Professional Documents
Culture Documents
by Randal O’Toole
In the last 40 years, American cities have spent nearly $100 billion building new rail transit
lines, ranging from the Kenosha, Wisconsin vintage trolley to the Washington, D.C. subway system. Despite
spending all this money, and hundreds of billions more to operate the systems, per-capita transit ridership has declined
since 1970.
Economists, taxpayer groups, and fiscally conserva- the second half of the meetings, “the glossy brochures come
tive thinktanks objected to almost every one of these lines out” and the “general manager wants to talk about their new
as a waste of money — although these prophets often went plans for expansion.”
unheeded. Recently, however, criticism of the rail transit Rogoff asks, “If you can’t afford to operate the system
boom has come from an unexpected source: Peter Rogoff, you have, why does it make sense for us to partner in your
the Obama administration’s selection as chief of the Federal expansion?”
Transit Administration. Fittingly, Rogoff gave his speech in Boston, whose state-
In a May 18 speech, Rogoff pointed out that the nation’s run transit system is on the verge of collapse and where a
rail transit systems are crumbling, and it makes no sense for recent audit found that $3.2 billion was needed just to bring
cities to spend billions of dollars building new rail lines when the system up to a state of good repair. Not only does the state
they can’t afford to maintain the ones they already have. not have that money; it isn’t even spending enough to keep
Rogoff argued that buses make more sense in many cities that the system in its current state of poor repair.
are pushing to build rail lines. Nationwide, says Rogoff, transit systems have a $78 bil-
Rogoff related that in his year as FTA administrator he lion maintenance backlog. The vast majority of this is for
has met with many transit agency general managers. These older rail lines in New York, Chicago, Boston, Philadelphia,
people spend the first part of the meetings grimly asserting Washington, and San Francisco; but this backlog is growing
that they can’t afford to run the systems they have and are each year, even as more and more cities undertake construc-
forced to make severe cutbacks in bus and rail service. But in tion of new rail lines.
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September 2010
The federal government typically pays at least half the cost every single study that compared bus-rapid transit with rail
of building new transit lines. Most transit agencies finance the transit found that buses could do more to relieve congestion
local matching share by selling 30-year bonds and repaying at a tiny fraction of the cost of rail transit. Yet heavy lobby-
those bonds out of general or dedicated funds such as sales ing by rail contractors and railcar manufacturers persuaded
taxes or property taxes. But rail transit infrastructure wears the transit agency board and the region’s voters to build rail
out and must be almost completely replaced every 30 years, transit instead.
so by the time the bonds are paid off, the transit agencies face Rogoff admitted that opening a new rail transit line is
an even larger bill for rehabilitating the rail lines. Since all the usually “a big press event with lots of cameras, microphones
costs of construction and maintenance, as well as most of the and political leaders,” while maintenance attracts little atten-
operational costs, must be paid for out of general funds, rail tion. But the problem goes deeper than that. Rogoff’s own
transit is financially unsustainable. agency, under the direction of Congress and the Department
The Washington Metrorail system is typical. It first opened of Transportation, gives transit agencies huge incentives to
for service in 1976. The federal government paid most of the build high-cost rail systems when low-cost bus systems would
construction cost, and local governments covered most of the work just as well.
operating costs. But no one budgeted any money for rehabili- Those incentives can be traced back to 1973, when
tation, so the system is now rapidly deteriorating, with almost Congress passed a law allowing cities to cancel planned inter-
daily train delays from broken rails, smoke in the tunnels, and state freeways and apply the federal funds to transit capital
other problems — not to mention the nine people killed in a improvements. Since few cities had enough money to operate
horrific 2009 accident caused by a poorly maintained signal- all the buses that they could purchase with the funds released
ing system. by not building an interstate freeway, Portland, Sacramento,
Thirty years ago, in 1980, only ten American urban areas and other cities chose rail transit as a high-cost solution that
had some form of rail transit. Those ten areas are now respon- could absorb lots of federal capital dollars without imposing
sible for nearly all of the $78 billion maintenance backlog. But high operating costs. The cities conveniently ignored the high
since then, more than two dozen other urban areas have built maintenance costs that would be required after 30 years or
rail lines. Systems in Baltimore, Buffalo, Miami, Portland, so.
Sacramento, San Diego, and San Jose will all turn 30 in the While the 1973 law was repealed in 1982, it generated a
next decade. Because few of these cities have set aside funding light-rail construction lobby that has now persuaded at least
to rehabilitate the systems, these aging systems will soon add two dozen urban areas to build rail lines. Today, the rail con-
billions of dollars to the unfunded maintenance backlog. Yet struction lobby is far more powerful than the fabled highway
the majority of those urban areas are actively building more
lobby. The combined budgets of every pro-highway group
rail lines, and close to 50 urban areas that don’t have rail tran-
in Washington, D.C. add up to less than $4 million per year,
sit are planning to build new lines.
while the transit lobby has a budget of more than $20 million
Rogoff gave some advice to cities that want to build these
per year, much of it from railcar manufacturers, rail contrac-
lines: “Paint is cheap, rail systems are very expensive.” Instead
tors, and rail engineering firms.
of building the rail lines, he suggested, transit agencies could
Thanks to efforts by this lobby, Congress created a multi-
attract as many new “riders onto a bus, if you call it a ‘spe-
billion-dollar annual fund for new rail projects in 1991. Unlike
cial’ bus and just paint it a different color than the rest of the
most other transportation funds, which are distributed using
fleet.”
formulas based on population or similar state and local attri-
This advice might be worthwhile. Kansas City, for exam-
butes, the “New Starts” rail fund was an “open bucket,” made
ple, has attracted 30% more riders on selected routes by run-
available on a first-come, first-served basis. Local leaders soon
ning colorful buses on ordinary streets but more frequent
realized that the cities that came up with the most expensive
schedules. The buses stop less frequently than normal ones, so
proposals received the most money. The cost of new light-rail
they get to their destinations faster. This is sometimes called
“bus-rapid transit.” lines, for example, zoomed from $15 million per mile for the
first one built in San Diego to $220 million per mile for the lat-
Rogoff noted that bus-rapid transit may not make sense
everywhere, but it “is a fine fit for a lot more communities est one being built in Seattle.
than are seriously considering it.” In Denver, for example, Counting both open-bucket and formula-driven funds,
Congress dedicates more than half of all federal transit dollars
to rail transit. This means a city that relies exclusively on buses
must compete against 400 other urban areas for the smaller
share of the federal transit pie. Building rail lines allows tran-
sit agencies to tap into the rail funds that are shared by only
about 30 urban areas.
To put some limit on wasteful rail projects, the Bush admin-
istration’s Secretary of Transportation, Mary Peters, imposed
two rules requiring that such projects be cost-effective. One
rule applied to all rail transit and it set an upper limit on the
amount a project could cost for every hour of peoples’ time
the project was supposed to save. This rule eliminated some of
“Every election day I ask myself the same question — ‘Heads or tails?’ ” continued on page 44
24 Liberty
September 2010
44 Liberty