Monday, August 11, 2014

Portland's Disastrous Light Rail Experience

"Dishonest scales are an abomination to the Lord,
But a just weight is His delight."
Proverbs 11:1

Yeoman's work from Ben Wear of the Austin American Statesman:
The Portland transportation scenario is one the Austin City Council — which Thursday voted to ask the public to OK $600 million in bonds in November for a starter light rail line — would dearly love to replicate.

But while Portland and Austin share reputations for liberal electorates and scenic beauty, they have significant differences in history, statewide politics, geography and, perhaps most significantly, timing. What happened in Portland over the past several decades would be a much more expensive undertaking in Austin and might not be financially and politically possible, even if voters say yes this fall.

The Portland rail story, however, is complicated. Though the city’s residents revel in the handy transit options, the system and how it came to be have carried significant costs: a transit agency with hugely underfunded retirement and health care obligations, labor unrest, bus service cutbacks and deferred maintenance of the expanding rail system. Meanwhile, hundreds of millions of city, county and school taxes were diverted to build the rail system and seed development along it.

And even in this showcase transit town, there’s a stubborn and surging anti-rail current. Several suburban cities and a neighboring county in the past couple of years have passed referendums requiring voter approval of rail spending, a procedural step that has bedeviled Austin transit supporters but one that Portland has managed to sidestep since the mid-1990s. And despite all the alternative transportation options, about seven in 10 people in greater Portland use a car to get to work, six of them driving alone.

No freeways have been built in the Portland area in the past 30 years, a source of unrest in suburban, conservative Clackamas County to the south and Washington state’s Clark County just across the Columbia River. And despite all the rail lines, the metro area’s road congestion, according to the Texas A&M Transportation Institute’s most recent urban mobility report, is roughly equivalent to that of Austin.
 But at least it was dirt-cheap and had with clear lines of authority:
By September 2015, when a $1.5 billion Orange Line extension into suburban Clackamas County is set to open, TriMet and the city of Portland will have spent about $4.1 billion building 82 miles of light rail, streetcar and commuter rail lines. The local share of that comes to $1.38 billion, or about a third.

Even that tab was split multiple ways, with three counties, the Portland Development Commission, Metro (Portland’s transportation planning agency) and others kicking in. The federal government has paid about 56 percent, including almost 60 percent of the light rail cost, and the state has spent about 11 percent.

At best, Austin and Capital Metro will see 50 percent from the Federal Transit Administration for the area’s first light rail line.

That assumes Congress continues transit grant funding at something like its current level — no sure thing, given the state of the federal highway trust fund and Washington’s wheezing political culture — and that assumes Austin manages to shoulder its way to the front of a lengthy line of municipal supplicants for the money.


Light rail construction costs nationwide have been increasing at a rate far outstripping inflation for reasons that aren’t really clear. Portland’s Orange Line will cost more than $200 million a mile. Based on the $1.4 billion cost estimate for the initial 9.5 miles of Austin light rail — $147 million a mile — building a 60-mile system comparable to Portland’s would cost $8.8 billion.

As it stands now, if the feds cover half the cost, Austin-area taxpayers are looking at a long-term tab of $4.4 billion. Absent help from state government or some other source of income, that would consume much of the city’s bond capacity for decades to come.

[Author's Note: Emphasis added]
 But at least those ridership projections held up:
Rail critics in Portland, pointing to U.S. census statistics, assert that transit has become less popular there since rail’s 1986 debut. In 1980, Cato Institute fellow Randal O’Toole says, the census reported that 9.8 percent of Portland area residents used transit (buses, at the time) to get to work. In 2012, 75 miles of rail transit later, that number had fallen to 7 percent.
And it's not like, true to form for "progressive" social engineering attempts, it ended up hurting the people it was allegedly supposed to help:
Some critics say the rail expansion has come at a cost to Portland’s poor, especially those who don’t live near a light rail line. Bus service hours have dropped 9 percent since 1987, even as Portland’s population has boomed.
About those unfunded pension costs:
TriMet, meanwhile — despite fare increases, service cuts and elimination in 2012 of a no-fare zone downtown — has a $1.1 billion unfunded liability for future employee health care benefits and employee pensions, according to a January audit by the Oregon secretary of state’s office.

The agency’s executive director, Neil McFarlane, told the American-Statesman that those pending, uncovered costs are not related to rail spending. Rather, he said, former TriMet leaders made unwise concessions in negotiations with the union representing transit workers.

“That was a bad call long ago,” he said.
 Glad they cleared that up!!!

Finally, there's the corrupt, crony, real estate "development":
Government has to help in various ways, he said. “It’s not just sprinkle this magic dust on the landscape and cool new housing will spring up.”

Those incentives Hales advocated 18 years ago have occurred in a big way. Portland has a civic animal absent from the Austin scene: the Portland Development Commission. This arm of city government, created in 1958, over time has formed 25 urban renewal areas throughout Central Portland, in each case collecting property taxes growing from the increased land and building values in those districts.

Between 1996 and 2013, the commission took in almost $1.3 billion in such “tax increment” revenue — money that might otherwise have been spent on schools or city or county services — and so far it has spent about $775 million, according to figures from the commission.

That money has been used to spur development in a variety of ways: forgivable loans to businesses; grants; property tax abatements; environmental remediation of former industrial sites; and construction of parks, streets, sidewalks and other streetscape improvements.

The commission has thrown money directly into the rail kitty from time to time, as well, Executive Director Patrick Quinton told the American-Statesman. It put $30 million toward the Yellow Line to Northeast Portland, $10 million into the ongoing Orange Line construction and at least $40 million into the streetcar projects.
 But finally, after almost 30 years, the central planners' plan is WORKING!!!
Hales says all those urban renewal districts, and all the tax revenue invested in them, are about to begin paying off for local government treasuries.
Read the whole thing here.

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