Planning for total gridlock: a lower white paper Executive Summary

Planning for total gridlock: a LOWER white paper

• Executive Summary:

• 1. Transit in the DC Area handles an insignificant amount of transport demand but will receive the majority of money in the next quarter century. This misallocation must be changed.
• 2. Metrorail is a White Elephant which must be maintained but not expanded
• 3. Surface Congestion will become much worse if we don’t radically change what we build, and how we finance it.
• 4. Fortunately, if we follow simple rules, we can defeat the Congestion Cartel and be able to move around again.

LOWER’s role in the Transportation Planning Process

• Citizen’s Watchdog group

• “The Emperor has no clothes”

• Music Man: Harold Hill (read Bechtel) tours the small towns (read congested areas) to sell shoddy equipment (read rail expansion systems) to clueless local school boards (read clueless local politicians.)

What is the Real Issue?

• Mobility!

• Because of the arbitrary “proffer” system, there is no guarantee adequate transportation improvements will happen.

• Blind faith in “rail”– a 19th century technology which has proven beyond a doubt to be INEFFECTIVE in reducing surface congestion in modern cities.

• “Why can’t we just all get along?”– common attitude.

• Reason: $$$$$$$$

Metro a “White Elephant” pretty, but a financial drain

• Thailand: White elephants were property of the sovereign (king), but couldn’t be put to work. A royal gift to anyone who displeased him. Means a financially ruinous possession that can’t be disposed of.

• Phrase arrived in England in mid-18th century. Empire builders applied it to expensive but otherwise useless public buildings or monuments. These are now called “historic properties.”

• Punch drew a famous cartoon applying this label to the Uganda railway.

• Modern, techie term is “legacy system.”

Metrorail- A legacy system

• To be maintained, but not expanded.

• On books at $9 billion, would cost $20 billion to replicate.

• Historical result has been to 1) reduce carpooling, 2) reduce express buses, and 3) increase single occupancy driving.

• Has NOT reduced surface congestion.

• Does NOT deserve a dedicated source of funding. Public sector monopolies must be held accountable every budget cycle.

• Would not be built if didn’t exist already

The “True Story” of Transit

Freeways comprise just 6% of our total road system yet carry 45 percent of all trips.

• Freeways comprise just 6% of our total road system yet carry 45 percent of all trips.

• Principal arterials comprise 6% of our road system yet carry 20% of all trips.

The problem: Misallocation of Transportation Funds

New Transportation Technology starved! A Nationwide Problem.

• Of nation’s 19 largest metro areas, 10 plan to allocate more than one half of their projected 20-25 year surface transportation budgets for transit capital and operating costs; 7 others plan to allocate between one-third and one-half. 17 out of 19!

• Source: Federal Highway Administration, Federal Transit Administration; 2002

DC is a strange town

• In addition to the too-high concentration

• of pols, many are focused overseas.

• Thousands of foreign policy experts, military, and private contractors struggle across the American Legion bridge between Md and Va. Each morning and each afternoon. Many are involved in the US’s spending of hundreds of billions of

DC has a special problem..

• Three jurisdictions, including an odd one, the District of Columbia

• Plus the National Government

• High Number of ambitious politicians, all busy fund raising with other priorities is not a recipe for coherence

• Transportation is an area where perceived competence exceeds actual understanding

Metro Matters, but not much

• Originally supposed to generate an operating profit, but now runs a 6% deficit on book value– $300,000,000 a year in operating deficits, and an equal amount in depreciation/amortization of capital costs

• Metro accounting would land its managers in jail if done in the private sector

• “Deferred maintenance” of $12 billion being promoted by Metro’s public relations machine

Public versus Private Investment

• Private:

• Costs are bad, revenues are not the test
• Profit is the goal: a sign of good management.

• Public:

• Costs are good, revenues good: let’s expand the bureaucracy!
• “Profit” concept not in lexicon

• Result: With political allocation of capital, “it’s a benefits regime that distributes jobs, contracts and influence: the costs are the benefit.”

• -------- quote: James Dunn, Rutgers political scientist who studies transit

• Another illustration: Federal transportation bill reauthorization, which now contains 4,000 earmarks, almost all of which don’t appear in any state’s transportation wish list for needed improvements.

Power of Pork

• Metro’s public relations empire

• 18 or so lawyers

• At least 180 people now on Dulles Rail payroll

• $500,000 slick paid media campaign to “sell” toll increases

• More money spent on study and design of extension than spent to build original Toll Road, even adjusted for inflation- around $80 million.

• A few percent of this “consulting” money finds its way back into the campaigns chests of local pols: Cliff Slater’s study in Honolulu says about 3% on average.

Dulles Rail?

• Current cost is $4 billion for 20 miles, or $200 million per mile

• Adding a pair of lanes to Toll Road (10 miles) would run about $100 million, and provide greater capacity

• Tysons better served with loop connecting to West Falls Church via straight (Route 7) routing– one of the few people-moving opportunities in the U.S. outside of airports.

The “Promise” of Dulles Rail

• Increase in modal share of passenger miles in Fairfax County from 1% overall to 2%

• No congestion relief on any road in Northern Virginia

• No affect on faster growing outlying counties of Prince William, Loudoun, Stafford

• $100 million a year increase in tolls on the Toll Road

• Subsidies per new rider equal to gross annual income of poorest 30% of Fairfax County Residents

More Dulles Rail “Promises”

• Spillover of failed freeways onto local arterials such as Rt 123, Lewinsville, 7

• Depletion of highway budget: Dulles Rail will cost more than Springfield Bypass/Wilson Bridge put together

• Will guarantee failure of ETL (HOT) lanes on I-495 (Reason: no place for express traffic to merge onto Dulles Toll Road).

• Bottom Line: I-66 level performance, only with ever escalating tolls.

• Obviously, this “vision” is a disaster.

Core Issue

• Why should the average, poorer taxpayer be subsidizing a richer commuter traveling to a higher paying job outside the jurisdiction where he/she lives?

• This issue was litigated in Los Angeles, where the transit agency wanted to cancel bus service and force use of rail: it was demonstrated that this procedure, which WMATA subscribes to, discriminated against the poorer bus riders.

• In Denver, with the “fast track” light rail proposal on the ballot, the no-growthers questioned whether subsidized transit would encourage “sprawl.”

Upper Class welfare: The poor subsidizing the rich

• The average subsidy to a new rider on Dulles Rail exceeds the per-capital income of the lower 30% of the population of Loudoun/Fairfax Counties

• New Rail Rider much better off than motorists subsidizing the operation at the Toll Plazas

• Very expensive to pull suburbanites out of their cars: these are so-called “choice customers” for the transit agencies.

• MUCH cheaper to give each new rider a brand new Lexus.

“Worst of all Worlds” scenario

• By 2025, Tysons/Dulles Corridor will have the unique disadvantage of:

• Highest property taxes in Virginia (special tax district)

• Only full-time tolled freeway in area

• Service Level “F” (failure) on every major freeway/arterial

• Like I-66, only with full time tolls

• Beltway even worse than today

Toll Road Relief?

• Heavy rail typically relieves 1 ½ years of traffic growth on adjoining corridor.

• Dulles Corridor, about 150,000 cars per day; rail will offload about 6,000 cars

• But we are paying for rail with higher tolls and subsidies for the rest of our lives

• This makes no sense

Traffic and Density

• Up to densities of 30,000 per square mile, linear increase of roadway use.

• At higher densities, per capita roadway use declines.

• Tysons population density is currently about 5,000 per square mile (20,000 over 4 square miles)

• Conclusion: Tysons would have to densify more than 6 times current level to have any “transit related effect” and 12 times current level before significant lessening of per capita highway use (60,000 people per square mile)

• Question: Who is adding to highway capacity?

• Kemper Freeman research, Seattle: http://www.letsgetwashingtonmoving.com/pages/KemperQ&A.doc

Suggested position

• Insist on “no degradation” policy– any new building permits will be based on actual measurements of arterial/freeway flows and plans to alleviate them funded prior to permits

• Reston Town Center history

• Let Tysons redevelopers worry about the transit/roads mix

• Impacts of densification should be paid for by the densifiers, not by taxpayers in general

No degradation policy continued…

• Idea is to get developer to assure there is enough “private” funds to take care of externalities, BUT

• Ffx county is lousy with followup.

• Developer resists since his cost of capital is much higher than public’s.

• Solution: utilize existing Tysons tax district for ANY transportation improvements within and surrounding Tysons. Let redevelopers pick the mix. Improvements will be paid for with tax-exempt revenue bonds, deductible by owners against income as a local tax.

• Advantage: Since actual measurable real-world impact is the test, redevelopers will pay close attention to cost-effectiveness. It’s THEIR money, not someone else’s. If McLean is impacted, they are on the hook to actually implement a solution. Since rail doesn’t solve the problem, that approach will be dropped.

• This format has been widely used in California post Prop-13 and elsewhere and is being proposed in Loudoun County.

As for actual plans to redevelop….

• I would remain agnostic. Tysons could and should look and function better than it does now.

• Some very attractive pedestrian oriented pseudo-urban cores have been put in place in various places… but they are hard to do. The usual pedestrian zone laid over traditional “center city” shopping streets usually hasn’t worked.

Impact on Dulles Airport

• Rail actually bad for airport

• $3 per ticket surcharge for everyone; around 3% of users will take rail. Equivalent to a $100 per ride subsidy for trip to airport. Much cheaper to give a voucher for 50% of taxi ride.
• Configuration of free and uncongested inner lanes encourages commuters to take the extra five minutes to drive around the airport and avoid tolls and congestion. This is poor design and the wrong economic incentive.
• Recent rail links to international airports have dismal patronage: JFK, Newark, Shanghai, San Francisco
• Dulles rated the third-worst medium size airport worldwide in terms of passenger satisfaction (2004 JD Powers study). Last thing it needs is higher cost structure. Airport now gets more traffic from congested Route 28 N/S and roads west than from the Dulles Corridor.

Virginia: Poor Leadership

• Governor Warner: Symbolic activity only, gave up after tax referendum

• Karen Rae, Texas export: “Nothing we will do will reduce congestion.” Carrying this slogan into practice, at our expense.

• Vincent Callahan, House of Delegates: no idea what to do.

• Gerry Connolly, et al. on Fairfax Board: Have spent almost nothing on roads during their two-term majority.

Citizen Apathy…does anyone care?

• Largest tax increase in Va. History last year, 10% rise in state income

• Fairfax, Loudoun, Montgomery Counties increase spending at 10% rates, much higher than population growth plus inflation

• Ehrlich’s experience in Maryland: business community is asleep, he is forced to backstop liberal legislature on his own (and the Md. Legislature is far to the left of the electorate).

Pressure Points

• On the Dulles Rail fiasco: it’s up to Tom Davis, Frank Wolf, and Jim Moran. Since this project is really a set aside in the federal pork category to the tune of $750 million, they can de-appropriate money or ask that it be reprogrammed.

• They believe (privately) that rail should stop in Tysons. In public, they dither.

• They and the Ffx board need to be encouraged take the position that “user pays” and that the Tysons densifiers should pay ALL the transportation costs associated with their plan– be it rail, bus, highway, monorail, helicopter, moving sidewalk, jetski, or whatever. Not toll road users or the rest of us in the form of lost time due to higher road congestion.

Transit Not Auto-Competitive

This is expensive congestion!

• Full time cost per new rider: $100,000 per year (same as S.F-San Jose proposed heavy rail)

• How much of this is coming from the fare box? – maybe $3,000

• Much cheaper to buy every new rider a Jaguar:

Why is this happening?

• A combination of “Emperor has no Clothes” and “The Music Man”

• $100,000,000 in study money– more than it cost to build the Dulles Toll Road in the first place

• Failed political system- lots of blame to go around

What can be done?

• Ask political candidates: “What do you propose to do about alleviating congestion?”

• Take future of Dulles-to-DC corridor to referendum in Fairfax/Loudoun counties

• Pay attention: Virginia and Fairfax spending has gone up almost 10% in past year– far in excess of inflation/population growth. Montgomery Cty MD the same

Do we know what to do? YES

• Maryland is showing the way. They have realistic leadership from the top.

• Technology is coming to the rescue with ETL/transponder applications. You will have a choice of:

• Known price (0) , unknown travel time (today’s highways); or
• Known travel time, advertised price that varies according to price selected to guarantee fast ride at time you enter the ETL lanes. It’s travel time insurance, purchasable when and if you need it.

What is going on here?

• “It’s not what we don’t know that hurts us, it’s what we think we know that isn’t true.”

• It doesn’t help when the myths are being repeated as propaganda by those with an axe to grind, or those too lazy to roll up their sleeves on solutions.

Transportation Metrics- Don’t be fooled!

A sad example of pork…

• New Jersey River Line Light Rail

• $ 1 billion project, Trenton to Camden, 34 miles
• 300% over projections, $476 million to design and build, $100 million for consultants
• Fare revenues are so low that collection costs exceed them, ride-for-free seriously considered. Fare recovery of total costs is 2%, subsidy is $31 per trip
• Farebox receipts $1.4 million first year, operating and maintenance costs $18 million
• $48 million a year in debt service
• Director of NJ Transit: “Light Rail line will have no noticeable effect on traffic congestion.” “It’s just bankrupting New Jersey Transit.” (John Pucher, Rutgers transit expert).

Don’t laugh- Dulles Rail is even worse on some measures

• Total Cost: $4 billion plus $4 billion capitalized value of annual subsidy ($100 million for operating, $100 million for depreciation/amortization (3% of $4 billion) at 5% cap rate) plus 22-mile share of Metro rebuild (.22 times $10 billion) or another $2 billion. Total: $10 billion (prior to overruns).

• New riders: Projected 47,800 new systemwide trips is inflated number due to nonconsideration of deterioration of service on Orange/Blue/Yellow lines. It also assumes no replacement of obsolete 42 seat buses used in Fairfax County, no bus shelters, no posted schedules, measures which would boost ridership 30%. It also assumes no just in time ridesharing, which today serves 44,000 people on the Shirley Highway. A more realistic number is a 25,000 trip per day increment, or 12,500 round-trip commuters. (Historically rail projections have averaged more than twice actual patronage).

• At a 7% cost of capital (FTA assumption), the true $700 million per year incremental cost divided by 12,500 round trip commuters times 260 days per year (weekday/weekend average) gives a true cost of $200 per day per new rider, or $52,000 per year. How much of that will be recovered at the farebox?

These numbers aren’t atypical…

• Comparison: San Francisco BART extension, Millbrae (SFO airport) to San Jose.

• BART rhetoric: “Connect the largest city in the Bay Area (yes, it’s San Jose, not S.F.) to the BART system.” Sound familiar?

• The REAL DEAL Silicon Valley: Rt. 101 far more congested than the Dulles Corridor

• Study showed true cost of $100 per ride or $47,000 per year for a full time commuter.

• Airport hookup to BART system is completed: an architectural success, but only about 5,000 paying passengers– a patronage flop. Similar story at JFK and Newark with their extensions to transit, and likewise with the maglev line at Shanghai’s new airport.

Beware Planning Assumptions

• Chicken and Egg: Does transit follow densification, or vice-versa?

• In post-automobile cities (built after 1910), no successful examples of density following expensive transit investment. E.g., Washington heavy rail stops.

• Plenty of examples of the opposite: Reston Town Center, Tysons, Columbia, Houston’s Post Oak, Dallas North end, Los Angeles nodes such as Century City, edge cities all over the U.S.

• Beware the argument that “if it is built, they will come” (Field of Dreams attitude): no evidence from WMATA, BART, or elsewhere this is true. “Transit Oriented Development” is a myth, much talked about, like Saddam’s weapons stockpiles, but nonexistent

Quick Relief In Sight

• Seattle Research, same story here:

• Study results: adding only 6 percent more lane miles, --half of which would be additional lanes on existing freeways, the other half would be additional lanes mostly on existing arterials—would reduce congestion from today’s level by 36 percent. And it would fully accommodate the 45 percent increase in trips expected over the next 30 years.

• What are we doing in DC instead with the money? Increasing the heavily subsidized heavy rail system 20%!

Role of Press in the debate

• Big City dailies usually support megaprojects: more activity, more advertising

• Post: “A Railroading to Dulles” editorial: “Before it’s too late, somebody should put the emergency brake so the public can get a good look at the landscape.”

• Pro-rail: Times community newspapers

• Anti: Northern Virginia Journal

• Many still undecided or deliberately neutral: Examiner, Post, Connection community newspapers

• Data Point: Denver’s Fast Tracks was supported by one daily, opposed by the other

Forget Farebox Recovery

• WMATA likes to brag about its “farebox recovery” percentage as if this is something good. What it really means is that the system is insolvent by any normal accounting standard since it cannot even cover its operating costs, much less repay original capital invested or replacement costs (and this is for a high capital cost enterprise).

• This is NOT what was promised when the system was sold to the voters in 1968.

Why Not a 21st Century System?

• Mix of High and Low Tech

• Information signs, to include just in time ridesharing information for upcoming zones

• Just in time congestion pricing on new highway capacity

• Competition for transit– buses, vans, jitneys, taxis, collective taxis, unionized, nonunionized, express, local, “public”, private

What is the answer?

• Briefly, more capacity:

• HOT lanes/Express Toll Lanes can be added by private sector, but need to interconnect

• Privately run express buses and just in time carpooling have demonstrated potential (Shirley Highway)

• “Fill in the Grid”– to-and-from the core plan obsolete, a grid is more efficient with transportation capacity

• Need second Potomac crossing

Why do Express Toll Lanes work?

Some basic principles

• User pays. Don’t subsidize one form of transportation over another.

• Car users generally pay their way. At most, auto travel is subsidized ½ cent per mile
• Transit is subsidized at least 50 cents per mile, much more for “choice” heavy rail riders in the suburbs.
• Not true that all transit must be subsidized. There are systems, and cities, where makes economic sense. Visit Wendell Cox’s website at http://Demographia.com

Conclusions-I

• Investment:

• Calculate cost-effectiveness using either travel time savings or congestion relief (in DC Area, valued at around $15 per avoided hour).
• Private Sector investment to be given first priority since it is probably cost-effective: Express Toll Lanes, just in time ridesharing (slugging), walking, bicycling. Note: more people in our area walk and bicycle than take public transit.
• Rank all proposed investments by cost effectiveness.
• According to latest research, highway forecasts of costs and value are accurate. Rail is systematically oversold.

Conclusions-II

• Investments, con’d

• A common investment threshhold must apply to all expenditure of transportation funds. This may be lower than in the private sector since the cost of capital is lower, being tax preferred and well secured. But the threshhold should be the same across modes.
• Investments should NOT be subsidized. Transit needs to recover more from the farebox and spend less. Any subsidies should be from the demand side, not the supply side (ie Metrocheck vouchers). Transit pricing must allow for replacement of capital items (depreciation) just as in the private sector.

Conclusions--III

• Investments

• In particular, the WMATA Heavy Rail must not be expanded. In the suburbs, the poor are subsidizing richer new rail riders as they travel to higher paying jobs outside the home jurisdiction. Dulles rail will be lucky to cover 1/3 of its operating costs while never paying back any capital costs. The White Elephant needs to be fed, but not to get fatter.
• WMATA deserves the absolute minimum necessary to keep the system safe and running. It is an open question whether some current suburban lines should be decommissioned in favor or dedicating the right of way to congestion managed surface use.
• WMATA needs to competitively contract out everything it can, and until it has done this, should not be given fresh money.
• WMATA’s board should consist of transit professionals, not the politicians who to date have simply fed the elephant more.

Conclusions-IV

• Investments

• The Council of Governments needs to rank order all projects on the Constrained Long Range Plan by cost-effectiveness.
• State and Local Governments and Transportation departments need to present their wish lists rank ordered by the same metrics prior to any request for funds.

Conclusions-V

• Funding

• Generally, any project should be funded if it passes cost-effectiveness criteria.
• The 25 year plan calls for spending about $700 per capita per year on transportation infrastructure, maintenance and operating. We already spend more than $700 in annual congestion losses, so we have a lot of catch-up to do.

Conclusions-VI

• Funding: Sources

• The best source is the USER. To the extent that the user can be precisely billed for the market-clearing value of a scarce resource, such as rush hour highway capacity, that option should be chosen as economically efficient. The first application should be Express Toll Lanes. As road pricing technology develops further, it may be possible to apply the concept more widely.
• For transit, users need to pay fully allocated costs for travel and parking. Any subsidies should be on the demand side.
• Until more precise billing technology is available, the gas tax is a suitable proxy for use. It also has the virtue of billing larger vehicles for their more intensive use of the roadway.

Conclusions-VII

• Funding

• More freeway capacity can be partly funded by Express Toll Lanes. We need a seamless network of such facilities on all our urban interstates.
• Arterial and collector improvements should be funded by gas taxes.
• Neighborhood streets part of new developments should be funded by a tax district allowing developer access to tax advantaged revenue financing, allowing homeowners to deduct the debt service on such improvements as local taxes on their tax returns.
• The Virginia proffer system needs to be replaced by a scientifically calculated mobility impact fee financed not by expensive up-front developer money, but by cheap revenue improvement bonds. Otherwise, we will chronically underinvest in our infrastructure.

As for a dedicated source for WMATA.. NO!

• WMATA must not receive a dedicated source of funding beyond its current resources.

• To do so would relieve the pressure to operate the system efficiently and have the USER PAY.

• At 330,000,000 trips/year, WMATA simply needs to raise the price of its service $1 per transaction on the average to pay for operating deficits. $1.50 per transaction would provide money for capital upgrades. It can also trim down cost of operating by contracting out wherever possible.

• Since Heavy Rail is not cost effective, no money, new or old, should go for further rail expansion. If done right, Bus Rapid Transit can be profitable and that is a technology that WMATA needs to learn. Far better to combine express regional bus service with our emerging network of Express Toll Lanes, a mixed guideway system.

The good news in closing.

• Congestion is an entirely manageable issue, and can be solved with the application of classic economic principles.

• Don’t listen to those who say that congestion is here to stay and that we can’t build or plan our way out of it. Vote them out of office at the next opportunity.

• Remember, congestion is worse in states where term limits aren’t in place! And remember who got us into the mess in the first place.