Coyote Blog

The hefty sales tax that funds Phoenix light rail deficits is about to expire, and as is usual, politicians not only don't want it to expire but they want to double it so they can build more over-priced rail lines.

One of the reasons that stuff like this is so hard to fight is a phenomenon called "concentrated benefits but dispersed costs."  This means that, particularly for certain crony handouts, the benefits accrue to just a few actors who, due to the size of these giveaways, have a lot of financial incentive to promote and defend them.  The costs, on the other hand, are dispersed such that the final bill might only be a few dollars per taxpayer, such that no individual has much incentive to really pay up to support the fight.

A great example of this is sugar tariffs.  These raise the price of sugar (as well as reducing our choices and effectively promoting imperfect substitutes like HFCS) so we as consumers should all fight them.  But the higher cost of sugar might only cost us, say, $20 each a year individually.   Are you really going to donate $100 in a political cause to save $20?  On the other side, these tariffs create millions and millions of dollars in profit for a few sugar producers, such that they have a lot of money and incentive to spend big on lobbying to keep the tariffs in place.

The new Phoenix light rail tax increase gives us a yet another sad example of the phenomenon:

Construction companies, engineering firms and transit service providers are the biggest early supporters of the Proposition 104 campaign to expand Phoenix transportation, while the group fighting the proposed tax increase still seeks major funding.

The MovePHX campaign, supporting the bus, light rail and street improvement plan going before city voters in August, raised $382,900 from March through the end of May, according to finance reports filed Monday.

Opposition group Taken for A Ride — No on Prop 104 received just under $417 from individuals over the same period. A second campaign committee opposed to the proposition formed after the contribution reporting period ended....

More than half of the contributions to the MovePHX campaign during the reporting period came from engineering, design and construction firms, including many that were hired for design and consultation on the Valley's first stretch of light rail.

The largest single donation came from We Build Arizona, a group of engineering, contracting and transit organizations that donated $125,000 to the campaign. TransDev and Alternate Concepts, Inc., which hold bus and light rail service contracts, contributed more than $35,000 combined.

A combined $30,000 came from police, firefighter and food and commercial worker union political action committees.

$382,900 to $417.  That is why cronyism is so prevalent.

A reader and frequent contributor sent me this:

When 120,000 people head to downtown Orlando for the big July 4 fireworks show at Lake Eola, none will be getting on SunRail.

It’s not running.

Central Florida’s $1 billion commuter-rail line usually only operates Monday through Friday, and while a few special weekend events in recent months have booked the train, one of the biggest gatherings of the year won’t.

Fireworks at the Fountain, in addition to the sky show, will feature more than 25 vendors, live music and children’s activities.

But Orlando city staff researched the addition of SunRail service, but found it wouldn’t work, said Cassandra Lafser, the city’s public information officer.

“Several factors contributed to this decision, including safety, availability and costs,” Lafser said in a prepared statement.

“The city’s concerns included: total train capacity, safety and security, hours of operation, pedestrian wayfinding and transport operations between the downtown stations and Lake Eola, and funding availability.”

Patrick Everson has the first of a two-part series of editorials in the Las Vegas Review-Journal on light rail.  In this first part, he is nice enough to refer to much of what I have written here about the problems with Phoenix Light Rail.  You can find his editorial here.

As I have written before, Phoenix has seen its total transit ridership flat to down since it built its light rail line.  This after years of 6-10% a year increases in ridership.  Most cities, even the oft-worshipped Portland, have seen the same thing.  Here is the chart for Phoenix (if you look closely, you can see how they fudged the bar scaling to make light rail ridership increases look better).

The reason is that per passenger, or per mile, or per route, or whatever way you want to look at it, rail systems are 1-2 orders of magnitude more expensive than buses.  Since most cities are reluctant to increase their spending on transit 10-100x when they build trains (and to be fair, proponents of rail projects frequently make this worse by fibbing about future costs and revenue expectations), what happens is that bus routes are cut to fund rail lines.  But since buses are so much cheaper, 10 units of bus capacity, or more, must be cut for each one unit of rail capacity.

The Anti-planner shows us an example in Honolulu.  No, the line is not finished so this effect has not happened yet, but you can see it from a mile away:

The city and state officials who promoted construction of Honolulu’s rail transit line now admitthat they don’t know how they are going to pay for the cost of operating that line. Between 2019, when the first part of the line is expected to open for business, and 2031, those costs are expected to be $1.7 billion, or about $140 million per year. In 2011, the annual operating cost was estimated to be $126 million a year.

Honolulu has about a hundred bus routes, which cost about $183 million to operate in 2013, or less than $2 million per route. The rail line will therefore cost about 70 times as much to operate as the average bus route.

So they have budgeted no money for operations, and are probably underestimating net operating costs as their revenue projections, as discussed later in the article, are transparently over-optimistic (this is always a good bet, since 99% of rail projects under-estimate their costs and over-estimate their ridership).  The rail line will cost as much to operate as 2/3 of their city's entire bus system, which is extensive and well-used. So how many bus routes will be cut to fund this one route?  10?  30?  70?

By the way, beyond the obvious harm to taxpayers, the other people hurt by this are the poor who are disporportionately bus users.  Rail systems almost always go from middle/upper class suburbs to business districts and seldom mirror the transit patterns of the poor.  Middle class folks who wouldn't be caught dead on a bus love the trains, but these same folks already have transportation alternatives.  The bus lines that get cut to fund the trains almost always serve much lower income folks with fewer alternatives.

Our great city is proposing to double the sales tax increase dedicated to light rail and make the increase permanent.  This all so we can spend more money to shift people from busses to a mode that is more than 10x more expensive per passenger mile.

This is the first even mild questioning of light rail I have seen, and it is certainly welcome.  It even acknowledges that the sole advantage of light rail over much more flexible and less expensive buses is that it is more appealing to the middle and upper classes.  Via Kevin Drum:

Josh Barro thinks our cities are building too much light rail. It's expensive, often slow, and offers virtually no advantage over simply opening up a bus line. The problem, according to a 2009 report from the Federal Transit Administration, is that "Bus-based public transit in the United States suffers from an image problem."

President Obama wants to spend something like a half trillion incremental dollars on "infrastructure".  I have found that these initiatives to sell infrastructure tend to be great bait and switch programs.  Infrastructure is generally the one type of government spending that polls well across all parties and demographics.  So it is used by government officials to pass big spending increases, but in fact what really happens is that the government takes a wish-list of stuff that most of the public would not be OK with increasing spending on, then they put a few infrastructure projects on top like a cherry to sell the thing.  They call it an "infrastructure" program when in fact it is no such thing.

Obama would never do that, right?  Hope and change?  In fact, he already has.  The first time around he sold the stimulus bill as mainly an infrastructure spending bill -- remember all that talk of shovel-ready projects?   Only a trivial percentage of that bill was infrastructure.  At most 6% was infrastructure, and in practice a lot less since Obama admitted later there were no shovel-ready projects.   (also here).  The rest of it was mainly stuff like salary support for state government officials.  Do you think he would have as easily sold the "wage support for state government officials" bill in the depth of a recession?  No way, so he called it, falsely, an infrastructure bill.

The other bait and switch that occurs is within the infrastructure category.  We have seen this at the state level in AZ several times.  Politicians love light rail, for some reason I do not understand, perhaps because it increases their personal power in a way that individual driving does not.  Anyway, they always want money for light rail projects, but bills to fund light rail almost always fail.  So they tack on a few highway projects, that people really want, call it a highway bill and pass it that way.  But it turns out most of the money is for non-highway stuff.  That is the other bait and switch that occurs.

Expect to see both of these with the new infrastructure proposal.

By the way, Randal O'Toole has a nice summary of the drawbacks of light rail and trolley spending

For the past two decades or so, however, much of our transportation spending has focused on infrastructure that is slower, more expensive, less convenient, and often more dangerous than before. Too many cities have given up on trying to relieve congestion. Instead, they have allowed it to grow while they spend transportation dollars (nearly all paid by auto users) on other forms of travel such as rail transit. Such transportation is:

• Slower: Where highway speeds even in congested cities average 35 miles per hour or more, the rail transit lines built with federal dollars mostly average 15 to 20 mph.
• More expensive: In 2013, Americans auto users spent less than 45 cents per vehicle mile (which means, at average occupanies of 1.67 people per car, about 26 cents per passenger mile), and subsidies to roads average under a penny per passenger mile. By comparison, transit fares are also about 26 cents per passenger mile, but subsidies are 75 cents per passenger mile.
• Less convenient: Autos can go door to door, while transit requires people to walk or use other forms of travel, often at both ends of the transit trip.
• Less safe: For every billion passenger miles carried, urban auto accidents kill about 5 people, while light rail kills about 12 people and commuter trains kill 9. Only subways and elevateds are marginally safer than auto travel, at 4.5, but we haven’t built many of those lately.

In the Warren Meyer style guide, any phrase like this one -- Why Can't Public Transit Be Free? -- would be reworded "Why Can't Other People Pay For My Transit" so as to be more accurate.  Because it clearly can never be free (short of an Iain Banks post-scarcity future world).  An even more generic title for this would be "why can't non-users pay for users' services?"

One other thought -- since when did "getting people out of their cars" become the goal of public transit?  Is that really a goal worth spending money on?   I understand that many transit advocates have this goal nowadays, but in the new systems being built (outside of New York) there is little or no energy reduction in moving people by transit.   And the cost per passenger mile of these system is much higher than for building more roads for more cars.   And it is no longer about mobility for poorer folks -- new light rails systems cost a fortune, and are built to appeal to professionals and the middle class, while crowding (due to their huge costs) buses that are the traditional source of mobility for the poor.

I get the sense that the argument for transit nowadays is almost aesthetic -- people find cars and roads and suburbs aesthetically distasteful, and want to replace them.  That would explain the focus on insanely expensive light rail systems, that look cool, over buses that actually move people for a reasonable cost.  I saw a great quote the other day, I wish I can remember who said it.  Something like, "Progressives aren't trying to create a rational world, they are trying to create Portland."

update:  Thanks to a reader, here is the actual quote (and source):  "The goal of progressivism is not to make the world rational; it’s to make the world Portland."

This DOT table, pointed out to me by Randal O'Toole, shows that money spent on highways could be increased immediately by over 30% if highway money was not diverted to transit and other uses.  About 13% of state gas tax revenues meant for highways are diverted to non-highway transit projects (e.g. light rail boondoggles).  Another 9.4% are diverted to general funds, and may not be applied to transportation projects at all.   The same table shows that if all state MVD receipts were used to support investments for cars rather than transit and general spending, money available for roads would increase 45% from those funds.

Transit projects should be supported by their own riders.  This will never happen, because they are so egregiously expensive per passenger-mile that no one would ride them if their trip were not subsidized by the rest of us**.  And I am exhausted with having folks argue that highways are "subsidized" because they require tax money beyond the gas taxes (which are essentially a user fee) when these extra tax monies for highways would be largely unneeded if the highway funds were used for highways.  The diversion to general funds is particularly troubling, since sleazy government officials are obviously trying to piggy-back off the popularity of highway infrastructure investment to generate a slush fund for activities taxpayers are less likely to support.

And please do not tell me that as a highway driver, investments in transit are doing me a favor by getting cars off the road.  Transit investments are so expensive per passenger mile that the same money spent getting a few cars off the road via transit would substantially increase road and highway capacities.  A dollar of highway investment carries at least an order of magnitude more passenger miles than a dollar of transit spending.

** I am always amazed that supporters of such transit projects call light rail projects "sustainable".  Forget for a minute that they seldom use less energy per passenger mile than driving.   Think about all the resources that go into them.  This at first seems like a hard problem -- how do we account for all the resources that go into transit vs. go into driving.  But then we realize it is actually easy, because we have a simple tool for valuing resource inputs:  price.  Prices are a great miracle.  They provide us with a sort of weighted average of the value and scarcity of the resources (both hard, like titanium, and soft, like labor and innovation) that go into a product.  So if light rail costs 10x or more per passenger mile than driving, as it often does, this means that it uses ten times the value of resource inputs as driving.  This is sustainable?  I do not think that word means what you think it means.

More street car craziness.  I love the phrase "modern street car".  Like an up-to-date stagecoach.

Despite mounting construction costs and uncertainty over federal funds, Tempe is still seeking to be the Valley's first city with a modern streetcar system traveling through its downtown.

...

Valley Metro executives Steve Banta and Wulf Grote reviewed the project with the Tempe City Council this month.

The new alignment has lengthened the route from 2.6 miles to 3 miles and increased costs. The cost range is now $175 million to $200 million depending on the type of vehicle technology used.

First, there is no way it comes in for these numbers, but even accepting the mid-point of their estimates this is $62.5 million a mile or $11,837 per foot.  Of course there is also the operating cost, which will certainly lose money since there is no way people are going to pay much for a maximum 3 mile ride.  My prediction is that they will sell the project promising that there will be a fare that helps cover costs but they will drop the fare quickly once implemented  (because no one will ride this thing unless it is free).  And and don't forget the cost of the loss of an entire lane of roadway each way to the trains.

Just consider how much less 4 buses running in a 3-mile circle would cost, and they would only consume a tiny fraction of the existing road capacity, rather than taking up an entire lane just for themselves.  This is just a huge upper-middle class subsidy, a special favor to rich people who think buses are too low class to ride but are OK being seen on a train.  Madness.

My best guess is that these kinds of projects have become prestige projects for government officials.  This is the way they show off to each other and act as a portfolio for them to seek larger jobs in bigger cities.

I just don't get it -- why the obsession with streetcars?  Why pay zillions of dollars to create what is essentially a bus line on rails, a bus line that costs orders of magnitude more per passenger to operate and is completely inflexible.  It can never be rerouted or moved or easily shut down if changes in demand warrant.  And, unlike with heavy rail on dedicated tracks, there is not even a gain in mobility since the streetcars have to wallow through traffic and intersections like everyone else.

What we see over and over again is that by consuming 10-100x more resources per passenger, rail systems starve other parts of the transit system of money and eventually lead to less, rather than more, total ridership (even in Portland, by the way).

But apparently, in DC the cannibalization of buses is even worse, as the streetcars are getting in the way and slowing buses down:  (hat tip to a reader)

Three District mayors have backed plans to return streetcars to D.C. streets, following in the transit-oriented footsteps of Portland, Ore., and other cities. Officials in the nation’s capital want to build a 20-plus-mile network connecting neighborhoods from Georgetown and Takoma to Anacostia, linking richer and poorer communities, giving people an alternative to the automobile and, they argue, spurring development along the routes. Eventually they see a system stretching about 37 miles.

... The inaugural 2.2-mile line, on H Street and Benning Road NE, is viewed by some as proof that the concept will work. Others see the opposite.....

Buses are facing significant delays behind the streetcars, which are making regular practice runs meant to simulate everyday operations. “We’re having to go around them. Since H Street has narrow lanes to begin with, it’s a challenge,” Hamre said. He said he has instructed bus drivers to pass streetcars only when they are stopped.

“That reduces the risk of misjudging,” Hamre said.

But it also forces faster-moving buses to hang back and wait for the less-agile streetcars, prolonging commutes for the much larger population of bus riders.

Back in 2010, District transportation officials estimated that 1,500 people a day will ride streetcars on the H Street/Benning Road line once it opens. But the X-line Metrobuses that travel the same streets — and go farther east and west — carry more than 12,000 passengers a day.

Apparently, the line creates so much value that no one is willing to pay even a dollar to ride it, so they will not be charging for the service for now.  By the way, from the "I don't think that word means what you think it means" files, note the use of the term "revenue service":

Early plans were to charge $1 or more a ride. But now “DDOT has determined that fares will not be collected at the start of revenue service,” according to a DDOT plan dated Oct. 2.

And from the "and other than that, how was the play Mrs. Lincoln" files:

District officials said the move will solve a pair of outstanding problems: They don’t have a system in place to collect fares, and ridership is projected to be underwhelming.

I bring your attention back to this chart from this post the other day about light rail killing transit growth.

I have no evidence that this chart was deliberately manipulated, but somehow the light rail ridership bar for 2014 got exaggerated.  It certainly seems suspicious.  Light rail ridership went up from 2013 to 2014 by only about 45,000, or 0.3%.  This is negligible  We should not even see the bar move.  Note the total ridership in 2011 and 2010 when ridership fell by 86,000 but the bar lengths are almost indistinguishable.  The rail ridership looks to my eye like the bar is 7-9% longer, not 0.3% longer.  In fact, the bar for 2014 clearly goes past the halfway point between 10 and 20, despite the fact that 14.3 should be less than halfway.  In fact, the 2014 rail increase of 45,000 is graphed as visually larger than the 1.3 million decrease in busses.

Check this graph out from the Phoenix Metro web site.  It shows bus ridership in years past, and more recently both bus and light rail ridership.

You can see a few things.  First, note that almost all the rail ridership came at the expense of bus ridership.  It  was almost a pure 1:1 substitution.  The bus ridership, even with a half year of light rail being open, was 65.7 million in 2009.  Total ridership was only 67.6 million in 2010 and 2011.  Yes there is a recession here, but of the 12 million or so in light rail ridership, at least 10-11 million of that came out of buses.  Essentially, we paid $1.4 billion in capital costs to move 10 million riders to a mode of transit that is at least an order of magnitude more expense.  Nice work.

Second, note that after over 12 years of growth, with the onset of light rail transit ridership has stagnated for 6 years.  Some of this, at least initially, is likely due to the recession but in fact recessions are supposed to spur transit ridership, not reduce it, as people look for lower cost alternatives.  There is a good explanation for this.  Because light rail is so much more expensive, the cost per rider for the entire transit system has skyrocketed.  With budgets unable to be increased this fast (and with fares covering only a tiny percentage of rail costs), the system must cut back somewhere.  Since rail can't really be cut back, bus routes are cut.

If we had seen the same growth rate from 2009 to 2014 as we had seen in the twelve years prior, we should have over 86 million trips in 2014 (note these are fiscal years, and fiscal year 2014 is already closed, so this is not partial year data).

We paid, and continue to pay (since rail must be subsidized heavily) billions of dollars to reduce transit ridership.

Yuk.  $14 million giveaway to developer

Last week, Phoenix City Council members approved a deal for the $82 million high-rise, mixed-use Phoenix Central Station. The development at Central Avenue and Van Buren Street will include about 475 apartments and 30,000 square feet of commercial space.

As part of the deal, Phoenix would give the developer, Smith Partners, a controversial tax-abatement incentive called a Government Property Lease Excise Tax for the tower portion of the project. The agreement allows developers to avoid paying certain taxes through deals that title their land or buildings to a government entity with an exclusive right to lease the property back.

In this case, the city already owns the land, but the developer will eventually take title over the building. The arrangement allows them to not pay property taxes for 25 years, which a city official estimates would be $600,000 to $900,000 per year based on conversations with the developer. However, the developer will make smaller lease payments back to the city, and, after eight years, pay taxes on those lease payments.

The agreement requires the developer to pay the city a portion of its revenue, which will net the city an estimated $4.4 million over the first 25 years

The difference from the $4.4 million they will actually pay and 25 years at $750,000 in property taxes is about $10 million (fudging concerns about present value and such).  I used to be OK with anything that reduced taxes for anyone, but now I have come to realize that discounting taxes for one preferred crony just raises taxes for the rest of us.  [Props to Republican Sal Deciccio for being one of two to vote against this]

Here is my guess as to what is going on here.  Phoenix paid a stupid amount of money to build a light rail line that costs orders of magnitude more money than running the same passengers in buses.  One of the justifications for this gross over-expenditure on the light rail boondoggle was that it would spur development along the line.  But it is not really doing so.  Ridership on light rail has been stagnant for years, as has been transit ridership (most of the light rail ridership gains simply cannibalized from bus service, shifting low-cost-to-serve bus riders to high-cost-to-serve train riders).

So they need to be able to show transit-related development to justify future light rail expansions.  Thus, this subsidized development along the rail line.

I will make a firm bet.  Within 5 years we will have Phoenix politicians touting this development as a result of the light rail investment with nary a mention of the $10 million additional taxpayer subsidy it received.

The Arizona PIRG has a report that can be summarized as "transit is increasing fast, driving is falling, all of our future investment should be in transit".  The Valley Fever blog has the story:

Arizonans are driving less, and relying more on public transportation, according to a report from the Arizona Public Interest Research Group Education Fund.

The shift is causing the Arizona PIRG Education Fund to recommend that public officials shift funding away from more highway projects, and more toward other transportation options."

"We recommend that transportation officials and elected leaders look at the data today, and not outdated assumptions, to make sure that any highway projects are absolutely necessary," Arizona PIRG Education Fund executive director Diane Brown tells New Times....

In the Phoenix metro area, the light rail opened in late 2008 and is already experiencing ridership numbers that weren't projected to be reached until the year 2020. In 2013, the Valley Metro transit system experienced a record high annual ridership, and between 2007-2013, boardings on Valley Metro transit service jumped from 60 million to more than 75 million - an increase of 25 percent. The Northern Arizona Intergovernmental Public Transportation Authority recently saw its highest monthly ridership in October 2013. And in Yuma, ridership on Yuma County Area Transit has tripled since 2011.

The report suggests that public officials re-allocate their focus and funding, away from building new highways and toward more transportation options.

This is a fantasy.

There is an enormous amount of obfuscation going on here.  The percentage rise of public transit trips is actually the miracle of small numbers -- small changes on an even smaller base.  The point of these charts is to try to say that Arizonans use a lot of transit and we should dump more billions into these projects.  As it turns out, despite all the huge public investment, transit is still a rounding error.

Note that, from their own report, driving vehicle miles per capita are 9175 per person per year.  So lets look at transit.  They exaggerate by showing averages for Phoenix and Tucson, where transit use is higher, not for the whole state like they show vehicle miles.  The total state transit miles per person in the same year, using their numbers, turns out to be as low as 64 (if no one outside of Phoenix or Tucson uses transit) and as high as 110 (if everyone outside of Phoenix and Tucson uses transit at the same rate as in the cities).  The likely number is around 75.

This means that after all these billions and billions of transit spending, transit trips are 0.8% of vehicle trips (75 vs. 9175). That is a rounding error.  You sure wouldn't get that impression from the report.  The Public Interest Research Group has a funny view of "public interest", putting the desired transportation mode of the 0.8% over the desired choice of the 99.2%

Well, you say, I should compare the increase in transit to the decrease in driving.  OK.  Again using their numbers:  Vehicle driving miles went down 348 per capita over the study period.  In the same time, per capital transit miles went up by about 26 in Phoenix and Tucson (likely less in the state as a whole).  So, at best, transit ridership accounts for about 7% of the drop in driving.

This is not nothing, but hardly justifies the enormous increase in transit spending over the last 15 years and the billions and billions in capital investment.

Oh, and by the way, Phoenix Light Rail ridership has cannibalized bus ridership about 1 for 1.  That means all that investment in light rail has just shifted riders to a more expensive, less flexible transit mode.  But that is another story.

From Randal O'Tooole

The American Public Transportation Association (APTA) argues that a 0.7 percent increase in annual transit ridership in 2013 is proof that Americans want more “investments” in transit–by which the group means more federal funding. However, a close look at the actual data reveals something entirely different.

It turns out that all of the increase in transit ridership took place in New York City. New York City subway and bus ridership grew by 120 million trips in 2013; nationally, transit ridership grew by just 115 million trips. Add in New York commuter trains (Long Island Railroad and Metro North) and New York City transit ridership grew by 123 million trips, which means transit in the rest of the nation declined by 8 million trips. As the New York Timesobserves, the growth in New York City transit ridership resulted from “falling unemployment,” not major capital improvements.

Meanwhile, light-rail and bus ridership both declined in Portland, which is often considered the model for new transit investments. Light-rail ridership grew in Dallas by about 300,000 trips, but bus ridership declined by 1.7 million trips. Charlotte light rail gained 27,000 new rides in 2013, but Charlotte buses lost 476,000 rides. Declines in bus ridership offset part or all of the gains in rail ridership in Chicago, Denver, Salt Lake City, and other cities. Rail ridership declined in Albuquerque, Baltimore, Minneapolis, Sacramento, and on the San Francisco BART system, among other places.

It looks like Chris Christie was doing his part to increase transit ridership in New York.

By the way, the phenomenon of small increases in light rail use offset by large drops in bus ridership is extremely common, almost ubiquitous.  Cities build flashy prestige rail projects that cost orders of magnitude more to build and operate than bus service, and are much less flexible when the economy and commuting patterns change.  Over time, bus service has to be cut to pay the bills for light rail.  But since a given amount of money spent on buses tends to carry more than 10x the passenger miles than the same amount spent on light rail, total ridership drops even while spending rises.  That is what is going on here.

Light rail is all about politician prestige, civic pride, and crony favoritism for a few developers with land along the route.  It is not about transit sanity.

Kevin Drum has a very good, succinct description of how the rail (light rail, high speed rail, commuter rail) spending game works, in the context of California High Speed Rail (HSR)

As near as I can tell, the HSR authority's plan all along has been to simply ignore the law and spend the bond money on a few initial miles of track. Once that was done, no one would ever have the guts to halt the project because it would already have $9 billion sunk into it. So one way or another, the legislature would keep it on a funding drip.

It's a time-tested strategy, and it might have worked if not for a meddling judge.

Here is a great example of this from Chicago, where all they could afford at first was a single station.

I applaud Drum for opposing this boondoggle, but if he really understands this so well, I wonder why he seldom demonstrates any skepticism about other rail and mass transit projects.

Rail projects, particularly light rail projects that are being constructed or proposed in nearly every major city, are a classic example of a nominally Progressive policy that ends up hurting all the people Progressives want to help.

Bus-based mass transit is an intelligent way to help lower income people have more urban mobility.  Buses are relatively cheap and they are supremely flexible (ie they can switch routes easily).  Such urban bus systems, which like any government run function often have their problems and scandals, never-the-less can be reasonably held up as a Progressive victory.

But middle and upper class people, for whatever reason, don't like buses.  But they do like trains.  And so cities, under middle class pressure, have shifted their mass transit investment to trains.  The problem is that trains are horrendously expensive.    The first 20-mile leg of Phoenix light rail cost over $1.4 billion, which amounts to about $70,000 per daily round-trip rider.  Trains are also inflexible.  You can't shift routes and you can't sell them-- they have to follow fixed routes, which tend to match middle class commuting routes.

Because the trains are so expensive to operate, cities that adopt them quickly start cutting back on bus service to feed money to the rail beast.  As a result, even transit poster-boy cities like Portland have seen the ridership share of mass transit fall, for the simple reason that rail greatly increases the cost per rider and there is not an infinite amount of money available to transit.

I have written many times about my problems with Phoenix light rail -- examples are here and here.  We paid $1.4 billion in initial capital costs, plus tens of millions a year in operating losses that must be subsidized by taxpayers, for a line that carries a tiny tiny percentage of Phoenix commuters.  Capital costs equate to something like $75,000 per daily round trip rider  -- If we had simply bought every daily rider a Prius, we would have save a billion dollars.

But, as with most things the government does, it is worse than I thought.  Over the last several years, I have been treating these daily light rail riders as if they are incremental users of the area's transit system.  In fact, they are not, by Valley Metro's (our regional transit authority) own numbers.  Here is the key chart, from their web site.

Compare 2009 to 2012.  Between those years, light rail ridership increased by just a hair under 8 million.  In the same time period, bus ridership fell by just a hair over 8 million.  So all new light rail ridership is just cannibalizing buses.  We have spent $1.4 billion dollars to shift people to a far more expensive transit platform, which does not offer any faster service along its route (the light rail has to fight through traffic lights on the surface streets same as buses).

This is a pattern seen in most cities that adopt light rail.  Over time, total ridership is flat or falls despite rising rail ridership, because rail is so expensive that it's operation forces transit authorities to cut back on bus service to balance their budgets.  Since the cost per rider is so much higher for light rail than buses, a dollar shifted from buses to light rail results in a net reduction in ridership.

Postscript:  Looking at the chart, light rail has achieved something that Valley Metro has not seen in decades -- a three year period with a decline in total ridership.  Sure, I know there was a recession, but going into the recession the Valley Metro folks were arguing that a poor economy and rising gas prices should boost their ridership.

I am constantly amazed at just how dogged the support for even god-awful light rail projects is among city-leader-types.  The projects cost orders of magnitude more per passenger mile to move people, they are inflexible once built (you can't move them if commuter flows change) and they tend to actually reduce total transit ridership in a city because they suck resources from bus transit.  Readers will know I have been a critic of Phoenix light rail for years.  Its capital cost was something like $75,000 per daily round trip rider and it was built in the least dense major city (meaning the least appropriate major city for rail) in the world.

Well, Phoenix is just about to spend $100 million per mile (!!) to extend our line 3.2 miles.  The extension is expected (by the optimistic people who support it) to attract 5000 daily riders, which actually means 2500 daily round trip riders by the way they do the numbers.  Yes folks, that math is right -- using the optimistic sure-to-be-exceeded cost numbers from the supporters and the optimistic sure-to-be-too-high ridership numbers from supporters, this will cost $120,000 per round trip daily rider, or enough to buy each daily rider a Prius and still save nearly a quarter of a billion dollars.  (By the way, with the low density in Phoenix and the fact the most promising route was built first, it should be no surprise there is a decreasing bang for the buck, even including network effects).

Why?  Why, why, why spend $300 million to benefit 2500 people?  I think this is the answer:

“It’s critical to Phoenix and the area of 19th Avenue. We can’t be a great city unless we have a great light-rail system,” said Greg Stanton, mayor of Phoenix and chairman of the Metro light-rail board.

So, just like you can't be among the elite in Manhattan without a house in the Hamptons, you can't be a real city without a light rail system.  We are spending billions solely to enhance the prestige of our city officials.  Ayn Rand had a great essay decades ago on public officials and prestige, I think as an essay included in the Virtue of Selfishness.  For those of you who are libertarian-ish but perhaps are jaded on her novels (I am increasingly in that category), you should definitely check out some of her essay work.  All the great philosophical thinking and defense of capitalism without the cardboard characters.

PS-  at this rate, it will only cost us $384 billion to serve the entire 3.5 million people in the Phoenix metro area with light rail.

I don't know what it is about rail transit advocates, but for some reason they seem to believe that capital costs of rail construction are somehow irrelevant.  There is no other way to explain this (thanks to a reader for the link):

A new rail station that opens next Wednesday in Ramsey could give the Northstar Commuter line the ridership boost it needs for an eventual extension to St. Cloud, an Anoka County official says.

But even as a ribbon-cutting ceremony Thursday heralded the arrival of the seventh station along the line, others have questioned the cost: about $13 million, or an average of roughly $130,000 for each of the 100 new daily round-trip riders the station is expected to attract. Some also wonder whether the new station will merely siphon riders from the two stations on either side of it.

But apparently the rail authority thinks the skeptics are being too pessimistic.  They expect it to be MUCH better:

Anoka County Commissioner Matt Look, a former Ramsey council member, predicted the new station will exceed the 100 daily round trips that Northstar officials hope it will generate. With a bus line being discontinued because of the station's arrival, and a 230-unit apartment complex going up near the site, Look said the station could increase Northstar's overall ridership by 25 percent. Based on current figures, that would be a rise of about 600 rides per day.

So the station's greatest supporter is optimistically expecting 300 daily round trip riders per day.  That makes the cost of the station per round-trip daily rider "only" $43,000.    Or approximately enough to buy every rider a new Prius and still save about half the costs.

David Zetland sent me this writeup on a plan I had not heard of -- apparently Amtrak has a $150 billion plan to improve speeds on the northeast corridor

Take, for example, Amtrak's proposal to bore a 10-mile rail tunnel underneath Philadelphia. As Steve Stofka, a transport blogger, explains, this proposal would require the most expensive type of tunnel imaginable—"It is freaking expensive to bore a ten-mile-long tunnel through an alluvial floodplain under a highly urbanised area—and to maintain it, since it will reside below the water table," Mr Stofka writes. At $10 billion, he notes that the project would be about three times as expensive per mile as the Gotthard Base Tunnel under the Swiss Alps. And all this is for marginal improvements in speed and access. The tracks around and through Philadelphia aren't, generally, big obstacles to high-speed rail—the tunnels in and around Baltimore, Maryland are. It would be much cheaper to replace Baltimore's terrible tunnels than to build a fancy new one under Philadelphia.

The Philadelphia tunnel, unfortunately, isn't even the worst part of Amtrak's plan. That honour goes to a $7 billion renovation of Washington's Union Station (pictured), which Slate's Matthew Yglesias rightly calls"insane".

From the AZ Republic

Valley Metro is set to break ground today on the first light-rail expansion, a 3.1-mile stretch into downtown Mesa that city leaders hope will bring a sorely needed economic boost.

The $200 million extension is expected to attract thousands more East Valley riders daily and potentially nurture new development along the line.

If we assume "thousands" means two thousand, then this means the metro area is spending $100,000 per new daily rider for this expansion, not including the additional operating subsidies that will be required to run the trains.  Given that none of these people will likely be able to give up their car, since the route goes so few places, why should they get a $100,000 subsidy?

How about we charge them what it costs?  The payment on a 30-year 5% bond is around $13,000,000 a year.  So if there are 2,000 additional round trip riders boarding or debarking at these new stations each day, that is 1.46 million trips.  So the tickets should be $8.90 per trip plus the cost of actually running the train.  We'll round it to $10, though the cost is probably higher.  If people really think this train is so great, they should be more than willing to pay the $10 a trip it costs for the expansion.

No, they are not?  What this means is that people think this is a really go idea as long as someone else pays.

PS-  If these seem unreasonably high, or simply an artifact of looking at this expansion on a stand-alone basis, think again.  For the original system, the capital cost was $75,000 per round trip rider and the public subsidy in 2010 was $32.73 per trip.  In other words, on the main system, riders would have to pay $32.73 a trip more to be actually covering the cost of the service they are receiving.  So if anything, these incremental numbers for the expansion are probably optimistic.

PPS - I am sure transit authorities would argue that the public did support paying for other people's transit by approving the sales tax increase for this purpose a few years ago.  But the train piece was packaged in with a bunch of highway improvements in the same proposition that people really did want.  It would never have passed on its own.  Transit official may disagree, but the proof is in their actions - they have never allowed the public to vote on the transit piece alone.

From Zero Hedge:

The hoped-for April spike in personal income tax revenues for the State of California fell once again below theoveroptimistic assumptions used to get the budget to “balance.” Instead of the $9.4 billion that the government had counted on collecting in April, it only collected $7.4 billion, according to the nonpartisan Legislative Analyst's Office. A 21% shortfall! In addition, corporate taxes were $450 million below forecast. After months of “disappointing” tax revenues, the total shortfall in income taxes now amounts to $3.5 billion for fiscal 2012 ending June 30.

The budget, supposedly balanced when it was passed last summer, had been spewing red ink from day one. Tax revenues were one problem. Expenditures were the other. The most recent re-revisions pegged the deficit at $9.2 billion. That was a few weeks ago. Now it’s going to be re-re-revised to nearly $12 billion.

Just how bankrupt does a budgeting process have to be for a budget that is supposedly in balance turn out to be $12 billion overdrawn barely 9 months later?  I have a California state tax refund on my desk -- better cash it quick or else its going to be replaced by scrip again.

The same article has this interesting tidbit about California high speed rail:

The CHSRA plan assumes that it would cost 10 cents per passenger mile (the average cost of carrying one passenger one mile at a given load factor) when international high-speed rail systems averaged 43 cents per mile, according to a report that just surfaced. The low-cost leader was Italy with 34 cents per mile; at the upper end were Germany and Japan with 50 cents per mile; Amtrak’s Acela Express, though not truly high speed, was in the middle with 44 cents per mile. And in California, it’s going to be 10 cents per mile?

The CHSRA correctly assumes that train tickets compete with air fares and the cost of driving, which, despite our incessant complaints, are lower in California than overseas. Thus, the US market requires cheaper tickets. And to make the project appear profitable, and thus more digestible for the taxpayer, the CHSRA lowered its projected operating costs to less than a quarter of the international average.

But if actual operating costs are 43 cents per mile and not 10 cents per mile, annual subsidies of $2 billion to $3 billion would be required just to keep the trains running, according to the report. Yet, AB3034, the California High-Speed Train Bond Act, makes these subsidies illegal. A conundrum that the Legislature, the Administration, and the CHSRA have so far successfully ignored.

I have said for a long time that I don't really think there is a lot of outright media bias in the sense of conspiring to bury or promote certain memes.   But there are real issues with the leftish monoculture of the media losing its skepticism on certain topics.

For example, high speed rail is one of those things we are just supposed to do, from the Leftish view.  Harry Reid's justification for a high speed rail line is typical:  he wants to see  "America catch up with the rest of the world".  Everyone else has these things, so it must be some failing of ours that we don't.  For the left, the benefits of high speed rail are a given, they are part of the liturgy and not to be questioned.  Which means that it is up to outsiders to do the media's work of applying some degree of skepticism whenever a high speed rail project is proposed.

Thus we get to this article on high speed rail about a supposedly "private" rail line from LA to Las Vegas.  As is usual in the media, none of the assumptions are questioned.

Greg Pollowitz gets at some of the more obvious problems.  First, it is fairly heroic spin to call a line that currently is getting $4.9 billion in public subsidies "privately funded."  Second, he points out that, like the proposed California high speed rail line, this is a train to nowhere as well

And second of all, having grown up in Los Angeles — and having lied to my parents to drive to Vegas since the time I was 16 years old — I consider myself somewhat of an expert on the Los Angeles to Vegas drive. (CNN, Fox, MSDNC — call me!) I remember Victorville fondly as the place where we’d make our food-stop and pick up some In-N-Out burgers for the final half of the journey. And I can tell you this: There is no way anybody would ever drive through L.A.’s notorious traffic only to stop halfway and hop on a train on the other side of the El Cajon Pass and in doing so give up their personal transportation once they actually get to Vegas.

I want to reality-check their usage numbers.

DesertXpress estimates that it will carry around five million round trip passengers in the first full year of operation,with the company charging fares of around $50 for a one-way trip.

OK, right now there are about 3.7 annual air passengers between Las Vegas and the southern California airports, according to rail supporters.  It is hard to get at drivers, but the Las Vegas tourism folks believe that 25% of 36 million annual visitors to Vegas come from Southern California, so that would mean about 9 million total or about 5 million driving.

What this means is that to make this work, they are counting on more than half of all visitors from Southern California (and remember this includes San Diego) taking the train.  Is this reasonable?

• The train is supposedly $50 (I will believe that when I see it).  Currently JetBlue flies from Burbank to Las Vegas for $56 in a flight that takes 69 minutes (vs. 84 for the train and remember that is from Victorville).   The standard rate from LAX, Burbank, or Long Beach seems to be around $74-77.
• Airplanes leave for Las Vegas from airports all around LA and in San Diego.  Let's take a couple of locations.  Say you live near downtown LA, not because that is likely but it is relatively central and does not feel like cherry picking.  Victorville is a 84 mile 90 minute drive AT BEST, with no traffic.  The Burbank airport is a 15 mile, 18 minute drive from LA.  LAX is just a bit further.  Victorville is 82 miles and 90 minutes from Irvine and 146 miles/144 minutes from San Diego.  Both of these Southern California towns are just a few minutes from an airport with $70-ish flights to Vegas

So are drivers going to stop half way to Vegas, once they have completed the hard part of the drive, to get on a train?  Are flyers going to drive 1-2 hours further to get to the rail terminal to say $20?  Some will.  But will more than half?  No way.

Postscript:  If you really want to promote the train, forget shoveling tax money at it and pass a law that the TSA may not set up screening operations at its terminus.  That might get a few customers, though the odds this would happen, or that it would stick over time, are minuscule.

Here is Kevin Drum, where he quotes from an Op/Ed about a new Southern California "Regional Transportation Plan/Sustainable Communities Strategy"

The plan includes expansion of housing near public transit by 60%....and projections of more than 4 million new jobs — with public transit within half a mile of most of them. Amanda Eaken of the Natural Resources Defense Council praised it as "the strongest transportation plan" in the history of "car-loving Southern California."

.... SCAG's new plan is born of the realization that as a region, we have to grow up, not out. That doesn't mean Hong Kong skyscrapers in Whittier and Redlands. It does mean more apartments near light-rail stations and more vibrant mixed-use areas like the ones in downtown Pasadena, Ventura and Brea. It doesn't mean wresting the car keys from suburban commuters. It does mean making jobs and housing accessible via foot, bike, bus and rail.

Here is his comment on this:

In theory, a plan like this should have almost unanimous support. Developers like it because they can put up denser buildings. Environmentalists like it because it's more sustainable. Urbanists like it because it creates more walkable communities. City governments like it because it creates a stronger tax base.

There's really only one constituency that doesn't like it much: every single person who already lives in these communities and hates the idea of dense, high-rise construction near their homes. So there's going to be fireworks. It'll be interesting to see how the NIMBY bloc gets bought off.

Can you spot which group of people whose  preferences have been left out?   He considers the preferences of planners, developers, environmentalists, urbanists, and current community residents.  That's everyone, right?

Yeah, except for the freaking people who are moving in and actually shopping for a home.  Apparently if you are looking for a place to live in California, everyone except for you has a say in what living choices you will find.  Want a suburban home on an acre of land -- you are out of luck (unless you get an existing one that is grandfathered in, but those are really, really expensive because they are what everyone really wants but no one in power in California will allow to be built).  Your chosen lifestyle has not been approved by your betters.