Guest post: Transitnomics: The real cost of the House transit cuts

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This guest post is by Brian Morrissey, hailing from Chicago. He tackles social and economic transportation issues on his blog, Commuter Age (or is that Commute Rage?) and on Twitter. Here, he takes a close look at the economic implications of the federal transportation funding shakeup on Chicago’s transit system. He has also written an excellent analysis of the national economic fallout of the proposed bill.


(A 1974 derailment in NewYork, photo: Doug Grotjahn via nycsubway.org)

If the current federal transportation spending bill is passed, public transit agencies across the country will immediately lose about $8 billion in grants used for capital improvement.

The bill, formally known as the American Jobs and Infrastructure act, HR7, makes these transit cuts by seriously weakening two laws that have stood as bulwarks against the complete capitulation to car culture in this country.

One is the Surface Transportation Assistance Act (1982), which provides revenue from federal gas taxes for transit. The other is the Intermodal Surface Transportation Efficiency Act (ISTEA, 1991), which created Transportation Enhancements, the dedicated funding for biking and walking infrastructure. Both laws have saved and maintained the transit infrastructure and service in the economic engines of this country — our cities. They helped meet growing demand for transit, ridesharing, and biking as rising fuel prices have increased pressure on household budgets.

Some national context: Total annual vehicle miles traveled (VMT) have remained flat since peaking in 2008, when the price of oil hit $147 per barrel and kicked the bottom out from under demand. Traffic fatalities have declined for 15 straight quarters to less than 34,000 in 2009, the lowest level since 1954. Bike commuting has experienced enormous gains in the last five years, more than doubling in some cities, including Chicago and New York. Transit ridership over the same time frame has grown to record levels nationally and new services in places like Dallas, Charlotte, and the state of Utah are extremely popular.

What would be the real economic impact of the proposed federal spending cuts?

Those $8 billion in transit cuts, for one thing. To frame this locally, I’ll use my home of Chicago. The region is home to nearly 10 million people, 25% of whom take public transit daily. If the federal transportation bill passes in its current form, $450 million in infrastructure spending annually would disappear for the seven county metropolitan region.

The immediate impact would first be felt when infrastructure improvements — such as the Red Line Extension and the Red & Purple Line Modernization Project — are delayed, likely indefinitely. Purchases of new buses and ‘L’ cars would also be affected, probably canceled. Vehicle, track, and stock maintenance would be minimal. There would be immediate layoffs of transit workers, with many more over time. 

With fewer employees and aging cars and buses not being replaced, service quality would begin an inevitable decline as maintenance costs increased and repairs were deferred. Critical incidents would increase and travel times would lengthen. Buses and cars would grow dirtier, with graffiti reclaiming its lost ground. Transit riders would basically return to the 70s era of disrepair.

The end result would be transit trips becoming car trips.

In 2010, Chicago was ranked worst in the nation for automobile congestion costs, with a total of more than $8 billion in wasted time and fuel. Meanwhile, the 4 billion passenger miles traveled on CTA, Pace (suburban buses), and Metra (commuter rail) saved $2 billion in time and fuel.

Four billion miles may seem like a lot, but it pales when compared with the 38 billion vehicle miles traveled in cars in 2010 in Chicagoland. Yet those meager 10% of total passenger-miles by transit yielded a whopping 20% savings in total congestion costs. Increasing transit investments would result in greater savings; the proposed transit spending cuts will create even greater costs.

In 2008, former MTA CEO Elliot Sander connected New York transit’s soaring ridership with vigorous capital investment: $76 billion since 1982 (the year the federal Mass Transit Account was created) had led to a ridership increase of 40%, he wrote. In Chicago, as well, 2008 marked the highest ridership since its low point when five ‘L’ stations were closed in 1992. 

In recent years, the CTA has undertaken several major capital improvements, which should continue to help ridership and revenue grow, assuming they will be able to maintain them. Capital improvements to transit can have a lifetime of 30 to 50 years if efficiently maintained; the annual loss of $450 million in infrastructure spending for the region will be amplified by lack of maintenance, raising the costs and breadth of needed maintenance and undoing ridership gains.

What would it mean economically for the Chicago region if these one billion transit miles were converted to vehicle miles traveled in private cars?

Based on available figures, 20-30% reduction in ridership in 15 years is possible if this funding is not replaced, resulting in an estimated $700 million in increased annual congestion costs by 2028. 

By using this breakdown of the public burden of the per-mile-costs of driving (for another analytical approach to the same figures, see Todd Litman’s 2004 paper “Whose Roads?”), we can see the annual financial impacts of the gradual shift from transit passenger miles to vehicle passenger miles as transit loses ridership:

Year 5 (5%) Year 10 (15%) Year 15 (25%)
Lost transit-miles
to vehicle-miles
200,000,000 600,000,000 1,000,000,000
Increased crashes $11,000,000 $33,000,000 $55,000,000
More road repairs $3,200,000 $9,600,000 $16,000,000
Land use impacts $13,200,000 $39,600,000 $66,000,000
Parking $12,400,000 $37,200,000 $62,000,000
Air Quality $8,000,000 $24,000,000 $40,000,000

These six factors alone could mean a staggering economic hit of nearly $1 billion annually to the Chicago region in 15 years. And these numbers are on the low end — the calculations are based on the national average, and costs in urban areas tend to be higher. Further, these calculation don’t include the direct personal expenses (and subsequent opportunity loss to the local economy) of these new vehicle miles, which are more than double the public costs.

Supporters of HR7 and of cutting dedicated funding streams in general are quick to point out that state transportation departments (DOT) can flex as much as they want to transit and bike/ped programs. But historically, they haven’t done so — state DOTs are, in practicality, highway agencies.

The seven county Chicago metropolitan area represents 75% of the population of Illinois and 25% of the region commutes via public transit, yet the Illinois Department of Transportation (IDOT) voluntarily flexes just 1.7% of the federal funding it receives to public transit services and infrastructure. IDOT may rightfully see itself as serving the needs of all Illinoisans, but in doing so highlights the vast inefficiencies of the car-only transportation network in most of the state; a strange twist on the tyranny of the minority principle.

Transit nationwide recoups 30% of its operating expenses from users. The CTA receives 55%. (This is called the fare box recovery ratio.); in bigger cities, it’s usually above 50%, even closer to two-thirds. The money invested in transit systems also creates more jobs. Our vast, sprawling, wasteful national road network, on the other hand, is about 95% subsidized. Yet it’s transit that’s being vilified.

It’s time to decide whether we want a transportation network that promotes efficiency and economic benefits, or a highway program with devastating external costs and public burden. Congress and President Reagan created the Mass Transit Account because they understood that investing in highway alternatives benefits everyone, including the driving public. The authors of the transportation bill seek to eliminate this investment for the benefit of a wealthy few. If they do so, it will be at the expense of every person in America who drives, walks, bikes, or uses transit.

This has been a guest post by Brian Morrissey of Commuter Age.


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