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Jonathon Nield

Fascinating approach. There is a lot more vested in the outcomes if the cities own the process from cradle to grave including the funding.

Will

Here's one thing that worries me: The urban/suburban/rural dynamic in the US is also a socioeconomic one. That is, regions are segregated racially and economically, and outlying areas have problems paying for transit in cities because the "wrong kind of people" use it. If the Feds quit paying for this stuff altogether, I have a hard time envisioning white, affluent suburbs paying for better transit in poor, primarily nonwhite cities.

This is a bigger issue in some metro areas than in others, but I think it's important to point out.

Alan Robinson

I think we need to link back to one of your posts, and one of Yonah's from a year ago discussing the roles of US and Australian states and cities in transit planning.

I'll restate a key point that was brought up. The US has many large urban areas that span multiple regional and state jurisdictions, unlike most other countries. Coordinating planning across these jurisdictions is already difficult. It's difficult to imaging that requiring these jurisdictions to coordinate revenues will be acceptable, especially given recent precedents in US politics.

read

The political economy of state government differs substantially from the federal relationship. In some ways, cities have an easier time obtaining funding for their desired infrastructure from the federal DOT than they would from state government, which is often subject to an urban-suburban-rural split that is less pronounced at the federal level (and particularly within DOT, which often appears more concerned with evening out allocation by state than in choices about types of infrastructure funding). Take Seattle - where the county and city constantly battle over infrastructure funding - as an example. State overrides of local desires are another issue - e.g. Virginia ramming an undesired freeway down Charlottesville's throat. In short, I'm not convinced that the local-led end state would be good for cities, if that's the concern. [this puts aside the financial implications of funding local infrastructure through local governments - which can be expected to borrow at higher rates than the treasury - or states, including legal limitations on state and local ability to run deficits].

George Bell

I live in Toronto, our big problem right now is that we just cancelled a massive LRT network that was agreed to by the current provincial government and previous mayor over 8 years (with some federal funding thrown in for parts of it). The new mayor campaigned on "no new transit on streets", which meant cancelling most of the LRT system, and instead burrying it in a "LRT-Subway" type system...so now the feds aren't paying anything, the province is going to build one "cross-town subway/LRT" and the Mayor can't find any funding for his pet-project subway to nowhere, so he is looking at possibly cancelling an order of new streetcars for the current toronto on-street network so that we can build 6km of subway in a mainly residential area....(and if that's not enough, it's likely that when the new provincial government is elected they will cancel the cross-town LRT, like they did 20 years ago - in fact spending money to fill the hole with cement)...the biggest problem with having multiple levels of government is that they all have to agree to do something...however it's clear that if you only had one level of government working on transit, they would only be able to focus on one project...we also run into the multiple jurisdictions competing for riders (a recent story had a woman on a mississauga bus who had an emergency and wanted to exit the bus being told by the driver that he wasn't allowed to let her exit the bus in toronto - although he could pick her up there...she had to wait until they arrived in mississauga before she could be let off the bus)...

Mike Orr

There's a vital difference between federal funding and state/local funding. The federal government can use deficit spending to prepay transit investments, but states/cities can't. The net result would be the same as what's happening with extended unemployment and certain public health programs: the federal govt is turning these responsibilities over to the states, but the states have no money, so those services just disappear.

Mike Orr

The problem of multi-jurisdictional metropolises would be no worse than it is now. States have successfully set up regional transit authorities, and will continue to do so.

Jarrett

Re the urban/suburban split. Contrary to Will's comment, this is no longer a class split, at least not consistently. Many of the urbanist success stories in the US have essentially pushed poverty out of the city and into suburban areas, and immigration is also making suburbia more diverse. If your model is the classic "white flight" suburbia of 30 years ago, which can still be found in some cities, then yes, it's a class issue. But there are metros where the class issue runs almost the other way.

Re state boundaries, I'm being general here about whether it's states, regions, or cities that step into the void, but given that transit needs vary widely within each region, I would love to see more core cities take up the mantle of funding the incremental cost of the higher level of transit that they need, as Seattle is already trying to do.

Erin Jonaitis

Love your blog; coming out of lurkerhood to say, I'm with Mike Orr on this one. In principle I have no problem at all with devolving transit decisions to the population that will actually be using the system. In practice I don't see how it leads to anything but defunding. In addition to the deficit spending problem Mike raised, there's also the problem that the US federal gov't gets to tax income at rates that states can't really pull off.

This is me thinking out loud -- but I wonder whether the slow behemoth that is the Executive Branch also effects a conservatism that is necessary for a transit system to work? I suspect that it is easier for a state to randomly axe a program than it is for the Executive Branch to do the same. For anything that requires *stable* funding -- and I'd argue that transit infrastructure is such a thing -- I worry that state or local control will mean a vacillation in funding levels that doesn't allow for much progress. I'm comparing this with science funding, where even at the federal level there's a cycle of boom and bust that isn't really great for our scientific infrastructure. If science instead depended on the whims of the celebrity and fringe-party governors that get swept in and out of office across the nation... I shudder to think of what would happen.

(If we're talking about a large enough program to merit a line item, though, the above goes out the window -- I have the sense it is easier for Congress to randomly axe things, compared to the Executive Branch.)

23skidoo

Ottawa/Gatineau is a cross-province urban area, and it certainly doesn't work like it would in the US. The autoroute 5 on the Quebec side just kind of ends at a surface street/truck ghetto on the Ontario side. Quebec just puts more money into everything, and at one point built urban expressways like the US.

Danny

The interesting thing here is that it isn't just Canada with the weaker Federal government and stronger transit outcomes. You can pretty much do the same for Europe (thinking of the European Union as a federal government and individual nations as states). Japan and Korea have strong central governments, but in terms of transit, have left funding up to the cities. Localized government is not diametrically opposed to transit success. In fact, I would argue it is the exact opposite.

As for the idea that the federal government needs to subsidize cities due to their infrastructure needs, I call BS.

Sure, it is a fact that cities have higher infrastructure needs...but it is also a near absolute fact that infrastructure has major economies of scale: you spend less per person as cities grow. Even a boondoggle like the Big Dig has a more favorable cost structure per user than most interstates in the western US. Cities do not have more funding necessities than rural areas...they have less.

Of course those funding necessities have a tendency to bloat and grow with greater corruption and inefficiency combined with less accountability...but how exactly are those aspects supposed to get better by placing a funding burden on a centralized entity with negligible local representation?

Andre Lot

Though the initial idea of cities controlling their own transportation funding "from cradle to gravel, including funding" might sound appealing, one must consider race-to-the-bottom and hold-out incentive issues, much more relevant on local/regional scale than on a federal level.

If a company or person doesn't want to pay US federal taxes, it has, essentially, to move out of the country. Many did that, but it is no feasible alternative for most business and people anyway. States engage each other in "bidding wars" to lower taxes and lure business away from next state (just look at the ongoing Kansas City, MO x Kansas City, KS "move across the river and pay (ever) lower taxes" programs)

In a local or regional context, the race to the bottom is far easier to get on. The biggest example is Wal-Mart: it has countless stores opened just across county or city limits, taking advantage of a sweet deal of property tax reductions or development of infrastructure by a more distant, smaller city to "skim" a bigger city it will actually serve most.

An interesting case is that of School Districts: for specific reasons, the ability to enroll your children on a specific district is, almost always, tied to the fact you live there (and pay, directly as homeowner or indirectly as renter, property taxes for that district). If you shop for lower property taxes, you lose the ability to benefit for a supposed better funded school with better education.

Indeed, search for "better schools" is often a reason for which urban-core families move out to suburbs. The process is well documented, and can essentially kill the attractiveness of a city for families if its schools enter a dead spiral with less and less funding for the district, pushing anyone not on the bottom (can't afford expensive housing elsewhere) or top (can afford private schools) of income scale out of town. Therefore, school districts have a large vested interest in charging proper and reasonable taxes to fund schools, as there is a direct, exclusive tie between taxpayer and service (education) quality.

Transportation services, however, operates differently than education. They benefit, instantly, those who are not using it. Traffic congestion is a very fluid phenomenon: reduction in traffic in a city A might well benefit those living next city B, regardless of whether they paid for the new subway in A. If a town J decides to build a new light-trail, next town H might not only refuse to chip money in, but also lower taxes and build a new subdivision right at the cities J-H limit, attracting many wealthier residents from J for those the extra hassle on longer commutes is more than outweighed by savings in lower taxes.

In a multi-jurisdiction program (like regional rail), the last hold-outs are put in a very advantageous position to extract last-minute concessions for projects that, for physical/geographic reasons, depend on their consent/approval. We already witness that in Los Angeles area often. If other cities want/need more a project than the hold-out, it is at an advantage to get that extra station, a much lower contribution to capital costs etc.

As it would be outright unconstitutional to mandate that a private employee shall live, shop and go out for dinner and clubbing only within the limits of the city (s)he lives in, there will always be an enormous incentive for a "lesser" city within a metro area to be the "tax heaven" of the region.

To poison everything, there is the fact state and federal representatives are elected in congressional districts that are bizarrely drawn and bear no relation to other administrative jurisdictions, drastically altering the balance of power in the legislative with their gerrymandering.

Kenny

Further to Andre Lot's comment, there are many other externalities that the transportation system of a city can generate for the rest of the country. Beyond the pure transit externalities of increased/decreased congestion and the like, there is of course the externality of climate change. It strikes me as a very "South Park" solution to say that California gets to have all the taxes and transit it wants, while Texas gets to have low taxes and high congestion and emissions, and everyone's happy (and let's just ignore the effects of Texan emissions on the California climate).

Danny

The notion of competition from tax havens is absurd. How many people live in Andorra? Bermuda? Lichtenstein? Bahamas?

People live where they want to live. Sometimes people live where they pay less taxes...but they are few and far between... and if they haven't moved to the Turks and Caicos yet, then there is obviously something else holding them back. They exist, but anyone who tries to lure them over real people is a fool.

Andre Lot

@Danny: for sure! The point I tried to make is that while it is absurd for 99,999% of ordinary people to move out of the country to pay lower taxes, it becomes a much more attractive and feasible proposition to relocate 15 miles away next town or county to avoid the new income tax surcharge to fund extensive transit... So is for many businesses to do the same to avoid local transit payroll taxes.

Art Busman

It sounds like "cities" are some disabled entities that require federal subsidies to exist lest they "die through underfunding." Please. Cities are huge technological, revenue generating machines and are self-sustainable. Why funnel their taxes to a far off federal entity to redistribute??? Why not keep it all local where locals decide spending priorities like transit? The whole NTD is a great example of the feds taking OUR local money and forcing us to waste OUR local money conducting asinine surveys for one simple piece of data. If a city wants transit, they can vote for it locally instead of beg the feds for it. The reason cities are hurting today is their orgy of urban renewal development conducted by non-elected officials in redevelopment agencies, borrowing and spending millions on often non-competitive contracts to build huge projects that often don't generate the tax revenue to justify their existence. If cities were more fiscally responsible, they wouldn't need fed handouts like some crackhead with four kids. Stop talking about cities like they're disabled. They're the engine of our economy. It's the redevelop agencies and local governments that are destroying the cities not the lack of fed welfare.

Paul K McGregor

It is interesting that a similar question came up on a Linkedin site for the APTA Research and Technology Committee and the moderator posed the question:

What are the biggest challenges you think the industry will face in the next decade? Would love to hear your thoughts

Most of the responses came from an engineering background so most people rattle off their pet projects that they would like to see get done.

As a planner though I responded with a more global response. First, when will this eonomic "downturn" get over? We are currently in a cycle where jobs cannot be created but spending won't improve until jobs are created. The real estate markets, both commercial and housing, won't improve until people get back to work. Second, when things do start to improve, will we be able to generate enoug sales tax like we did in the 90s or will reduced sales tax revenue be the norm? Most people agree that it won't be the case. My final point is what the future role of the Federal government will be in transit funding. Will it continue to be the robust funding that we now have or will the cuts that have to be made now continue on well into the future? How will this impact projects that are in the early stages of development as it relates to funding levels down the road?

And yes, there needs to be a lot more dialogue within the regions of this country to decide what future public transportation will have. It is not a matter of conservatives or tea party types saying we should get rid of transit because it doesn't pay for itself. Transit is part of our city fabric and that transit should continue to be a part of the solution instead of being a part of the problem. I hope that transit will continue to grow in the future like it has in the past and that these current economic problems are just a road block being thrown up along the way.

Dan W

If blue states could keep more of the money that goes up subsidizing red states, perhaps they could provide better transit systems for their urban areas.

California, Illinois, New York and Massachusetts all receive less than 80 cents back for every federal tax dollar paid. In the meantime, Mississippi gets back a whopping $2.02 for every tax dollar paid. Alabama is over $1.50.

If states were allowed to drop out of federal transportation funding schemes, could that potentially help blue states and the urban areas in them?

Eric Doherty

I think there is an interesting side question to this, the reduction in 'free' capital from federal sources could sharpen decision making processes. My experience is that many transit agency and municipal employees focus only on the operating costs they have to pay, and consider any federal and provincial capital contributions to be free money. (Writing from Canada where the federal % is typically lower than in the US).

They also seem, to some extent, to see capturing federal contributions to be an end into itself. This leads to favoring capital intensive transit projects, such as light metros, over lower capital cost improvements to the transit system.

Maybe it is time to look at the overall cost of options, instead of trying to cash in on the maximum amount of free capital. It is easier to think about transit systems from the point of view of the transit rider if you are not distracted by a pile of free money only available for large capital projects.

For example, at one point (in BC, Canada) the Crown Corporations Secretariat made a point of featuring on overall cost per rider in multiple accounts evaluations. The perspective of this (now defunct) planning group seemed to be that there is only one public purse, and money must be spent wisely regardless of which compartment it comes from.

Dan Allison

The money saved by federal budget reductions will not be available to the states, regions and cities to use. It will be in the pockets of the rich. That is what this political movement is about, taking money from middle class and poor people to give it to the rich. We will all be wondering where the money from budget reductions went, just like we wondered where the peace dividend went.

Danny

Oh no, not the blue subsidizes red meme again. Look, not every expenditure is a subsidy.

A federal dollar spent at the Los Alamos National Laboratory in New Mexico might be an expenditure for the state, but it is most definitely a benefit for the entire nation, and therefore not a subsidy. The same goes for almost all federal expenditures (military, research, education, etc).

There are a few expenditures that could rationally be called subsidies to states, but by the time we get to those numbers, the blue/red divide has vanished.

Christopher Stefan

One issue I see with devolving transit funding to state and local governments is often due to state-level politics the state government is loath to provide sufficient taxing authority to city and county governments or transit agencies (where those are something different than city or county government).

For example here in the Seattle area there are any number of things including maintaining or expanding transit service that cities, counties, or local transit agencies if only the state would allow them the taxing authority to pay for it. Often even the requirement for voter approval really isn't a problem as citizens feel certain types of projects are worth paying taxes for.

Danny

Christopher, how is it that cities and counties do not have taxing authority?

EngineerScotty

Cities and counties have limited taxing authority in many states. In Oregon, for instance, property taxes are capped at 1.5% ad valorem, excluding bonded indebtedness; the sales tax is illegal, and while it may be legally permissible for a municipality to levy an income tax, the administrative headaches mean none has done it.

TriMet and other state-chartered taxing authorities are funded by a payroll tax in their service districts, but the amount is constrained by the state.

Other states may vary.

Danny--while it is true that many expenditures have national benefit; federal dollars sent to a particular locale get circulated in the local economy, and provide jobs and tax revenue for the hosting state. Are you aware of any studies on the subject which excluded national benefits from the calculation?

Danny

Scotty, I understand that federal expenditures bring local benefits. Those benefits are secondary and indirect.

Even if we tried to account for secondary and indirect benefits in addition to primary benefits, we would still have to come to terms with the fact that their primary benefit is a public good.

If you want to call it favoritism, that is fine...it is a favoritism that could just as easily be correlated with income, operational costs, or strategy as it could with political boundaries.

But a subsidy it is not. A subsidy means you are getting something you didn't pay for. When we pay taxes, we are explicitly paying for public benefits...and we are explicitly getting public benefits, regardless of where the money is spent.

By expecting tax revenues to be spent equally among the different states, we are implicitly denying the only benefit of a centralized government. I mean, technically we could have the government apportion all expenditures equally among the states, and instead of one big Los Alamos National Laboratories we could have 50 smaller ones. But if we get to that point, the federal government no longer has a purpose.

Jon

Great societies use tax-generated revenues to build great infrastructure. Declining nations let this stuff go to hell.

Progressive states like New York and California once built their own core structures, from water, sewers and roads to universities, but legislated defunding of local government since the 1980s makes that highly unlikely today. (Is your state even solvent? Lucky you.)

I see this deal as marking a decisive turn away from American greatness. Congress said, "Let it all go to hell." and the President said, "OK."

Randy

The lack of local taxing authority is a problem here in Vancouver where the federal and provincial governments have devolved responsibility onto a local transportation authority, but have have declined to grant it sufficient funding or means to raise its own revenue to do the job.

John Norquist

Jarrett thanks for challenging the notion that Fed money is usually the key to better cities.US cities, most of which derive their income from property and sales taxes, clearly benefit from the Federal Bill of Rights and the Interstate Commerce Clause. These two provisions created the setting for America's spectacular market based growth over the last 200+ years. The benefit from Federal Taxpayer financed programs is more debatable.Most cities get less than 5% of their budgets from Fed sources.

The Federal government has a built in bias against cities.Wyoming, North and South Dakota outvote California and NY state by 6 to 4 in the Senate. Rural states lacking cities large enough to generate demand for transit dominate the Senate and thanks to GOP control, rural interests dominate the House as well.Even when Dems control they tend to pander to the highway lobby and agribusiness.

Pro-transit Senators like the late great Daniel Patrick Moynihan are rare indeed. The Canadian system of little or no national funding for highways and transit might work better for US cities. All large Canadian cities have good transit, at least by North American standards. Vancouver knows, for example, that city money invested in transit will improve taxable property values. Both Edmonton and Calgary, in "Red province" Alberta have effective transit systems backed up with strong land use policies because political leaders know they add value.

The Canadians have better health care and better transit. Maybe we would have been better off losing the War of 1812.

zefwagner

I think the US needs to move towards a city-state system, with more power devolved to the existing Metropolitan Planning Organizations. More Metro areas need to follow Portland's lead and have a directly elected MPO, and states need to give MPOs the authority to levy whatever taxes they wish. Why are we still allowing state governments to decide whether cities can vote to tax themselves?

Chris Stefan

Danny,
In general local government has only what tax authority the state legislature decides to delegate. Typically this delegation includes only certain types of taxes and places limits on how much tax can be collected and under what conditions it can be raised, such as requirements for a public vote.

In states that have the initiative process this can get even messier as there are often initiatives on the ballot (backed by primarily suburban and rural interests) to roll back much of the taxing authority delegated to local government. For example look at Prop. 13 in California, Measure 5 in Oregon, or Initiative 747 in Washington.

Dan W

Conservatives try to get away with claiming that defense spending and military bases are "national spending" and not "subsidies" in conservative states.

This is horsehockey. Every state fights to preserve the military bases in their state precisely because they are massive subsidies to the economies of their state.

Mississippi receives a whopping $2.02 back for every tax dollar it contributes to the federal government. California, Illinois, New York and Massachusetts meanwhile all receive less than $0.80 back.

With a few exceptions it is conservative red states that benefit by being heavily subsidized by the more progressive blue states.

Here is a link to a chart if you want to see who's subsidizing whom:

http://www.taxfoundation.org/research/show/266.html

Bossi

My 2 cents-

I am a small government fiscal conservative; and that's precisely why I'm an urbanist.

I believe that the US Federal Gov is a bit too involved with local transportation affairs, as my sentiments are that many transportation decisions would be better suited toward smaller governments. In general, my view of a federal role would be to help foster information sharing and research, such as sharing what has worked & what hasn't among various cases & areas.

There are certainly city-specific projects which serve a major national interest, with major ports being a prime example. While some degree of federal oversight may be necessary over areas without much alternative to ensure that a local gov can't hijack a major port to suit solely its own purposes, I do agree that a degree of city vs. city competition might not be the worst thing where competition between ports is present. Letting the local govs keep greater shares of their funding may help them better suit projects to their specific location & needs, and lessened levels of bureaucracy can help reduce both time and costs.

Even with more national-scale projects such as the Interstate Highways, freight rail, and Amtrak: I see the Feds as playing more a role of middle-man and communicator -- helping to bring relevant parties to the table as a guy sitting in a middle seat; rather than directing the meeting from the seat at the end of the table.

Eric

One problem with moving transit to local jurisdictions is that the result often sucks for people that live near the boundaries of jurisdictions and constantly make trips that span multiple areas.

For example, consider someone who has a 5 mile commute to work in a straight line down a major road, which happens to cross a county line halfway through. Ideally, that person shouldn't have to pay twice as much as everyone else by having to buy bus passes for two agencies. Nor should that person have to pay the time penalty of transferring from one agency's service to another's just because of the jurisdictional boundary.

And that's before you consider that if one county is willing to invest more in bus service than the other county, the county with worse service determines the overall quality of the entire trip.

When you drive or bicycle, the only impact crossing a county line has on your trip is at most a road sign you barely notice. Transit should work the same way.

Rod_Stevens

Interesting that so many of the above arguments are well-thought out, that so many deal with the politics of big vs. small government, and federal vs. local, and so few discuss the practical effects of devolution.

I've lived in San Francisco, Portland (born there), Seattle and Vancouver, and the latter had, by far, the most rational transportation system I've seen. What made it that? A unified budget, region-wide, for roads, buses, rail transit and even ferries. it genuinely acts like a city, and decides where to put the money. When I lived there (1998-2000), there were complaints that Skytrain funding had led to bad bus service. I suspect these things ebb and flow. At any rate, since all the money comes out of the local pot, it means that people have to live with their decisions, rather than opting for some flavor-of-the-month transit solution because the feds will pick up most of the tab. Isn't that what has happened with LRT, BRT and trollies the last ten years? In Vancouver, the most "distortion" in the system comes from the land use policies of trying to centralize employment in the city centers and along the transit lines. That means the Skytrain gets lots of funding. You can argue for or against this policy, but at least there is a tie between land use and transportation, which is more than what happens in most U.S. places.

I now live on Bainbridge Island, and transit doesn't work very well here. After touching down last night, I took the LRT downtown. Travel time: 55 minutes, vs. what used to be 30 or 40 minutes on the bus. Then a 40 minute way for the ferry. Total time in air: 1:50 minutes. Total time from airport to home: 2:45 minutes. In Vancouver I probably woulnd't have been able to find an affordable equivalent to Bainbridge. On the other hand, the urban alternatives would have been better, along with the transit to go with it. Bottom line: our U.S. financning system isn't creating especially good transit networks.

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Ross Williams

My impression is that it is access to federal dollars that has allowed the metropolitan planning organizations to function. People from various jurisdictions work together because everyone needs everyone elses support for their own projects.

There is also a problem with all transportation facilities of distributing burdens and benefits. The Sellwood bridge in Portland is a good example. It is "owned" by Multnomah County but heavily used by commuters from Clackamas County. Apparently, the voters in Clackamas County don't think they should have to help pay for the bridge.


The fundamental problem with a lot of urban/suburban split is this distribution of burdens and benefits. The inner city provides the infrastructure for employment, entertainment and transportation but have very limited tools for recovering costs from the suburban residents and businesses who benefit from those.

And this is not just an issue at the local scale. Those highways across the West through Wyoming, Montana and North and South Dakota benefit a lot of people who don't live there. Its not realistic to expect those sparsely populated areas to pay for the national transportation facilities across them.

The final issue, and another Portland example. Portland's population was actually shrinking in the 1980's when it decided to build its first light rail system. There is no way they could have won support for it as as strictly local investment. But that investment by the federal government has helped Portland rebound into one of the most desirable places to live in the United States. I don't think that is unusual.

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