Monday, January 30, 2012

You get what you pay for; though often much less. See High-Speed Rail.

This is a really neat article and fits very well into the current high-speed rail discussions that are filling the blogosphere.

HSR is for an elite population.  If built, the state (federal or state) must subsidize this transit mode at great cost.  Public mass transit is by nature a deficit operation because it is understood to be a public good. 

Operating costs exceed the willingness of riders to use such transit beyond a certain price point. That is to say, if ticket costs were to cover operating and maintenance expenses, we all would be priced out of using this service.  In high density population regions, I support the use of my taxes for providing the most cost effective mobility for the most people, especially for commuter purposes. I reject the use of public dollars to subsidize business inter-city travel.

If anything, I would level a transit tax on those corporations with transiting/commuting employees since those employees directly benefit the corporation's bottom line. This should be particularly the case for inter-city rail transit.

What these authors here are describing is precisely what we can see happening around us, both with regional transit or the HSR project. Either for the dreaded high-speed rail system, or for Caltrain or BART,  the demand for ever greater subsidies, whether there there is a rising or declining passenger load curve, suggests some fundamental flaws in the transit system's business plan. Fares go up whether ridership goes up or down. Services and maintenance is cut due to the increasing gap between fare-box receipts and tax based subsidies.

A plumber would say that there's a significant leak somewhere.  Or, it's very badly designed plumbing.  If you see what I mean. And, there are fundamental differences between the two Parties in what the appropriate fix would be.

I suppose we have to ask this question about railroads, especially inter-city passenger rail; if drivers pay gas taxes to sustain and expand highway infrastructure, and flyers pay a tax with their air-fare that pays for airport usage and expansion, what do train riders pay?
Randal O’Toole: On Transit, Choose Mobility Over Image
by DAVID BIER on JANUARY 30, 2012

In Gridlock: Why We’re Stuck in Traffic and What to Do About It, 2009, Randal O’Toole (known as the Antiplanner over on his blog) describes how government funds are wasted on public transportation projects built in the environment’s name.
Instead of efficiently serving the public by providing cost-effective transportation for those who cannot or do not want to drive, transit agencies have developed insatiable demands for more tax revenues. Is there an economic boom leading to higher ridership? Then transit agencies demand higher taxes to accommodate the new riders. Is there a recession reducing the tax revenues that support transit? Then transit agencies demand a larger share of taxes to make up the difference. Does a rise in gas prices lead to record ridership? Then transit agencies need more taxes because they too must pay higher fuel prices.

Transit systems that depend on taxes to cover three-fourths of their costs are not sustainable. Ironically, transit only seems to work at all because hardly anyone uses it. To operate transit systems carrying a much higher fraction of personal travel would bankrupt the nation.

Consider the problems in the New York urban area. New York’s transit system carries more than 40 percent of the nation’s transit riders and more than twice the share of regional travel of any other transit system in the nation. Fares cover a third of transit costs, which is higher than the national average. But the region’s transit system is in a perpetual fiscal crisis; one reason costs are only three times revenues, instead of four, is that maintenance has been deferred on many of the region’s rail lines. Even before the current financial crisis, New York’s Metropolitan Transportation Authority projected a $17 billion deficit over the next five years. Recent debates over so-called congestion pricing in Manhattan have really been about finding new sources of money to keep the transit system going.

While it is wonderful to think that we are rich enough to afford expensive but little-used monuments like high-speed trains and urban rail systems in cities like Charlotte and Honolulu, the current recession shows we are not. What these things really mean is that a small group of rail contractors and riders get to sponge off the taxes collected from nearly everyone else.

The Obama administration justifies its support of high-speed rail and rail transit on the supposed environmental benefits. But the nation’s automobile and airline fleets have historically improved their energy efficiencies by 1 to 3 percent per year, and technologies now under development offer every reason to believe that the trend will continue. Given that record, virtually no passenger rail projects being considered today will save any energy over their lifetimes when compared with driving or flying. Further, rail lines power by diesel or by electricity generated from burning fossil fuels will typically produce more greenhouse gases per passenger mile than driving or flying. As we develop more sources of renewable electricity, applying that electricity to plug-in hybrids or other electric autos will do more for mobility and reducing emissions than building passenger rail lines.

A major part of the problem here is the mental disconnect between user fees and taxes. When people learn that the government has spent more than $400 billion building interstate highways and only about $200 billion building urban rail transit and intercity high-speed rail, they think it is only fair to spend more on rail. Most will ignore the fact that the highways carry 35 times as many passenger miles as all rail lines put together. The real difference is that the interstates were entirely paid for out of user fees while rail fares have failed to cover the operating costs, much less the capital costs, of any rail line. The glee that high-speed rail advocates feel when subsidized trains put profitable airlines out of business is similarly misplaced.

The distinction between user fees and subsidies is far more important than the difference in costs between different modes of travel. Rail transit’s and Amtrak’s high costs would not be an issue if passengers found train travel valuable enough to pay those costs, but they don’t. To attract passengers, both Amtrak and urban transit agencies set fare prices roughly competitive with the cost of driving and expect taxpayers to pick up the difference….

Americans have a choice. We can spend tens or hundreds of billions of taxpayer dollars on transportation projects that sound good but really serve only a small elite. Or we can restore a user-fee driven system that will continue to improve personal mobility and reduce transportation costs for generations to come. The former may fit Europe’s and Japan’s aristocratic heritage. To best serve our way of life, America must choose mobility over image.

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