address traffic issues. The final list could range from new transit to small expressways or large privately-owned toll roads.

In 2011, state planners will then start working on how to pay for the projects and precisely where they would be placed. That means actual construction might not start until 2016 or later, nearly 30 years after the original battles over the Elgin-O'Hare extension.

It will be all but impossible to placate the community holdouts, which are nothing if not vociferous in their efforts to save the State from thousands of new jobs and a shot at nurturing a global city within its boundaries. According to Ryan, the O'Hare expansion project will be done by 2016. It makes good engineering sense to get the associated road and transit improvements in place--or at least well underway--by that point. After all, why move dirt twice and draw out the adverse construction impacts over many years rather than just a few?

"Rick Powell," who commented on yesterday's post, argues that IDOT's seemingly glacial pace is in fact required by law:

These days, however, it is very difficult to wind through the maze of NEPA regulations and state-mandated "Context Sensitive" processes that are designed to consider all reasonable alternatives, to examine every possible environmental impact, and to involve the community extensively in the process. Can you think of any communities that might have issues with this potential project? You may not like it, but this is the legal and political environment for large scale transportation projects today.

It may be that the pendulum has swung too far to the side of "paralysis by analysis" but if so, it will probably take awhile for it to swing back the other way. Meantime, "public private partnerships" do not yet have the legal standing in IL to do a slash-and-burn design/build highway project with eminent domain powers, and even if they did, they would likely be subject to the same procedural issues as the public agencies must operate with.

Is this assessment accurate? Can it be that the federal government accepts that its $140 million earmark will be used to fund years of studies and public meetings and not a single transportation improvement in the area?

Elgin X-Way/O'Hare Bypass--"Very Theoretical"

It looks like the $140 million earmark the region got in the currrent federal transportation bill (SAFETEA-LU) for the construction of (a) an extension of the Elgin-O'Hare Expressway to one or both of those destinations and (b) a western bypass road behind O'Hare Airport connecting the Northwest Tollway and the Tri-State Tollway will be used to fund plenty of studies and plans over the next decade. Just what we need.

The three major papers in the Chicago area all had stories today (here, here, and here) that IDOT is going to do a very thorough study that will take until at least 2010 to put together a "priority list" of highway and transit improvements in this land beyond O'Hare. "Then, for three years, they will look at how to finance the top projects and identify the general areas to locate them." After that, if the financing comes through, "the officials will start the long process of further engineering, alternative studies, environmental impact analysis and land acquisition."

Clearly this is not a project on a fast track and the question is why not. After all, the Elgin-O'Hare Expressway and O'Hare Bypass projects already have been the subject of years if not decades of studies and debate. One would think that our transportation officials would have a pretty good idea by now about what to do. And why have they not viewed the $140 million earmark from the current federal transportation bill as a clear federal direction that the State and region should get cracking on these transportation improvements, which are expected to deliver major economic and transportation benefits to the region and thus the nation. (See 2006 West O’Hare Corridor Economic Development Study here.)

The State already has spent $5.4 million of this $140 million earmark. Rather than spending more years and substantially more dollars putting together a "priority list," then more years and more money looking for financing, and then still more years and more money doing alternatives analysis and the like, maybe the State should be looking for ways to compress the process and do these tasks as simultaneously as is legally possible. Why not shoot for a big slug of federal transportation dollars in the next federal transportation bill for serious engineering and construction work rather than wait on two more six-year federal transportation bill cycles to get construction going full bore as seems likely given IDOT's current plan?

Business Leaders for Transportation proposed last year that the Expressway and the Bypass be constructed in a much more timely fashion using a public-private partnership. (Report here.) Certainly there are fully public options as well (e.g., public operating authority financing construction by charging tolls).

Senator Don Harmon's bill (SB 378) to give IDOT and the Toll Authority the power to enter into public-private partnerships is stalled in the General Assembly. Given IDOT's go-slow approach to the Elgin-O'Hare Expressway and the O'Hare Bypass, such power likely would be wasted on that agency anyway.

$140 million is a lot of federal money. Is it a worthwhile investment of those valuable transportation dollars to pursue a plan that makes it just a "very theoretical" possibility, according to Pete Harmet, an IDOT area programming bureau chief, that construction will even begin by 2016? After all, the earmark is for "Construction of O'Hare Bypass/Elgin O'Hare Extension" and presumably not for a decade's worth of expensive priority lists and preliminary plans.

As IDOT knows all too well from its Dan Ryan project, construction costs in recent years have risen significantly faster than the rate of inflation. Waiting to do these projects are not going to make them any easier or cheaper.