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Taken for a Ride
By John Hood

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Jul. 25th, 2014

RALEIGH — Critics of a just-passed Senate bill complain that it limits the ability of Wake, Guilford, and Forsyth counties to raise sales taxes to fund proposed rail transit systems in the Triangle and Triad.

What’s bad news to some can be seen as good news to others. My colleagues and I have made no secret of our skepticism concerning the wisdom of spending general tax dollars to subsidize high-cost, low-capacity forms of transportation such as rail transit. Today I commend to your attention two recent pieces that explore the issues in greater detail.

First, longtime JLF friend Randal O’Toole has just written a new policy paper for the Cato Institute that does something rather cruel to rail-transit boosters: it subjects their grandiose claims to rigorous empirical analysis. The claims don’t survive.

For example, “light” rail is actually very costly per passenger mile traveled. Unlike “heavy” systems such as subways, light rail transit isn’t even in the same ballpark as bus transit or highways when it comes to the cost of moving a large number of people in a short period of time. “Rail transit is not about moving people if cities choose low-capacity systems,” O’Toole points out. “Rail transit is not about efficiency if cities choose high-cost systems. Instead, rail transit is simply a form of crony capitalism: a way to spend large amounts of tax dollars in order to build political coalitions that have no real interest in transportation.”

Harsh words? Yes. But they reflect O’Toole’s careful analysis of the statistical trends in rail transportation. Heavy rail systems such as the New York subway, the Washington metro, and systems in Philadelphia, Atlanta, Boston, and Chicago carry an average of about 25,000 weekday passenger miles per route mile in each direction. Light rail carries an average of only about 5,000. Yet most cities, including those in North Carolina, are either unwilling or ill-suited to heavy systems that might, in some markets, make economic sense. Instead, they opt for what appears to be cheaper — light rail — that is in fact very expensive when evaluated correctly on the basis of enhanced mobility per dollar.

“In the end,” O’ Toole concludes, “building new rail transit lines, at least in the Americas, is almost always a mistake. Putting the same amount of money to use in relieving congestion for everyone by undertaking such projects as coordinating traffic signals and building high-occupancy-toll lanes adjacent to crowded highways would produce far greater benefits. Alternatively, providing the same transit capacity with buses instead of trains would cost far less.”

Your other recommended reading is “Directing Traffic,” a piece by reporter Charles Gerena in Econ Focus, the quarterly magazine of the Federal Reserve Bank of Richmond. While providing a range of views about the effectiveness of transit investment in state such as North Carolina, the piece contains updated ridership trends for Charlotte’s existing rail line that aren’t exactly comforting. From 2007 to 2012, Charlotte’s population grew by 17 percent and the metro as a whole grew by 13 percent. But rail-transit boardings grew by only 5 percent. Despite all the hoopla, the effect of the Lynx line on the Queen City’s transportation patterns and traffic congestion is barely discernible.

In fact, its defenders rarely claim anymore that Charlotte’s rail transit was an attempt to address congestion. Instead, they claim that the primary function of the system was to revitalize commercial and residential development along the route of the line. But to the extent this represents only shifting development from one part of the city to another — and that is likely to be a very large extent — there is no net growth here. Some businesses, investors, and landowners gained at the expense of others (which is one reason why O’Toole uses the term “crony capitalism” to describe the process). As you’ll read in the piece, even researchers sympathetic to Charlotte’s transit experiment have found that its effects on urban development was rather small.

Just some things to keep in mind as you follow legislative debate about transit taxes. For most taxpayers, they represent just another cost of living, not a cool new toy.

John Hood is president of the John Locke Foundation.


Past Columns

This Month's Columns

Jul. 25th, 2014
Taken for a Ride


Jul. 24th, 2014
Hobby Lobby Exposes Clash Between Positive and Negative Rights


Jul. 23rd, 2014
We've Got You Covered


Jul. 22nd, 2014
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Jul. 21st, 2014
Credit Claims Are Poorly Scripted


Jul. 18th, 2014
Another Round of the Numbers Game


Jul. 17th, 2014
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Jul. 16th, 2014
Plant The Seed for Fruitful Debate


Jul. 15th, 2014
Speech-Stifling Ordinance Grants Notable Exemption


Jul. 14th, 2014
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Jul. 11th, 2014
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Jul. 10th, 2014
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Jul. 9th, 2014
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Jul. 8th, 2014
A Questionable Case for Raising Taxes


Jul. 7th, 2014
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Jul. 3rd, 2014
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Jul. 2nd, 2014
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Jul. 1st, 2014
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