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Transit

A public good is an economic commodity most efficiently provided by the government. Public goods include things like national defense and border control, the benefits of which cannot be withheld from any single consumer. That means these services are rarely marketable commodities.

But the nature of public goods is debatable. Is government the most efficient entity for providing health care, or education? Experiences in Canada and the United States (respectively) suggest it may not be.

Things get fun when one starts to consider services the government nearly always supplies. Should the government be in charge of snowplowing?

Residents of Michigan know that local Road Commissions often can’t keep up with the deep snows blustering off Lakes Superior, Michigan and Huron. And even when those big orange trucks clear the main highways, time constraints force them to ignore the still impassable back roads.

Perhaps the market is the answer. Ottawa County, near Grand Rapids, is expanding a contract with Countryside Snowplowing, which will now be responsible for clearing 192.5 miles of roads. It allows the county to reduce its unionized work force, and avoid laying off employees during the summer. They also expect Countryside will clear of the back roads quicker, happy news for those a few miles outside of town.

There’s one “public” good sent back to the public markets. What’s next?

Back in January of 2007 the West Virginia Department of Transportation closed the eastbound lanes of I-70 through the Wheeling Tunnel in order to make repairs to the tunnel’s two traffic tubes. The project was supposed to take four months for each of the  tubes and cost about $5 million all together. Ten months and $6 million later the eastbound tube of the tunnel re-opened unfinished, missing about half of the tile from its walls and leaking water through the ceiling; the westbound tube hadn’t even been touched. It seems the contractor and DOT were unable to determine the proper kind of glue to use on the tiles that line it. There is a time line of the saga here.  

That was back in November. Now state officials are still stumped about how to fix the tunnel and they are trying to come up with an alternative. The latest plan on the table is elimination of the 40 year old tunnel by cutting the hillside away. While this plan has its merits I suspect that it should have been considered, oh, I don’t know, about 13 months and $6million dollars ago. 

On the bright side if the tunnel is eliminated the state won’t have to rely on eminent domain to obtain the land on top of the tunnel, they already own it. Too bad they spent $7.3 million to build the Wheeling Heights government housing project on the hill back in 2005 and 2006. That will have to be torn down if the tunnel is taken out. One would think the state’s wise and benevolent central planners would have seen that one coming but hey, its not their money.

Or not.

Deviating from our normal fare on the blog, I'd like to post this fascinating, funny look at the future of transportation. It's by Disney in 1958, exactly 50 years ago. 

When home sales are down what do Chicago politicians plan to do? Raise real estate taxes, of course!

The CTA financial fiasco never seems to end, now with a new tax being considered by the Chicago City Council in order to pay for CTA workers' pension plans. These plans act as nearly a second salary for workers AFTER they retire.

This is why today--right at this moment, in fact--realtors' organizations are holding a news conference at City Hall to protest a 40% increase in real estate transfer taxes. Aldermen are due to vote on the proposal on Wednesday, Feb. 6.

The 15,000-member Chicago Association of REALTORS® vehemently opposes the increase, which will raise transfer taxes on all Chicago-area real estate transactions by 40%, to roughly $10.50 per $1,000. Revenue from the increased tax would be used to fund CTA pension plans, not improve CTA quality or service. “The people of Chicago deserve to know that this tax will not put a new bus on our streets, or a new train on our tracks,” said Hanna. “This is the wrong tax on the wrong people at the wrong time.”

Remember how the CTA’s major funding problems meant they were going to have to slash service and raise fares a few weeks ago?

(Basically, if you haven’t followed the news surrounding the Chicago Transit Authority for the past year or more, let me catch you up. It goes in this cycle:  CTA DOOMSDAY! Services will be cut and rates will go up! Then…the state legislature swoops in with funding bail-out at the last minute. Then…CTA DOOMSDAY! Call your state legislator to tell them how important public transit is to you, or services will be cut and rates will go up! Then…the state bails them out. Then…you get the idea.)

Anyway, well, we just finished the “state swoops in with funding bail-out” portion of the cycle, and now the CTA is moving forward with $27 million in upgrades for 406 rail cars, paid for by federal funds and a local matching program.

To be fair, some of these upgrades seem legitimate:  like security cameras, and onboard technology that will diagnose mechanical problems, thereby reducing maintenance costs.

However, several other upgrades hardly seem necessary, especially for a service that has been struggling so much with funding:  like “seats with an anti-stain fabric less likely to absorb odors; flat-screen TV monitors that give the train's location on the route, the next station, and travel time estimates; and more seats facings the aisles.”

Really? I wonder how long it will be until the next Doomsday.

For Illinois Governor Rod Blagojevich, giving free ride handouts to senior citizens and “solving” the CTA’s budget woes (meanwhile, breaking his pledge not to raise taxes) was just as easy as this spontaneous poem—which sprung from his lips at this morning’s annual PUSH Excel Dr. Martin Luther King Jr. Scholarship Breakfast—suggests:

“There were some dark clouds hovering over the CTA.

But those dark clouds have rolled away.

Now the sun is gonna shine

So you can get on the blue line, the brown line, the red line.

And everything will be just fine."

Because, you see, it really is a breeze “to roll the dark clouds away” when you’re spending other people’s money.

After begging for months, the Chicago Transit Authority has finally gotten its wish: More money to run the same old, money-losing operation.

Politicians will impose 0.25% sales tax increase on residents of Cook County--where Chicago is--as well as several "collar counties" surrounding the city.

Although the tax increase is being billed as a "long-term" solution, our friends at the Illinois Policy Institute beg to differ.

"The Governor called this transit deal ‘a nice, happy ending’,” said John Tillman, CEO of the Illinois Policy Institute.  “Unfortunately, this is not a fairy tale, and it’s certainly not the ending to the CTA’s woes. The reality is that taxpayers will be soaked yet again while real, sustainable solutions are ignored.   Much is expected from taxpayers; little to nothing from the poorly managed CTA.  It’s not a fairy tale with a happy ending—it’s another nightmare for the taxpayers who have to bear the burden.” 

Mark my words. In fewer than 10 years we'll be right back at this point.

I arrived back home on Monday, boarded a bus, and what did I hear? The same message playing over the speakers as a couple of months ago, asking me to contact my state legislators to get them to give more money to the CTA, Chicago's transit system.

Yes, there's a problem with this: It's called taxpayer-funded lobbying, which, as Sarah so aptly described in this SamTV report, is when government agencies use OUR money to ask us to put pressure on our politicians for them to spend more of OUR money.

Not only have we come up with some ideas on how to fix the CTA's current situation (which they got into because of poor planning and management, mind you), but so have our friends at the Illinois Policy Institute.

They've issued a report on what the CTA could do if its leaders just had enough political willpower:

For over 28 years the CTA (and the larger RTA system) has been asking for taxpayer-funded bailouts while it puts off necessary reforms that would reduce or eliminate the need for such bailouts.  While the CTA has been adopting a number of meaningful reforms, they do not sufficiently fix the root causes of the CTA financial crisis that have been repeated year after year.

Some of IPI's suggestions include:

• Adjust fares to inflation to an average of $1.50 per rider from the current $.96 per rider. This will yield $267 million in increased revenues immediately.  This assumes no fall off in ridership since we know that pricing is not the primary reason for ridership declines.  Unlike tax increases, which do change taxpayer behavior, fare increases will do little to change rider behavior.  However, operational and productivity improvements will convince former riders to return and new riders to give the CTA a trial.
  
• Implement real competitive contracting.  The CTA only tenders a fraction of its spending via competitive contracting (2.8%) while the average transit agency tenders 40%.  Further, the average agency saves 40% in spending when it does competitive contracting while the CTA is saving only 20% (thus the need for transparency).  Just getting to the average would save the CTA $173 million annually.(8)
• Be transparent by opening the books.  The legislature should demand full transparency for all CTA spending.  Every check written, every contractor paid, every consultant hired and all the other details of spending should be open in an online, easily searchable database.  This will create real accountability.

Read the entire report here...and allow me to wish you a very happy, healthy and prosperous new year! Here's to 2008 being a banner year for government transparency and accountability across the country!

In a bad move that only enables the "wolf-crying" that the Chicago Transit Authority has been engaged in, IL Governor Rod Blagojevich bailed the CTA out for two more months.

The governor issued a $27 million grant today that doesn't solve the problem, and delays either drastic tax increases or service cuts. The CTA has mismanaged its budget--unlike the other government-operated service called the Metra, which serves the suburbs--and now wants taxpayers to dig deeper into their pockets to pay for its waste.

Check out Sarah in our SamTV report below to see what's going on...

It’s that time again—the Chicago Transit Authority (CTA) is begging for more state funding.

Today, ChicagoCard holders received an e-mail from CTA president Ron Huberman, sadly announcing the unveiling of the 2008 budget, which includes a series of service cuts, fare increases, and layoffs. And, of course, there was a heavy dose of blame on the Illinois Legislature, and strong urging for Chicagoans to tell the Legislature how badly the CTA needs more funding.

Basically, the CTA wants us to beg for higher taxes in order to solve their mismanagement crisis.

In addition to the CTA email, I received one from the National Taxpayers Union encouraging citizens to tell Springfield “NO” to any more taxes—we already pay astronomical amounts. NTU outlines what’s at stake, and provides a template so Illinois citizens can tell their legislators not to raise taxes for transit bailout—see it here.

I don't think I need to tell you whose advice I'm going to take. 

The CTA is continuing to trumpet the sounds of doomsday for the public transit.

"600 employees laid off!"

"Routes must be slashed!"

"Monthly passes must be raised from $75 to $84!" they cry. 

Beyond feeling like I'm at a public transit Labor Day Sale, I can't help but be annoyed by the city's fear mongering when there are other obvious solutions (look to London's rail system).  Or, apparently, Mayor Daley has found his own Euro-solution and we can steal Paris's idea of bike rental. Oh joy—I can't wait to take a government-funded bike down Michigan Ave through the February sleet and snow. 

Soon I will be returning to Chicago for my second year of what is becoming an annually ritualistic offering of my soul to higher academia's ruthless reaper. Yet, not only will my brain be hurting; my wallet will too.

As many Chicagoans know, our transit authority's bureaucratic monopoly has hit the fan. The CTA traveler's "Doomsday" is approaching. No surprise here - just the expected consequence of the governmental leviathan and its continual feeding through wasted tax dollars; as SAA's Michael Livshutz has keenly pointed out, Chicago can break its citizen-hurting, transit monopoply through privatization and therefore allow expansion of choice, cheaper fares, and more efficient services. Maybe with the added pressure of losing passengers, the CTA won't allow their tracks to be inspected just "once in five months" as revealed during further study of the July 2006 Blue Line derailment.

BUT HAVE NO FEAR! BLAGOJEVICH IS HERE!! That's right...the savant of corruption himself, the governor who fellow Illinois Democrats have called a "madman", the problem-solver that sues his own party's house majority leader!!! The gov has announced that he will outline a plan this week to remedy the CTA of having to raise fares and cut routes. Now, maybe I'm jumping the gun, but Blagojevich's actions of precedent might just shed light on his coming proposition. Don't take my word for it; just listen to the man himself.

A new local, online-only newspaper picked up Michael Livshutz's piece on the Chicago Transit Authority. Check it out.

Michael writes:

The CTA’s costs are twice as high its revenues. Wages and overtime costs alone are 60 percent higher than its revenues. Its retirees enjoy complimentary medical care forever. Its 10,000 employees have 17 labor unions, and any one of the 17 unions can hold CTA hostage with a strike threat. It cannot convince its employees to regularly come to work on time. No wonder CTA’s trademark slogan is “doomsday.” 

Check back our website for more from Michael Livshutz in the coming days. 

I received an email last night from the Chicago Transit Authority.  Emails from the CTA are usually notifications that my fare card has been reloaded, and thus deleted promptly. However, this one made me stop and read:

“Due to insufficient state funding, the Chicago Transit Authority Board recently approved a contingency plan which includes changes to CTA service and fares.” It turns out these “changes” are service reductions and fare increases, which just doesn’t add up.

It seems the CTA is irritated with the state government for refusing to increase subsidization of their failing system—but that’s nothing compared with Chicagoans’ irritation with an already poor transportation system that’s both increasing fares and reducing service. Now, on principle, I’d prefer they increase fares than increase state funding, but the real heart of the matter is how they’re managing the funds they currently have.

I can’t wait to hear what my bus stop comrades have to say about this.

While driving the back country roads yesterday around Fort Worth, I spotted a TxDot (our transportation system) bus en route with only one person inside...the driver.

Now this might not be a shock to most of you individuals who live in hives of government excess. However, it does not take a rocket scientist to determine that establishing a profitable, successful transportation system through bussing and simple rail in the Fort Worth area is not the most prudent venture. With a significant, geographic hindrance through vast, rural sprawl and a significant, populous hindrance through lack of demand, I am amused at the governmental devotion to expand.

Expansion needs money; money needs taxes; taxes need people like you and me. I, along with the vast majority of Tarrant County citizens who utilize the convenience of our beat-up KIAs, soccer-mom Suburbans, and old-school F-150s, will foot the bill for TxDot expansion.

In Fort Worth, TxDot defends its expansion plans with increased passenger percentages (oh great...maybe the lone driver will have someone to give him company). Dick Ruddell, the president of Fort Worth TxDot, argues that congress should continue to invest for the sake of global warming. Though Ruddell will probably have more customers if TxDot successfully lobbies for a "vehicles miles traveled tax" in the coming years, the government should wake up, respect market demand, prudently spend the taxpayer's dollar, and unlike in most mass-transportation centers, allow entrepreneurs to provide cheaper fairs and efficient travel.

Follow-up: I wrote this article about a week ago. Between then and now, I decided to perform a little experiment: I made a point to travel extensively around Fort Worth on errands and see firsthand how much utilization our transit system can boast. The result...all buses (48 surveyed) were empty except one, which had 3 people inside. Three days ago, I promised my dad to give him a buck every time we see a bus with someone other than the driver. I think my odds are pretty good.

Being a Chicago resident who hails from Atlanta, I'm keen to compare the two cities' public transit systems. (Hint: Chicago's is a lot better than Atlanta's, mostly for the reason that it actually tries to serve most of the people who fund it.)

That's not to say that Chicago's system is perfect. Far from it. I've written about the exorbitant amount of time and money that it's taking for the Chicago transit system to install an additional track on the elevated trains in the city...but that's not what this post is about.

Atlanta's transit system is called MARTA, and its funding is collected by three bodies: the City of Atlanta, Fulton County and DeKalb County. When this system was originally devised, the players determined that a 1 percent sales tax would be levied in all three jurisdictions in order to fund MARTA...with the intent that it would sunset eventually. (MARTA receives no money from the State of Georgia, nor from the feds.)

Well, like so many taxes, it hasn't, and now, the under-served North Fulton County region wants some answers about why it is being held hostage by its other two "partners", Atlanta and DeKalb, who are served well by the system and who want to continue the 1 percent sales tax until 2057. With a 2-1 vote like this, residents of Fulton County would have no choice but to pay up.

Daniel Tyree McElrath of the Roswell Beacon (a paper in Roswell, the suburb where my family live) has a great article on the problem and writes:

MARTA has long poor-mouthed when asked to extend its service into North Fulton, saying the budget was tight, that it was operating in the red, that it had other priorities. It finally proposed an expansion of the northern corridor...North Fulton was glad to take it...The new MARTA line offered welcome relief.

But a funny thing happened on MARTA’s way north. That extension got taken off the table even as other proposals that came later got funded — most notably the 22-mile “Beltline” trolley loop around Atlanta.

And now North Fulton was being asked to approve a sales tax extension? Without voter approval? Or worse, it might have to watch while Atlanta and DeKalb approved the tax, prying those pennies out of the purses of North Fultonites, whether they liked it or not.

It's a taxpayer hostage situation if I've ever seen one.

So what do North Fulton County residents do? There's been talk of ceding from the rest of the gerrymandered county and forming a new jurisdiction, but that wouldn't do all that much in solving this problem since the new county would have to honor all of its past contracts.

The author of the article that I mention above asks people to lobby the state legislature to provide funding for MARTA, but I'm not too hot on that, either.

Why not see how well (or not) the money is being spent by MARTA currently by issuing public records requests, and evaluating the current bang for the buck. I have a sneaking suspicion that there's quite a bit of waste in the system and that the people of North Fulton County need to take MARTA to task, especially if they want to stop paying through the nose for something that barely serves them at all.

Get to it.

(The picture above shows the Lenox Square train station, one of the multi-million dollar stations that MARTA has built, located very close to where I grew up. Why not build more, less expensive stations rather than fewer expensive stations?) 

Public transit--a great thing to have when planned well and run efficiently--is often one of the biggest wastes of taxpayer money out there. Transit authorities are frequently (mis)managed by unelected boards who aren't content to make transit improvements with the money allocated to them, and instead choose to use that money to lobby for even more.

On what level does that make sense?

Apparently, the folks at Americans for Prosperity in Wisconsin don't think that it does on any level, which is why they planned to hold a rally on the steps of the state capitol today so that they could protest the meeting of the Wisconsin Regional Transit Authority's board.

Boots and Sabers has a run-down:

The RTA is funded by a $2 fee on rental cars.  This fee generates about $500,000 per year.  The RTA has spent $496,000 of that on a lobbying firm to lobby the legislature to increase the $2 fee to $15 (among other ideas for hiking taxes).  Yes… an unelected board is using taxpayer dollars to pay lobbyists to lobby for higher fees.  Your government at work.

The board canceled its meeting after fearing a good citizen turn-out. That doesn't mean that they won't try to meet in some smoky room at 3 AM tomorrow, but kudos to AFP-WI for getting the word out about today's planned gathering.

When I moved to Chicago about a year ago I chose a neighborhood that was near a train station. But, as of yesterday, all of my intricate planning went to naught as the Chicago Transit Authority (CTA) began a three-year project to add an additional set of tracks to the aging rail system. This will help out three years from now, but until then, public transitites will have to adjust their schedules. I, for one, will take the bus more frequently, and will invest in a pair of work shoes with better traction so that I might avoid falling all over my fellow bus riders at every stop light.

The three-year time frame on this renovation makes me wonder: Is this as efficient as it ought to be? Could relying on private companies to improve the system rather than public workers actually speed things along and save the people money?

Hope as we might, we don't know the answers to those questions, but an article in the Economist opines on the poor condition of the overall Chicago-area transit system and gently suggests bringing private enterprise in on the fun. 

The people of Chicago pioneered other types of market ventures. Let's not rest on our laurels this time.