America's Transit Challenge: Part III

Taxpayer dollars scarce as residents and taxpayers increase demand for transit, commuter-rail options
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4SanDimas
Workers on the LA Metro Foothill Gold Line Extension.
LA Metro via SmugMug
This article is the third of five on transit in the U.S. and North America. Read parts One, Two, Four, and Five online.

As urban areas large and small continue to attract jobs, residents, workers, and visitors, their transportation systems demand ever more upkeep and expansion. For some, the gap between need and the means to pay for it is a bridge too far.

New York’s Metropolitan Transportation Authority projects a budget deficit of $467 million in 2020, rising to nearly a billion dollars by 2022. The agency is looking at a five-year capital investment plan that could reach $60 billion. Chicago needs $30 billion to fund priority projects.

Other agencies need funds for expansion as they build-out new light rail, streetcar, or commuter rail lines. And all are confronting dramatic changes: adoption of new technologies including integrated and mobile fare systems; accommodating shared and automated vehicle networks; and the evolution of transportation toward the concept of mobility-as-a-service.

“We are trying to spread limited dollars far too thin,” says Brittney Kohler, program director of transportation and infrastructure at the National League of Cities. “The demand isn’t going to go away.”

Despite the handwringing over loss of riders to Uber and Lyft, transit ridership has grown 30 percent since 1996. Agencies are now handling 17 billion more passenger-miles annually. And 47 percent of public transit trips are now by rail.

Underlying this is an urban vortex sweeping in economic activity and vitality. Metropolitan areas create 95 percent of net new jobs. Nearly a quarter achieved double-digit employment growth since the 2008 to 2009 recession. But that growth has been accompanied by a national retreat from infrastructure investment.

In 1966, the U.S. government devoted nearly 6 percent of its budget to infrastructure. Today, it’s less than half that, at just 2.5 percent. In hard dollars, spending declined from a 2003-peak of $122.7 billion to $98.4 billion in 2017, a drop of nearly 20 percent.

Federal spending on mass transit and rail resembles a roller coaster ride: Topping out in 1981 at $24.8 billion, plunging to a low of $9.4 billion in 1999 and climbing part-way back to $17.3 billion for 2017. That sounds better, but Congress would need to invest $70 billion this year to equal 1981 spending in inflation-adjusted dollars.

That politically driven roller coast doesn’t help transit planners trying to build big, multi-year projects.

“Uncertainty and a lack of a strong federal partner is truly a challenge today,” Kohler says.

State and local taxpayers have had to pick up the ball. They’ve raised infrastructure investment by a whopping 170 percent since 1956, to $342 billion — 3.5 times more than the Feds now kick in.

“Cities have tried in a lot of different ways to step up their game and they are no stranger to doing more with less, but there is a certain breaking point where that is not a feasible strategy,” Kohler says.
Metratransittrouble
A newly painted truck sits on a track in front of a Metra bi-level gallery car being refurbished at the railroad's "Rocket House" Rock Island line shops in 2017. Metra and other Chicago-area agencies have had to make-do with limited resources and have re-built much of their own equipment — extending useful lives in the process.
TRAINS Collection
Illinois Starved Chicago Transit for a Decade
It certainly isn’t working for Chicago. Of the $30 billion backlog cited by the Regional Transportation Authority, nearly two-thirds, or $19.4 billion, is just for state-of-good-repair projects.

“It’s sobering,” admits Leanne Redden, executive director of the RTA. “We are fortunate enough to have the second largest transit system in the country,” she says, “but it’s big and it’s old and there has been chronic underinvestment in it for decades.”

Funding for the Chicago Transit Authority and Metra comes primarily from the state of Illinois, which has cut funds for operations in recent years and hasn’t passed a capital spending bill since 2009. However, the agencies may see portions of $2.2 billion remaining from nearly $3 billion in state borrowing.

RTA can levy a sales tax, which it has, but is capped out on any further increases.

“Anything else that we want to do in terms of raising revenue, we have to have permission from our state legislature,” Redden says.

Key needs for Metra include repairing and replacing old locomotives and rail cars, along with upgrading train control and grade crossing signal systems. RTA says that 61 bridges need repair or replacement across the system.

The Chicago Transit Authority is looking to overhaul or replace much of its aging rail fleet. It wants to continue repairing and rebuilding the Red and Purple Lines, and extend the Red Line from 95th Street to 130th Street.

Redden says that underfunding is already affecting ridership through increased delays and mechanical failures. Without additional investment, 37 percent of the system’s assets will exceed their useful lifespan in 20 years, up from 31 percent today. Maintenance costs will rise, the cost of new construction will grow, and breakdowns will become more frequent.

RTA isn’t asking for a $30 billion pot of gold to be left at their doorstep. Redden sees that as a 10-year need, and most wants a dedicated, reliable, sustainable source of funds. And she warns there are inevitable consequences to the riding public if the state continues to shortchange transportation.

“If we’re going to choose not to make the appropriate investment, then we have to have a very different conversation that I think nobody wants to have. We will have to start thinking about how we scale back, shut down, parts of our transit network. I don't think anybody — business community, elected officials, residents — ultimately really wants to go there.”
LAMetroshoptour
Guests of LA Metro receive a shops tour in 2013.
TRAINS Collection
Voters Support Transit
In city after city, when voters have been asked to pony-up for public transit, they’ve said "yes."

In the November 2018 election, voters in 34 states approved $40 billion for transportation, according to the Eno Center for Transportation. A total of 34 transit measures passed, while only five failed.

Perhaps the flagbearer for voter-assessed transportation funding is Los Angeles. Starting in 1980, four separate one-half cent sales tax measures have been approved, with specific allocations ranging from 15 percent to 25 percent of revenues designated to public transit and paratransit.

Since then, LA Metro has opened 84 miles of light rail and 14 miles of subway, carrying 108 million riders last year. Major new projects are being built, including a nine-mile extension of the Purple Line, a light rail connection under downtown Los Angeles that will enable through running between the Blue Line and Gold Line, and the Crenshaw/LAX project that will connect with a new people mover taking passengers directly to the airport.

Seattle leads the nation in transit ridership growth and says it has the most ambitious transit system expansion plan in the U.S. Voters approved three tax measures, in 1996, 2008, and 2016, to build and operate a region-wide mass transit system. They include sales tax, property tax, and vehicle excise tax increases.

“The voters have a big enough appetite to want to have more transit that they’ve been willing to say yes to that,” says Matt Shelden, deputy executive director of planning and innovation for Sound Transit.

These revenues paid for the Link and Tacoma Link light rail lines, Sounder commuter rail, and bus services. There are no sunset clauses on the tax measures but that doesn’t mean taxpayers will keep paying for construction once approved projects are completed. Tax levels will roll back to the level needed to support operations and maintenance.

To keep taxpayers happy, Shelden says it’s important to deliver.

“If you promise the voters you’re going to do something, you better do it or they’re not going to say 'yes' the next time,” he says.

Beth Osborne, director of Transportation for America, says, “You look at the way Seattle and Los Angeles and those sorts of communities have tackled this. They set a very bold and broad vision that they want to build a world-class transit system for their community and they get into specifics. People said, 'I like that vision and I am in.' ”

That hasn’t been the case everywhere.

“There isn’t a huge amount of new funding being discussed in most legacy cities,” says Yonah Freemark, a member of the Urban Mobility Lab at the Massachusetts Institute of Technology who studies transport politics. “It’s primarily just doing as they can with the existing sources of funding they have available.”

But the nation’s biggest city is about to tap a new well of dedicated revenue.
MTA
Cities Turn to Congestion Pricing
Beginning in 2021, New York will become the first city in the U.S. to impose congestion pricing, with all revenues designated for the Metropolitan Transportation Authority. The Long Island Rail Road and Metro North will split 20 percent of the funds with 80 percent going to city transit.

When London implemented congestion pricing, downtown traffic dropped 30 percent. In the most recent fiscal year, the charge generated $316 million. Stockholm, Milan, and a few other cities have tested or enacted congestion pricing.

Details will be revealed later this year for New York City’s plan, but it’s expected that automobiles entering Manhattan south of 61st Street will be charged $12 to $14 and truckers will pay $25. About 880,000 drivers enter the congestion zone each weekday and are expected to generate at least $1 billion a year in revenue for the MTA.

Congestion pricing is an enticing source of funds that other big U.S. cities are looking at. It’s being discussed in Boston and Chicago. LA Metro is conducting a feasibility study.

“Congestion pricing is a big deal,” says Nadine Lee, Metro’s chief of staff and the architect of the agency’s “Vision 2028” plan. “It allows us to address some of these big externalities related to transportation.”

Beyond generating revenue, congestion pricing can improve air quality and promote equity for transit users, she adds.

In discussions with transit agency leaders, industry gurus, and outside experts, two key priorities emerge. First is “long-term viable funding that supports a sustainable system,” says Osborne.

Equally important, according to Kohler: “What cities need most is certainty, that they can trust the federal government to be a strong partner.”

To get what they need, “Cities and transit agencies need to advocate robustly for themselves,” says Transit Center’s Steven Higashide. And he stresses the importance of enlisting other stakeholders, especially those with political power.

“In cities that have increased transit funding, you often see really strong alliances between business leaders, social justice leaders, faith leaders, and labor to raise awareness of the fact that transit is underfunded and to make the case for increased funding,” Higashide says.

Money for local and regional transit has, in recent decades, mainly come from taxpayers, riders, and transfers from other user-paid accounts such as toll roads. On the federal level, the cash-starved Highway Trust Fund is the piggybank for FTA grants.

But in a rapidly evolving urban transportation marketplace, that’s beginning to change, with new, private-sector money increasingly on the table.
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