Coyote Blog

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.

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 been toying with a concept I am calling national adolescence.  My emerging theory is that civilizations go through phases much like that of a human male, and the most dangerous to all around it is adolescence.  Adolescent males can do crazy, unproductive things to show off, to count coup, to bolster their ego and perceived status.  They are more prone to being violent and dangerous, to pick stupid fights to prove their alpha-maleness rather than to achieve rational goals.

Nations often go through an adolescent phase.  Sometimes it can last for decades or centuries.  Two symptoms of this phase are 1) Imperialism and over-readiness to fight and 2) monument-building and other such show-offery.

I have written a number of times about monument building, for example here.  We see it in countries trying to build record-tall buildings -- note who is doing it, they are always the nouveau riche (e.g. Dubai).  We see it in cities wanting to have light rail systems in order to be considered a real city (ie as a status project).  We see it in every Thomas Friedman column about China doing big things while we are not.  And we see it now in the fear that somehow having China sending men into space 50 years after the US and USSR did so somehow is a marker in the decline and fall of the US.

I don't buy it.  What you are seeing, what Thomas Friedman is seeing, is adolescence.  We may regret lacking as much youthful vitality, but we should not aspire to the adolescent's poor judgement.  Our sixties space program went exactly nowhere, except to let us count coup on the rest of the world and cement our status.  The Chines space program as currently configured will achieve nothing more.

PS-  The Egyptians may be a good example.  All the great Pyramids were built when the Egyptian civilization was really young.  There are a variety of reasons why pyramid building ended, but surely a maturing confidence in their civilization's greatness must be one.

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.

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.

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.

Several times in the past I have posited that folks in power simply hate buses.  How else to explain light rail and high speed rail projects that are both substantially more expensive and substantially less flexible than buses.  Some of the reasons for this include:

• Politicians like rail better because it is sexier.  Period.   They are trying to spend taxpayer money to support their own re-election talking points.
• Unions and city workers like rail because it is more expensive.  More money gets spent, either creating more union jobs or giving transit leaders bigger budgets which translate into higher salaries and more prestige for themselves.  And the lack of flexibility is good for them because it makes their job immune to budget cutting.  Just too many sunk costs.
• Middle and upper-middle class folks in the public have a deep disdain for buses, which they associate with poverty and blue collar labor.  Riding buses hurts their self image, even if the service is no worse than trains.  Rail is the Louis Vuitton handbag of transit.

In Phoenix, light rail requires a subsidy of $3.82 center per mile (that is the government spending above and beyond the fare), which is nearly 10x what we spend on buses.  And light rail uses more energy per passenger mile here than driving.

Anyway, this story from Iowa seems to support my point -- the government is proposing to spend tens of millions of dollars to create a rail service that is slower and more costly than existing private bus service.

The latest in lunacy in high-speed rail lunacy: at Joel Kotkin’s newgeography.com Wendell Cox reports that the U.S. Transportation Department is dangling money before the government of Iowa seeking matching funds from the state for a high-speed rail line from Iowa City to Chicago. The “high-speed” trains would average 45 miles per hour and take five hours to reach Chicago from Iowa City. One might wonder how big the market for this service is, since Iowa City and Johnson County have only 130,882 people; add in adjoining Linn County (Cedar Rapids) and you’re only up to 342,108—not really enough, one would think, to supply enough riders to cover operating costs much less construction costs.

Oh, one other thing. Cox reports that there is already luxury bus service, with plus for laptops and wireless Internet, from Iowa City to Chicago. It’s part of a larger trend for private companies to offer convenient and inexpensive bus service. A one-way ticket on the bus costs $18, compared to a likely train fare of more than $50. And the bus takes only three hours and 50 minutes to get from Iowa City to Chicago. That’s one hour and 10 minutes faster than the “high-speed” train.

I have argued for a long time that the shift of city transit departments from buses to a love affair with light rail has been a disaster.  Rail is so much more expensive per passenger mile, and so inflexible, that it generally forces a shrinkage in the total number of riders at the same time that budgets explode (example article here).

There are a lot of explanations for this phenomenon.  Part of it is incentives - heads of agencies with rail get paid more than bus-only agencies, and unions love the higher-paying rail jobs that never go away (part of the flexibility issues with rail).  Part of the explanation is cultural - rail is now hip and edgy and allegedly green and modern.  Buses are so last century.

And part of it is social/racial.  White upper middle class yuppies wouldn't be caught dead on buses.   They like trains better, particularly when they are successful in running rail routes through middle class commuting routes.  If the cost of this forces cut backs on buses that run where the poor need to go, oh well.

So, I ask you, what city in America is most famous as a model for urban planning and light rail?  Portland.  So it is interesting to see what effect this planning and transit strategy has had on the population.  I have already written here before that Portland bus service has been gutted in favor of rail, such that total ridership in the city has dropped despite spending a lot more transit dollars.  These maps from the Portland Oregonian show another effect -- shifting transit dollars to modes favored by rich white people has... caused Portland to be increasingly white.  What a surprise.  Via the anti-Planner

Last year, there were about 3.2 trillion passenger miles driven by urban drivers in cars in the US.  My point about light rail is that we can barely afford it for just a few people, given that we spent $1.3 billion to build a rail line for just 17,000 daily round trip riders in Phoenix.  If it were truly a sustainable technology, it could be applied to all commuters.  But at a national average taxpayer subsidy per light rail passenger mile of about $2**, this means that to roll light rail out to every urban commuter would cost $6.4 trillion a year in government spending, almost half our annual GDP.  If it required the subsidy rates we have in Phoenix per passenger-mile, such a system would cost over $12 trillion  year.  In fact, the numbers would likely be even higher in reality, because light rail in most cities is almost certainly built on the highest populated corridors with the most bang for the buck (though some of the diminishing returns would be offset by network effects).

Light rail only works today because we drain resources from millions of taxpayers to benefit just a few generally middle class commuters.    This is not a model that will scale.

** This includes both service on the debt, which is payment for the original construction costs, as well as annual operating losses.  This subsidy is required essentially forever.  After 20-30 years when the original bonds are paid off, by that time systems generally have to be rebuilt in their entirety   (as folks in places like Washington DC are learning).  There are probably only 5-6 cities in this country that have the urban population densities to make rail systems come even in the ballpark of working financially, and places like Phoenix, Seattle, Houston, Portland and LA are NOT among them.

Let me offer up a definition of sustainability that I think most environmentalists and progressives would accept:

We are acting in a sustainable manner if we are achieving our goals in a way that does not hamper the ability of other people in the world, or of future generations, to achieve their goals.

Most environmentalists and progressives would call light rail lines in US cities a "sustainable" technology because of its notional impact on fuel use and CO2 output (yeah, I know, but we are not going to address those assumptions today).

Let me present one fact, from Federal Transit Administration's 2009 survey of public transit authorities, whose data is linked in various ways here.  Or you can download the summary spreadsheet here.  For all US light rail systems in total:

User fares paid per passenger-mile:           $0.18

Total cost per passenger-mile:                     $2.22

Taxpayer subsidy per passenger-mile:       $2.04

Since I live in Phoenix and the Phoenix light rail system seems to get particular praise as a "success" from light rail supporters, here are the Phoenix light rail numbers;

User fares paid per passenger-mile:          $0.07

Total cost per passenger-mile:                     $3.89

Taxpayer subsidy per passenger-mile:       $3.82

So there, folks, is your sustainable technology.  As I have written before about sustainability, "I do not think that word means what you think it means."

Nationwide, non-users of light rail pay for 92% of its costs.   In Phoenix, non-users pay for 98% of the costs.  Taking the Phoenix system as an example, resources are drained from literally millions of people so that 17,000 or so people can ride it round trip each day.   Using resources from millions of people, and building up debts that will last into the next generation, to support the transit of just a few people, seems to be the antithesis of sustainability.

If there is any common denominator among progressives, it is that they have little respect for how individuals spend their money.  So they might be unmoved by the loss of resources from so many.  So lets just look narrowly at transit, which I presume the do care about.

Before Valley Metro operated a light rail system in Phoenix, they also operated a bus transit system.  This system still requires a subsidy, but it is much lower than the light rail subsidy.  In 2009, the bus subsidy was $0.74 per passenger-mile.  This means that for the same amount of taxpayer funds, Valley Metro can provide 1.0 passenger-mile by train or 5.2 by bus ($3.82/$0.74).   I can guarantee that cities building light rail are not having their budgets quintupled.  So the result is that, as light rail gets built, total transit ridership falls in most cities as rail costs crowd out existing bus services.

Update: Most light rail articles in our local papers, which have been mindless boosters of the system, generally consist of asking riders if they like the system, who inevitably answer "yes!"  This is somehow a proof the system is great.  Well, duh.  I too am likely to be happy with a service where I only pay 2% of the costs.

Update #2:  Last year, there were about 3.2 trillion passenger miles driven by urban drivers in cars in the US.  My point about light rail is that we can barely afford it for just a few people, given that we spent $1.3 billion to build a rail line for about 17,000 daily round trip riders in Phoenix.  If it were truly a sustainable technology, it could be applied to all commuters.  But at a national average taxpayer subsidy per light rail passenger mile of about $2, this means that to roll light rail out to everyone would cost $6.4 trillion a year, almost half our annual GDP.  If it required the subsidy rates we have in Phoenix per passenger-mile, such a system would cost over $12 trillion  year.  In fact, the numbers would likely be even higher in reality, because light rail in most cities is almost certainly built on the highest populated corridors with the most bang for the buck (though some of the diminishing returns would be offset by network effects).

Folks who read this site know I have been critical of Phoenix light rail since well before it was opened.  So often, folks just willfully misinterpret my criticisms.   The actual rail line and its service is pretty nice, and the facilities are quite attractive (lets see what they look like in 10 years though).  If Santa Claus had just delivered the Phoenix light rail system for free to Phoenix, I would be thrilled with it.   But Santa unfortunately was not involved, and instead the rail line was paid for by area residents, and it cost them over $75,000 per daily roundtrip rider to build, plus annual operating deficits infinitely into the future.   I would be thrilled if an Aston Martin Vanquish showed up in my garage tomorrow, but I am not going to fork over a quarter of a million bucks for one.  Ditto the light rail system.

Anyway, the 2009 FTA transit database is out, and Randal O'Toole has helpfully summarized it in spreadsheet form, which you can download here.  You can peruse your own local system.  Probably the hardest thing to figure out are the mode codes, which are deciphered here.  Since 2009 was the first full year of operation for Phoenix light rail, we can finally look at data for Phoenix on an apples to oranges apples basis with other transit systems  (it is really, really hard to squeeze useful information out of the data Valley Metro posts on their site).

I am just going to highlight two numbers for Phoenix light rail (TRS_ID 9209 in the data).

• The public subsidy per individual trip (that is one person boarding and riding one way) is $32.73!!   No one would pay this amount if it were the fare.   This equates to a public subsidy (beyond the fares paid) of $3.82 per passenger mile.  Remember, this is not a hostile analysis, but based on the numbers Valley Metro itself submits to the FTA.   Note the IRS reimbursement rate for the total cost (capital and incremental expense) of driving a car is 50 cents per mile, which drops even lower per passenger mile when the car has more than one person in it.  The average occupancy of a car is something like 1.5, which would make the cost per passenger mile of the average car to be about 33 cents per mile.  Ignoring the passenger fares, the public subsidy alone for light rail in Phoenix is 11.6 times larger [note: and yes, this includes the gas tax, so it includes a lot of the maintenance of the road infrastructure.  To include full cost of maintaining and building highways, it might have to be a few cents higher, but its not going to come anywhere in the ballpark of the light rail number].
• But we are paying more for rail to save the environment, right?  Well, the BTUs expended per passenger mile for Phoenix light rail was 4402.  This compares to the average for passenger cars as determined by the DOE at 3437 BTU/PM.  So the train actually uses 28% more energy to move one rider one mile than does the average car.

Years before the light rail system was completed, I made my light rail bet:  That with the capital cost, I could easily buy a Prius for every daily rider, and still save money.  And for less than the annual operating subsidy, I could give all the new Prius owners free gas each year.  Already my bet has proved more than correct.  But now we know that under my Prius plan, we also would have saved energy, since the Prius uses less than 1700 BTU/pm, less than a third of what Phoenix light rail consumes.

This story just floored me:

"How much is sustainability worth?" asks Pulitzer-prize winning reporter Nigel Jaquiss. "Try $65 million in public money." That's how much taxpayers will be spending on a $72 million "green" building in downtown Portland. At $462 a square foot, it will be "perhaps the most expensive office space ever built in Portland."

The director of the Oregon Environmental Council defends the building as something that can "leverage long-term outcomes," whatever that means. But she would defend it, since the state is promising OEC, 1000 Friends of Oregon, and other left-wing environmental groups office space in the building at low rents that are guaranteed to stay fixed for decades.

Although the public is paying for most of the building, "tenants will be expected to share a commitment to help advance Oregon's leadership in sustainable development, collaborate with fellow tenants, and pursue OSC's standards for energy and water use." Apparently, people who don't share those "commitments" won't be welcome, even if their taxes helped pay for the building and even if they are willing to pay more for office space than the greenies.

Sustainability supposedly bills itself as being about using a reduced amount of resources.  But this goal is already accomplished by pricing signals, as they signal the relative scarcity of resources we might want to employ.  By definition, then, building the most expensive office space ever means that they are more resources (or a mix of scarcer resources) per square foot than any other previous construction project.  How in heavens name is this "sustainable?"

Like many such public projects (e.g. light rail), this project drains resources from millions of people via taxation to benefit just a few.  It takes an approach that could never, ever be scaled to benefit everyone in the city as it would be bankrupting.  This construction uses unreasonably large resources for an application that will never come close to returning this investment and can only be funded on a small scale using the resources drained from millions of people.  How is this "sustainable?"

I will leave the answer to these questions to the reader, but here is a hint:  Those advocating projects like this tend to treat human labor as free, to be deployed like Egyptian slaves to the whim of the state planner, either via taxation or more directly through demands for free labor (e.g. in recycling programs).

As predicted by skeptics of light rail, like myself, the Phoenix light rail system is starting to kill bus service.  This is a familiar pattern -- in most cities that have added rail, from LA to Portland, total transit ridership has fallen as light rail systems have been built.  That is because rail is so expensive, and its costs are mostly fixed (ie bond payments for construction costs) and absolutely inflexible (ie you can't shift routes).  Since rail costs far more, even orders of magnitude more, per rider than buses, this means that even with modest increases in total transit budgets, total ridership falls when capacity is being shifted to much higher cost rail.  Bus service is inevitably cut, because even if you close rail lines, the costs remain.

So here we are, in Phoenix.  The article is mainly about the regional transit coalition falling apart, which I have no opinion or interest in, but you can see what is going on anyway.

A bad economy has meant that building a regional bus system in the Valley is no longer a regional endeavor.

A half-cent sales tax was supposed to be the magic bullet that paid for transit and roads. But as tax revenues continue to shrink, cuts to the plan have become inevitable.

Avondale leaders say the toll includes the decimation of future West Valley bus routes and the end of the regionalism that Proposition 400 promised....

Paul Hodgins, capital-programming manager for Valley Metro, which operates the transit system,said every region took a 25 percent cut in transit dollars.

Here is what is going on, though the article only sort of alludes tangentially to this way down in the last 2 paragraphs.  Half of the transit dollars in the sales tax increase went to rail, and half to buses.  The rail money is almost all for debt service on capital spending which has already occurred.  This money has to be spent or the local authorities will default on their bonds.  The other half was for bus operations.

Now, there is a 25% cut in the sales tax dollars from this sales tax increase.  The half that went to rail can't be touched.  So the 25% cut results in a 0% cut in rail and a 50% cut in buses.  Further, since bus service carries a lot more passenger trips per dollar spent than rail, this 25% cut will end up affecting well over 50% of the total ridership that benefited from the sales tax funds.

It is clear from the article that folks probably understand this, but no one from the AZ Republic to the transit agencies are yet ready to admit it.  Expect the proposed solution to be in the form of more taxes rather than a rethinking of transit strategy.  Rail is an albatross, and I wonder how often it has to drive failures like this before people start recognizing it as such.

Several people sent me this Reason video on light rail in Detroit

I was really struck by the cargo cult reasoning here and the confusion of cause and effect.  Because we see rail in highly developed urban areas (e.g. Manhattan) then if we build rail in a blighted area, it will soon look like Manhattan.

Note the mentions of serving sports stadiums.  As I have observed earlier, light rail systems almost always service professional sports stadiums.  Is there no limit to the public subsidies that politicians are willing to throw at sports franchise owners?

Then ending is a classic

Update: From Wikipedia, for those not familiar with cargo cults:

Cargo cult activity in the Pacific region increased significantly during and immediately after World War II, when the residents of these regions observed the Japanese and American combatants bringing in large amounts of material. When the war ended, the military bases closed and the flow of goods and materials ceased. In an attempt to attract further deliveries of goods, followers of the cults engaged in ritualistic practices such as building crude imitation landing strips, aircraft and radio equipment, and mimicking the behaviour that they had observed of the military personnel operating them.

Sure sounds a lot like Detroit, trying to bring back the prosperity.  This is actually pretty endemic in modern-day policy making, as so few people really understand the origins of wealth.  Obama's stimulus programs can be seen in the same light, as cargo cult economics.

My column in Forbes is up for the week, and discusses the failure of light rail.  In particular, it focuses on Phoenix light rail, which has been hailed by the intelligentsia as a stirring success.  Which it is ... if you are willing to completely ignore its costs.  Saying that Phoenix light rail represents an example to be emulated is roughly equivalent to saying that an Aston Martin makes a sensible middle class family car.

One reason Phoenix is a particularly bad candidate for a light rail line is that our population is so dispersed, and there are not any obvious commuting routes.  Our downtown is a destination for very few, but even here the commutes, as shown on this distribution map, are from all over, hardly very good fodder for rail (the downtown is near the "phoenix" label).  More importantly, people work all over, so taking a suburban zip code, look at where people are commuting to from suburban 85032.   Again, all over.  Notice how few are going downtown (where the light rail line is -- downtown is toward the south about where the "phoenix" map label is).  In other words, people in Phoenix are driving from all over to all over.

Update: Now here is my idea of rail running in the streets, via Shorpy

Did you ever notice that when government programs are labeled "popular," it is always by their beneficiaries, e.g.

For the second time in two years, the state universities are weighing whether to limit or even get rid of the popular AIMS scholarship, which waives tuition and fees for thousands of college students.

Since most similar government programs consist of giving people something of value for free or at least for a below-market price, aren't they always going to be popular with their recipients?  Wheat subsidies are popular with wheat farmers, light rail subsidies are popular with those who ride it, cash-for-clunkers was popular with folks who got 2-3x blue book value for their trade-ins, and education subsidies are popular with the students and parents who get them.  In this usage, then, I would argue that the word "popular" in the paragraph above is entirely tautological and should therefore be eliminated from standard usage.  The only meaningful definition of "popular" vis a vis a public program should be "popular with those who fund it."

The Tampa Rail blog has responded to my post criticizing Phoenix light rail (which the Tampa folks used as a glowing example of rail success).  Remember I wrote, in part:

Look, I don't think I have ever argued that Phoenix Light Rail was run poorly or didn't have pretty trains.   And I don't know if moving 18,000 round trip riders a day in a metropolitan area of 4.3 million people is a lot or a little (though 0.4% looks small to me, that is probably just my "pre-web" thinking, whatever the hell that is).The problem is that it is freaking expensive, so it is a beautiful toy as long as one is not paying for it.  Specifically, it's capital costs are $75,000 per daily round trip rider, and every proposed addition is slated to be worse on this metric (meaning the law of diminishing returns dominates network effects, which is not surprising in this least dense of all American cities).

Already, like in Portland and San Francisco, the inflexibility of servicing this capital cost (it never goes away, even in recessions) is causing the city to give up bus service, the exact effect that caused rail to reduce rather than increase transit's total share of commuters in that wet dream of all rail planners, Portland.  Soon, we will have figures for net operating loss and energy use, but expect them to be disappointing, as they have in every other city (and early returns were that fares were covering less than 25% of operating costs).

Of course, as with all government issues, the ultimate argument is that I am some sort of Luddite for actually demanding definable results for billion dollar government spending

Sorry Coyote, save for the topic matter I'm afraid I'm just not going to be much fodder for you. We're years past 'it's an expensive tax thing'.

We know that. We know rail like any capital project is expensive to execute and expensive to maintain - in dollars. But anyone who raises the math to me will wind up with the same big 'so what'. Community investment doesn't bother everyone the same way and different people see different value. There's no way you or I cold supernaturally understand the net benefit for or against light rail. We must simply choose to believe and pick our sides.

If you believe that just because rail is expensive they aren't worthwhile, you need to explain every public vote that has gone for implementing and expanding rail systems around the world even though most operations are publicly subsidized.

Gotta run'em well, and, over time, integrate with a city, but LR is a carefree mobility solution in areas where people choose to support and pay for it.

See, they are well past my neolithic argument, into their little post-modernist world where aesthetics and political correctness trump any actual need to demonstrate money is being used well.  Though it is interesting to see him resorting to faith as a justification.

I have two words for this person -- "opportunity cost."  On one hand, the money for this project must be taken out of private hands to build the rail line -- even leaving out the substantial individual liberties questions here, there is still some obligation to demonstrate the money is better used than it would have been in the private hands from which it is taken.  Ditto, by the way, for the stimulus bill.   On the other hand, to the extent that one wishes to spend government money to move people from A to B, one needs to demonstrate that this method is better than others.  I would argue high speed rail fails both tests.

Update: Joel Epstein and I have a go around the same issues in the Huffpo comments.

Tampa Rail writes (hat tip to a reader):

The new Phoenix light rail system is emerging as one of the most successful new systems in the country.  This is especially poignant for Tampa because in scale, project scope, and demographics, Phoenix represents the apogee of operating examples.

Over the course of its first year the system has received high marks in community integration, stunning ridership figures, and respectful financial constraint (making tough decisions on long-term planning that do not inhibit the value of its starter-line status today).  This is exactly what Hillsborough County is shooting for in its own implementation.  A perfect balance of conservative control and benchmarking combined with progressive action and democratic freedom, the latter which may finally come to Hillsborough County in the form of a referendum.  That all good stuff was achieved by such a strikingly similar auto-depenent culture is a great omen.  A starter light rail system can be championed by civic conservatives (Mark Sharpe), and civic progressives (Ed Turanchik) to great outcome....

Both pieces I link to here embarass anti-rail or anti-tax groups who are, as the Phoenix article notes, "muted" if not definetively silenced.  Their arguments against community investement were loud, often intelligent (once one bought into the ideological premise that rail systems must 'pay for themselves' and that community investement is somehow inherently evil - points not firmly established by any means among rationale individuals), and grossly atypical.  I will forever hype on how mechanical, unchanging, and how pre-web these attacks were formulated.

Ooh, how can I overcome my embarrassment?  Look, I don't think I have ever argued that Phoenix Light Rail was run poorly or didn't have pretty trains.   And I don't know if moving 18,000 round trip riders a day in a metropolitan area of 4.3 million people is a lot or a little (though 0.4% looks small to me, that is probably just my "pre-web" thinking, whatever the hell that is).

The problem is that it is freaking expensive, so it is a beautiful toy as long as one is not paying for it.  Specifically, it's capital costs are $75,000 per daily round trip rider, and every proposed addition is slated to be worse on this metric (meaning the law of diminishing returns dominates network effects, which is not surprising in this least dense of all American cities).

Already, like in Portland and San Francisco, the inflexibility of servicing this capital cost (it never goes away, even in recessions) is causing the city to give up bus service, the exact effect that caused rail to reduce rather than increase transit's total share of commuters in that wet dream of all rail planners, Portland.  Soon, we will have figures for net operating loss and energy use, but expect them to be disappointing, as they have in every other city (and early returns were that fares were covering less than 25% of operating costs).

PS- I get a lot of comments that I have some weird anti-train bias.  Actually, I have an n-scale model railroad in one room of my house, and spent a lot of my teenage years traveling along rural rail lines and photographing trains.  I love trains.  I just don't like stupid investments.

PPS- I was just thinking, on the basis the Tampa writer declares the building of Phoenix Light Rail a raving success, I could say the same thing about buying a super-size 100" flat screen TV for $50,000.  It is beautiful.  Everyone who sees it will love it.  It works flawlessly.  Lots of people will be able to enjoy it at one time.  In fact, it is the greatest, most sensible and successful purchase of all time as long as you never mention the cost.  Which is, by the way, why only one person I have ever met has one (I happened to be at a Reason reception the other night and the homeowner had such a beauty on his living room wall).

Update: I try to anticipate every argument in these posts.  The one other argument is that rails takes congestion off roads.  But for most of its length, Phoenix light rail displaced one lane of road in each direction.  These lanes had a capacity as large or larger than what Phoenix light rail carries.  The were also much cheaper to build.  I must say I liked my quote from that post

If running trains requires, as you suggest, draining resources from millions of people just to move thousands, how is it sustainable?

From the AZ Republic, which just can't stop itself from shamelessly cheerleading any effort to spend billions on rail in Phoenix (perhaps the world's worst candidate for rail transit given its density and distribution of businesses).

Enough people would board a train in the Valley's suburbs that a future commuter-rail system would be as popular as some of the busiest lines in the West, new studies have found.

Well, that's a low bar.

A trio of yearlong rail studies, in nearly final form, indicates commuter rail could carry almost 18,000 passengers a day by 2030. Planners at the Maricopa Association of Governments

say, based on the findings, they favor a 105-mile, X-shaped system that could feature 33 stations and cost roughly $1.5 billion. That's a little more than the Valley's 20-mile, light-rail starter line.

If this was presented to me as a business opportunity, I would have had them stop right there.   Even before inevitable cost overruns and over-confidence in ridership, even with the supporters' numbers, they want $1.5 billion to carry 18,000 people a day.   That is a capital cost of $83,000+ per daily rider, beating the old record of Phoenix light rail which cost around $75,000 per daily rider.

Planners assume the trains will recoup about 40 percent of their expenses, based on the national average for similar service. The average fare would be about $6 to $7, Wallace said, although no detailed study has gone into fares. Generally, rates would go up the farther the trip.

Can you imagine any other investor in the world other than the government making an investment knowing that in the best case of its strongest supporters revenues will only cover 40% of costs?  And why should the rest of us subsidize folks who live in outlying areas to commute?  They moved to those areas in large part because housing was cheap and cost of living was low, with the knowlege they had a long commute.  So those of us with the forsight to live close to work have to subsidize them?  This is a really valuable service for them but they can't even pay half the cost?

Further, lets look at those cost estimates.  If we get 18,000 a day on weekdays and a third that on weekends, that yields 5 million round trips.  Given an 8% interest rate over 30 years, the capital charge is $134 million a year before overruns.  That means the fare would have to be $27 round trip or $13.50 one way just to cover the capital cost alone, without even considering operating costs.

This means their figures are nuts.  $6-$7 one-way fares barely covers 40% of the capital costs, much less the operating expenses.  We are talking about an offering that is deep in the red.  $13 round trip at 5,000,000 round trips equals $65,000,000 of revenue.  That means that taxpayers will have to foot the bill for all the operating costs  ($30 million?  $60 million) and at least $69 million of capital charges.   It is not unfair to assume that this would punch a minimum $100 million hole each year in the government's budget that we will have to make up with taxes.

Update: Gotta achnowlege this bit of sanity in the AZ Republic comments from "astonished"

Light rail is such a boondoggle. It's expensive to build and always runs at a loss. It is very hard to change the routes to respond to ridership needs. It's a vanity project for hip liberals.

If public transportation is a goal, then get some buses going. Buses are flexible, cost effective, cheap to run and maintain, and if ridership changes, you just change the routes and schedules.