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Friday, March 18, 2005

The Opposite of True

Posted by: Hammer / 6:49 AM

P.J. O'Rourke, who might or might not be funny, cribs from the Heritage Foundation circa 2002. O'Rourke writes:

The new transportation bill, currently working its way through Congress, will provide more than $52 billion for mass transit. Mass transit is a wonderful thing, all right-thinking people agree. It stops pollution "in its tracks" (a little ecology-conscious light-rail advocacy joke). Mass transit doesn't burn climate-warming, Iraq-war-causing hydrocarbons. Mass transit can operate with nonpolluting sustainable energy sources such as electricity. Electricity can be produced by solar panels, and geothermal generators. Electricity can be produced by right-thinking people themselves, if they talk about it enough near wind farms. ...

There are just two problems with mass transit. Nobody uses it, and it costs like hell. Only 4% of Americans take public transportation to work. Even in cities they don't do it. Less than 25% of commuters in the New York metropolitan area use public transportation. Elsewhere it's far less--9.5% in San Francisco-Oakland-San Jose, 1.8% in Dallas-Fort Worth. As for total travel in urban parts of America--all the comings and goings for work, school, shopping, etc.--1.7 % of those trips are made on mass transit.

Then there is the cost, which is--obviously--$52 billion. Less obviously, there's all the money spent locally keeping local mass transit systems operating. The Heritage Foundation says, "There isn't a single light rail transit system in America in which fares paid by the passengers cover the cost of their own rides." Heritage cites the Minneapolis "Hiawatha" light rail line, soon to be completed with $107 million from the transportation bill. Heritage estimates that the total expense for each ride on the Hiawatha will be $19. Commuting to work will cost $8,550 a year. If the commuter is earning minimum wage, this leaves about $1,000 a year for food, shelter and clothing. Or, if the city picks up the tab, it could have leased a BMW X-5 SUV for the commuter at about the same price.

Back in 2002, the Heritage Foundation wrote:
The Minneapolis "Hiawatha" light rail line, now under construction, will cost $19.00 per new rider. This amounts to $8,550 annually per new commuter--enough to lease a BMW X-5 Sport Utility Vehicle.
Does the Hiawatha line cost $19 per new rider? We'll get to that claim in a minute. First, though, let's assume it's true. How does that compare to O'Rourke's BMW? You've leased your BMW X-5, but that doesn't mean you can actually drive it. You need insurance: figure $100/month in Minnesota. Figure 22 working days, 44 commutes a month. That's $2.27/trip for insurance. That's great, except you haven't paid for gas. Figure 20 mile commute, 1 gallon of gas per trip. As of today, that's $2.20 per trip. Car insured and all gassed up, you drive to your job downtown. Unless you drive a taxi, you probably are going to have to park. You can park in the Depot Lot for $5.00 a day, or $2.50 per trip. So that's one trip, right? Well, just about. You still have to maintain your car. According to the TurboTax, the federal mileage rate is 37.5 cents per mile. For a $20 mile commute, that's $7.50. Bottom line is that you're spending $14.50 one way to drive your BMW to work -- not including the $19 per trip to lease the damn thing. Total cost for the BMW commute comes to $33.50.

Misleaders like O'Rourke will have you believe that people respond rationally to markets and that unregulated markets work perfectly. If it costs $33.50 to drive to work each day, then market theory tells us that everyone will take the $1.75 ride instead.

That, of course, is not how it actually works out. There are two reasons for this: One, transit choices are more complicated than dollars and cents. Two, O'Rourke's numbers -- and mine -- are pure bunk.

Heritage doesn't explain their numbers, but I'll gladly explain mine. The Hiawatha line cost $715 million to construct. Over the next 15 years, ridership is projected to average 19,300 per day. That comes to 105,000,000 rides, or $6.77 per ride. That's also the low-end forecast. To date, ridership is almost double the forecasts. That would drive the cost down to $3.40 per ride. The passenger pays about half that cost.

These figures don't account for the maintenance and operation of the LRT. I can't find those figures to properly factor them in. The other obvious response is that highway construction is funded by the state gasoline tax. That's just not true. The state gas tax generates a bit over $600 million in 2004. In the current bill before Congress, Minnesota would receive $575 million in federal highway aid. You also have to include money allocated in state bonding projects ($400 million in 2003, no bonding bill passed in 2004) and costs paid by local governments. You'd have to more than double the 20 cent gas tax to fully fund road improvements with a gas tax. Even then, car commuters would not meet the Heritage Foundation's standard where fares paid by commuters cover the cost of their own rides. Car commuters – and Hammer is one of them – don't directly pay for the environmental degradation carbon combustion causes.

Which do you think will come first – a fair assessment of the costs of commuting borne by commuters, or a fair reckoning of the costs of transit from the Heritage wonks?


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