Coyote Blog

A few weeks ago I posted Valley Metro's own numbers that showed that the billions spent on light rail in the Phoenix area have done nothing but case the stagnation of transit ridership in Phoenix.  Light rail ridership actually fell substantially despite an expensive extension of the line.

Today, the Antiplanner has an update on light rail in Phoenix, and it is not pretty:

As of 2016, light rail carries less than 0.2 percent of all travel in the Phoenix urban area. The 2016 American Community Survey says that the same tiny percentage of commuters take light rail to work, which is unusual as transit’s commuter share is usually much higher than its total share. Phoenix light-rail ridership in the twelve months ending in June, 2018 was down 4.4 percent from the previous twelve months. Transit ridership for Phoenix as a whole is down 5.6 percent for the same time period.

Phoenix is one of many Sunbelt urban areas in which rail transit makes no sense at all. Aside from the Antiplanner’s argument that buses can move more people than light rail, rail systems only make sense where there is a high concentration of downtown jobs that a hub-and-spoke transit system can serve. According to Wendell Cox’s calculations, downtown Phoenix has only about 26,000 jobs, which is just 1.4 percent of jobs in the metropolitan area.

Phoenix is particularly unusual (though not unique) in that its suburbs are actually denser than the city itself. According to the 2010 census, the city of Phoenix has about 2,800 people per square mile, while its suburbs have nearly 3,500 people per square mile. With both jobs and population spread out, the region needs nimble, low-capacity transit if it needs any transit at all.

Arizona State University students make up a “substantial component” of light-rail riders. Until this year, students were able to buy transit passes for 200 for the nine-month school year, plus $75 for the other three months. The same passes would cost other members of the public $768 per year. Despite the steep discounts, student weekday ridership dropped by around 40 percent between 2011 and 2015.

The last paragraph reminds me that I forgot to discuss the issue with ridership and ASU students in my last post.  A huge portion of Phoenix light rail ridership comes from two sources:  subsidized ASU students and fans going to downtown sporting events.  This helps to explain why the commuter share of Phoenix ridership is so low -- essentially, many of the light rail riders are not commuters but in these two other groups.  Why we should be spending billions to subsidize bar crawls for already heavily-subsidized ASU students or to save sports fans money on downtown parking** is beyond me.

He has this good news:

The Phoenix city council is considering delaying or even killing some planned light-rail lines because it is concerned that city streets are falling apart and too much money is being spent instead on an insignificant form of travel.

** much of the downtown parking revenue for sporting events goes to the city and county, so cannibalization of this revenue is yet another hidden cost of light rail.

Well, another year's ridership numbers are out for Valley Metro and Phoenix light rail and they are just as grim as they have been every year since Phoenix spent the first $1.4 billion on the first leg of the rail system (source)

Now, this picture is bad enough, until you realize that Valley Metro completed a huge extension of the rail line in 2016.  In 2016 the line length was increased by 31% and the cumulative capital investment increased by 36%.  With, as you can see, essentially zero effect on rail ridership in red.  The only small highlight was that after falling for years, bus ridership actually perked up a few percent.  As you may remember from earlier posts, bus ridership could be expected to fall due to cannibalization from light rail, but in fact it tends to fall even faster than rail ridership rises, causing total ridership to fall.  The reason is that light rail costs at least an order of magnitude more (including amortized capex) per passenger mile than busses, and so light rail tends to starve the bus system of funds.  Every light rail system implementation has been met with the need to slash bus service to pay for the huge light rail costs.  So despite enormous operating subsidies and more than $2 billion in cumulative capex, rail ridership has been flat and total transit ridership has fallen.

But in fact the picture is worse than this when you look over a longer timeframe, which is why Valley Metro has probably changed their practice from graphing nearly 20 years of history to graphing just 6.  Here is an older chart of theirs I posted years ago: (the top year in this chart is the bottom year in the chart above)

I will get back to the annotation in a moment.  But notice that despite all the cost and disruption and higher taxes from the light rail system, total ridership this year of 66.8 million is less than any year since light rail was opened and baredly 8% higher than it was before light rail opened 10 years ago in 2008.  Just organic city growth and recovery of the economy since 2008 should have driven faster growth than this.  In fact, in the 10 years before light rail was opened, Phoenix transit ridership grew 70%.  If that organic growth rate in bus service had been allowed to continue without the backbreaking costs and limited capacity of light rail being added to the mix, we should have expected 105 million riders this past year, not 66.8 million.

I am, perhaps surprisingly to many readers, NOT going to go on a rant about the Supreme Court's decision yesterday that states can collect sales tax on interstate sales over the Internet, at least I am not going to rant about taxing internet sales per se.  Realistically, it was never realistic to think the government would keep its hands off this piggy bank, especially as Internet sales have skyrocketed.  However, this decision creates absolutely enormous practical problems for small businesses and Congress needs to act quickly to mitigate some of these.

The problem is the management problem this presents, particularly for many small retailers, and I don't think most consumers understand this.  Sales taxes seem simple from the consumer point of view -- say your sales tax rate is 7%, the cash register collects 7% and it all seems to be handled automatically.  But even at your local store, things can get complicated.  Your food purchases may well be taxed at a different rate (perhaps even 0%) than your other purchases.  You probably don't notice, but if you go over the city limits into a neighboring town or unincorporated area, the rates may suddenly be different.

Take Arizona, which seems from my experience to be roughly average.  The sales tax rate table is 18 pages long in a small font.  There are 29 separate rate categories which each have different rates in each of Arizona's 15 counties.    My business is in 6 counties and we have 3 rate categories that apply, or 4 if you consider items with no tax as another rate category.  This is 24 different state/county sales tax rates we charge.  But that is the easy part.  Because then there are, in addition to county taxes, 92 different towns and cities that have their own rate tables with up to 29 different rate categories that add to the base state/county rate.  Other states such as Washington (rule of thumb -- if the state has no income tax then it has a LABYRINTHIAN sales and business tax systems) have additional overlay taxes such as for transit and stadium districts.

When my company opens a new location, we have to spend hours on the Internet and with maps trying to figure out what sales taxes to collect, and even with good due diligence we sometimes get it wrong and find in an audit we are actually just inside or outside some line where the rate changes (we once had a location 30 miles outside of Seattle on a long dirt road where we found we had to collect the Seattle Rapid Transit tax).  Thatcher, AZ is a town of like 4000 people but has its own special sales tax rates -- do you know where the town line is?  Well neither do they, because last time I checked they did not have any sort of online lookup system to tell one automatically if the address is inside or outside the town and its sales tax district.

So it's a hassle for my business, but a one time hassle when we open a new location.  Now imagine that you are a small retailer on the internet selling fruit cakes.  You don't go out and establish sales tax locations, in some sense the location comes to you.  John Smith wants to buy a fruitcake and has an address that says Thatcher, AZ, but in the rural world one can easily have a town's name in your address but live outside of the town  (we have a campground with a Grant, Alabama address that is well outside of the city and tax limits of Grant but the town fathers come after us every year or so trying to see why we are not collecting their sales tax).  What sales tax do I collect from this customer?  Is there even a tax on food in that location?  If there is, there might be separate rates (as in California, for example) for prepared vs. packaged food.  What kind of food is my fruitcake?

But it actually gets even worse.  Because now all I have done is collect some amount of tax.  That is the easy part!  The hard part is registering with all the sales tax authorities to collect and pay the tax.  Well, you say, I guess I have to grit my teeth and register 50 times, which I can tell you is a gigantic pain in the ass because every state manages the process differently.

But even after registering in all 50 states, you are STILL not done, because many states don't have a fully unified sales tax collection system.  In Arizona, for example, the larger cities require their own registration and monthly reporting.  Each of these towns in AZ require a separate registration and monthly report:

Apache Junction,
Avondale,
Chandler,
Douglas,
Flagstaff,
Glendale,
Mesa,
Nogales,
Peoria,
Phoenix,
Prescott,
Scottsdale,
Sedona,
Tempe,
Tucson

Douglas, Arizona is a town of freaking 16,000 people but make sales there and you have to have a separate local registration and reporting.  And this list is for one not-very-urban state.  Currently my company does business in 9 states but we are registered and pay sales taxes to about 25 different authorities -- and we are mostly a rural business, so we are not in the larger urban areas that are more likely to have their own sales tax systems.

By the way, you might be thinking, "well, if I am a small business, I can just file with such and such authority in the months I have a sale there." Wrong.  Once you register and file once, you will be expected to file every time, even if they are zero reports.  The one source of relief is some states allow less frequent reporting.  It used to be there were states where I had low volume we filed once a year, but that seems to be a thing of the past.   Most states seem to have a minimum of quarterly reporting, no matter the volume.  Politicians want their money NOW (last sentence should be pronounced using Veruca Salt voice).

This is why businesses tend to have to sign up for very expensive sales tax management services.  But even that is not the end of difficulties, because registering for sales tax in an authority also forces one to register and pay other taxes and fees.  For example, Tennessee has another tax called the state and county business tax, which is essentially a revenue tax.  Even if you are an out of state company, you must file and pay this tax on any revenues.  If you sell in all of TN, that is one additional state registration and 95 different county registrations and 95 different county tax forms  (our company has to do about 8).  But wait, there is more!  Because a business also has to register with any of about 200+ cities in TN for payment of city business tax.  If you are selling all over TN, that is another 200+ registrations and 200+ annual reports (if this seems all very complex in TN, remember that TN has no income tax and note what I said earlier about the sales and business tax systems of states with no income tax).

I have written many times that regulation tends to benefit larger companies at the expense of smaller companies.  Who is more likely to be able to comply in this world I have described, Amazon or the fruitcake company?  Jeff Bezos is turning handsprings today because a) this kills a lot of his competition and b) to survive, many small venders will have to move to larger retailing platforms that can do some of the sales tax work, of which the largest and best is.... Amazon.

Congress needs to act.  It is going to have to be a compromise, because states are going to be putting a lot of pressure to let this situation stand because they want the money.  I would propose a national sales tax system on interstate retail sales that preempts any state sales taxes.  It will be hard to keep it from growing out of hand but it would be nice to establish a principal in law that the tax would be some sort of weighted average of the states' internal sales taxes.  The Feds would add a percent or two for themselves and there would be one registration for all -- as easy for me to do as it is for Bezos.  Yes, I know all the problems with this, but I don't think the status quo is tenable and I don't think Congress has the votes to go back to the old untaxed system, so this is the best we can expect.

Private employees unions (I will leave out public employee unions from this discussion, as they are a different animal) enter the public discourse a lot less frequently than they did in my youth, say in the 1970's.  At that time, union power and actions and negotiations and strikes were very frequent stories on the evening news.  However, one thing I have noticed throughout my life is that commentators seems to be either all-in for or against unions.  I actually think the issues are more subtle, and that unionization is a mixed bag.

On the pro side, unions are basically free association.  It is the right of any set of individuals to band together for negotiating leverage.

On the pro and con side is the role of government.  Early on, the government acted to stop individuals from exercising their free association rights and forcibly break up unions and bar their activities.  Today, I would probably argue the government has slid the other way by writing rules to tilt negotiating power away from employers towards unions (the obvious counter to this is if it is true, why have private unions withered over the last two decades).

On the con side, and it is a big con, is the tendency of unions to push beyond just wage and working condition negotiation into advocating for productivity destroying rules (e.g. featherbedding, strict job categories, etc).  These productivity destroying rules have helped to undermine whole industries, and, ironically, the unions themselves.  They embody an inherent contradiction in that the wages gains the union wants require productivity gains to support, productivity gains which are impossible under union-preferred work rules.

Here is a great example of the negative side of these union rules, from a NYT report on why New York subways cost so much more to build than do similar projects in the rest of the world

It is not just tunneling machines that are overstaffed, though. A dozen New York unions work on tunnel creation, station erection and system setup. Each negotiates with the construction companies over labor conditions, without the M.T.A.’s involvement. And each has secured rules that contractors say require more workers than necessary.

The unions and vendors declined to release the labor deals, but The Times obtained them. Along with interviews with contractors, the documents reveal a dizzying maze of jobs, many of which do not exist on projects elsewhere.

There are “nippers” to watch material being moved around and “hog house tenders” to supervise the break room. Each crane must have an “oiler,” a relic of a time when they needed frequent lubrication. Standby electricians and plumbers are to be on hand at all times, as is at least one “master mechanic.” Generators and elevators must have their own operators, even though they are automatic. An extra person is required to be present for all concrete pumping, steam fitting, sheet metal work and other tasks.

In New York, “underground construction employs approximately four times the number of personnel as in similar jobs in Asia, Australia, or Europe,” according to an internal report by Arup, a consulting firm that worked on the Second Avenue subway and many similar projects around the world.

That ratio does not include people who get lost in the sea of workers and get paid even though they have no apparent responsibility, as happened on East Side Access. The construction company running that project declined to comment.

The article also touches on one of my frequent themes, about why Progressives still support huge public sector payrolls when these actually reduce the government services they are passionate about:

Public officials, mired in bureaucracy, have not acted to curb the costs. The M.T.A. has not adopted best practices nor worked to increase competition in contracting, and it almost never punishes vendors for spending too much or taking too long, according to inspector general reports.

At the heart of the issue is the obscure way that construction costs are set in New York. Worker wages and labor conditions are determined through negotiations between the unions and the companies, none of whom have any incentive to control costs. The transit authority has made no attempt to intervene to contain the spending.

“It’s sad, really,” said Lok Home, owner of the Robbins Company, which manufactured much of the tunneling equipment used for East Side Access. “Because if they controlled the costs, they could do twice as many expansion projects and still have more money for maintenance.”

Well, the numbers are in for the 2017 fiscal year (which ends June 30) and after another huge investment in light rail, Phoenix has lost more transit ridership.   From the Valley Metro web site:

First, credit where it is due.  After years of bizarre chartsmanship where bars on their graphs bore only a passing relationship to the numbers being graphed, Valley Metro seems to have adopted a new (or their first) graphing program.

As you can see, while light rail trips were up by about a million, bus trips were again down by over 2 million, for a net loss in transit ridership of over a million, the fourth year in a row this has been the case.  I had expected rail ridership to rise, since in 2016 the rail system was expanded by 31% in length and 36% in cumulative investment.  This extension resulting in a 15.6% increase in rail ridership between 2015 and 2017.  Early on, I got in a debate with supporters of the line arguing that since they had cherry-picked the densest corridor in town to start, incremental extensions would actually reduce ridership per mile because they would be serving less promising routes.  Supporters argued that I was ignoring network effects and that ridership would rise faster than line length.  I guess we are sorting out that argument now.

In the ten years leading up to the opening of the light rail line, transit ridership grew by an average of 6.7% a year in Phoenix.  In the 8 years since the rail line's opening, total transit ridership has fallen 1% per year.  This is a well known effect (at least well known to all but rail die-hards) that Randal O'Toole, among others, has been pointing out for years.  Since light rail is an order of magnitude more expensive to operate per passenger-mile, and since transit budgets are never infinite, growing light rail tends to strangle bus traffic, because bus routes and service have to be cut to feed money into the light rail money pit.  Since every dollar spent on rail moves fewer passengers than a dollar spent on buses, transferring money from buses to trail reduces total ridership.  It is worth noting that had the line not been built and bus transit had been allowed to grow as it had before the line, there might have been over 40 million more trips last year assuming pre-2009 growth rates.

As someone whose company engages is what is usually called "public-private partnerships" or PPPs, one would expect me to be an enthusiastic supporter of all such efforts.  (As an aside, my company privatizes the operation, but not the ownership, of public parks and we are paid entirely by user fees and get not one single dollar of tax money.)

But I totally agree with Randal O'Toole's frustration here, talking about light rail in Denver:

Now RTD has been forced to admit that two other lines being built by the same company won’t open on time. RTD claims that it saved money by entering into a public-private partnership for the line in what is known as a “design-build-operate” contract. In fact, it saved no money at all, but was merely getting around a bond limit the voters had imposed on the agency. If the private contractor borrows a billion dollars or so and RTD agrees to pay the contractor enough to repay the loan, the debt doesn’t appear on RTD’s books. Taxpayers will still end up paying interest in the loans, which actually makes it more expensive than if RTD had stayed within its debt limit.

Public-private partnerships work great if the private partner is funded out of the user fees collected for the project, such as a toll road or water system. The Antiplanner resents the way the transit industry has coopted the term, public-private partnership, because their kind of partnership works differently. Instead of being dependent on fares, the private partner gets a fat check from the agency each month–up to $3.5 million in this case–whether anyone rides the train or not. This means the private partner has little incentive to make sure the system is working. RTD has withheld a portion of the monthly payments until the problems are solved, but eventually the contractor will get all of the money.

The solution isn’t for the agencies to build the lines themselves. The solution is to completely avoid megaprojects that aren’t funded out of user fees. Without the discipline of user fees, everything that’s happening with the A line should have been expected.

Valley Metro, the agency that operates light rail and most bus service in the Phoenix area, has published its 2016 annual ridership numbers, and they are awful (the agency is on a july-june fiscal year).  Over the past year, they have opened two extensions of the current light rail line, spending $o.5 Billion to extend the line 6.2 miles.  So what did we get for this?  Falling transit use.

To begin with, we must again look past Valley Metro's downright bizarre chartsmanship, where differences in bar length bear absolutely no relationship to the values graphed (just try to figure out the bar lengths for the last three years of light rail data).

We see that light rail ridership is up 9%.  This appears low, given that the line and total investment were increased by about 33%, but the new extensions were not available for the whole year.  My guess correcting for opening dates is that on a full year basis this represents about a 20% increase.  For May, June, and July light rail ridership has been running 19%, 26%, and 20% above the same month last year (before either extension was opened).  This is well below the increase in line length (31%) and line total investment (36%)

I have always argued that the first 20 miles of the light rail line cut through the densest part of the city, including the downtown area (such that it is), the two highest visitation sports stadiums, and ASU  -- and as such any future expansions were going to have a much harder time justifying themselves (ie, as in this case, a 31% expansion in length would yield something less than 31% increase in ridership).  Light rail supporters have argued in return that I had things exactly backwards, that network effects would mean that ridership increased faster than route length.  My sense is that this argument will pretty clearly tip in my direction by the time we have 2017 data.

By the way, with total investment up to over $2 billion and average weekday round trip ridership at about 23,500 in fiscal 2016, then the total capital cost (not including annual operating subsidies) of the line sits at about $85,000 per round-trip rider.   Whenever Valley Metro supporters defend the line against my attacks, they will often quote various riders saying how much they love it.  Of course they do!  They damn well should love it -- we taxpayers spent $85,000 for each one of them to open the line AND subsidize every single one of their rides.

But if you really want to see the cost of these subsidies, look at the bus and total transit ridership in the chart above.   Total transit ridership in the area has fallen to the lowest point since before the light rail line was first opened, despite the fact the city it serves is still growing.  This is because bus ridership has fallen off the map.   Just last year, for every 1 rider gained to the light rail line expansions, 3.6 were lost on busses.   To see how far bus ridership has fallen, you have to go back further than the chart above shows.  Here is an older Valley Metro chart I annotated for a previous article:

You can see from this that bus ridership in Phoenix fell to a level we have not seen since 2003!  This is despite the fact that the Phoenix MSA has added about a million people since that time.

As it does in every city, light rail costs are starving the rest of the transit system.   By shifting transit dollars into a mode that requires 10x  more money to move a single passenger, the numbers of passengers served has to fall.  You can see from the chart that Phoenix transit ridership was rising steadily from 1997 to 2009.  But once light rail was completed, transit ridership absolutely stopped growing, despite population increases and large increases to total transit budgets.  Without light rail, we might very well have seen transit ridership as high as 90 million today, if past ridership growth trends held.

Here is the trick:  You want a tax increase for X.  The public is never going to approve of raising taxes for X.  So you bundle 95% X with 5% Y, Y being something the public is really excited about.  As much as possible, you never mention X in any discussion of the tax increase, despite most of the funds being dedicated to X, and instead focus solely on Y.   If history is any guide, you will get your tax increase.

What a specific example?  You want a tax increase to fund a huge public transit boondoggle.  The public is not buying it.  So you rebrand the public transit project as a "transportation bill", you throw in a few highway improvements, you talk mainly about the highway improvements, and you get your public transit bill.

Another example is general revenue increases.  Most of these tax increases go to increasing the salary and pensions of bureaucrats and senior administrators that aren't really doing anything the public wants done in the first place.  So you say the tax increase is to improve the pay of three (and only these three) categories of workers:  police, firefighters, and teachers.  The public likes what these folks do, and could mostly care less about what anyone else in local government does.   So even if the taxes help about just 3 teachers among 3000 other bureaucrats, you sell it as a teacher salary increase.

It is because I understand this one weird trick that this sort of story does not surprise me in the least:

'Yikes!': Some Arizona teachers see little from Prop. 123

For months leading up to the vote on Proposition 123, supporters of the public education funding measure pleaded for its passage, saying it represented money for teachers.

But as the first installment of cash has gone out, many teachers may find Prop. 123 is a smaller windfall than they hoped. And voters may be surprised to learn where some of the money is going.

In some cases, teachers will collect less than 20 percent of their district's Prop. 123 funds. Some districts will use most of their money for other purposes, ranging from textbooks to computers to school buses, according to an Arizona Republicsurvey of district spending plans.

The measure was sold as a way to direct money — significant money — to teachers and classrooms....

With no rules on how the money can be used, each school district has tried to address its own priorities. While many supporters of the measure invoked teachers as the main reason to vote for Prop. 123, others in the public school systems have staked a claim to the money, especially after many went years without raises beginning in the recession.

Those seeing raises include relatively low-paid secretaries, custodians and bus drivers. But it also includes superintendents, principals and mid-level administrators who don’t work in classrooms.

That may not sit well with voters who opposed the measure or with supporters who thought they were doing something more substantive for teachers.

 

In 2014, I published  an article based on Valley Metro's (our transit operator in Phoenix) very own ridership chart.  Here was the chart I showed:

My point was that the huge amount of money spent on light rail, which essentially constituted a single commuting route in this enormous and spread-out city, was cannibalizing bus service.   The cost and investment to carry a light rail passenger is at least an order of magnitude greater than that needed to carry a bus passenger, and no public system can long endure this sort of cost increase to shift passengers from a relatively cheap transit mode to an expensive one.  Inevitably, bus service (which mainly benefits the poor) is terminated to pay for the train (which benefits middle and upper class riders who would not be caught dead on a bus).  I am pretty sure the train would have been harder sell if they had been honest and said that they were going to have to cut bus service for the low-income working folks so that ASU students and Arizona Diamondbacks and Phoenix Suns fans could have a better way to get to the ballgame.

Anyway, Valley Metro has updated the chart for 2015 and it continues to look bad:

They were smart to cut off history on this one so you can't see how they killed the growth trend with the advent of light rail.  But you see that total transit ridership fell, with a small fall in light rail ridership and a huge fall in bus ridership.   Oops.  As an aside, they still have not fixed their terrible chart plotting.  You can see this years bar for light rail being longer than the one for 2013 despite the fact the number is lower.

The 2016 numbers will be interesting.  Since 2015 they will have opened several light rail extensions and got themselves a huge new tax increase approved (over my stern opposition).

Update:  In retrospect, the bus ridership fall was significant but "huge" probably is an exaggeration.  I was fooled by looking at the bar lengths, which again seem to have nothing to do with the actual data.  They are clearly drawing this manually -- no automatic charting program would get it this wrong.

The AZ Republic has some of the first information I have ever seen on the nature of Phoenix light rail ridership.  The first part confirms what I have always said, that light rail's primary appeal is to middle and upper class whites who don't want to ride on the bus with the plebes

Light rail has changed the demographics of overall transit users since the system opened in 2008, according to Valley Metro.

Passengers report higher incomes than bus riders, with more than a quarter living in households making more than $50,000 a year. Many riders have cars they could use.

The 20-mile system running through Phoenix, Tempe and Mesa recorded more than than 14 million boardings last year. Still, census data estimate less than one-third of 1 percent of Phoenix commuters — or about 2,000 people — use rail as their main transportation to work.

.0033% huh?  If we built similar facilities to serve everyone, it would only cost us about $420 billion at the rate of $1.4 billion per third of a percent.

But I thought this next bit was the most startling.  I always had a sneaking suspicion this was true but never have seen it in print before:

While the much larger bus system reaches most corners of the Valley, light rail connects specific destinations along a single line. Nearly half of light-rail riders are enrolled in college.

I must have missed this in the original sales pitch for the light rail line: "Let's pay $1.4 billion so ASU students can get to more distant bars."   Note that by these numbers, students likely outnumber commuters 10:1.  Doesn't bode well for light rail extensions that don't plow right through the middle of the most populous college campus in the country.

Postscript:  They don't break out people riding to get to sporting events downtown, but sporting events make up most of the largest traffic days on the system.  From my personal acquaintances, many people use light rail as a substitute for expensive downtown parking at sporting events, parking (often semi-illegally) near light rail stops and taking the train the rest of the way in.  On the whole, its not very compelling as a taxpayer to be helping to subsidize someone else's parking.  And from a municipal fiscal standpoint, it means that light rail fares may be cannibalizing (on a much greater ratio than 1:1 given the price differential) parking fees at municipal parking lots.

Randal O'Toole and the Arizona Free Enterprise Club have weighed in with a comprehensive report on Phoenix's Prop 104 transit tax, and the results are ugly.  A few findings:

• The oft-repeated claim that light rail has generated $7 Billion dollars in economic development is simply untrue. In fact, many of the projects included in this claim have never been built (like the Sycamore Station development) or involve projects that have nothing to do with light rail (such as the $600 million Convention Center Expansion, which was funded largely by state tax dollars).
• The main beneficiaries of the transit plan appear to be contractors and developers who have projects near rail stations. The tax revenue from the plan combined with the generous subsidies offered to select developments ensures that this plan will benefit a few contractors and developers at the expense of others.
• The plan is unbalanced and ignores vehicle street improvements. Despite the fact that only 3% of the population uses transit (less than 1% use light rail), 95% of the funding in the plan goes toward expanded bus and rail service. Only 3% goes toward vehicle street improvements.
• Transit ridership actually fell after the light rail opened. From when light rail opened in 2009 through 2014, any gains in light rail ridership were offset by the loss of more than one bus rider. Ridership is still 1.2 million less per year than it was in 2009.
• The transit plan as proposed will increase traffic congestion, energy usage and greenhouse gas emissions. In fact, the transit plan will use more

The complete report is here.

Coyoteblog readers will be totally familiar with this statement from the report about light rail merely cannibalizing bus riders, echoing past articles I have had saying the same thing:

According to the city of Phoenix and Valley Metro, light rail is a great success in Phoenix, generating a 42-percent increase in transit ridership since 2001 and stimulating the construction of $7 billion in new real estate development along its route. A close look, however, reveals that both of these claims are wrong.

The increase in ridership took place between 2001 and 2009, the (fiscal) year that the light-rail line opened. Since that year, for every light-rail rider gained, the region’s transit systems lost more than one bus rider. Per capita transit ridership has declined by 8 percent since 2009 partly because the high cost of light rail forced a 34-percent increase in average bus fares by 2010 and an 18-percent decrease in bus service by 2013.

You can see this perfectly well from a chart right off of our transit authority's web site (except for my annotation in red), which I discussed in depth here.

It is just incredibly disingenuous that light rail supporters are trying to claim credit for transit ridership increases that occurred before the line was built and whose growth the line essentially halted.

Another claim the report demolishes is that light rail is somehow spurring development.  Supporters claim $7 billion of light rail development planned or built along the line, but oddly enough that is the exact same figure they were touting almost 8 years ago before the line was even completed.  Doesn't seem like they are getting much traction, huh?  In fact, the list actually shortens with every year as projects get cancelled and no new ones are added.  But beyond this, simply adding up development along the line and claiming that it is all incremental to the line's construction is simply moronic, the same facile BS analysis often used to support publicly funded football stadiums.    The obvious questions are:

• How do they know this development is incremental, and not development that would have occurred anyway?  In particular, this line was built through the three of the largest pre-existing development hubs in the metropolitan area (North Central Ave, Downtown Phoenix, and Tempe/ASU).  There was always development activity in these areas, and always going to be
• Much of the new activity they cite is near Tempe Town Lake, and I would give that project, not the rail, much of the credit.  The city did a marvelous job (see, I can give props to government once in a while) converting a big wide ugly dry ditch into a lake that is the centerpiece for business and condo development
• Much of this development is subsidized by various government programs.  It is impossible to separate the effects of the subsidy from the rail line.

Finally, if you don't believe me about the relative costs of the two modes, let's take a look at the number from Phoenix's own plan.  They speak for themselves:

So what does one get for the 5x higher operating costs and 134x higher capital costs of light rail over buses?  Well on the negative side, one gets a system that is substantially less flexible and responsive to changes.  The only positive I can come up with is that middle and upper class white people consider buses low class and want a transportation mode of their own.

A reader sent me a link to this Vox article on streetcars.  What I thought was interesting is just how weak the case for streetcars is, even when made by folks are are presumably sympathetic to them.  This page is entitled "Why do cities want streeetcars."  The arguments are:

• Tourists like them, because you can't get lost like you can on buses.  My response is, "so what."  Unless you are one of a very few unique cities, tourists are a trivial percentage of transit riders anyway.  Why build a huge system just to serve out-of-town visitors?  I would add that many of these same cities (e.g. Las Vegas) considering streetcars are the same ones banning Uber, which tourists REALLY love.
• Developers like them.  Ahh, now we are getting somewhere.  So they are corporate welfare?  But not so fast, they are not even very good corporate welfare.  Because most of the studies they cite are total BS, of the same quality as studies that say sports stadium construction spurs all sorts of business.  In fact, most cities have linked huge tax abatement and subsidy programs to their streetcars, such that the development you get with the subsidy and the streetcar is about what you would expect from the subsidies alone.  Reminds me of the old joke that mimicked cereal commercials: "As part of a breakfast with juice, toast, and milk, Trix cereal has all the nutrition of juice, toast, and milk."
• Good for the environment.  But even Vox asks, "as compared to what."  Since they are generally an alternative buses, as compared to buses that have little environmental advantage and often are worse (they have a lot more weight to drag around when empty).
• The Obama Administration likes them.  LOL, that's a recommendation?  When you read the text, what they actually say is that mayors like the fact that the Obama Administration likes them, for it means the Feds will throw lots of Federal money at these projects to help mayors look good using other peoples' money
• Jobs.  This is hilarious Keynesianism, trying to make the fact that streetcars are 10-100x more expensive than buses some sort of positive.  Because they are more inefficient, they employ more people!  One could make the exact same argument for banning mechanical harvesters and going back to scythes.   Left unquestioned, as Bastiat would tell us, is how many people that money would have employed if it had not been seized by the government for streetcar use.
• Je ne sais quoi.  I kid you not, that is their final argument, that streetcars add that special something to a neighborhood.  In my mind, this is Vox's way of saying the same thing I did the other day -- that the streetcar's appeal is primarily based on class, in that middle and upper class folks don't want to ride on a bus with the masses.   The streetcar feels more upscale than buses.   The poor of course, for whom public transit is most vital, don't want to pay 10 times more for sexiness.  Oh, and watch this video of Washington streetcars blocking traffic and crunching parked cars and tell me what it is adding to the neighborhood.

Every argument I have ever been in on streetcars always boils down to something like "well, all the cool kids like them."  Once, after defending the US approach to rail (vs. Europe and Japan) as (correctly) focusing on productivity vs. sexiness, having gone into a lot of detail on the economics of freight vs. passengers, I got a one sentence answer from Joel Epstein of the HuffPo:  “You should get out of the country more often.”  That was it -- the cool cosmopolitan kids who vacation in Gstaad but never would be caught dead driving across Nebraska were all against me.

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.

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.

There is one thing you can almost always assume with government managed land and infrastructure -- facilities will likely have a large deferred maintenance backlog.  Two examples:

• Subways and transit lines are falling apart
• Parks are falling apart

These problems are ubiquitous.  You can point to any government parks agency, and most any transit agency, and you will find the same problems.

Why?  Well, I have not studied the problem in any academic sense, but I am face-to-face with the problem every day in parks.

Let's start with the reason that is not true -- that somehow budgets can't support capital maintenance.  I know for a fact that this is not true in parks.  We operate over 100 public parks and are totally up to date with all maintenance and have no deferred maintenance backlog.  This is despite the fact that we work with only the fees paid by visitors at the gate.  Government agencies typically supplement fees at the gate with an equal amount of tax money and still don't keep up with maintenance.  So the issue may be costs or priorities, but the money is there to keep parks fixed up.  (I am willing to believe the same is not true of large transit projects, but these projects are known in advance not to be able to cover their lifecycle costs with revenues, and simply hide that fact from taxpayers until it is too late.  Thus the sales tax increase that is being requested in Phoenix to keep our new light rail running).

I think the cause lies in a couple areas related to government incentives

1. Legislatures never want to appropriate for capital maintenance.  If the legislature somehow has, say, $100 million money it can spend on infrastructure, their incentives are to use it to build new things rather than to keep the old things in repair (e.g. to extend a rail line rather than to keep the old one fixed).
2. If you want to understand a government agency's behavior, the best rule of thumb is to assume that they are working to maximize the headcount and the payroll budget of their agency.  I know that sounds cynical, but if you do not understand an agency's position or priorities, try applying this test:  What would the agency be doing or supporting if it were trying to maximize its payroll.  You will find this explains a lot

To understand #2, you have to understand that the pay and benefits -- and perhaps most important of all -- the prestige of an agency's leaders is set by its headcount and budgets.  Also, there are many lobbying forces that are always trying to pressure an agency, but no group is more ever-present, more ubiquitous, and more vocal than its own staff.   Also, since cutting staff is politically always the hardest thing for legislators to do, shifting more of the agency's budget to staff costs helps protect the agency against legislative budget cuts.  Non-headcount expenses are raw meat for budget cutters, and the first thing to get swept.  By the way, this is not unique to public agencies -- the same occurs in corporations.   But corporations, unlike government agencies, face the discipline of markets that places a check on this tendency.

This means that agencies are loath to pay for the outside resources (contractors and materials) that are needed for capital maintenance projects out of their regular budgets.  When given the choice of repairing a bathroom at the cost of keeping a staff person, agencies will always want to choose in favor of keeping the staff.  They assume capital maintenance can always be done later via special appropriation, but of course we saw earlier that legislators are equally unlikely to prioritize capital maintenance vs. other alternatives.

The other related problem faced is that this focus on internal staff tends to drive up pay and benefits of the agency workers.  This drives up the cost of fundamental day to day tasks (like cleaning bathrooms and mowing) and again helps to starve out longer-horizon maintenance functions.

As proof, you only have to look at the mix of agency budgets.  Many parks agencies (e.g. New Jersey state parks, which I have studied in depth) have as much as 85% of their budget go to internal staff.  My company, which does essentially the same thing (run parks) has about 32% of our budget go to staff.  State parks agencies have 50% or more of their staff in headquarters or regional offices.  In my company, 99% of the staff is in the parks.

I don't think that these incentives problems can be overcome -- they are simply too fundamental to how government works.  Which is why I spend my working hours trying to convince states to privatize the operation of their recreation facilities.

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.

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.

via the Anti-planner:

Washington DC has proposed an anti-auto transportation plan that is ironically called “MoveDC” when its real goal is to reduce the mobility of DC residents. The plan calls for reducing auto commuting from 54 percent to no more than 25 percent of all workers in the district, while favoring transit, cycling, and walking.

This strikes me as just incredibly elitist.   There is no way the politicians and lobbyists who are writing this stuff are going to by cycling and walking or even riding a bus.  They are going to drive (or be driven).  This is about getting the hoi palloi off the roads and out of their damn way.

As Randal O'Toole points out, congestion pricing, if done correctly, could actually improve capacity, but he is skeptical it will be done correctly.