Economic Development Research Group
Economic Development Research Group
News Article | March 24, 2016
Last week, San Francisco residents found that their regional rail service, the BART, was experiencing systemwide delays and thwarting commutes. Such service problems aren't unusual. In response to the news, for example, one rider tweeted, “we've come to expect rush-hour equipment problems and train delays from you [BART]. What you're saying is that today ends with '-day'.” What was uncommon was the response from @SFBART, the service's official Twitter account, which happened to be run that day by employee Taylor Huckaby. Instead of merely apologizing, Huckaby explained. “BART was built to transport far fewer people, and much of our system has reached the end of its useful life. This is our reality,” he tweeted. “We have 3 hours a night to do maintenance on a system built to serve 100k per week that now serves 430k per day. #ThisIsOurReality” While Huckaby’s response was taken by many as a refreshing bit of candor from a public agency, others were more cynical. SF Weekly's Chris Roberts equated Huckaby’s BART sanctioned “real talk” to a long con on the part of BART designed to raise enough political will to pass a $3.5 billion dollar bond measure which BART says it needs to overhaul the system and make critical maintenance changes. The problems that Huckaby highlighted are real, however, and they aren’t limited to BART or to San Francisco. Nationwide mass transit systems are faltering. Washington, D.C. shut down its Metro for 29 hours last week, citing the need for critical repairs after an electrical fire halted its rail system. The shutdown left 700,000 commuters scrambling for alternative transportation and exacerbating the city’s already awful traffic. Over the next year, New York City's MTA is closing 30 subway stations to fast track overdue repairs. Boston’s T is plagued with maintenance problems that became particularly acute during the winter of 2015 when snow and cold crippled service for a month. And all of this is happening at a time when more of us are riding public transportation than ever before. In 2014 Americans took 10.8 billion rides on mass transit—the highest number of rides in 58 years, according to the American Public Transit Administration (APTA), a mass transit advocacy group. APTA’s data reflects much of what Huckaby tweeted: Between 1995 and 2014, mass transit ridership increased 39 percent nationwide, while driving peaked in the mid-2000s. This shift to mass transit isn’t happening just in cities with established mass transit systems like New York and San Francisco. It’s also happening in cities that we don’t necessarily equate with mass transit—cities like Atlanta, Houston, and Salt Lake City. If BART and Huckaby are trying to manipulate riders into voting for increased financing—and they claim they're not—you can hardly blame them. Mass transit is starved for cash. The money that funds mass transit, whether it's bus, train, light rail, or trolley, comes from a mix of four sources: riders, federal subsidies, state subsidies, and local transit support, usually through property taxes. And all of them are shrinking. On the federal side, most of that money comes from the federal gas tax: 18.4 cents on a gallon of regular gas 24.3 cents on the gallon for diesel, with 81-percent going to fund highways and the remaining 19 percent going to mass transit. That’s right—mass transit depends on people driving cars for a significant portion of its federal funding. Unfortunately the Highway Trust Fund is perpetually on the brink of bankruptcy. The fund was designed to collect the gas tax and dispense it to states and municipalities to spend on their transit projects. The money collected was to roughly equal the money dispensed minus reserves. Since 2008, however, the fund has spent more than it's received. The issue is that while costs, partly due to inflation, have increased the gas tax has remained the same since 1993, not keeping pace with inflation. At the same time, cars become more efficient, which means people are buying fewer gallons of gas. The end result is less funding for transit, and a find that's only managed to stay afloat this far through congressional dispensation. “There have been substantial declines in the gas tax between 2002 and 2012,” said Phil Oliff, a manager at The Pew Charitable Trusts and an author on a 2014 Pew study that looks at transportation funding. “When you adjust for inflation, the gas tax has declined about 31 percent at the federal level and 19 percent at the state level.” This leaves little money for the maintenance necessary to keep mass transit systems going, nevermind the expansions necessary to move increasing numbers of riders. This isn’t a problem just for mass transit, but when you’re drawing from a smaller pool of money in the first place, its impact is more acute. When combined with the fact that, at every level of governance the percentage of dollars we direct to highways exceeds what we spend on mass transit, it becomes apparent that not only does mass transit receive a smaller percentage of the pie, but that pie is shrinking. This isn’t just a problem for mass transit riders, it's a problem for drivers too. Quality mass transit trumps road building when it comes to reducing traffic. In fact, planners and economists call road building “induced demand” because it encourages people to hop into their cars instead of walking or taking mass transit. Cities like New York don’t have high rates of mass transit ridership simply because they have broad comprehensive systems, but because driving in New York City is frequently more expensive and slower than alternatives. “Bringing cars off of the roads, both saves money in terms of road building and road requirements,” said Glen Weisbrod, whose company, Economic Development Research Group, Inc., researches the economic impact of a range of development projects including mass transit. Each time mass transit proves itself be less reliable, however, it creates an incentive for people to take to the roads. Why not simply have the riders bear the full cost of the system? After all on average, the cost of a BART fare covers 68 percent of the cost of a ride, more than that of most transit systems. Subsidies make up the rest. But even if riders bore 100 percent of the cost, this would only cover the cost of daily ridership, not long-term maintenance and capital improvements. Additionally, there’s a tipping point at which transit costs will push people back into cars, and road building as already mentioned does nothing to combat traffic while also being still more costly. Finally, there’s the issue of fairness: Drivers don’t bear the full cost of roadways, so why should mass transit riders bear the full cost of mass transit? A 2015 US PIRG study found that user revenue only covered 48 percent of the costs of roads. General taxpayers, and bond dollars filled in the remaining 52 percent. The way we talk about mass transit funding could leave one with the distinct impression that it’s a burden, not a boon. “Public transportation is seen as having three kinds of benefits social, economic, and environmental,” said Weisbrod. Socially, mass transit benefits the many people who can’t (or shouldn’t) drive: children, the elderly, the blind, and St. Paddy’s day revelers. Environmentally, it reduces greenhouse gas emissions, and economically, Weisbrod found that for every $1 billion of annual investment in public transportation leads lead to more than $1.7 billion of net annual additional GDP, most of which stays in the local community. To get those benefits, we need to have mass transit that’s reliable and responsive to people’s needs. And for that, we need proper funding. “It’s important to understand financing isn’t funding,” said Oliff. “Financing measures like municipal bonds, infrastructure banks, and public private partners are not by themselves the solution to the country’s transportation funding challenges. Financing is an important tool, but at the end of the day they need to be repaid using revenue sources like taxes tolls or fees.” And that means getting serious about funding mass transit.
Alstadt B.,Economic Development Research Group |
Coughlin J.,Economic Development Research Group
Transportation Research Record | Year: 2012
Patterns of freight movement result from economic exchange. That is, buying and selling activities along complex global supply chains drive infrastructure-level demand. Yet commodity forecasting techniques used in freight plans and port studies frequently ignore these broad drivers. The fundamental thesis of this paper is that the macro level-the global macroeconomic perspective-is increasingly important to making reasonable freight projections at the micro level-the infrastructure level. This paper therefore has two goals. First, it briefly reviews the state of the practice in freight forecasting and ultimately concludes that the macro level is noticeably absent in most forecasting methods and reviewed studies. Second, the paper presents a method of generating county-level commodity forecasts that embody macro drivers and trends. Specifically, the approach ties together three critical pieces of information: (a) a county-based social accounting structure representing detailed factors of economic supply and demand; (b) a set of domestic macroeconomic forecasts providing future industry-by-industry production trends that recognizes spatial growth patterns, changing technology, relative industry growth, and broad forces affecting final demand; and (c) a forecast of U.S. international trade, recognizing differential economic growth of trading partners as well as pressures from international competition and currency fluctuations. The result of this methodology is county-level trade forecasts (in dollars) that are analytically (not statistically) tied to macroeconomic growth trends. These forecasts can be used alone for sketch or policy-level analysis, or they can be combined with meso- and micro-level information and models for comprehensive freight forecasting at the infrastructure level. The method presented is being implemented in the Transportation Economic Development Impact System, a web-based analysis system used in planning major transportation investments in the United States and Canada.
Landau S.,Economic Development Research Group |
Weisbrod G.,Economic Development Research Group |
Alstadt B.,Economic Development Research Group
Transportation Research Record | Year: 2010
Benefit-cost analysis (BCA) is widely used for airport investment analysis, for both ranking of alternatives and funding decisions. Although the technique is theoretically straightforward, its application can become complicated by a series of factors that are particularly problematic for aviation applications. For one, the requirement for ground access makes air travel intrinsically multimodal. In addition, the speed of air travel attracts classes of users and dependent parties with particular speed sensitivities and delay consequences. When BCA is applied to airport project proposals, it can raise issues of how to handle competing modes and intermodal interactions, and the definition of the real users and beneficiaries of airport improvements. To examine these issues, the authors compared benefit-cost guidance for airports with counterpart guidance for other travel modes and conducted a review of the current state of practice of benefit-cost studies for airport improvements. The findings point to challenges for improving methods of airport BCA.