Federal funding for infrastructure

texanskan · Feb 11, 2008

Hey just curious, here in Harris county we pay an extra penny per dollar for sales tax that goes to our roads, plus we have toll roads that still charge even though the original funds have been raised.

Anyway my question is we always hear about how the feds pay for like 90% of the cost for roads does this not apply in places like Houston? Maybe 100% in rural areas but much less in urban areas.

How much of this stupid metro rail tab is getting picked up by the feds? Would we be getting less if we had high speed rail?

thanks

texanskan · Feb 11, 2008

bump, anyone?

weslinder · Feb 11, 2008

I don't know all the details, but I know this:

The 9:1 Matching Funds are for new Interstate Highways only. New US highways/others are matched at a lower rate. Capital improvements to existing highways are also matched at a lower rate. Maintenance funds to roads built with federal funds are matched at the lowest rate, which IIRC is 1:1.

Rocket G · Feb 11, 2008

High speed rail? In Houston that would never happen.

Between Texas cities? Proposed years ago, but SWA killed that idea.

So far the Feds are not picking up much, if anything, of the MetroRail tab, IIRC.

rodrick_98 · Feb 11, 2008

there was a pretty good article on the rail in yesterday's paper... i'll try and see if it's posted online.

rodrick_98 · Feb 11, 2008

it's actually an op-ed piece, written by bill king the former mayor of kemah. i'm not really sure if this applies to your question, but it does touch on the money metro receives from the sales tax.

http://www.chron.com/disp/story.mpl/editorial/outlook/5527880.html

RIDING FOR FREE
Let's try transit without a fare box

By BILL KING
Copyright 2008 Houston Chronicle

Just about everyone involved in Houston's mobility dialogue agrees that an increase in transit ridership would be a good thing. Yet, for years our transit programs have been trapped in the box of a "rail versus freeway" debate that has left motorists facing ever rising congestion and transit riders with few options. I believe that one way out of this box may be to get rid of the fare box.

Today, the Metropolitan Transit Authority reports slightly under 300,000 daily "boardings." Because of transfers, it is a little bit of guesswork to determine how many commuters are actually using transit. But it is probably something in the 120,000-130,000 range. For every commuter we can convince to take a train or bus to work, we get one car off our roads. That means less congestion and fewer emissions and collisions. Clearly a good thing.

Metro has developed a far-ranging, multibillion-dollar plan dubbed Metro Solutions that it hopes will increase transit ridership. Phase 2 of that plan consists of five light rail lines and will cost about $2.2 billion. The ultimate cost will undoubtedly be higher. Metro projects that its Phase 2 lines will have about 140,000 daily boardings. However, these lines will replace existing bus service along the same routes, so not all of the boardings will represent an increase in transit ridership. The net increase on the Main Street line from switching to light rail has been about 19 percent.

If this ratio holds on the Phase 2 lines, we should pick up an increase in daily boardings of about 20,000 to 30,000 or something like 10,000 to 12,000 new transit riders. This is a very small increase compared to well over 1 million daily commuters in Houston.

The traffic models indicate that this relatively small increase will be about offset by the lost street lanes the rail lines will use and the scores of new street level crossings. As a result, there will be no meaningful reduction in traffic congestion from the Phase 2 lines.

Even so, and notwithstanding that Phase 2 was approved by voters over four years ago, today it is mired in controversy. Recent adverse action by the Federal Transit Agency has made it questionable when, if ever, Metro might receive the matching funds necessary to build Phase 2. One lawsuit over the alignment is pending and others have been threatened. Metro has not reached agreements with the city or the Texas Department of Transportation on its use of their respective rights of way and utility conflicts.

In the meantime, the traffic congestion index continues to climb skyward, the ozone attainment date is pushed further and further away and we are crashing our vehicles into one another at record rates. Is there another way to increase transit ridership and do it now? I think there may be. Make it free.

Now, before you think I am proposing we give away the store, you need to know that Metro recovers a very small percentage of its costs through fares. In fiscal year 2006, Metro only collected about $54 million in fares compared to $435 million in operating expenses, or only about 12 percent. That is because Metro gets the overwhelming majority of its funds from a 1 percent sales tax. And Metro is currently enjoying a boom in its sales tax revenues. In the past two years, sale tax receipts have increased by approximately $84 million and are on track this year to increase almost another $40 million. Metro currently is sitting on nearly $400 million in cash, receivables and short term investments.

Also, Metro spends about $5 million a year collecting its fares and advertising, expenses that could be dramatically reduced if fares were eliminated. So eliminating fares would probably only cost us around $50 million annually.

What would that $50 million buy us? Unfortunately, we do not have good comparable experiences to predict how much ridership might increase with free service. The fare elasticity models predict a 20-40 percent increase. However, most of these models were designed to test the effect of increasing fares and therefore may not accurately predict results from eliminating fares. In the early 1990s, the Austin transit authority tried free fares for a year and got a 76 percent increase in ridership.

If we assume a 50 percent increase in ridership, we would pick up about 50,000-60,000 new transit riders each day. This increase is easily more than four times that projected for Phase 2 and at a fraction of the cost. The operating costs alone for Phase 2 are projected to be $64 million, well above what we would lose from eliminating fares, not to mention repaying the principal and interest on whatever portion of the $2.2 billion construction cost is not covered by the FTA.

More importantly, this could happen immediately. Phase 2, even by Metro's optimistic projections, is four to five years away. If we realized a 50 percent increase in ridership, some other advantages would be:

• The new Metro commuters would save about $100 million per year in commuting costs. Current Metro customers would save the $50 million they are now paying in fares. That is $150 million annually in the pockets of working families, many of whom have been facing increasingly difficult financial circumstances with rising gas prices.
• A reduction in carbon dioxide emissions of about 500 million pounds a year with corresponding decreases in nitrogen oxide and volatile organic compounds.
• A reduction in the traffic congestion for the rest of the folks still on the road. The actual reduction is impossible to predict with any precision and it would vary substantially by roadway.
• More Metro buses would run on schedule. Metro bus drivers tell me that many of their delays come from fare "hassles" as riders get on the bus, e.g., not having the correct change, not being able to find their wallet, etc.
Would these benefits actually be realized? There is no way to know for sure. There have only been limited experiments with free fares. Most of the systems that have tried some version are smaller systems and do not have Metro's suburban-oriented Park & Ride system. Much of the congestion reduction benefit from such a proposal would come from the longer Park & Ride routes.

Other cities are flirting with the concept. San Francisco has free fares on days with high air pollution. New York Mayor Michael Bloomberg and Los Angeles Mayor Antonio Villaraigosa have also recently floated the idea for their cities.

Certainly, there would be potential problems that would have to be addressed. Previous attempts experienced security issues from juvenile delinquents and the homeless abusing the free fares. However, in the Austin experiment, these problems were greatly reduced over time with aggressive enforcement. There would also likely be some increase in operating expenses and the need for new buses. But the FTA reimburses 80 percent of the cost of buses compared with 50 percent or less for rail systems.

Elimination of fares is not an end game solution. There is still a pressing need for expanded transit service throughout the region. But going to a fare free system may be a way to jump-start a new transit paradigm. With a larger transit constituency, public support for new programs may grow.

The nice thing about the idea is that it is not irrevocable. If it does not result in the hoped for benefits, we can always reverse course and try something else. Houston's transit program has been log-jammed for years with no end in sight. Personally, I am ready to try something different, even if it is a little "out of the box."
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