The Washington Post in recent weeks has published a number of pieces, both articles and editorials, on purportedly massive economic benefits from building the Purple Line (a 16 mile light rail line in the Maryland suburbs of Washington, DC). See, among others, the items from the Post here, here, here, and here. Their conclusion is based on uncritical acceptance of the results of a consultant’s report which concluded that the funds invested would generate a return (in terms of higher incomes in the region) of more than 100% a year. But transit projects such as this do not generate such huge returns. This should have been a clear red flag to any reporter that something was amiss.
As discussed in an earlier post on this blog, the consultant’s report was terribly flawed. There were obvious blunders (such as triple counting the construction expenditures) as well as more complex ones. While one should not expect a reporter necessarily to have the expertise to uncover such problems, one would expect a good reporter and news organization to have sought out the assessment of a neutral observer with the necessary expertise. This was not done.
The consultant’s report was so badly done that one cannot conclude anything from it as to what the economic impact would be of building such a rail line. But more importantly, the report did not even ask the right question. It looked at building the Purple Line versus doing nothing. But no one is advocating that we should do nothing. We have real transportation issues, and they need to be addressed.
The proper question, then, is what is the best use of the scarce funds we have available for public transit. If an alternative approach can provide better service for more riders at similar or lower cost, then the impact of building the Purple Line versus proceeding with that alternative is negative. As discussed below and as an illustration of what could be done (there are other alternatives as well), instead of the Purple Line one could provide free bus service on the entire county wide local bus systems. These bus systems cover poor communities as well as the rich (the Purple Line will pass through some of the richest zip codes in the nation), and for the cost of the Purple Line the bus systems could be expanded to provide free bus service to as many as four times the ridership the Purple Line is projected to carry (with such projections, based on past experience, likely to prove optimistic). The local bus systems already carry twice the projected ridership of the Purple Line.
With the aim of providing an alternative view to the discussion being carried, I submitted the attached to the Post for consideration as a local opinions column. The Post decided, however, not to publish it, so I am making it available here.
Solving Our Transportation Problems Will Require New Thinking, Not Old White Elephants
As Governor Hogan comes to a decision on the Purple Line, there is increasing pressure from proponents arguing the 16 mile light rail line will yield huge developmental benefits. A recently released and highly publicized study by the consulting firm TEMS concluded the line would raise incomes by $2.2 billion a year, for a capital cost that TEMS took to be just $1.9 billion (the cost estimate is now higher, at close to $2.5 billion). Thus the return, TEMS says, will be well in excess of 100% a year.
As the saying goes, when something sounds too good to be true, it usually is. The TEMS study was badly flawed. More importantly, it did not address the right question. What we should be asking is how best to address our very real transportation needs, given the limited public resources available.
There are numerous problems with the TEMS study. To start with more obvious blunders: It estimated impacts during the construction period as if the entire Purple Line would be built in Montgomery County, would be built again in Prince George’s, and built again in Washington, DC (even though it will not even touch Washington). That is, it triple counted the construction expenditures and therefore its income and jobs impacts. It also assumed that all the inputs (other than the rail cars) would be sourced in Washington or these counties. But steel rail cannot come from here: Neither Washington nor its suburbs have any steel mills.
There were more fundamental problems as well. Among them was the fallacy of cause and effect. In their statistical analysis, TEMS found that higher income neighborhoods are associated with lower transportation costs. From this they jumped to the conclusion that lower transportation costs led to those higher incomes. That is not the case. Rich people live in Georgetown and, being close to downtown, transportation costs there are relatively low. But moving to Georgetown does not suddenly make you rich due to low transportation costs. Rather, one can afford to buy a home in Georgetown if you are already rich.
Perhaps the most basic problem is that TEMS assumed it was either the Purple Line or nothing. But no one is advocating doing nothing. We face real transportation issues, and they need to be addressed. Unfortunately, alternatives have not been seriously examined. Part of the problem has been narrow-minded thinking that has failed to consider broader alternatives than solely a line on this fixed corridor.
As an example of what might be done, consider the locally run RideOn and TheBus systems in these counties. These two systems already carry double the projected ridership of the Purple Line.
The annual operating cost of the Purple Line is expected to be $55 million a year. This is in addition to the $2.5 billion capital cost. Taking just half of that annual operating cost, net of fares expected to be collected due to the Purple Line, one could cover the full amount currently collected in fares on the entire county-wide RideOn and TheBus systems. That is, one could provide free bus service on the entire systems for just half of the cost of operating the Purple Line.
Some might say that with zero fares, there would be the “problem” that many more riders will want to take these buses. But that would be fantastic. One would need to cover the additional costs, but this could be done. Note first that filling empty seats on buses costs nothing, and there are a lot of empty seats now. There is then the second half of the annual operating cost of the Purple Line, and finally the $2.5 billion capital cost. Taken together, these funds could cover the full costs (including costs covered in county and state budgets) of doubling the scale of the RideOn and TheBus systems.
We can therefore have the Purple Line, serving riders on a narrow 16 mile corridor that runs through some of the most affluent areas of these counties, or for the same cost provide free bus service on systems that could carry four times as many riders. Furthermore, the bus systems serve not just affluent areas but also the poorest communities of the counties. For the poor, earning at or close to the minimum wage with perhaps two jobs to get by, daily bus fares of $6 or $8 or more are not insignificant.
We need to be open to broader options for how to address our transportation crisis. The debate on the Purple Line has not done that. And by treating the issue as the Purple Line or nothing, proponents are increasing the likelihood that the outcome will be nothing.
Note on Sources:
a) The TEMS consultant report, March 2015, commissioned by Montgomery County, Prince George’s County, and the Greater Washington Board of Trade.
b) Current cost estimates for building and operating the Purple Line, along with ridership projections, are from the most recently issued Federal Transit Administration Purple Line Profile Sheet, November 2014.
c) Cost and ridership data for the local transit systems (RideOn and TheBus) are from the National Transit Database of the Federal Transit Administration.