The current murmur is that the Milwaukie Light Rail project is going to need about a $50M injection of capital funding (if anyone has a draft funding plan document, please share it) to complete the local match, which TriMet plans to provide by bonding future payroll tax revenue.
Depending on Interest rates, that means something like $5M annually NOT available for operations. There has to be a better answer than that.
18 responses to “What the Transit Rider’s Union SHOULD be Focusing On”
$5 million = WES 2.0
Allow cars to use the bridge and charge a toll. You solve 2 problems: local match for light rail, and relieve the looming need for the $40 million+ south portal, at least for a while.
I can’t believe no one is considering this option. Is the greenwashing of this project that important? “Looky here! We have a new bridge that we don’t allow cars on! Write about us NYT!”
I’ve been a proponent of tolling the bridge for private cars for a long time. $5 million per year is about $14,000 per day. At $2 per car, that would mean about 3500 cars in each direction daily. That’s a fraction of the daily traffic volume of other downtown bridges.
In the alternative, stop being so freakin’ shy about the ballot based on ONE narrow defeat of a MAX project on a crowded ballot in 1998. Ask Tri-Met area voters to pony up $50 million or so for the local share.
Another option that Tri-Met deliberately overlooks: in 1994, Tri-Met area voters approved $475 million in bonding authority to build a light rail line from Clark County to Clackamas County. That bonding authority has never been withdrawn and (to my knowledge) had no expiration date. Tri-Met chooses not to issue these bonds because it would look bad politically to pick up the project again fifteen years later without another vote. But if they coupled the Milwaukie LRT with an extension to Vancouver, they’d have $475 million in local funding available.
Sigma:I can’t believe no one is considering this option. Is the greenwashing of this project that important? “Looky here! We have a new bridge that we don’t allow cars on! Write about us NYT!”
ws:I don’t get that either. If allowing cars gave better access for people and did not saturate any of the streets with traffic, then why not at least provide a lane?
“There has to be a better answer than that.”
1.Build one extra mile for the Sam Trak train to connect to Milwaukie.
2.Get a diesel powered rail car.
3.Connect to Eastside stretcar at OMSI.
4. Send Streeetcar line to west side over the Marquam bridge piers.
Building the downtown mall and extending MAX to PSU has run $200 million just by itself.
I have to give you credit for advocating for this; it proves that you’re not overly hungry for new rail projects, and think that bus riders should be screwed. But how about having the state laws that authorize the payroll tax require that it go, at least mostly, towards operations? I think it might be too late to attach it to the current tax increase bill, though.
Overall, I think that rail lines and other large capital projects should be considered special, one-time projects and should be funded by special, one-time-only funding.
Jason McHuff Says:
Overall, I think that rail lines and other large capital projects should be considered special, one-time projects and should be funded by special, one-time-only funding.
Exactly. Infrastructure (like rail lines) and other capital expenditures (like new buses) need to be considered on their own merits as long-term investments, and funded accordingly with bond issues and the like.
It’s a big mistake to confuse long-term investments with short-term operational issues like whether a given bus line should operate on Sundays.
Even if it were possible to get the legislature to change the law to artificially shuffle money between long-term and short-term, that’s not a very businesslike way to operate.
I think those who argue that transit should run more like a business need to understand the difference between long-term investment (and life-cycle cost estimation) and short-term operational fixes to short-term problems. Well-run businesses do understand that.
Where does the “local match” come from?
It is easy to forget that after the defeat of S/N light rail in 1998, Metro took MAX off the table for the Milwaukie corridor. It was put back only after SE Portland and Milwaukie communities demanded that be done.
Because cost per ride numbers are so much better with light rail than with buses, bonding operations money to pay for such cost effective capital investment makes sense. Riders are getting a better product at less cost to the provider…what business would fail to do make this move?
Buses…and God knows I love the 85 Swan Island…have their place, but are not efficient in heavily traveled corridors.
If only we also knew the prorated capital costs per ride…
These costs are usually estimated in project proposals, but seem to disappear once they’re completed. It doesn’t help that capital and operations money come from ‘different’ pots.
With bus at ~$93/hour, streetcar at ~$135/hour, and MAX at ~$220/hour, we really don’t need a huge increase in ridership to break even on ops costs. But the capital cost for a bus is only about $1.50 per mile. Rail systems need to serve a lot of passengers before we break even on capital costs.
“Exactly. Infrastructure (like rail lines) and other capital expenditures (like new buses) need to be considered on their own merits as long-term investments, and funded accordingly with bond issues and the like.
It’s a big mistake to confuse long-term investments with short-term operational issues like whether a given bus line should operate on Sundays.
Even if it were possible to get the legislature to change the law to artificially shuffle money between long-term and short-term, that’s not a very businesslike way to operate.
I think those who argue that transit should run more like a business need to understand the difference between long-term investment (and life-cycle cost estimation) and short-term operational fixes to short-term problems. Well-run businesses do understand that.”
Why? The only reason I can think of is if the public would eventually want to sell the investment to a private concern.
Here is what you are saying Mr. Feldman:
“Public transit should be analyzed on a cost for service basis. But if there is a way to make it more complicated, such as by building its own dedicated infrastructure then that infrastructure has value in itself that the public should also pay for.” Even if there were a way to sell off the infrastructure (not very likely) it still should be part of the cost for service calculation.
When a business invests in capital equipment it has to consider that as a cost of doing business: rarely is it an investment. That’s why they get capital depreciation tax deductions. If it were an investment they would be hit with a capital gain tax; which would be another equation to figure out.
When you are drawing a distinction between “long term investment” and “short term operational fixes” you need to depart from generalities. If it is along term investment spell out the specifics. I don’t have a problem with factoring in things like : environmental and livability issues, ability to lure new users; traffic abatement. Yet, most businesses, that survive anyway, do so through short term operational fixes, i.e. flexibility.
If we are going to make some “long term investment ” i.e. infrastructure, I could think of a lot of things better than rail tracks running in the ROW, and lots of overhead wires. I concur with Mr. Occam “consider first the simplest solution.”
Public investements in infrastructure aren’t very often sold to private concerns; but they are often put up as collateral for those who buy bonds. It’s rare that a government bond finds itself in default–as governments have taxing power (and many bond issues include specific taxing provisions to provide for repayment), such bonds are generally a safe investment–but despite all that, it’s very difficult to issue bonds to buy something that isn’t a capital asset. Busses, of course, are capital assets, but fuel and drivers wages are not.
But the bottom line is–many funding sources are only usable for capital purchases; this is not due to any chicanery or obfuscation on the part of government knowingly trying to justify waste of public funds. It’s just the realities of funding.
Business purchases of capital frequently ARE investments–even though when you buy equipment, it’s almost always assured that the value of the asset will depreciate, not increase. A piece of machinery in a factory, or a new front-loader in a construction operation, enables more revenue-producing work to be done. Likewise with a new bus or a new train; nobody expects these to increase in value–they are being bought because they are useful assets. Capital gains/loss taxes only are concerned with the actual gain or loss in value of an asset; not with revenue derived from its use,
There has to be a better answer than that.
Your darn tooting! No real discussion on this topic.
Let’s not starting talking in abstractions here.
TAX MONEY IS TAX MONEY IS TAX MONEY
If you have to take from Peter and give to Paul, then you got NOTHING!
When Tri-Met does a new infrastructure project, and needs to contribute its own funds (beyond, say, a few million that it could cough up out of its operating budget), and issues bonds…. it ain’t spending tax money. It’s spending BORROWED money that gets repaid with tax money. Just like when you or I take out a mortgage to buy a house, or a flat in the Pearl if you prefer–we’re spending money borrowed from the bank; our own salary is then used to repay the loan.
In both cases, debt financing is used to purchase something that would otherwise require years of savings to afford. And, in both cases, the lenders will have tons of conditions as to what can be bought with the borrowed money–the bank is generally happy to write mortgages so I can buy a house. Were I to tell the bank that I wanted to take out a mortgage so I could vacation in Tahiti, however, the bank would tell me to take a hike–or refer me to the credit card department, where financing for such expenses IS available–at a much higher rate of interest, and with a much lower credit limit.
The “expense” vs “capital” dichotomy is real, folks. It ain’t something the government made up. It exists in business, and in personal finance as well.
Interestingly enough–in the world of government, getting capital funding isn’t too hard, given the taxing power of governments and the relative safety of municipal bonds. Operational funding is harder to come by, frequently. In the world of business, it’s the opposite–many business maintain lines of credit to smooth out cash flow issues, but are reluctant to tie up cash in capital equipment (many financial metrics used by Wall Street in analyzing the financial performance of companies effectively penalize the company for a large asset base. EVA, or “economic value added”, is one example).
“When Tri-Met does a new infrastructure project, and needs to contribute its own funds (beyond, say, a few million that it could cough up out of its operating budget), and issues bonds…. it ain’t spending tax money. It’s spending BORROWED money that gets repaid with tax money.”
Well, please explain the difference at the bottom line. They should only borrow under the right circumstances. Job security for a bureaucracy isn’t the right reason. A business would be stupid to do that, although I know some do.
Borrowing to provide a reliable high capacity transit option to SE Portland and Milwaukie, on the other hand, is a no brainer. Why not give more people the better product they have asked for.
Any large organization may be subject to “management capture”–wherein those appointed to run the affairs of the organization on behalf of the organization’s stakeholders (the public, the shareholders, etc) instead (mis)use their authority in various forms of self-dealing.
It’s probably far worse in the private sector, where numerous corporate executives have enriched themselves with ridiculously out-of-line salaries. Most such forms of graft are illegal in the public sector. The suggestion that public sector bureaucrats spend money for “job security” is difficult to substantiate–if for no other reason than vast expenditures of public funds aren’t necessary for “job security”. Fred Hansen doesn’t need to build trains to keep his job.
There is one other difference between a public agency and a private business that is routinely glossed over. Private businesses typically exist to make money. Public agencies typically exist to provide some public good. While public agencies do have to balance the books; expecting them to act like for-profit enterprises is missing the point. (Indeed, given the coercive powers enjoyed by government, I don’t WANT them being run for profit–really bad stuff happens when the machinery of law is deployed for reasons other than public benefit).
Has Tri-Met made bad decisions in the past? Probably. Is construction of the Green Line one of them? My guess is no.
Do you guys ( L.A., ES) ever read what other people say? I’m not going to write any more on this thread.