Rick Snyder's New Way to Go

Wednesday, Michigan Gov. Rick Snyder introduced a new transportation funding proposal. Little by little, details are coming out.
First, here are the main parts of the proposal as they were delivered Wednesday:

• Changing the way motor fuel is taxed from per-gallon paid at the pump by motorists, to a percentage of the price paid by wholesalers; the shift is to be "revenue neutral" when it kicks in, but will change as the price of oil fluctuates;
• Adding an additional registration fee for license plates;
• Allowing regions to add a further fee to license plates for regional transportation projects;
• Creating a regional transportation authority for Southeast Michigan that includes the City of Detroit, and the counties of Wayne, Oakland, Macomb, and Washtenaw.

Today (Friday, Oct. 28) Dennis Schornack, Special Advisor to Gov. Snyder, added a number of details at a meeting of the special financial advisory group of the Ann Arbor Transportation Authority. (This is the blue-ribbon pannel assembled to propose funding methods for the Transit Master Plan.)
Remember that these are still proposals, and must be approved by the House and Senate, which will certainly have a lot to say about it...but here are some of the highlights:

• The state-wide registration fee is to be based on the value of the vehicle, as the current fee is; it is advertized as "$10 per month", but that obviously adds up to $120 per year; that's said to be a maximum, so presumably people whose cars are worth less money would pay less than $120 for their registration;
• Any county or contiguous group of counties can propose a license fee of up to $40 per year; (that's $13.3333 per month); the amount would need to be approved by the majority of voters in the proposed region, with no "opt-out" provision for sub-regions that don't think they want to participate; in our case, that means the votes of everybody in Macomb, Oakland, Washtenaw, and Wayne counties, including the City of Detroit, would be tallied together - not as individual counties, and if the majority of voters in one county voted against it while the majority of the region voted in favor, they would still be subject to the tax;
• All the funds raised by either new fuel or new license fees would be subject to the Michigan constitutional requirement that 90% of all funds raised through vehicle and fuel taxes be allocated to roads and bridges, with a maximum of 10% going to transit;
• Funds raised by a regional registration fee would be limited in where they can go: 95% would be directed to the county in which they are raised; in other words, for every $1,000,000 Washtenaw County raises, it would be guaranteed at least $950,000 for its internal use, but the other $50,000 could be spent in another part of the region at the discrition of the regional authority;
• The Governor will recommend that the full 10% constitutionally allowable be used for transit, which is more than the amount currently allocated; using the example above, Washtenaw County would be able to use $100,000 for transit out of every $1,000,000 it raises through license fees;
• The regional transit authority for Southeast Michigan would be responsible for four proposed transit routes: Gatiot Avenue, Woodward Avenue, M-59, and Michigan Avenue to Detroit Metro Airport and Ann Arbor;
• Other public transit services in the area would be "contracted" to provide service, and would receive federal and state funds through the regional transit authority
• The committee setting up the regional authority for Southeast Michigan is composed of Governor Snyder, Mayor Dave Bing, andx Federal Transit Administrator Peter Rogoff; these would continue to serve as titular heads of the authority once it is set up, though of course others would carry out the day-to-day administration.

So that's a lot of information, but it's all tentative. Remember the second Detroit River Bridge? The Governor proposes, the Legislature disposes. (But the Governor hasn't given up on the bridge yet...)
The information we have raises a lot of questions as well. Mr. Schornack, when questioned about some of them, smiled and said the Governor preferred to start with the "10,000-ft. view" and work out the details later. What questions do you have? We may be able to get at least a few answers from the Governor at Monday's Michigan Rail Summit.
Meanwhile, I'm off the the Midwest Highspeed Rail Association's Fall meeting in Cleveland. I started this blog on the AATA bus coming home from the meeting, and I'm now on the Megabus en route from Toledo to Cleveland. (I had to try the Megabus service to see how public transportation that claim to make a profit actually feels to the consumer. More later...)

If you don't offer walkable urbanism, you can write off your future development

"If you don't offer walkable urbanism, you can write off your future development." - Christopher Leinberger

That was his answer when I asked about need for healthy development in the face Southeast Michigan's declining population and environment.

Leinberger, a Professor at the University of Michigan's Taubman School of Architecture and Urban Planning, and a Senior Fellow at the Brookings Institution in Washington, DC, was speaking at Concentrate's Speaker Series at The Ann Arbor Comedy Showcase. (No joke.)

After his talk, I pressed him further about Ypsilanti Township's situation - after all, that's where I live and where I'm a Planning Commissioner. He answered with a smile, "Ah, Ypsilanti! What a great town!" "But what about the Township," I insisted. "Focus, focus, focus on the downtown!"

Unable to monopolize the Great Man's attention further, I couldn't tell him that Ypsi Township doesn't have a downtown. But I can imagine his reply if I had. "Work with the City!" Can we actually work together, the City and the Township...?

I just read in today's Ypsilanti Courier that Paul Schreiber, the City of Ypsilanti's Mayor, addressed his City Council with a gloom-and-doom message last night. So bad is the financial outlook that not only could 65% of the City's general-fund employees be laid off, but those that remained would have their health insurance capped or cropped. The Township isn't much better off, with the work-week reduced to 30 hours and mandatory furlough days.
The City's Water Street project was to be a great example of what Leinberger praised tonight as a "near-downtown" center of walkable urbanism. Instead, it's a $1.3 million annual debt load on the City and it's citizens. We've got to find a way to turn it from a burden into a profitable, tax-paying development. The City and the Township need to work together for that, because without a financially healthy urban center, neither of the Ypsilantis will pull through this financial crisis. But we can't seem to work together, can we?

It was Ben Franklin who said, "If we don't all hang together, then surely, we shall all hang separately."

Looks like we're about to prove him right. The noose is tightening around Ypsilanti, both City and Township. Let's get together and at least plan our development strategy jointly, beginning with walkable urbanism, a focus on downtown, and and end to greenfield development in the Township.

More on this later...

Q: Sustainable I understand, but why transit-oriented?

I've been re-thinking some of the basic issues Wake Up Washtenaw is here to address. Based on some of the questions I get when out talking with people, I'm going to "go back to the basics" with a series of FAQs (Frequently Asked Questions). Here's the first:

Q: Sustainable I understand, but why transit-oriented?

A: Transportation has determined how humans build communities since the rise of cities. Whether on rivers, harbors, or caravan routes, people living in fixed towns and villages want to be where they can take advantage of transportation routes. In the United States, it's especially important for us to be able to move freely, because the essence of freedom is being able to go where we want to go.When someone is arrested, the first freedom they lose is the ability go where they want.

During the second half of the 20th century, we Americans invested about 1.2 trillion dollars to build the Interstate Highway System, which enabled many of us - for a while - to live a long way from where we work, play, and get our food.  But now, we're paying the price: the result was sprawl, congestion, dependence on foreign oil, and forcing people either to invest heavily in personal transportation (cars), or be relegated to an under-class whose freedom to move around is very limited. Car-less people have relatively few choices of where to live in order to preserve their freedom of movement. That's why young people who prefer not to have a car migrate away from Michigan to live in cities like Chicago, Boston, Washington, Seattle, and San Francisco. And that's why being unable to own a car in Michigan is effectively a prison sentence.

Good, reliable transit provides everyone with a relatively inexpensive alternative way to get where they want to go...within limits. It doesn't go everywhere, and it never will. Transit will never replace personal vehicles for everyone, so it's important to have cars and trucks that don't burn petroleum products.


But strong, fixed transit does more than provide an alternative: it encourages communities to grow in compact clusters close to transit stations. Such communities enable people to obtain their daily needs within walking distance of where they live. It enables them to use transit to get to work on time. It makes it necessary to for them to walk a bit more, which improves their health. It eliminates the need to burn petroleum in order to get to a store for food. That, in turn, reduces our dependence on imported oil. (Americans send more money abroad to buy oil than we pay in taxes to maintain our roads.) And greenhouse gas emissions are reduced as well. Transportation is responsible for about 30% of America's greenhouse gas emissions.

So having communities that are oriented around good, fixed transit is an essential key to sustainability. There's a lot more we need to do, but without reshaping our communities away from sprawl, all other measures will fall very short of sustainability.

What ever happened to profitable public transportation?

Back in the 19th century, lots of entrepreneurial companies set up public transportation services...mainly rail-based, both on streets and on their own right-of-way. And they made handsome profits.
We still have a few private transportation companies making a profit in the early 21st century, but very few: some airlines (not all!), and just possibly some inter-city bus companies. Megabus? Greyhound? I'm not sure. (Usually I like to check my facts, but today I want to spark comment and discussion, so bear with me...and put in your two-dollars worth! [Inflation.])
I think it's critical to get private business to invest in - and make a profit from - public transportation. Why? Because we need to ramp up our public transportation options pretty quickly to avoid peak-oil problems, and if the private sector could be offered a profit in making that happen, it could get done much sooner.
Today, I want to look at how public passenger transportation used to make money, how it still does in some places, and why it no longer does here in the US.

How did they do it?

In the 19th century, railroads were money-making operations for a number of reasons...

• At first, roads were terrible and there was no other practical way to get around. (Contrary to what some people may think, Conestoga wagons were never  transportation of choice - only of necessity.)
• In competition with canals, they were faster and less labor-intensive.
• When other railroads arose in competition, they either provided needed capacity, or were bought out; we see this happening in the airline industry now.
• In the west, the government granted lands to the railroads - more than they needed for themselves, but enough to sell as real estate to pay for the cost of their construction. Of course, this land had been stolen from the Native Americans...
• Monopoly was standard procedure whenever possible; when a railroad was the only one serving a territory, it charged crushing rates, and employed any means possible, including violence, to maintain its monopoly; ask any California historian about the "soulless Southern Pacific".

Why can't we do it anymore?

Several reasons, some connected to abuses of the past...

• No more stolen Native American lands to give away to the railways.
• Heavily subsidized options: highways are almost 100% subsidized by taxpayers, and airways are to a large extent also, yet the fact that we have to subsidize public bus and rail service comes as an unwelcome surprise to many Americans.
• In order to use automobiles on "free" (publicly subsidized) highways, we pay more to foreign countries in gasoline and diesel costs than we do to our own government for the highways.
• Transportation companies are not allowed to diversify much, because of their history of monopolizing and bullying.

Where does public transit make a profit?

True, there aren't many places where it does...but there are some. Each merits a closer look than I can give it, but here's a quick outline.

• Latin America, for sure Curitiba, Brazil; and Bogota, Colombia; maybe others too. The government of these two cities built the infrastructure for bus rapid transit (BRT) and loaned money to private operators to purchase appropriate BRT equipment. The operators repay their loans, pay taxes, fuel, drivers, etc., and make a profit beyond that. Labor and fuel costs are relatively low in Latin America, which clearly helps.
• France with high-speed rail. The French TGVs run on track paid for with government money, but they make enough profit from high-speed service to subsidize normal-speed service operation throughout France.
• Japan has many private companies that run passenger railways and make a profit. Whether the railways themselves make a profit is not always clear, because the companies are all diversified into retail, real-estate, entertainment, banking, hospitality, and so forth. In many cases, a company's railway and its other holdings operate synergistically. For example, Hankyu owns department stores built over some of its stations, and hotels nearby, each part of the business helping the other.

Now what?

What can we do here in the United States? Are our legal and financial structures too rigid to allow public ground transportation to make a profit ever again? If not, what do we need to change? What legal and financial structures can be modified to permit us to provide lots more public transportation, and fast? Share your ideas here!

Yes Folks, Some Government Spending Really Is "Investment"

These days, we hear politicians earning "points" by always using the word "wasteful" along with "government spending". Yes, some of it is wasteful. But I'd like to point out one example of government spending that's really an investment.

But first - what exactly is an "investment"?

According to Dictionary.com, to invest is:

to put (money) to use, by purchase or expenditure, in something offering potential profitable returns, as interest, income, or appreciation in value.

Wikipedia puts it this way:

In Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security of principle, as well as security of return, within an expected period of time.

Can we say that government spending on subsidized transportation is really an investment? Can we all expect to gain from it? Has thorough analysis been done? Is the principle secure? Will we see a secure return within an expected period of time? Or does it fail on any of these counts, making it truly wasteful?

Turns out the American Society of Civil Engineers (ASCE) and the Economic Development Research Group of Boston (EDR) recently did an analysis of spending on highways and transit. They were apparently concerned about the fact that Congress has failed to pass a Surface Transportation bill for three years. Too many things seemed more important to Congress, so we've been limping along with extensions of the previous bill. Since that was crafted eight years ago, a lot of things have changed. One very important change: the Highway Trust Fund, which help build and maintain our road system, has run out of money. It's been supplemented by money from the General Fund...some of it from our income taxes, much of it borrowed and contributing to the trillions of dollars of debt our country now owes.

Here's ASCE summary:

The nation’s deteriorating surface transportation infrastructure will cost the American economy more than 876,000 jobs, and suppress the growth of the country’s Gross Domestic Product by $897 Billion by 2020, according to a new report released today by the American Society of Civil Engineers. The report, conducted by the Economic Development Research Group of Boston, showed that in 2010, deficiencies in America’s roads, bridges, and transit systems cost American households and businesses roughly $130 billion, including approximately $97 billion in vehicle operating costs, $32 billion in delays in travel time, $1.2 billion in safety costs, and $590 million in environmental costs.
If investments in surface transportation infrastructure are not made soon, those costs are expected to grow exponentially. Within 10 years, U.S. businesses would pay an added $430 billion in transportation costs, household incomes would fall by more than $7,000, and U.S. exports will fall by $28 billion per year.

What does this mean to ME?

• The Bureau of Labor Statistics tells us that in July of this year, 13,900,000 people were officially unemployed. If 876,000 were added to that, it would increase the number of unemployed by nearly 10%. That would further reduce investment in our transportation infrastructure by reducing tax revenue...but the infrastructure would still be deteriorating, needing more investment with less revenue. The infrastructure is our "principle" (because we already invested in it) and if it deteriorates, it would reduce the "security of principle" mentioned in the definition of investment above.
• How much would it cost for each US household if we invest nothing more than we do now? According to the study, changing nothing incurs a loss of $7,000 per household. (Not a good investment.)
• The Census Bureau tells us there were 112,611,029 households between 2005 and 2009. If, instead of losing $7000 each household were to invest half that amount ($3500 over the next ten years, or an average of $350 per year) there would be $394,138,601,500 ($394 billion) more spent on transportation infrastructure and services over the ten-year period..
• According to the Department of Energy the 2009 revenue into the Highway Trust Fund was $36.9 billion. But an additional $350 per year investment from each household produces roughly $39 billion each year, more than doubling the Highway Trust Fund.
• This $350 per year would result in a net gain of $6650 per year, or $66,500 on the the $350 annual investment.
  

Is this "wasteful government spending"? You decide.

To learn more:

• American Society of Civil Engineers: "New Report Shows Failing to Invest in Transportation Will Cause Job Losses, Shrink Household Incomes"
• Dictionary.com: "invest"
• Economic Development Research Group: ASCE Transportation Investment Report
• Federal Highway Administration: "Financing Fderal-Aid Highways"
• National League of Cities: "Senate holds transportation hearing..."
• U. S. Census Bureau: "Quick Facts" page
• Wikipedia: "Investment"

Calling All Champions

In the last post, I talked about the some of the arguments for and against dropping the WALLY line. In this post, I want to talk discuss what to do about it.

We need a Champion!

By now, I've been to quite a few conferences about transit and transit-oriented development. I've learned that one thing in common with all successful transit initiatives is that they have a "champion" - a person or group who takes an interest, talks to the right people, monitors progress, and when progress lags, kicks butt.

WALLY has no champion.

But isn't AATA the champion for WALLY? No. It can't be.

Let me explain. AATA is a tax-supported transit authority. Like all tax-supported entities, it cannot, by statute, advocate taxing the people to support itself. Conflict of interest.

I'm sure Mike Benham would love to be the champion for WALLY and any number of other the transit initiatives that are part of the "smart growth" master plan. And he would make a great champion. So would Michael Ford. But neither of them can do it without putting AATA in an illegal position...and losing their jobs.

So...where can WALLY find a champion?

I've been inspired by the Texas Eagle Monitoring and Performance Organization (TEMPO). It's a "champion" group for Amtrak's Texas Eagle, the train the runs from Chicago to San Antonio. It's composed of mayors, chambers of commerce, and citizens from the cities and towns along the Texas Eagle's route. They did an incredible job of making sure the Texas Eagle kept running when it was threatened with extinction by Congress. They've monitored its performance and let Amtrak know when they are not happy with it. They've managed to get the frequency increased from three time weekly to every day, by lobbying their congressmen and badgering Amtrak. They've produced travel guides for passengers that whoop up the attractions of each town along the way.

Why did they bother? Because they realized the economic value of well-run, reliable, frequent rail service to each and every town along the way. That's why it was the mayors and chambers that started the organization. And notice that elected officials and business leaders carry a lot of weight with Congress.

That's what we need for WALLY: elected officials and business leaders. They need to champion the economic benefits of a commuter line the runs north and south, as well as east and west. They're the ones who can talk to legislators and have their voices heard.

And not just for WALLY. The Ann Arbor to Detroit line needs similar champions. So does the Wolverine line - Amtrak's service from Pontiac to Chicago. SEMCOG can't advocate for the AA-Detroit line any more than AATA can advocate for WALLY. And by 2013 or 2014, Michigan will have to pay for the entire cost of Wolverine service, according to PRIIA, a Federal statute that modifies the way Amtrak is funded. Who will go to the State legislature and tell our congressmen and senators we really need Wolverine service? Not Amtrak - they are forbidden by statute.

It's up to us, the citizens, to alert the elected and business leaders of the economic value of each of these services to their communities, and point out what they stand to lose without them.

So let's do it. Let's kick butt.

Is WALLY Dead?

At Tuesday's meeting of the Ann Arbor Transportation Authority's Planning and Development Committee there was a short but intense discussion of WALLY, the WAshtenaw-LIvingston commuter rail proposal.

You see, about $190K has been budgeted for station architecture, but not spent this year. Should it remain in the budget for next year? The money has come from several sources, including Washtenaw County, the City of Howell, and AATA itself. The question came up when Board Member David Nacht questioned whether it was responsible to pay architects to design stations if the chances of trains running was practically nil.

Mr. Nacht is doing his job in a responsible way. His point is that spending taxpayer money for something that's already doomed is irresponsible, and AATA should either return the money or use it for something more likely to succeed.

AATA staff members pointed out that money has already been spent for WALLY line track upgrades, signal systems, grade crossing adjustments, refurbishing rail cars, and environmental studies. Why kill the project now?

The answer - which is well taken - was that operating funds haven't been identified, so even if all the preparations are made, how can we run trains without enough money? Without Livingston County's support for WALLY, the trains just won't run anyway.

Good points, but not insuperable. If it had been easy, we would have done it already. Although I respect Mr. Nacht for trying to be a good steward of taxpayer money, cutting off funding for WALLY is not responsible for two reasons...

1. Money already invested

A lot of money has been invested in WALLY already. If the $190K is given back, it will effectively kill WALLY. The point is not that the architecture of stations is essential to get WALLY going. The service can start, if necessary, using concrete slabs and bus shelters. But AATA has been the leading agency for WALLY, and refusing to spend money on it would send a powerful message that it's a dead duck.

Mr. Nacht's question is, "Aren't we just throwing good money after bad?" If the death of WALLY was a sure thing, I suppose he'd be right. But it's not a sure thing unless AATA kills it. More on that later...

Another reasonable question of Mr. Nacht's: "Can't the track be used for freight and the rail cars for other purposes?" Yes, but the freight business run by Great Lakes Central Railroad was doing fine before the tracks were upgraded. MDOT, which provided the money for the upgrades, did it specifically for passenger service. Its purpose was to reduce congestion on parallel US 23 during peak travel times. It directed the money to rail rather than highway because adding lanes to US 23 would be far, far more expensive. And yes, the rail cars could be used on the Ann Arbor to Detroit commuter line when/if it starts, but there is another set of cars refurbished for that purpose. If WALLY doesn't use the cars intended for it, the money will have been spent for resources that won't be used.

In short, by saving $190K, several million will have been spent needlessly. I call this penny-wise but pound-foolish.

2. Future money lost

By refusing to continue with AATA's funding for WALLY, we-the-taxpayers will lose out on a great deal of money we could be getting. Some of this is Federal and State transportation money, but even more is private investment that will go elsewhere

Yes, WALLY is public transportation and is eligible for Federal and State funds. Both Federal and State treasuries are tight, and likely to get even tighter. But what money is available will go elsewhere if give up hope now.

Moreover, the primary reason for WALLY (in my view, at least) is not to relieve congestion on US 23, helpful as that would be. It's to provide an economic incentive for investment in compact, transit-oriented development in Southeast Michigan. That's a goal worth a lot of effort, because without it we'll lose not only money, but one chance for a future with hope of sustainability. Our children and grandchildren will find themselves in a region whose developement is choked by high transportation costs and low potential for growth. Those who can, will leave the area to those who can't. It's what I'm working to prevent.

The wall, the chicken, and the egg

Mr. Nacht is afraid continuing efforts on WALLY is like driving full-speed into a concrete wall. I know from my study of rail transit growth that it's a wall of mist. Forgive me for saying it again: it's normal for rail initiatives to face opposition and for people to think it will never work. But the opposition is more a wall of mist than of concrete. When nay-sayers see the benefits and decide to invest time and money in the project, it works. Or at least, if they stand back with a wait-and-see attitude, once it gets going the rail line proves itself worthy of continued funding.

The wall is not simply nay-sayers, but a lack of obvious funds to run the trains with. Nobody "knows" where the money will come from. That doesn't mean there isn't money to do it with. Remember that 76% of people polled for AATA's Transit Master Plan said they wanted the Smart Growth plan - the plan requiring the highest level of citizen funding. WALLY is part of that plan, and though it won't serve everyone, it is part of the package people say they want. Out of the entire Smart Growth plan, it's only a small part, requiring a modest proportion of any funds raised through millages. For the last several months we've heard Tea Party legislators talking about "the will of the American people" being to cut back on everything. I honestly don't believe it. Some Americans, sure. Not all of us. Paying for something that will benefit our local economy is far different from sending money off to Washington with no say in how it's spent.

Michael Benham compared finding the funding to a chicken-and-egg process. Without operating funds, why should we build it? But without building it, how can we operate it? Clearly we have to start by building it. I'd rather see us being the egg, not the chicken - in the sense of "chickening out".

If we don't invest in Southeast Michigan, nobody else will. Let's do it.

To learn more:

• Ann Arbor Transportation Authority Board of Directors
• AATA Transit Master Plan
• City of Howell, Michigan
• Partners for Transit
• WALLY page at AATA