“Beyond Traffic” Has a Different Meaning in Portland

Portland is one of seven cities still in the running for a $50 million grant as part of the “Beyond Traffic” challenge sponsored by the federal Department of Transportation.

While the idea of solving traffic congestion sounds great, that is not an actual goal of Portland planners. In fact, local officials are trying to make traffic worse, by downsizing roads and lowering traffic speeds. As part of this campaign, a northbound travel lane on Naito Parkway was recently removed, and later this year two lanes on Foster Road will be eliminated.

Portland planners think we drive too much, so they want $50 million in federal funds to develop new data collection systems to encourage people to travel by bus, train, or bike. Since most people prefer a car, this will be a big waste of public money.

The transportation challenge for Portland is the need for an expanded highway system. Experimenting with technologies such as electronic tolling as a way of paying for that expansion might have been a useful grant application. But Portland planners don’t want to grow the system; they’d rather keep it small and congested, then use fancy technology to entice a few people onto a slow bus.

This is not a plan that will move us “beyond traffic.”

Updated as of 6/22: According to The Oregonian, the U.S. Department of Transportation has selected Columbus, Ohio as the winner of the federal “Smart City-Beyond Traffic” competition.

With this distraction out of the way, perhaps city planners can turn their attention to something more useful, such as finding ways to actually reduce traffic congestion in Portland.

Voters Decided to Leave Themselves Stranded by the Side of the Road

In the month since voters in Austin, Texas upheld new city regulations on ridesharing companies like Uber, the law of unintended consequences has been confirmed.

Austin’s highly regulated taxi industry got the city to impose strict regulations on their competition, but Uber and Lyft threatened to pull out of the city rather than comply with rules they said would be bad for them and their customers. The ridesharing companies backed an initiative to repeal the regulations.

As one pundit noted, a majority of voters decided “…to leave themselves stranded by the side of the road frantically searching for a ride. Well, that’s not what they’d say they did. Strictly speaking, they voted to stick it to corporate interests—by supporting political interests who favored other corporate interests.”

The unintended consequences of that vote included about 10,000 ridesharing drivers losing their employment, bars losing business as people had fewer ways to get home safely, and disabled residents looking for new ways to get around the city.

The market responded quickly with unregulated “black market” services such as Austin Underground Ride springing up to meet demand.

Austin voters may not have realized that the only way big corporations become big in a free market is by meeting consumer demand. In this case, Uber and Lyft may become a little bit smaller, but everyone in Austin lost some of their transportation freedom.

New Report: Transportation Funding Should Be a State and Local Responsibility

Study Finds That Transportation Funding Should Be a State and Local Responsibility

May 4, 2016 

FOR IMMEDIATE RELEASE

Media Contact:
John A. Charles, Jr.

503-242-0900

john@cascadepolicy.org

PORTLAND, Ore. –  In a study released today by Cascade Policy Institute, economist Randall Pozdena recommends that transportation regulation and finance devolve from the federal government to state and local governments. In addition, the study recommends that most transportation taxes be replaced with targeted user fees, to ensure that those who pay for services receive benefits commensurate with those payments.

For over 30 years, the federal government has assumed a disproportionately large role in the regulation and subsidization of transportation services. Yet, most travel is local. For instance, the Cascade research paper found: 

  • More than 50% of all household trips, by all modes, are less than five miles long
  • More than 90% are less than 20 miles
  • 92% of freight shipments are less than 500 miles, by weight

Despite the dominance of local travel, 32% of all transportation funding flows through federal processes.

Of the various transport modes, private freight, airline travel, and pipeline shipments are the least regulated and least subsidized. These modes benefit from high levels of private ownership and capital investment, subject to normal market discipline.

Highway travel and transit suffer from the most distortions and cross-subsidies through federal intervention. As a result, most urban areas face growing levels of traffic congestion, and large urban transit systems are seriously (and often tragically) under-maintained.

The transit industry, which has steadily become a government-sponsored enterprise since passage of the Urban Mass Transit Act of 1964, is the sector most in need of a new business model. According to Dr. Pozdena,

“By definition, transit trips are extremely short and not important parts of larger networks. Federal and state governments should be out of the transit sector altogether, and rely on fare box revenue to ensure that the cost of the service is worthwhile to the user.”

For comparison purposes, Dr. Pozdena calculates that it costs roughly $60,000 to recruit one new additional transit rider in Oregon, which is 10 times the cost of providing new highway capacity for one additional auto commuter.

The Portland region in particular suffers from a mode imbalance in which vast sums of federal and state dollars have been spent on lightly-used passenger rail lines, while new highways and bridges have been canceled or delayed. This problem can be solved by inviting private investors to build needed new facilities through toll-based payments, and implementing time-of-day pricing schemes to ensure free-flow travel conditions on the regional highway system.

Last week the Oregon legislature announced the formation of an 18-person task force to study transportation funding for the 2017 legislative session. According to John A. Charles, Jr., CEO of Cascade Policy Institute,

“The Oregon Legislature has struggled unsuccessfully for decades to devise a sustainable transportation funding system. As yet another task force prepares to scale the fortress wall with the same weapons used in previous assaults, members should consider a new approach including targeted user fees rather than broad-based taxes, electronic tolling and variable pricing, elimination of political mandates prohibiting new highway facilities, and market-based reforms including privatization.

“These principles work everywhere else in the economy; they would work in the transportation sector as well, if we allowed them.”

The full report, Devolution of Transportation: Reducing Big Government Involvement in Transportation Decision-Making, can be downloaded here.


Founded in 1991, Cascade Policy Institute is Oregon’s premier policy research center. Cascade’s mission is to explore and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity. To that end, the Institute publishes policy studies, provides public speakers, organizes community forums, and sponsors educational programs. Cascade Policy Institute is a tax-exempt educational organization as defined under IRS code 501(c)(3). Cascade neither solicits nor accepts government funding and is supported by individual, foundation, and business contributions. The views expressed in Cascade’s reports are the authors’ own.

 

TriMet’s Edifice Complex

Recently TriMet announced that after two years of planning for an expensive new “bus rapid transit” line from Gresham to Portland, the new service would actually take 8-11 minutes longer than current buses.

Over in Southwest Portland, TriMet is planning a $2 billion light rail line to Bridgeport Village near Tualatin, a suburban shopping mall.

Agency planners are fascinated with shiny new objects, but most riders don’t benefit. For example, between 2000 and 2015, TriMet opened five new rail lines, but the total vehicle-miles of daily transit service actually dropped by 5%.

It’s time to admit that TriMet’s basic business model is becoming obsolete. The agency is a sluggish monopoly that takes years to bring new service to market, while customers live in a smartphone world where they have millions of choices and same-day delivery.

In particular, the coming era of driverless vehicles will create entirely new businesses that will free riders from the tyranny of fixed-route transit service. Legacy systems such as TriMet will be stuck with a vast network of aging infrastructure that will be too expensive to maintain.

We don’t need another light rail line to Bridgeport, or a bus rapid transit line to Gresham. What we need is new vision of mobility in Portland.

(revised 4/6/16)

Where Did President Obama Stay in Cuba?

This week, Barack Obama became the first U.S. President in nearly 90 years to visit the country of Cuba. While security concerns may have prevented him staying in a private home rented through Airbnb, he would have had some 2,700 such homes to choose from in Havana alone.

The amazing thing is that Cuba is a communist country, yet it allows short-term room rental services to operate, while some major American cities such as Atlanta, Denver, and Los Angeles do not.

While the American President likely rode through the streets of Havana in his own armored limousine, he apparently could have ridden in one of those iconic 57 Chevys if the driver had one of the still rare and expensive Cuban email accounts. Such ride-sharing services are also allowed in Havana, while Uber and Lyft are still fighting powerful taxi monopolies in some American cities.

We can have legitimate disagreements about normalizing diplomatic and economic relations with Cuba; but we should applaud the movement toward private home ownership and use, and the entrepreneurial opportunities its communist government now allows.

It will be ironic if Cuba comes into the modern free-market era at the same time that some American politicians try to impose more government restrictions on the very economic freedoms that many Cuban refugees risked their lives to achieve by coming here.

Portland Chases Another Dream

The U.S. Department of Transportation announced this week that Portland is one of seven cities still in the running for a $50 million grant as part of DOT’s “Smart Cities” challenge. Portland is proposing to build “smarter streets” that talk to self-driving cars and to develop an app that will decrease reliance on private automobiles.

This is not a joke, and it’s not another episode of Portlandia. There are actually federal bureaucrats who think that putting sensors in streets to talk with computerized cars is important, and that Portland is capable of running such a system.

Apparently, they are unaware that Portland’s street system is so run down that the city could be the film location for a Mad Max movie.

And given the region’s obsession with 19th century street cars that move more slowly than pedestrians, why would anyone think Portland is capable of being a national leader in 21st century roads?

This is a city that tried to prevent car-sharing companies such as Uber and Lyft from legally operating here last year. No fancy street sensors were required; the necessary smart phones were already in the hands of potential customers. All the City Council needed to do was get out of the way, and even that was too complicated for them.

We should let Google worry about autonomous cars. Portland should stick to something simple, like filling potholes.

Broken Promises: The Real Trends in TriMet’s Transit Performance (2004-2015)

TriMet’s ridership is declining and its level of fixed-route service is lower today than it was in 2004. According to mainstream transit advocates, the solution is to spend more public money.

The problem is we’ve already tried that, and it’s not working. TriMet has been imposing a regional payroll tax on most employers since 1972. The rate was initially 0.30%, then grew to 0.60% by 1979. During the 2003 legislative session, TriMet sought approval to raise it by another tenth of a percent. According to TriMet General Manager Fred Hansen, “TriMet’s proposed payroll tax increase will be used exclusively to provide new or enhanced transit service. This will include assisting in the operation of Washington County Commuter Rail, Clackamas County light rail, Lake Oswego Streetcar, increasing Frequent Service routes, and enhanced local service connections to these lines.”

The rate increase was approved, and was phased in over a 10-year period, beginning January 2005.

During the 2009 legislative session, TriMet lobbied for another rate increase, phased in over 10 years. The new rate of 0.7337% went into effect on January 1, 2016.

Now that we have more than a decade of experience with payroll tax rate increases, it is informative to compare revenue trends with service trends. The results show that there is no correlation between revenue and service.

 

 

TriMet Financial Resource Trends for Operations

2004-2015

 (000s) 

2004 2006 2008 2010 2012 2014 2015 % change
Passenger fares $55,665 $68,464 $80,818 $93,729 $102,240 $114,618 $116,734 +110%
Tax revenue $155,705 $192,450 $215,133 $208,933 $248,384 $275,357 $292,077 +88%
Total operations $290,513 $342,274 $404,481 $433,609 $488,360 $522,155 $493,572* +70%

 

*Grant revenue in 2015 dropped by $41,876 due to timing of receipt; those funds will appear in TriMet’s 2016 income statement.

 

VIEW TABLE IN PDF HERE

 

In fact, there is negative correlation – as TriMet’s revenue went up over the course of a decade, actual service went down. 

 

Annual Fixed Route Service and Ridership Trends for TriMet

2004-2015 

2004 2006 2008 2010 2012 2014 2015 % change
 
Hours of service 1,698,492 1,653,180 1,712,724 1,682,180 1,561,242 1,608,090 1,676,826 -1.3%
Miles of service 27,548,927 26,830,124 26,448,873 25,781,480 23,625,960 23,763,420 24,248,910 -12%
Originating rides 71,284,800 74,947,200 77,582,400 77,769,119 80,042,810 75,779,560 77,260,430 +8.4

 

Source: TriMet, http://www.trimet.org/pdfs/publications/trimetridership.pdf 

VIEW TABLE IN PDF HERE

 

There is a slight correlation between revenue and transit use, as total originating rides went up 8% while operating revenue went up 70%. However, ridership peaked in 2012 and has dropped by 3.5% since then.

It is also interesting to compare revenue trends with TriMet’s share of commute trips. The Portland Auditor has conducted an annual “community survey” since 1997, and those surveys measure travel choices by Portland residents. The results show that TriMet’s market share of commuting has remained exactly the same since 1997, despite (or because of) massive expenditures on rail transit during that period. 

 

Travel Mode Share for Weekday Commuting

Portland citywide, 1997-2015 

Mode 1997 2000 2004 2008 2010 2012 2013 2014 2015
                   
SOV 71% 69% 72% 65% 62% 61% 64% 63% 60%
Carpool 9% 9% 8% 8% 7% 6% 6% 6% 5%
Transit 12% 14% 13% 15% 12% 12% 10% 11% 12%
Bike 3% 3% 4% 8% 7% 7% 7% 8% 9%
Walk 5% 5% 3% 4% 6% 7% 7% 8% 8%
Other n/a n/a n/a n/a 7% 6% 6% 6% 7%

VIEW TABLE IN PDF HERE

Notwithstanding the obvious drop in service, TriMet claims that the legislative promise was met because new rail lines were opened. But to the 66% of TriMet riders who saw their bus service drop by 12%, shiny new rail lines were of little consolation.

The chief enablers of TriMet’s tax addiction have been Portland-area business associations, including Portland Business Alliance, Westside Economic Alliance, Oregon Business Association, and the Central Eastside Industrial Council. Those groups repeatedly embraced higher taxes for their members on the premise that more transit revenue equaled more transit service. That premise is clearly false.

When the TriMet Board meets to increase the tax rate again in September, Portland business groups should reconsider their automatic support. Unless and until TriMet service levels reach those of 2004, there is no reason to continue “throwing money” at an underperforming monopoly.


John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

Failed Promises: Why the Legislature Should Reject TriMet’s Request for New Spending Authority

TriMet is currently seeking new spending authority in SB 1510 to help finance regional “multi-modal” transportation projects. Legislators should deny this request based on previous experience with TriMet commitments.

To refresh the memory: during the 2003 session, TriMet sought approval to increase the payroll tax rate by one-tenth of a percent. According to TriMet’s then-General Manager,

“TriMet’s proposed payroll tax increase will be used exclusively to provide new or enhanced transit service. This will include assisting in the operation of Washington County Commuter Rail, Clackamas County light rail, Lake Oswego Streetcar, a substantial increase in Frequent Service routes, and enhanced local connections to these lines.”[1]

The rate increase was approved, and was phased in over a 10-year period.

During the 2009 legislative session, TriMet sought an additional rate increase. The legislature again approved the request. The TriMet board approved the first of 10 planned rate increases last September, and the new rate of 0.7337% went into effect on January 1, 2016.

Let’s look at the results. After a decade of tax increases, it’s clear that there is no correlation between increased TriMet revenue and actual levels of service: 

TriMet Financial Resource Trends for Operations, 2004-2015

 (000s)

CLICK HERE TO VIEW TABLE IN PDF 

2004 2006 2008 2010 2012 2014 2015 % change
Passenger fares $55,665 $68,464 $80,818 $93,729 $102,240 $114,618 $116,734 +110%
Tax revenue $155,705 $192,450 $215,133 $208,933 $248,384 $275,357 $292,077 +88%
Total operations $290,513 $342,274 $404,481 $433,609 $488,360 $522,155 $493,572 +70%

 

In fact, there is negative correlation – as TriMet’s revenue went up over the course of a decade, actual service went down: 

Annual Fixed Route Service and Ridership Trends for TriMet

2004-2015

CLICK HERE TO VIEW TABLE IN PDF 

2004 2006 2008 2010 2012 2014 2015 % change
 
Hours of service 1,698,492 1,653,180 1,712,724 1,682,180 1,561,242 1,608,090 1,676,826 -1.3%
Miles of service 27,548,927 26,830,124 26,448,873 25,781,480 23,625,960 23,763,420 24,248,910 -12%
Originating rides 71,284,800 74,947,200 77,582,400 77,769,119 80,042,810 75,779,560 77,260,430 +8.4%

 Note: The term “originating rides” excludes transfers.

Source: TriMet, http://www.trimet.org/pdfs/publications/trimetridership.pdf 

There is a slight correlation between revenue and transit use, as total originating rides went up 8% while operating revenue went up 70%. However, ridership peaked in 2012 and has dropped by 3.5% since then.

TriMet claims that the 2003 promise of “enhanced service” was met because many new rail lines were built. But to the 66% of TriMet riders who travel by bus and saw their service drop by 12%, shiny new rail lines were of little consolation.

TriMet now wants to expand its reach through SB 1510 so as to spend new funds for “multi-modal” projects. We suggest a simple response: unless and until TriMet transit service returns to at least 2004 levels, no additional spending authority should be granted.

[1] Fred Hansen, testimony before the Senate Revenue Committee on SB 549, March 11, 2003, p. 3.


John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization. 

TriMet’s 7-Year-Old WES Line: Still a Project in Search of a Purpose

February marks the seven-year anniversary of the Westside Express Service (WES), the 14.7-mile commuter rail line that runs from Wilsonville to Beaverton. While the train’s owner, TriMet, has emphasized the steady growth in ridership over time, the truth is that WES has been a failure. Daily boardings are still far below the opening-year forecast, and taxpayers subsidize each rider by nearly $35 per round trip.

Although WES was 15 years in the making, it was always a project in search of a purpose. At various times the train was promoted as: (1) a congestion relief tool for HWY 217; (2) a catalyst for so-called “Transit-Oriented Development;” or (3) a way of providing “another option” for travelers. None of these arguments holds up to scrutiny.

During legislative hearings in Salem, representatives from Washington County claimed that WES would take 5,000 motor vehicles per day off of nearby highways. But WES is not even capable of doing that because it only runs 8 times (each direction) in the morning, and 8 more times in the afternoon. And unlike traditional commuter trains pulling eight or nine passenger cars, WES travels only in one-car or two-car configurations.

During its best hours of performance, the total number of passengers traveling on WES is less than 0.5% the number of motorists traveling on HWY 217/I-5 at those same hours. WES crosses more than 18 east-west arterials four times each hour. On busy commuter routes, such as HW 10 or Scholls Ferry Road, each train crossing delays dozens of vehicles for 40 seconds or more.

Since the train itself typically only carries 50-70 passengers per run, this means that WES actually has made Washington County congestion worse than it was before the train opened.

WES also will not be a catalyst for “transit-oriented development,” because the train stations are a nuisance, not an amenity. The noise associated with train arrivals was always underestimated and has proven to be a significant problem for nearby businesses and residents.

As for the hope that WES would provide “another transit option,” there were already two TriMet bus lines providing over 4,000 boardings per day in parallel routes prior to the opening of WES. Commuter rail simply replaced inexpensive bus service with a massively subsidized train.

Several key statistics summarize the problems with the train:

  • WES was originally projected to cost $65 million and open in 2000. It actually cost $161.2 million and opened in 2009.
  • TriMet projected an average daily ridership of 2,400 weekday boardings in the first year; actual weekday ridership was 1,156. It grew over time to 1,964 in 2014, but dropped to 1,771 last year. Since each rider typically boards twice daily, only about 900 people actually use WES regularly.
  • The WES operating cost/ride in January 2016 was $15.95, roughly five times the cost of bus service.

Ridership and Cost Trends for WES

2009-2015

(in 2015 $)

 

2009 2010 2011 2012 2013 2014 2015 % change
 
Avg. daily boardings 1,156 1,313 1,571 1,700 1,876 1,964 1,771 +53%
Operating cost per ride $27.41 $24.46 $20.43 $18.39 $18.98 $15.85 $18.60 -32%
Cost/train-mile    $54.70 $54.12 $53.30 $53.79 $56.82 $51.12 $55.01 +1%
Cost/train hour $1,180 $1,166 $1,171 $1,180 $1,501 $1,109 $1,203 +2%
Average subsidy/ride $26.18 $23.00 $19.01 $17.64 $17.19 $14.36 $17.10 -35%

 

 


Ridership has certainly improved since 2009, but still remains far below the rosy projections made by TriMet for the opening year of operation. There is little reason to think that ridership will grow significantly, given that the train runs exclusively through four suburban communities with no major job centers within walking distance of train stations.

WES is destined to be a one-hit wonder―an expensive monument to the egos of TriMet leaders and Westside politicians. Taxpayers would be better served if we simply canceled WES, repaid grant funds to the federal government, and moved the few WES customers back to buses.


John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

 

WES at 7: Still a Financial Train Wreck

February marks the seven-year anniversary of the Westside Express Service (WES), the 15-mile commuter rail line that runs from Wilsonville to Beaverton. While the train’s owner, TriMet, promotes WES as a transit success story, the truth is that commuter rail has been a failure.

WES was originally projected to cost $65 million and open in 2000. It actually cost $161 million and opened in 2009.

TriMet projected an average daily ridership of 2,400 weekday boardings in the first year. Actual daily ridership in 2009 was 1,156, less than half the forecast.

Ridership grew over time and peaked at 1,964 in 2014, but then dropped. For January 2016, daily boardings averaged only 1,735. Since each rider typically boards twice daily, that means fewer than 900 people actually use WES regularly.

The operating cost per ride is $16, most of which is subsidized by taxpayers. This is five times the cost of bus service.

Rail proponents have long dreamed of extending WES to Salem, but taxpayers would be better served if we simply shut the train down. When you’re losing $14 per boarding, you can’t make it up in volume.


John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

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