Roll The Dice For Transit Funding?

Here an excerpt from a transcript of last night's interview with the Governor. Note the lack of clarity when it comes to operating funding for the service board and the seeming possibility that only the CTA gets an operating funding bailout.

Post any news that you might have in the comments:

There’s been some talk of how the RTA fits into the casino deal, what do you see as the solution of funding for that?

“I think the Chicago casino and a capital construction program create the resources that would be used to be able to fund the CTA as well as ways to be able to help the RTA and do it without raising taxes on people. So this too is a vehicle to be able to address our mass transit needs.”

Just so I’m clear, would there be three sources tapping into gambling—education, capital and RTA?

“CTA.”

((Deputy Gov. Sheila Nix added: “The capital bill would give some capital to CTA and RTA too.”))

Mass transit officials were looking for operating funds, so I’m trying to figure out how you plug that hole without the quarter-cent sales tax—unless you’ve flipped on that?

“No. No. What a question. I don’t want to pass judgment too soon because those were some of the things we talked about in the meeting today. Let me answer the question by saying that funding for the CTA and the RTA is very much part of the discussion for a capital construction infrastructure bill that is being driven by a Chicago casino. And that Chicago casino is a way to address a lot of those issues, including CTA and RTA.”

Good Kit: Congestion Pricing Primer

Kit Hodge of the Metropolitan Planning Council is probably mortified at being fingered (incorrectly) as the author of this blog. "Zoot alors, linking me to such drivel," we suspect she is saying.

So let's acknowledge the "Congestion Pricing 101" piece she recently posted on the MPC website. At least someone is willing to keep swimming against the local current.

The RTA "Role to Do" is to "Pursues to Improve"

The RTA has hired Grace Gallucci, an experienced transit executive from Cleveland, to fill a newly created position of "Deputy Executive Director of Research, Analysis and Policy Development." Announcement here. According to the RTA "Gallucci heads up a new department that will ensure the RTA has adequate finance, administration and operations information as the RTA pursues to improve [sic] its role to do regional planning and to coordinate, oversee and fund the CTA, Metra and Pace."

The RTA already has a "Senior Deputy Executive Director of Strategic Planning and Regional Programs." With a "Deputy Executive Director of Research, Analysis and Policy Development" now in the fold the RTA should at least win any struggle with the service boards over who has the planners with longest job titles!

SB 572: More On Who Gets What

Despite a recent suggestion to the contrary from DuPage County Board Chairman Bob Schillerstrom, SB 572 does not appear to represent mark a major shift in the allocation of operating subsidies among the three service boards.

Per the Auditor General's Report (pg. 319 of 450) the allocation of operating subsidies among the three service boards in 2005 was as follows:

CTA -- $442.5 million (58%)
Metra -- $241.7 million (31%)
Pace -- $84.4 million (11%)

These allocations include both the distributions of RTA sales tax revenue according to the statutory formula and the RTA's distribution of its discretionary operating funds, over 90 percent of which go to the CTA.

The proposed modifications to Amendment No. 2 to SB 572 provide for an increase in the RTA sales tax rate across the six-county region (to 0.50 percent in the collar counties and 1.25 percent in Cook County). This will generate $280 million. The proposal also assumes that the State will contribute its Public Transportation Fund match and and continue its $54.3 million contribution to paratransit service, generating a total of $125 million.

Of this grand total of $405 million in new regional transit operating subsidies, $130 million will be spent on paratransit ($100 million), a Pace-administered Suburban Community Mobility Fund ($20 million), and a new RTA Transit Innovation, Coordination and Enhancement Fund ($10 million).

This leaves $275 million. The RTA will not be taking its 15% off the top for its discretionary operating funds pot, leaving the full amount to be allocated as follows:

CTA -- $132 million (48%)
Metra -- $107.3% (39%)
Pace -- $35.7% (13%)

The funding story does not end here, however. If the City of Chicago enacts the real estate transfer tax then the CTA will get all $100 million in new tax revenue plus the $25 million Public Transportation Fund match of this new tax from the State. When the Chicago real estate transfer tax money is taken into account and Pace is credited for the $20 million it will get for the Suburban Community Mobility Fund, the allocation of new operating subsidies will be as follows:

CTA -- $257 million (61.2%)
Metra -- $107.3 million (25.5%)
Pace -- $55.7 million (13.3%)

If anything, these numbers indicate that CTA and Pace are getting a larger share of the new money than they get under the current system while Metra gets less.

When the new money is included with the existing allocations it appears that not much will change:

CTA -- $699.5 million (58.9%)
Metra -- $349 million (29.4%)
Pace -- $140.1 (11.8%)

Compare these percentage shares with those listed at the beginning of this post. It looks like the CTA and Pace are doing a tiny bit better at Metra's expense as a result of the proposal.

The account of Schillerstrom's analysis is as follows:

Proponents of the legislation, including Schillerstrom, point out that for the first time since the RTA was created the collar counties will not be sending money into Chicago to help the CTA. Also for the first time, tax money will be coming out of Chicago to help the suburbs. . . .

These assertions appear to be incorrect. Chicago will generate only about $65 million in additional sales tax revenue as a result of the increase in the RTA sales tax rate. Yet, the CTA's share of the new sales tax revenue is twice as much--$132 million. So somebody in the suburbs is sending new sales tax money into the Chicago to help fund the CTA.

Perhaps when he says "Chicago" Schillerstrom means "Cook County." It appears that under the proposed new RTA funding structure suburban Cook County will continue its role as the deep pocket for the region's public transit system. We will look at this in another post.

Of course, it is quite possible that Mr. Schillerstrom's comments came after the suburbs and their allies drove a better bargain for Metra and perhaps Pace at the expense of the CTA. Only time will tell.

As of the time of this post, SB 572 has not been further amended. All of the message signs at Ogilvie station this evening had those Orweillan scrolling messages urging us to pressure our legislators to support SB 572. Thus, it appears that SB 572 continues to be the vehicle for transit funding and RTA "reform." Where is Jenny Holzer when we need her?

Post Breaking News--Monday, August 6th

This should be an interesting week. Post breaking news from Monday, August 6th, in the comments to this post.

Feel free to send me documents that might be of interest to readers at: moderator1stc@yahoo.com

Please specify any limitations on use and/or attribution concerning any materials you send.

I'm looking for a copy of the draft legislation that is supposed to emerge from LRB today.

Read breaking news from late last week here.

Those That Got Get?

We noted some weeks ago the comment by Jim Reilly, the Chairman of the RTA, to the DuPage County Board that Metra is the "winner" in SB 572.

Now at least one suburban newspaper, the Naperville Sun, in an editorial in today's newspaper, has taken up the theme. The editorial urges approval of SB 572. Here is its analysis of why SB 572 favors the collar counties:

Proponents of the legislation, including Schillerstrom, point out that for the first time since the RTA was created the collar counties will not be sending money into Chicago to help the CTA. Also for the first time, tax money will be coming out of Chicago to help the suburbs - specifically the collar counties will be paying $121 million a year, while Pace will get a dedicated revenue of $100 million for paratransit purposes and Metra and Pace combined will get $163 million.

The legislation reforms the RTA to give it more authority vis-a-vis the transit agencies and improve the city/suburban balance of its board. Additionally, it changes the funding formula so that the CTA gets a smaller percentage of RTA money while Metra and Pace receive a larger percentage.

Schillerstrom thinks this bi-partisan legislation is the best deal the suburbs are ever likely to get, though some local legislators are dragging their feet and displaying their aversion to raising taxes.

Recall that both the Auditor General and the House Mass Transit Committee have concluded that under the current funding structure the collar counties--like Chicago--consume a larger share of transit resources than their share of the tax burden. Does SB 572 give the collar counties an even better deal?

SB 572: Final Action Deadline Now August 10

The "final action deadline" for SB 572 has been extended to Friday, August 10th.

Does anyone know if this deadline extension has any significance to the questions if and when SB 572 will be called for a vote in the Illinois House?

"Wouldn't Metra Get Mad"?

I was discussing possible CTA rail extensions with a family member who is a transit enthusiast. I mentioned that in light of the congestion on the Eisenhower and the many shopping and employment centers in the area from Oakbrook to Naperville it made sense to extend the Congress branch of the Blue Line deep into the heart of DuPage County. (For some reason Conrad's "Heart of Darkness" came to mind, only all the natives are white!)

My young family member's response was: "But wouldn't Metra get mad?" I immediately thought how unfortunate it was that already impressed on this young mind was the notion that the service boards squabble and compete endlessly over "turf" in this purportedly regional public transit system. This started me thinking about the following comment to a recent post:

Mayor Daley better see that Metra get a lot of money from this bill. Hopefully, he'll require that they increase service levels in the City. More stops on the services they have today and more off-peak service. There are parts of Metra, all over the city, but particularly the Metra Electric, that could easily become more integrated into the urban fabric and really improve the quality of some neighborhoods.

Without that pressure, Metra will just keep fares artificially low on the far suburban zones and continue to sprawl, sprawl, sprawl themselves.

Some questions for us to chew on rather than our fingernails as we wait for something to emerge on the public transit front from Springfield:

1. How effective will the post SB 572 RTA be in ending the turf battles between the service boards? In the Congress Line extension example, would the RTA's power to control the alternatives analysis be sufficient to stop Metra from trying to prevent the CTA from expanding into "Metra territory"?

2. Does Metra under serve the City of Chicago? If so, what would be (and should be) the City/CTA response if Metra undertook a major expansion of service in the City and nearby suburbs? What would such a Metra expansion look like and what effect would it have on the CTA?

3. Is it accurate to say that Metra keeps fares "artificially low" in the "far suburban zones"? I thought Metra alone among the service boards had distance-based pricing and that folks in the far outlying areas did not get a price break? Is it also fair to say that the CTA and Pace keep their fares "artificially low" for long trips precisely because they have opted not to use Metra's distance-based pricing approach?

4. Is Metra investing in the wrong places in the region as the poster argues? Instead of possibly marginal projects like the STAR Line or the Johnsburg extension might Metra get a better bang for its buck investing in new lines in more densely populated areas. For example, would Metra do better running in the rail corridor running near Cicero Avenue (the Crosstown Expressway route) than the STAR Line?

5. Does Metra contribute to sprawl in this region by focusing its investment on projects such as the STAR Line, Manhattan extension, Elburn extension and Johnsburg extension?

6. Last, but certainly not least, have the drafters of SB 572 missed a historic opportunity by not consolidating the service boards into the RTA as operating units rather than retaining them as standalone service boards?

The Moving Target: Legislation Update & Scheduling

Pasted in below is what appears to be the outline of a comprehensive RTA funding/reform bill as it existed as of the middle of last week. Much of it will be familiar to those who are acquainted with Amendments #1 and #2 to SB 572.

The draft bill underlying this summary has been the subject of extensive debate and revisions since it was circulated. The Legislative Research Bureau is putting together another draft, which is likely to be in the range of 200 pages. This revised bill should be ready by Monday. A vote is planned on Tuesday even if the House Republicans have not climbed on board as a group in support of the bill .

Note the sweetners in this outline:

-- Metra and Pace get a bigger share of the new money raised from the collar counties.
-- There is a $20 million Suburban Community Mobility Fund, which presumably funds the extremely expensive (e.g., $25/ride) but extremely popular suburban vanpool services.
-- The Chairman of the Cook County Board gets to appoint one RTA and one Metra board member.
-- The increased draw on the State General Revenue Fund through the Public Transportaton Fund match is deferred until 2009.
-- The RTA does not take 15% off the top of the new tax money for its discretionary use.
-- $25.6 million to Downstate transit--no recovery ratio requirement and no funding source identified.
-- No change to the current statutory formula for allocating sales tax revenue.

I had to scratch around for this dated bill summary. I hope someone will be kind enough to send me a copy of the bill that emerges from LRB on Monday.

Send interesting materials to: moderator1stc@yahoo.com

Post your breaking news here.

* * *

MASS TRANSIT FUNDING AND REFORM: SB 572

Operating Revenues and Expenditures – A Regional Solution to a Regional Problem

To address the operating funding shortfall at Metra, CTA and Pace, and to provide additional funding for transportation needs in the Collar Counties (DuPage, Kane, Lake, McHenry, Will), the RTA Act is amended to authorize additional funds to be raised, primarily from the RTA region.

Operating revenue sources
• $280 million from 0.25% regional sales tax increase (imposed by RTA)

• $70 million* from traditional state-funded match of 25%
*Phased in, starting Jan. 1, 2009. GRF impact $0 in SFY’08, approx. $40m SFY’09

• $55 million continuation of State paratransit funding
Additional 5% match on all sales tax and on RETT; effective immediately
Revenue neutral for State in SFY ’08: replaces GRF appropriation of $54.3 million for ADA paratransit

Operating revenue allocation
• $100 million to Pace for ADA paratransit service for seniors and disabled in the region
Held in RTA trust fund; allocated to Pace only as needed for annual ADA paratransit costs. RTA annually assesses costs of providing services required by the ADA, and conducts triennial audits of paratransit costs.

• $20 million to Pace for a Suburban Community Mobility Fund (SCMF)

• $10 million for an RTA transit innovation, coordination and enhancement fund (ICE Fund)
Competitive selection process for projects in the region

• $275 million distributed among Metra, Pace and CTA for mainline operations:
o $144 to Metra and Pace (52%)
• $107.3 million to Metra (39%)
• $35.7 million to Pace (13%)
o $132 million to CTA (48%)

Notes:
• Annual funding for paratransit, SCMF and ICE increase or decrease consistent with tax collections.
• Allocation of existing RTA sales taxes is not changed.
• All new revenues are allocated, there is no 15% RTA discretionary portion.
• $200 million of new expenses would be exempted from the ratio to avoid the need to match each new dollar with a 50 cent fare increase. This exemption would be phased out over 10 years, thereby requiring gradual fare increase. Debt service on pension obligation bonds and security costs are also exempted from the farebox recovery ratio.

Additional Chicago Contribution to Pay for CTA Costs
• $100 million Real Estate Transfer Tax imposed in Chicago by Chicago City Council
Tax imposed at rate up to .3% ($1.50 per $500 valuation)

• $25 million* traditional State-funded match of 25% allocated to CTA
*Phased in, starting Jan. 1, 2009. GRF impact $0 in SFY’08, approx. $12.5m SFY’09.

Collar County Empowerment
• $121.3 million from additional 0.25% sales tax increase in the Collar Counties to produce for the Collar Counties to use at their discretion for local road and transit projects.
• Tax imposed by RTA ordinance, collected by Department of Revenue, and allocated directly to the counties based on point of sale.

Downstate Operating Funding
• To address operating shortfalls for downstate transit systems, $25.6 million is provided.

RTA Reforms for Coordination, Efficiency and Transparency

To achieve a better coordinated and more efficient regional transit system, and to implement the recommendations of the Illinois Auditor General, the RTA Act is amended to enhance the RTA’s responsibilities and accountability with respect to regional planning, fiscal oversight, and fare and service coordination.

Adoption of Strategic Plan
• Requires RTA Board to adopt (by 10 votes) a comprehensive, long-term Strategic Plan for regional transit, to be reviewed and updated periodically (§2.01a(a)).
• The Plan will establish (i) goals and objectives, e.g., ridership increases, service and fare coordination, job access for low-income communities, (ii) standards, measurements and reporting requirements related to achieving the goals, and (iii) criteria for evaluating which capital projects are included in the Five-Year Capital Program (§2.01a(b, c, d)).
• The Plan also will include a 10-year assessment of the transit system’s financial condition (§2.01a(f).
• RTA is authorized to adopt sub-regional or corridor plans (§2.01a(h)).
• RTA must coordinate with the Chicago Metropolitan Agency for Planning in developing the Strategic Plan and capital program (§2.01a(g)).

Capital program
• Capital projects can only be in the Five-Year Capital Program if they meet the criteria in the Strategic Plan and can be funded within amounts determined by the RTA to be available during that period (§2.01b, §2.01a(c)).
• RTA is required to do “alternatives analysis” for any newly-proposed transit expansion projects with construction costs of over $25 million where potentially more than one Service Board could be the provider of the proposed service (§2.01a(i)).

Annual budgets
• Annual Service Board budgets and two-year financial plans to be consistent with Strategic Plan as a condition for approval by RTA (determination made by 10 votes) (§4.11(b)(2)(vii)).
• Service Board budgets must include additional details, including long-term obligations such as pension and employee benefit expenses (§4.01(a), §4.11(d).
• Allows RTA to adopt (by 10 votes) required formats, financial practices and assumptions that Service Boards must use in preparing annual budgets and capital programs. Provides that if the Executive Director certifies that a Service Board has not submitted its budget in the required form, etc., and such certification is accepted by the Board (10 votes) the Service Board is limited to the previous year’s operating funding levels (§4.01(f), §4.11(b)(1), §4.11(d)).
• RTA is required to withhold up to 25% of sales tax revenues allocated by formula (in addition to current withholding of discretionary funds) until a Service Board budget is approved by the RTA (§4.11(b)(4)).

Auditing and Access to Information
• The Service Boards are required to comply in a timely manner with requests for information from the RTA (§4.01(g)).
• The RTA is required to audit the Service Boards no less than every five years; such audits may include management, performance, financial and infrastructure condition audits (§2.01(b)).
• RTA is required to audit ADA paratransit costs every three years (§2.01d).

Coordinated Sales and Marketing: The RTA is required to develop and adopt (with 10 votes) a coordinated sales, marketing, advertising and public information program for all transit in the region. Service Boards’ programs must be consistent with the regional program (§2.05(c)).

Coordination of Fares and Service: At the request of a Service Board, and with the authorization by the RTA Board (7 votes), the RTA Executive Director is given power to mediate and, if mediation is unsuccessful, recommend to the RTA Board decisions in disputes between Service Boards regarding fare coordination, transfers, service coordination, and duplication of service; such decision is binding if approved by the RTA Board (7 votes) (§2.12b).

Innovation, Coordination and Enhancement Fund: A new fund is created to award grants to Service Boards, transportation agencies, and local governments, for short-term, lower-cost projects and service enhancements (§2.01c, §4.11(a)).

CTA Pension and Retiree Health Care Reform

To stabilize the long-term financial health of the CTA pension and retiree health care system, the funding for pensions and retiree health care are separated, employee and employer contributions are increased, benefits are adjusted, governance is strengthened, bonds are issued, and ongoing financial oversight by the Auditor General is established.
The proposal is endorsed by the RTA, CTA, ATU, CFL, AFL-CIO, Mayor Daley, Civic Federation, Commercial Club, Taxpayers Federation, IRMA, IMA and State Chamber.

Pension Reform
• CTA contribution increases from 6% of payroll to 12%; employee contribution increases from 3% to 6%. CTA gets “credit” for debt service up to 6% of their contribution.
• $1 billion in pension obligation bond proceeds deposited into pension fund to bring it to approximately 72% funded. Debt service paid from CTA’s share of new operating funds.
• Pension fund must stay above 60% funded through 2038, and reach 90% funded by 2059. If additional contributions are needed to comply with this requirement, they are made 2/3 by CTA, 1/3 by employees.
• Governance reforms by elimination of ‘bloc” voting (each member would vote independently); 11 member Board of Trustees established: five union, five CTA, and expert member selected by RTA Board.
• Benefits changes for employees hired on or after January 1, 2008:
o Reduced pensions available at 55 years of age and 10 years of service (currently 3 years).
o Full pension available at 64 years of age (currently 55) and 25 years of service.
o CTA executive pension eliminated.

Retiree Healthcare Reform
• An independent healthcare trust is established to manage retiree benefits seeded with $450 million in bond proceeds. No later than January 1, 2009, the Trust is solely responsible for providing retiree health care benefits.
• Contributions by active employees would be at least 3% of compensation on a pre-tax basis (currently they contribute nothing) bringing total pension and health care contribution to at least 9%.
• Retirees and their dependents would contribute up to 45% of the cost of coverage (currently retirees contribute nothing and dependents pay approximately 2% of the costs of coverage).
• Governance reforms by elimination of ‘bloc” voting (each member would vote independently); 7 member Board of Trustees: three union, three CTA, and expert member selected by RTA Board. Trustees can adjust contributions and/or benefits as needed financially.
• Retiree benefits would be no greater than 90% in network, 70% out of network (currently benefits include 100% indemnity coverage option).

Oversight by Auditor General
• Auditor General certifies financials prior to issuance of bonds.
• Auditor General annually submits financial report to General Assembly.

Wages
• Five-year contract with wage increases between 3 and 3.5 percent.

Governance Reforms

The following reforms are made to the Boards of the RTA and Metra, in part to implement the recommendations of the Illinois Auditor General. No changes are made to the CTA or Pace Boards.

RTA

Current
RTA Board: 13 members (5 Chicago – 4 Cook – 3 collar counties)

4 by Mayor
1 Chairman of CTA
4 by suburban members of Cook County Board
1 by Chairman of DuPage County Board.
2 jointly by Chairman of Boards of Lake, McHenry, Kane and Will
Board Chair appointed by 9 members of Board

Proposed
RTA Board: 13 members (4 Chicago - 4 Cook - 4 collar counties); supermajority vote requirement changed from 9 to 10

4 by Mayor
3 by suburban members of Cook County Board
1 by President of Cook County Board.(from Suburban Cook County)
1 by Chairman of DuPage Board
1 by Chairman of Lake County Board
1 by Chairman of Will County Board
1 jointly by Chairmen of Boards of McHenry and Kane
Board Chair appointed by 10 members of Board

Metra

Current
Metra Board: 7 members

1 by Mayor
3 by suburban members of Cook County Board
1 by Chairman of DuPage County Board
2 jointly by Chairmen of Boards of Lake, McHenry, Kane and Will
Chairman appointed from among the members, with 5 votes

Proposed
Metra Board: 8 members
1 by Mayor
2 by suburban members of Cook County Board.
1 by President of Cook County Board (from Suburban Cook County)
1 by Chairman of DuPage County Board
1 by Chairman of Lake County Board
1 by Chairman of Will County Board
1 jointly by Chairmen of Boards of McHenry and Kane
Chairman appointed from among the members, with 5 votes

Post Your Breaking News Here-Edition #1

For a variety of reasons I cannot post breaking news about the transit funding package as quickly or as completely as I would like. Two kind readers posted deliciously interesting news items in response to one of yesterday's posts. They suggest that the transit funding package is running aground.

If you have news about the status of the transit funding package (and don't forget the RTA "reform" package) please post that news in the comments to this post.

Let's work together to restore some of the transparency that was promised to us long ago.

NOTE: Please use this to post news. Try to save the commentary and debate for other posts. I may prune the comments accordingly so that this remains the spot for breaking news. Don't be offended if your comment disappears.

Political Hectoring: Metra Edition

Observed on the scrolling message sign at the Metra station this afternoon:

SUPPORT SB 572, NEW FUNDING FOR PUBLIC TRANSIT. VISIT RTACHICAGO.COM AND SEND A MESSAGE TO SPRINGFIELD TODAY

For the reasons set out in yesterday's post, this kind of explicit call to mass political action by a public agency is unseemly. In addition to the tough job of fulfilling their statutory responsibilities do public agencies now have to compete with each other through campaign-style political organizing? Is this how we want our public agency leadership to spend their time and our money?

The Region's Transportation Team: Response To Its Defenders

I've been taking some hits in the comments from those who believe that my criticisms (here, here and here) of this region's transportation team are unfair. (By "transportation team" I mean that extended network of planners, academics, NGOs and transportation agency executives that is largely responsible for the stewardship of our regional transportation system.)

I can take it. I'm a big person. But I feel compelled to respond. Bear with me. I think the issue of the performance of our transportation team is important to understanding the pickle the region finds itself when it comes to transportation generally, and public transit in particular.

The Blame The Politicians Argument

The thrust of the defenders' argument is that you shouldn't blame the team. Rather, the blame lies with an "Orweillan" political system that presumably squelches the creativity and best laid plans of the planners, transportation agency executives, and transportation NGOs who make up the team.

This argument doesn't hold water. Certainly, if we could clone John Norquist by the hundreds and install him in political offices throughout the region (and state) it might be a bit easier for transit and land-use plans favored by transit-oriented planners to be implemented. Barring that, are the political and demographic fundamentals of this region all that different from the fundamentals in large urban regions elsewhere in the United States?

Most if not all urban regions have sprawling suburbs/exurbs, a surplus of overlapping jurisdictions charged with transportation and planning, growing congestion problems and a continued decline in the relative importance of the central city in terms of population and employment. Is the quality of the local and state political leadership in this region markedly worse than the similarly situated political leadership in other large urban areas?

The transportation team, after all, has the responsibility to engage political leaders as they find them. Their job is to inform, inspire and, yes, cajole these political leaders to embrace transportation and land-use policies that will benefit the quality of life and enhance the economic competitiveness of the region. Politicians, be they as saintly as Paul Simon or as venal as [fill in the blank] typically don't come to office with a nuanced understanding of transportation issues. It's the team's job to bring them along, saint or sinner.

More Indicia Of Team Weakness

There are more indicia of the weakness of our region's transportation team than just the recent loss of an Urban Partnership Program grant because of an overly timid and undeveloped grant proposal, the seeming across-the-board rejection of congestion/roadway pricing by politic ans and editorialists, and the fact that Indiana is way ahead of Illinois in putting together the Illiana Expressway, an important addition to the region's interstate system to handle projected increases in east-west truck traffic.

Academia

This region has at least one substantial academic transportation center: The Urban Transportation Center at UIC. Other than a few quotes pooh-poohing congestion pricing (Siim Soot comment), what contribution did this academic center make to the debate over the Moving Beyond Congestion Plan? Surely there is some significance to the fact that the RTA chose to engage a private consultant to churn out the Moving Beyond Congestion analyses rather than rely on local academic talent from UIC or any of the other universities in the area.

Ask yourself, when is the last time you found that the work of a local transportation academic made a significant difference in your professional work? When did the the popular work of one of those local transportation academics (e.g., op-ed column) inspire you? Thought so.

Innovation

The last few federal transportation bills (ISTEA, TEA-21 and SAFETEA-LU) contained a variety of innovative programs. It is impossible to survey all of these programs, so let's take innovative transportation financing programs. This region has ample public finance talent (e.g., investment bankers, lawyers) and a wide variety of transportation infrastructure needs. It was (and is) well situated to be at the edge of innovation. Yet, what does the record show with respect to how well our transportation team utilized these assets to take advantage of the federal innovative financing programs:

TIFIA Loan Program (see "TIFIA Projects"): $3.2 billion in TIFIA assistance used to support $13.2 billion total investment in 12 projects in 10 states. No Illinois participation.

State Infrastructure Banks: $6 billion dispersed in 33 states via 520 agreements. No Illinois participation.

Private Activity Bonds (see "PPP Update"): New program under SAFETEA-LU. $4.8 billion for three projects in three states. No Illinois participation.

GARVEE (see "GARVEE Roundup"): $6.6 billion in 41 bond issues in 20 states. No Illinois participation. (Note, however, that the CTA has been able to issue GARVEE-like bonds backed by FTA full funding grant agreements over the RTA's vigorous objections.)

This region has long been a laggard when it comes to keeping up with innovative financing techniques. ISTEA had an innovative financing program that ended a decade ago. The region's transportation team was asleep at the switch even back then:

TE-045 (see Appendix 1): Approximately 40 states took advantage of the program in 88 projects. No Illinois participation.

Professional Recognition

If the region's transportation team was top-notch, you would expect that the team members would get the recognition of their peers and play a major leadership role in transportation-related professional organizations. Alas, the team appears to be stuck at the end of the bench.

AASHTO
The American Association of State Highway and Transportation Officials ("AASHTO") is the leading professional organization on the highway side. The region's team is pretty much a non-presence in the leadership ranks:

AASHTO Executive Committee: No Illinois representation.

Standing Committee on Finance and Administration: Nope.

Standing Committee on Highway Traffic Safety: Nope.

Standing Committee on Highways: Nope.

Standing Committee on Planning: Nope.

Standing Committee on Public Transportation: Tim Martin, formerly the Secretary of IDOT, is the Chair.

Standing Committee on Quality: Nope.

Standing Committee on Research: Nope.

Standing Committee on Rail Transportation: Nope.

Standing Committee on Water Transportation: Nope.

APTA
On the public transit side, things aren't any better. Bernard Ford from the CTA served as President of the American Public Transportation Association ("APTA") years ago. He was the only person from the region to serve in that capacity in the past 20-25 years.

Currently, there are no team members on the APTA Executive Committee. APTA's Board of Directors has 98--count 'em--members. The only local name I recognize as serving on that huge board is Steve Schlickman, the RTA's Executive Director. No offense to Steve, but the qualification for becoming a member of a 98 member board is probably just showing up for meetings.

Conclusion

The purpose of this exercise and my alleged "whining" about the region's transportation team is not to take cheap and anonymous shots at folks who on the whole are smart, dedicated and well-intentioned. Instead, the purpose is to remind us that fixing what ails the region's transportation system is more than just a matter of money and nips and tucks to the RTA Act.

The team with its accumulated expertise has a crucial role to play in jump-starting innovation when it comes to the design, execution and financing of transportation projects in this region. The first step is to recognize that this region is behind many of its competitors--e.g., New York City, Texas, and (it pains me to say it) Indiana. There are plenty of hard-knuckled and not always visionary politicians in those places too. The team needs to stop laying the failures of vision and innovation at the feet of their political clients and start figuring out how to yoke vision to power.

Maybe our politicians--and the public they represent--are having a hard time buying what the team is selling because they instinctively know that the product is mediocre. Witness the terribly difficult ongoing struggle to get just the operating funding portion of the Moving Beyond Congestion funding package through Springfield.

"Pretty Optimistic"

The RTA's Chairman Jim Reilly is quoted in today's Daily Southtown that he is "pretty optimistic" about the prospects for the RTA funding package. As Mr. Reilly does not appear to be a person given to wild flights of irrational exuberance, this is good news for supporters of increased funding for this region's public transit system.

The same article reports that SB 572 (or some stealth alternative) will be subject of a hearing this week and will be voted on by the House next week. As of the time of this posting, no new amendments have been offered to SB 572 and no meeting of the House Mass Transit Committee has been publicly announced. The current final action deadline for the bill is August 4th.

Just a few days ago, Representative Hamos indicated that the House vote on the RTA funding/"reform" package would have occurred by now. With this delay maybe her office can post copies of the full legislative package that is coming.

The Pace Of Political Activity By Public Agencies

Pace's Board met today and voted to implement its "doomsday" budget scenario via a sweeping set of service cuts and fare increases.

In the last 48 hours I've received "blast" email from Pace requesting that I contact my legislators and ask them to support Senate Bill 572. The email is as follows:

IT’S NOT TOO LATE TO HELP

AVOID A TRANSIT CRISIS

The calls and letters are working, but more support is needed immediately!

With the legislature still in session, Pace urges you to contact your state legislators and the Governor to tell them how important your service is to you.

Without your help, we may not get the required funding to prevent service cuts and fare increases. We encourage you— along with friends and family— to share your concerns about the impact that fare increases, the elimination of all weekend and Metra feeder service, and reduced paratransit service will have on you.

Ask your legislator to support Senate Bill 572, which provides new funding for

public transit. To find your legislators’ contact information, call 847-364-7223 or visit www.pacebus.com to send an email directly to your elected officials TODAY.

Share your story, your Pace service depends on it!

Am I old fashioned in my concern about public agencies using public money and resources (e.g., Pace's email system) to urge members of the public to engage in political action? If public agencies can urge folks to take political action via emails are they justified in using public money to run ads, do fake opinion polls designed to put agency opponents in a bad light, lend their name in support of candidates who support the public agency, and the like?

Can a public agency take up legislative causes championed by one political party or a fraction thereof? ("Pace supports Governor Blagoevich's health care plan because healthy bus riders are happy Pace customers. So call your legislators now.") Could Pace champion the fact that "Pace supports Republicans, whose tireless efforts to block a state capital plan over the past four years have helped the transit system immensely." (Or maybe not that one exactly!)

Drawing the the line between what is acceptable and what is unacceptable in terms of using public resources to press for political action by members of the public may be an aesthetic matter as much as a legal matter. (The federal Hatch Act does put some real restrictions on political activities by the employees of state and local agencies that received federal grants but I'm not sure if it reaches the agencies themselves.)

In my admittedly old fashioned view, public agencies should focus on performing the tasks assigned to them by their enabling acts. Their involvement in the political side of things should be limited to providing accurate and complete information to any politician--indeed, any citizen--who asks. This includes, of course, briefing legislators on issues important to the public agency, but it does not include trying to orchestrate direct political pressure on the legislators. Public agencies hope that their good performance and the good will that results from treating all politicians evenhandedly regardless of party affiliation is sufficient to gain legislative support for their funding requests.

My preferred approach may be hopelessly naive. Agencies that fail to whip their clients into a frenzy of political action may well fall short of getting their "fair" share of the available public resources.

It certainly strikes me as acceptable for Pace's people to make speeches in favor of SB 572 that may get reported and for Pace's publicity machine to disseminate factual information about Pace's needs and the effect of SB 572. Moreover, as bills go, SB 572 is not a particularly bad one for Pace to use email blasts and other tactics to drum up political support. SB 572 appears to have bipartisan support. Pace's political advocacy on its behalf thus lacks the trappings of a public agency's use of public funds to prop up the platform of one political party.

I'm still troubled, however, by Pace's use of blast email urging its customers to engage in political action on behalf of SB 572. It puts a public agency in the middle of the political thicket. It is a high-risk operation that if effective in getting Pace's customers riled up may risk alienating the legislators and their staffs who have to field the calls and the visits.

I don't know if the retort "every agency is doing it" is factually accurate. Nor do I think that such an assertion, if true, justifies Pace's use of public resources to rev up its customers to do its political bidding.

Transparency And The Final Deal

Since 2004, Representative Julie Hamos has been good about keeping the public informed about the status of her transit reform effort. Her website has a transit page that contains copies of presentations and testimony submitted by various parties during various hearings before the House Mass Transit Committee, cites to her transit-related legislative initiatives (e.g., S.B. 572), and links to relevant news articles. Earlier this year she convened transit working group meetings open to all interested parties.

Things have changed. Representative Hamos' transit web page hasn't been updated for weeks. Her emails to transit aficionados and other interested parties about upcoming working group meetings have ceased.

We know that there is a lot going on. WBBM reported that Representative Hamos has continued to convene working group meetings. She has put together a 200 page plus proposed bill that covers much more than what is covered by amendments No. 1 and No.2 to SB 572. We know from these articles (here, here and here) and others that these issues include a 10 year waiver of the 50% recovery ratio requirement for the RTA, more money for downstate transit agencies, imposing a "similar" recovery ratio requirement on downstate transit agencies (good luck!), and a bond program to help address the CTA's pension problem.

A month ago, Representative Hamos circulated for general comment a highly controversial legislative proposal to change the governance of the RTA and Metra. This time, however, she has refrained from circulating the current proposal(s) for public review and comment.

It is common practice for legislators to clamp down on the flow of information during the final stages of putting together a piece of highly contentious legislation. Nevertheless, it is disappointing the Representative Hamos, who seemed to be making a concerted effort to keep all interested informed, has restricted the flow of information during the hopefully final few weeks of this legislative session.

If someone has access to materials that may be of interest to readers of this blog, please send them to me at moderator1stc@yahoo.com. Your anonymity will be respected and protected. I'll try to do a quick turnaround to summarize the materials and post them here even if it means losing some sleep.

More On The Weakness Of Our Region's Transportation Team

I know I was hard on our region's transportation team in the previous post. Yet, my concern is that our transportation team is somewhat mediocre compared to the teams in other regions. By "transportation team" I mean that extended network of planners, academics, NGOs and transportation agency executives that is largely responsible for the stewardship of our regional transportation system.

One big indication of the relatively poor quality of our region's transportation team is the failure of this region's Urban Partnership Program grant application. Another indicator is the lack of a Chicago area presence on national transportation policy making committees and professional organizations.

For example, below is a recent DOT press release announcing the appointment of an Intelligent Transportation Systems Advisory Committee. Intelligent vehicle/intelligent roadway technology is at the cutting edge of research and funding as we search for ways to use our highways more efficiently and more safely. There is significant potential that such systems and equipment could comprise a significant economic growth sector over the next several decades.

So, review the list of appointees and what do you see. Not one transportation official, academic, or industry representative from this region was named to this important committee. This is another unfortunate indication that this region's transportation team lacks the depth and creativity sufficient to be asked to be a part of what could be the "next big thing" in surface transportation.

We can debate the causes--institutional fragmentation, poor political leadership, and the like--but the fact remains that when the federal government looks for innovation in managing today's transportation system (the Urban Partnership Program) and in laying the foundation for a more sophisticated highway operating system (ITS Advisory Committee) it doesn't look to this region for help. That is a problem because to maintain its global competitiveness this region can't be a laggard when it comes to transportation.

* * *
DOT PRESS RELEASE

US Transportation Secretary Names ITS Advisory Committee Members
U.S. Transportation Secretary Mary Peters has named the following candidates to serve on the Intelligent Transportation Systems (ITS) Advisory Committee, pursuant to Section 5305(h) of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU). The ITS Advisory Committee is charged with reviewing areas of ITS research being considered for funding by the Department and advising the Secretary on ITS aspects of the Department's strategic plan. The ITS Program is overseen by the Department’s Research and Innovative Technology Administration (RITA). For more information, contact Marcia Pincus in the ITS Joint Program Office.

1. Randell H. Iwasaki. Mr. Iwasaki is Chief Deputy Director of the California Department of Transportation.
2. Alfred Foxx. Mr. Foxx is Director of the Baltimore City Department of Transportation.
3. John M. Inglish. Mr. Inglish is General Manager on the Utah Transit Authority Board of Trustees.
4. Ann Flemer. Ms. Flemer is Deputy Director of Operations for the Metropolitan Transportation Commission of the San Francisco Bay Area Metropolitan Planning Organization.
5. Dr. Lawrence D. Burns. Dr. Burns is Vice President of General Motors for Research and Development and Strategic Planning.
6. Tomiji Sugimoto. Mr. Sugimoto is Vice President of Honda Research and Development Americas, Inc.
7. Robert Peter Denaro. Mr. Denaro is Vice President of NAVTEQ.
8. Iris Weinshall. Ms. Weinshall is former Commissioner of the New York City Department of Transportation.
9. Ronald Greer Woodruff. Mr. Woodruff is Senior Vice President of Corporate Safety and Security for J.B. Hunt Transport.
10. Bryan P. Mistele. Mr. Mistele is Founder, President, and Chief Executive Officer of Inrix Technologies.
11. John Worthington. Mr. Worthington is President of Transcore.
12. Joseph Averkamp. Mr. Averkamp is Director of Product Strategy for Sprint-Nextel.
13. Dr. M. Granger Morgan. Dr. Morgan is a Professor and Department Head of Engineering and Public Policy at Carnegie Mellon University.
14. Dr. Joseph M. Sussman. Dr. Sussman is JR East Professor in the Department of Civil and Environmental Engineering within the Engineering Systems Division at the Massachusetts Institute of Technology.
15. Dr. Kenneth J. Button. Dr. Button is a Professor of Public Policy at the George Mason School of Public Policy and is Director of both the Center for Transportation Policy, Operations and Logistics, and the Center for Aerospace Policy Research.
16. Dr. Adrian Lund. Dr. Lund is President of the Insurance Institute for Highway Safety and affiliated Highway Loss Data Institute.
17. Michael Replogle. Mr. Replogle is the Transportation Director for Environmental Defense.
18. Thomas C. Lambert. Mr. Lambert is Vice President and Chief of Police of the Department of Police and Traffic Management at the Metropolitan Transit Authority in Houston, TX.
19. Steve Albert. Mr. Albert is Director of the Western Transportation Institute at Montana State University.

Hilkevitch Stalls Out On Urban Partnership Program Article

John Hilkevitch's article in today's Tribune about this region's failure to even place in the race for one of five Urban Partnership Program grants gave this region's transportation team an undeserved pass.

In the article, entitled "Gridlock Plan Stalls Out: Millions to Ease Pain are Going Elsewhere," Hilkevitch noted the irony that this region, with the second-worst traffic congestion in the nation, will not get a penny of the $1.1 billion congestion relief grant money. As he observed, "the goal of the contest was to encourage state and local officials to think creatively--especially at a time of shrinking federal matches for transportation projects and tight state budges--to ease the growing gridlock facing drivers, public-transit commuters and businesses that rely on over-the-road deliveries."

He described the "preliminary concepts" that made up this region's application. These concepts included new vehicle control technology for vehicles running on new lanes in the I-55 median, congestion pricing on both I-55 and the Northwest Tollway, and variable pricing of parking in downtown Chicago. Hilkevitch's assessment of why this region's application failed is as follows:

The federal government made it clear proposals that featured a strong congestion-pricing component would have an advantage.

The government considers congestion pricing of transportation systems an essential tool to smoothing out traffic flow, reducing pollution and increasing the capacity of existing highways without heavy investment in new construction. The idea is to use price incentives to encourage drivers to travel at off-peak times or consider taking mass transit instead of paying a higher fee to drive on the most congested roads at the busiest times.

The political and transportation leaders in the Chicago region and in the state have been slow to break away from the status quo and embrace congestion pricing, perhaps afraid that drivers and businesses would protest the user fees. Only the Illinois tollway authority has a limited congestion fee, which is available to commercial vehicles equipped with I-PASS toll-collection transponders. Toll-rate discounts are applied depending on the time of day.

An obvious place to expand congestion pricing would be on the express lanes of the Kennedy and Dan Ryan Expressways.

According to Hilkevitch, this region's transportation team was"surprised" and "disappointed" with the failure of this region's application to advance:

Illinois officials said they were disappointed and surprised their application to the Urban Partnership competition failed to advance. It means the Chicago area, which is the second most-congested region in the U.S., lost its chance to receive hundreds of millions of dollars. Officials attributed the lack of success to deadline pressure to submit the application, the large number of agencies involved in the process and strong competition from other regions of the country.

Why Hilkevitch, normally a careful reporter, unquestionably accepted the explanation given by these officials for the failure of this region's application is hard to understand. Chicago had the same amount of time as very other urban region to prepare its application after DOT announced the program in late 2006. Every applicant including this region had the same April 30, 2007 deadline. Indeed, it appears that this region's transportation team had the benefit of a DOT briefing on the program. (DOT handout here.)

Given the congestion problems facing this region, our extensive highway and transit networks, and the fact that roughly 2-3 million local vehicles already are fitted with a toll collection device (i.e., the I-PASS), this region was especially well-positioned to meet DOT's requirements for the Urban Partnership Program regardless of the number of applicants. Given the ambitious scope of the Program, it is unlikely that there was a large number of applicants. Yet, Hilkevitch never verified if local transportation team representatives had any factual basis for pointing to a "large number" of applicants to explain the failure of this region's entry.

The sad fact is that our transportation team and their local and state political clients failed to submit a credible proposal containing "the innovative congestion-busting programs that can be quickly implemented using what's called the four Ts--tolling, transit, telecommuting and technology." This region lost because it is behind its urban competitors when it comes to transportation planning and its willingness to use road pricing as a tool to both allocate increasingly valuable highway real estate to vehicles and raise money for alternatives like public transit. As Hilkevitch stated:

All the proposals in the [Chicago area] federal grant application would take time -- and some local investment -- to implement, officials said.

But quick action -- not long-range planning -- is what the U.S. Department of Transportation was looking for.

Two quotes from Hilkevitch's article illustrate the challenges this region faces if it expects to move into the front ranks when it comes to transportation planning and execution. The first quote is from David Spacek, IDOT's bureau chief who had the unenviable job of coordinating the local effort: "We put together what we thought were some interesting concepts, but we really didn't know where it was going to go."

DOT made it clear that "interesting concepts" would not cut it, yet this region's transportation team submitted an application containing nothing but concepts. When your local transportation experts say "we really didn't know where it was going to go," you know you are in trouble!

Has the region's transportation team learned from this $200 million plus mistake? It doesn't appear so. First, they blame the loss on bogus reasons like "deadline pressure" and a "large number" of competitors rather than the fact that they submitted an application filled with concepts rather than the kind of concrete plans that could be implemented in a few years, which is was DOT clearly said it was requiring.

Second, it appears that our transportation team is more than willing to retreat to a comfortable cocoon spun of nostalgia for grandpa's highway system--lots of capacity, little congestion and plenty of tax revenue--rather than take on the difficult task of advocating for innovative pricing strategies that respond to today's conditions--growing demand for the limited resource of highway capacity and an underfunded transit sytem.

Hilkevitch quotes Tom Murtha, a senior planner at the Chicago Metropolitan Agency for Planning: "The fact that we were not chosen is a setback, but we are going to pursue some studies and attempt to move forward soon."

Yep, let's follow up on an important grant application that failed because it was filled with too many preliminary concepts and not enough concrete proposals with more studies.

Maybe Hilkevitch chose not to go hard on the very people he must rely upon day in and day out for sources and quotes for his transportation beat. Maybe he thought that harsh criticisms belong on the editorial page and not in his column. Maybe he thought that the Murtha and Spacek quotes were enough to drive home the point that our region's transit team is more than a bit hapless.

However, his column format gave him more editorial license, he failed to look behind the lame explanations for why this region's application was rejected, and he did not identify the source(s) of the political pressures that prevented congestion pricing from being anything other than a preliminary concept in this region's application.

Hilkevitch stalled out. Maybe it is contagious when it comes to the Urban Partnership Program!

Just One More Thing. . . Mandatory Indexed Fares

Steve Jobs is famous for using the line "just one more thing" at the end of a media event to roll out new product surprise.

Our elected State leaders appear to be moving closer to hammering out a budget for the full fiscal year. When their discussion turns to the transit funding and RTA reform package (SB 572) wouldn't it be great if they added one more thing, namely, a requirement that transit fares be adjusted annually and automatically to match the increase in the consumer price index.

There already is talk in the air of relatively modest fare increases being part of the transit deal. Other major transit agencies have recently instituted fare increases or are considering such: LAMTA, SEPTA, NYMTA.

Why not use the current "doomsday" situation as an opportunity to enact legislation that requires annual indexed fare increases. This would allow the service boards to get out of current herky jerky method of fare increases--holding off fare increases as long as possible (and well beyond per the Auditor General) and then instituting big fare increases after a ritual dance of public hearings, political grandstanding, editorial chest thumping, and the like.

The legislation would make fare indexing mandatory so there would be no need for a public hearing on fare increases if the service board's increase matched the rise in the applicable index. Public hearings concerning fare increases would be required only when a service board wanted to increase fares more than that indicated by the index.

Indexing transit fares would be a nice way to signal that area riders, like area taxpayers, are stepping up to provide more resources to this region's public transit system. Limiting the annual fare increases to the rate of inflation should be a relatively easy pill for riders and their elected officials to swallow. Indexed fares should help stabilize the operating funding base for the service boards.

The electronic fare systems at Pace and the CTA make implementation of annual fare adjustments relatively easy. Maybe the requirement of annual indexed fare adjustments could finally prompt the Metra apparatchiks to get a modern fare collection system. Metra appears to view credit cards and electronic fare collection methods with the same furrowed brow suspicion as it once viewed bicycles and Democrats on its trains. But I digress.

The New York MTA, in so many ways the model for how this region could build a "world class" transit system, is considering a series of modest annual fare increases over the next several years. (Board proposal here.) The three annual increases are designed to yield a cumulative 15 percent fare increase by 2009.

It is way too much to ask of our service boards and the RTA to implement a coordinated fare indexing system. Legislative leaders, it is time for one more thing in the transit package and that is a requirement of annual fare increases indexed to inflation. Fare indexing is something both proponents and opponents of transit funding increases can agree on. Proponents see fare indexing as a way to increase transit funding while opponents see fare increases as a way to instill fiscal discipline in the users of public transit. Fare indexing is thus a way to help build the veto-proof super-majority for the transit reform/funding package.

There are transit utopianists who believe that fare indexing will hurt transit because any fare increase will drive away some transit customers. There are two answers to this. First, transit is not a cheap public good. It is fiscally responsible to ration that public good fairly painlessly through fare increases that match inflation. Second, the stronger funding base provided by a system of indexed fares likely will allow the service boards to provide a higher quality of service. Better service quality will win back more customers to transit than will be lost via the small annual fare increases.

Just one more thing. Is it too much to ask?

Urban Partnership Program: Update

The failure of the region's transportation team to make it past the first round in the U.S. Department of Transportation's Urban Partnership Program and its $1.1 billion was a big loss. The loss illustrated just how far behind this region is compared to other urban areas when it comes to embracing innovative solutions to transportation problems. Forget our pretensions of having or building a "world class" transportation system. This area couldn't even beat the likes of Denver and Minneapolis.

If this somewhat dated report is to be believed, by August 9th DOT will announce the five winners from among the nine semi-finalists: New York, Seattle, San Francisco, San Diego, Minneapolis, Atlanta, Miami, Denver and Dallas.

Stayed tuned. With a few recent exceptions I guess we are used to watching others compete for the big prizes.

Suburbanites & The New Math

It seems like it was only yesterday that the public officials of Kane County were piling on Steve Schlickman and Leanne Redding, two architects of the RTA's Moving Beyond Congestion plan, complaining that the RTA was unfairly squeezing the collar counties for cash to bail out the CTA. Yet, it was literally just yesterday that Kane County official were praising an RTA proposal to amend SB 572 to change the funding splits between the three service boards and the RTA.

As you might recall, SB 572 provides for a one-quarter of one percent increase in the RTA sales tax rate throughout the six-county region. This will increase the sales tax rate to 0.5% in the collar counties and 1.25% in Cook County. (In addition, the collar counties will be able to impose another 0.25% sales tax that they can use at their discretion for road and transit projects.) This tax increase should raise roughly $300 million in new money for transit.

SB 572 also provides for a real estate transfer tax in the City of Chicago only. It is unclear how much revenue this tax would raise. Representative Julie Hamos estimates the revenue at $42 million while the Illinois Department of Revenue pegs the new revenue from the transfer tax at almost $100 million.

Under SB 572 all of this new money regardless of source is to flow to the service boards through the current sales tax allocation formula in the RTA Act and from the RTA through its allocation of discretionary operating funds. At the end of the day, the CTA was to get 60% of the new money, Metra 30% of that money and Pace 10%. This allocation is consistent with historical levels.

What has changed? The Daily Herald reports that "the RTA cut the amount of cash going to the CTA, raised the amount going to Metra and Pace and required Chicago taxpayers to pony up much more in the form of a real estate transfer tax." The new "compromise" will see the CTA getting 48 percent, Metra 39 percent and Pace the remaining 13 percent.

It is appears, however, that this "compromise" may be less than meets the eye. The key question is whether the new 48%/39%/13% allocation formula applies to the revenue from the Chicago-only real estate transfer tax if it is enacted. Certainly, if the CTA agreed to such a huge haircut in its share of all of the new operating funds, a reduction of 20%, then the CTA is either stupid or desperate or both.

I suspect the CTA is neither. It is more likely that the revised allocation formula applies only to the revenue from the 0.25% increase in the RTA sales tax across the region. The only change is that the Chicago Mayor and city council, rather than the General Assembly, will have to step up and impose the real estate transfer tax. If Chicago does so, all of that new revenue will go to the CTA and in the end the CTA's share of new money will be about 60 percent.

The new "compromise," in other words, likely is nothing more than a numerical sleight of hand that will have no bottom line impact on the service board shares of new money. If the Mayor of Chicago is willing to push through the real estate transfer tax then City representatives can still support the so-called reform package because they know that in the end the City will get approximately 60% of the new revenue. The compromise will, however, allow suburban public officials to thump their chests and say they have beaten back the rapacious hands of the CTA. Providing the suburban officials with that political cover may be the only point of this "compromise."

There is also talk about increasing the size of the RTA Board from 12 to 15 members. The reconstituted board would look as follows:

City of Chicago--5 members selected by Mayor (CTA Board Chair off the RTA Board)
Cook County--5 members--4 selected by the suburban members of the Cook County Board and one member selected by the President of the Cook County Board
Collar Counties--5 members--one from each collar county

The Daily Herald article, however, indicates that reconstituting the RTA Board in this fashion is far from a done deal.

Surely some reader has accurate information about whether the proposed new allocation formula applies to all new operating revenue, including the proceeds of a Chicago real estate transfer tax, or just to the 0.25% increase in the RTA sales tax rate. Pray tell if you do. If it turns out that the CTA has agreed to a measly 48% share of all new operating dollars then we truly have some new math.

Congestion Pricing: Tale of Two Cultures

A somewhat acerbic anonymous commentator on an earlier post on congestion pricing Chicago style suggests, among other things, that in some circumstances congestion pricing on highways can cause sprawl. The comment merits a response.

Support for Congestion Pricing

First, the commentator argues that "the support for congestion pricing in NYC is much higher than it was in London or Stockholm before it was introduced in those cities." This assertion is unsupported and appears contrary to the polling data in the Poole article cited in the post. Poole reports that New Yorkers polled 2-1 against Mayor Bloomberg's plan. From all reports I've seen (but don't have time to find to cite just now) concerning the level of support for congestion pricing systems in London and Stockholm, initial public support in those cities was at least as high and likely significantly greater than in New York.

The Two Cultures Of Congestion Pricing

Anonymous commentator also argues that "your talk of pouring congestion pricing revenues into road improvements misses the whole point of the tool." The commentator does not outline the "point" of congestion pricing, but continues, "making driving easier is only going to encourage more driving, which will require higher prices to manage demand."

This argument exposes a key philosophical divide with respect to congestion pricing. For folks like the commentator, "driving" is inherently bad and the point of congestion pricing is to reduce private vehicle use. This certainly is a rational position. Vehicles and highways as currently constructed and operated result in high levels of energy consumption, increase our country's dependence on foreign oil, worsen air pollution, foster obesity, etc. In this view, congestion pricing helps drive people to public transit, bicycles, walking, and other transportation alternatives that have a more benign effect on the environment and that are an antidote to the dread culture of sprawl.

Under this "environmental" approach to congestion pricing, spending congestion toll revenue on highway improvements is counterproductive. As the commentator argues, making driving easier through highway improvements funded by congestion tolls "is only going to encourage more driving." Driving, in other words, is an inherent evil.

In contrast, the "efficiency" approach to congestion pricing views congestion pricing as a tool to help the greatest number of people move the greatest distance in the least amount of time. These proponents focus on how congestion pricing will increase vehicle speeds in the congestion pricing zone. They welcome using congestion tolls to fund highway improvements throughout the region so long as those investments improve transportation system capacity and travel speeds. They worship at the altar of speed and convenience.

The efficiency proponents of congestion pricing are at worst neutral on the question whether driving is a good thing. They recognize that most trips today are made by private vehicles and that the car is a powerful tool of empowerment for many people. They also recognize that a substantial percentage of goods and services are delivered through vehicle travel. These efficiency proponents may celebrate suburban sprawl as the apotheoses of civilization (what are they smoking?) or simply shrug their shoulders, viewing sprawl as an inevitable and not especially delightful by-product of current technology.

Understanding this fundamental philosophical/cultural difference between the two wings of the congestion pricing movement will help us navigate through the debates over congestion pricing in this region. The ironic fact is that in order for congestion pricing to have a prayer in this region the environmental proponents and the efficiency proponents must form a coalition. That will be difficult because they have incompatible agendas.

The environmental proponents of congestion pricing will have to accept the fact that using some of the congestion tolls for highway improvements is politically necessary to get congestion pricing in the first place. They will have to accept that using toll revenue for such improvements will increase driving in the area of those improvements. Yet, a congestion pricing scheme might result in a net decrease in driving and would provide a source of new money for the transit system and other alternatives to the private auto.

Likewise, the efficiency proponents will have to accept that a congestion pricing system will deter driving and may slow average travel speeds as people switch from cars to bicycles, public transit, and walking. Such a reduction in average speed with offend the tender sensibilities of the efficiency proponents, who think that more travel faster is necessarily a good thing for society, even if it just means we can get to Dunkin Donuts a bit faster.

These proponents need to come together in a marriage of political convenience. They will both get something they want, namely congestion pricing, but they both will have to give up much that they prize. That's politics. That's life.

Congestion Pricing And Sprawl

Anonymous commentator also argues that having congestion pricing areas throughout the region is counterproductive. Here's the argument:

You're also not thinking about the land use implications of the different forms of congestion pricing in the region. Price the highways and we'll get more sprawl. Use a downtown cordon and you will probably get more concentrated development around the core. Strategically price on-street and off-street parking throughout the region and you can shape growth as you desire, presumably to reduce sprawl.

This argument does not seem sound. I don't see why a tolled "downtown cordon" is likely to yield "more concentrated development around the core" but tolling elsewhere will yield "more sprawl." Why should we assume that development that is pushed out of the urban core by congestion pricing--if any--will relocate to areas immediately adjacent to the core rather than in relatively low density/low cost suburban sprawl areas? Indeed, isn't the flight of people, jobs and shoppers to the sprawl-blighted suburbs just what the opponents of a Chicago cordon congestion pricing are warning us against?

At the same, why shouldn't we assume that tolling roads in outlying areas will create incentives for people in those supposedly benighted areas to take fewer trips, move closer to their jobs, and the like, all of which will help counteract the centrifugal forces of sprawl? Are the suburban folks immune to price signals, not if the capacity crowds at the outlet malls are any indication. Isn't region-wide tolling, either through expansion of the I-PASS system or through a new generation of GPS technology that charges motorists by miles driven, more likely to counteract sprawl than tolling access to a single, central core area in this six-county region.

Anonymous argues that "making driving easier is only going to encourage more driving, which will require higher prices to manage demand." Is that a problem or an opportunity? What about offering drivers better roads and charging them for the privilege of using them? Using higher congestion tolls from such improved roads will help support the public transit system and other alternatives to the private auto.

We want a system where road improvements yield corresponding improvements in the public transit system. Road tolling throughout the region provides that link.

At the same time, let's focus more energies on technologies that make driving less of an environmental burden and that allow more efficient use of our roadways by safely reducing headways without reducing speeds. Shrinking the environmental gap between transit and driving, which already seems to be occurring, likely can be done more efficiently by focusing on the mode used by 90 percent of the travelers--private vehicles on highways--rather than just trying to entice more of that 90 percent to switch to public transit.

Deal a' Cookin?

The Chicago Tribune reports that a state budget deal may be in the works. I hear from reputable sources that the transit funding package contained in SB 572 is likely to pass the General Assembly and may even get enough votes to allow an override of a veto.

Representative John Fritchey reports that the General Assembly may only authorize the Chicago City Council to approve a real estate transfer tax to be used for transit purposes instead of imposing the tax directly. If that is the case, then maybe the City Council should return the favor by enacting the tax but directing that all of the proceeds go to the CTA. The CTA currently is slated for a 60 percent share contemplated of the new revenue under SB 572. Getting all of the real estate transfer tax would be a nice bump up, although it is likely that the RTA would jigger things so the CTA's net share of new operating money is capped at 60 percent.

I've also heard that transit is in line for a substantial share of a new capital funding package. The massive five-year multi-billion dollar per year capital plan proposal that was part of the Moving Beyond Congestion package has gotten little attention in recent months. Increased capital funding is, however, key to revitalizing the region's public transit system.

Maybe you are noticing that transit funding advocates are walking around these days with a new spring in their steps. Is the champagne on chill at RTA headquarters? Or maybe this is all just sunstroke and wishful thinking.

Congestion Pricing Locally: Lessons from New York

With New York's congestion pricing plan back from the dead, it is possible to contemplate a local congestion pricing model despite Alderman Burke's pessimism and loud whining from motorists about recent increases in downtown parking rates that hints at the vociferous response that any congestion pricing system locally is likely to receive.

Poole's Article

In a Sunday op-ed column in Newsday, Robert Poole of the Reason Foundation, a leading proponent of congestion pricing, lays out a more workable model for congestion pricing. His analysis is consistent with other research discussing what is necessary to garner sufficient public and political support for road pricing schemes.

Poole provides a useful definition of congestion pricing: "'Congestion pricing' means charging drivers a toll to use roads at time and places where demand exceeds capacity." He goes on to claim that "in every case, congestion pricing has reduced weekday vehicle counts enough to meaningfully speed up traffic flow, offering time savings for motorists and bus travelers."

Poole cites two major flaws in Mayor Bloomberg's congestion pricing proposal. The first flaw is that the $8 daily charge is too low to reduce traffic significantly. The New York plan projected a 6 percent reduction in Manhattan traffic, far below the 15-20 percent reductions in London and Stockholm, where the congestion charges are higher.

The second flaw, according to Poole, is that the net revenue from the New York congestion charge, "only" a few hundred million dollars annually, would not fund much in the way of better transportation infrastructure. Further, all of that money would be devoted to transit improvements. What this means is that the beneficiaries of the congestion pricing system would not see all that much benefit while those paying the charge, namely, auto drivers, would see no benefit. Hence, support for the New York plan was muted while opposition has been vociferous.

Poole's solution is to increase the efficacy of the system and spread the revenue to mute the opposition from drivers. He proposes that New York should follow the Stockholm model, where the congestion pricing area coverings a relatively large part of the city and where a substantial portion of the net revenues is used to fund highway improvements. According to Poole, when the Swedes starting devoting some of the congestion fees to highway improvements, public support for the system shot up to 67 percent.

Poole thus suggests that the New York plan be revised so the congestion fee is high enough to deter 20-25 percent of the traffic to the Manhattan business district. He estimates that this would take roughly a $16 daily toll. In addition, New York should "devote a major share of that larger revenue to highway projects that offer congestion relief in the other boroughs, which would also benefit commuters from outside the city who have to go through those boroughs to get to town"

Poole closes his article on an optimistic note. He claims that the idea of congestion pricing "is robust enough to be doable without federal financial support" and predicts that if the plan funds suburban transportation improvements that the New York program "could be just as popular throughout the metropolitan area as Stockholm's."

Local Implications

This region is well-situated to implement the kind of broad-based congestion pricing system that Poole recommends. First, there are well known congestion trouble spots outside of the Loop--the Eisenhower, the Circle, the Dan Ryan and I-190 into O'Hare all come to mind with respect to non-tolled roads and the Tollway has trouble spots as well. Second, there are significant transit assets in many of these corridors (e.g., Blue Line in Kennedy and Eisenhower rights of way).

Putting these two together suggests a congestion pricing system installed in such major corridors and supporting both highway and transportation improvements in those corridors. In this way, motorists would see that the tolls they pay would be funding both highway improvements and public transit alternatives. This might mute some of the opposition to the tolls.

Likewise, public transit riders would see improvements both in terms of what money can buy (e.g., banishing slow zones from the Blue Line) and quality (e.g., tolled express lanes allow for fast and reliable express bus service). Muting the opposition from drivers and getting the support of the public transit beneficiaries of congestion pricing is what it will take to implement such a system.

A single, compact congestion zone in the City of Chicago funding public transit gives rise to all sorts wealth transfer and city vs. suburban noise. Instead, think of a mosaic of congestion pricing areas throughout the six-county area. Each area would contain both the pricing zone and a set of visible highway and transit improvements funded by the tolls. A portion of the tolls collected--say 10 percent--would go to the local governments in the area to help them deal with any additional traffic diverted from the tolled highways. Presumably, the easiest way to implement and administer the system would be to extend the Illinois Toll Authority's I-PASS system, which already has several million toll collection units in the area.

From today's perspective of a gridlocked state government, a regional transportation team that can't even make it to the second round of the federal Urban Partnership program competition, and a Chicago city government loathe to use HOV/HOT lanes and the like, such a regional congestion pricing system seems far-fetched. The current fragmented and silo-like approach to regional transportation (mixing metaphors)--IDOT, CDOT and local authorities responsible for highways and the RTA and the service boards responsible for public transit--hinders the intermodal approach to transportation that is needed to implement an effective congestion pricing system.

Yet, current institutional arrangements and political alignments are not forever. Repeat that as your mantra as you wind your way through stop-and-start traffic on the expressway, counting your blessings that you aren't the poor jamoke stuck on the bus or train next to you. Or maybe you are that poor jamoke, in which case you repeat the mantra with even more fervor.

New York Congestion Pricing Plan: Resurrection!

Take down the black bunting, push back the gloom and doom, maybe we can get a refund on the casket: New York's congestion pricing plan is back on the table and the city is still in line to capture about $500 million in federal Urban Partnership Program funds. A commission will study the issue, make recommendations to the New York legislature early next year and we will see what happens then. Here's a summary:

The 17-member New York City Traffic Congestion Mitigation Commission is charged with submitting its preferred plan to Gov. Eliot Spitzer and the Legislature by Jan. 31. Bloomberg's plan calls for charging motorists $8 to $21 to enter Manhattan below 86th Street from 6 a.m. to 6 p.m. on weekdays.

Lawmakers will have two months to vote on the commission's recommendations. Spitzer, legislative leaders, the mayor and the City Council will appoint commission members, who will study how to fight congestion and whether Bloomberg's tolls are appropriate.

If the commission chooses a plan different from the mayor's, it must reduce traffic by the same amount he has proposed: 6.3 percent of vehicle miles traveled, or 120,000 cars daily.

If Bloomberg's plan passes the Legislature as is, the city could start collecting tolls as early as March 31. But officials said the city could move forward immediately with the first stages of the plan, minus the fees.

Talk about snatching at least a partial victory from the jaws of defeat. Maybe the congestion pricing idea has legs after all, in New York and perhaps even in this region.

More to come.