It is Time to Admit the Purple Line Was a Mistake

The Path the Purple Line Will Take – Before and The View At Rock Creek Now

A.  Introduction

The proposed Purple Line, a 16-mile light-rail line passing in an arc across parts of suburban Maryland around Washington, DC, has become a fiasco.  The State of Maryland, under Republican Governor Larry Hogan, is preparing to sign a new contract with the private concessionaire that will pay that concessionaire $3.7 billion more than had been agreed to under the existing contract.  The total cost of that contract alone (there are significant other costs on top) will now be $9.3 billion (66% more than the $5.6 billion set in the earlier contract), and the opening will be delayed by at least a further 4 1/2 years (thus doubling the originally contracted construction period – now to a total of 9 years).  And the governor is doing this with no legislative approval being sought.

The Purple Line has long been controversial – due to its high cost, the disruption it is causing to a number of suburban neighborhoods, the destruction of parkland it has been routed through, and its use of scarce resources for public transit to benefit a privileged few rather than the broader community.  There are alternatives that would not only be far more cost-efficient but also less environmentally destructive.  The project illustrates well why the US has such poor public transit and poor public infrastructure more generally, as scarce resources are channeled into politically-driven white elephant projects such as this.

In response to the announcement of the terms of the revised contract with the concessionaire, I submitted to the Washington Post a short column for its “Local Opinions” section.  They have, however, declined to publish it.  This is not terribly surprising, as the Washington Post Editorial Board has long been a strong proponent of the Purple Line, with numerous editorials pushing strongly for it to go forward.  And while the Post claims that it supports an active debate on such issues, the guest opinion columns it has published, as well as letters-to-the-editor, have been very heavily weighted in number to those with a similar view as that of its Editorial Board.

I am therefore posting that column here.  It has been slightly edited to reflect developments since it was first drafted, but has been kept in style to that of an opinion column.

Opinion columns must also be short, with the Post setting a tight word limit.  That means important related issues can not be addressed due to the limited space.  But with room here, I can address several of them below.  Finally, I will discuss the calculations behind two of the statements made in the column, as a “fact check” backing up the assertions made.  These should themselves be of interest to those interested in the Purple Line project (and in public transit more broadly), as they illustrate factors that should be taken into account when assessing a project such as this.

B.  The Column Submitted to the Washington Post

This is the column submitted to the Post, with some minor changes to reflect developments since it was first drafted:

               It is Time to Admit the Purple Line was a Mistake

Governor Hogan has re-negotiated the contract with the private concessionaire that will build and operate the 16-mile long Purple Line through suburban Maryland.  The Board of Public Works has approved it, and despite an extra $3.7 billion that will be spent the Maryland legislature will have no vote.  The private concessionaire will now be paid $9.3 billion, a 66% increase over the $5.6 billion cost in the original contract.  And this is just for the contract with the concessionaire.  The total cost, including contracts with others (such as for design and engineering work) as well as direct costs at the Maryland Department of Transportation (MDOT), is likely well over $10 billion.

The amount to be paid to the concessionaire for the construction alone will rise to $3.4 billion from the earlier $2.0 billion, an increase of 70%.  And even though the construction is purportedly halfway complete (with $1.1 billion already spent), the remaining amount ($2.3 billion) is larger than the original total was supposed to be.  And the amount being paid to the private contractors for the construction will in fact be even higher, at $3.9 billion, once one includes the $219 million MDOT has paid directly to the subcontractors in the period since the primary construction contractor withdrew, and the $250 million paid to that primary contractor in settlement for the additional construction expenses it incurred.  That $3.9 billion is close to double the $2.0 billion provided for in the original contract.  In addition, the project under the new contract will require an extra 4 1/2 years (at least) before it is operational, doubling the time set in the original contract to 9 years.  Even though the project is purportedly halfway built, the remaining time required will equal the time that was supposed to have been required under the original plan for the entire project.

The critics were right.  They said it would cost more and take longer than what Maryland asserted (and with supposedly no risk to the state due to the “innovative” contract).  It also shows that it is silly to blame the opponents of the project.  The lawsuit delayed the start of construction by less than 9 months.  That cannot account for a delay of 4 1/2 years.  Furthermore, the state had the opportunity during those 9 months to better prepare the project, acquire the land required, and finalize the engineering and design work.  Construction should then have been able to proceed more smoothly.  It did not.  It also shows that Judge Leon was right when he ruled that the project had not met the legal requirements for being adequately prepared.

Even the state’s own assessment recognized that such a rail line was marginal at best at the costs originally forecast.  With the now far higher costs, no unbiased observer can deny that the project is a bad use of funds.  The only possible question is whether, with what has already been spent, the state should push on.  But so far only $1.1 billion has been spent on the construction, plus the state agreed to pay the former construction company the extra $250 million when it quit the project.  Thus close to $8 billion (plus what the state is spending outside of the contract with the concessionaire) would be saved by stopping now.

There are far better uses for those funds.  A top priority should be to support public transit in Montgomery and Prince George’s countries.  Even at the originally contracted cost for the Purple Line there would have been sufficient funds not only to double capacity on the county-run bus systems (doubling the routes or doubling the frequency on the routes or some combination), but also to end charging any fares on those buses.  Those bus systems also cover the entire counties, not simply a narrow 16-mile long corridor serving some of the richest zip codes in the nation.  In particular, better service could be provided to the southern half of Prince George’s, the location of some of the poorer communities in the DC area and where an end to bus fares would be of particular benefit.

Covid-19 has also now shown the foolishness of spending such sums on new fixed rail lines.  DC area Metro ridership is still 80% below where it was in 2019.   Rail lines are inflexible and cannot be moved, and in its contract the state will pay the concessionaire the same even if no riders show up.  Who knows what will happen to ridership in the 35 years of this contract?  In contrast, bus routes and frequency of service have the flexibility to be adjusted based on whatever develops.

It is time to cut our losses.  Acknowledge it was a mistake, don’t sign the revised contract, and use the funds saved to provide decent public transit services to all of our residents.

C.  Additional issues

a)  The Cost of Not Keeping the Original Construction Contractor

Media coverage of the proposed new contract has focussed on the overall $9.3 billion cost (understandably), as well as the cost of the construction portion alone.  The figure used for that construction cost has been $3.4 billion, a 70% increase over the originally contracted $2.0 billion cost.

But as noted in the column I drafted above, that $3.4 billion excludes what MDOT has paid directly to the subcontractors who have continued to work on the project since September 2020 (under the direct supervision of MDOT) after the original primary contractor (Fluor, a global corporation with projects on six continents) exited.  According to a report by MDOT in January 2022, $219 million was paid directly by MDOT for this work, and this will be in addition to the $3.4 billion to be paid to the concessionaire.  One should also add in the $250 million Maryland has agreed to pay the original primary contractor in the settlement for its claims that it incurred an additional $800 million in construction expenses on the project – expenses that were the fault of the state from an inadequately prepared project.  That $250 million was for construction costs incurred, and should be included as part of the overall construction costs that MDOT is paying the concessionaire.  The total to be paid for the construction (if there are no further cost increases, which based on the experience so far cannot be guaranteed) is thus in fact $3.9 billion.  This is close to double the original contracted cost of $2.0 billion.

This also raises another issue, which remarkably does not appear to have been discussed (from all that I have read).  The original contractor in 2020 had requested an additional $800 million in compensation for extra costs incurred in the project that it argued were the fault of the state.  One can debate whether this was warranted and whether it was the fault of the state or the contractor, but the amount claimed was $800 million.  Thus, had the state agreed, the total cost would then have been $2.8 billion, up from the originally contracted $2.0 billion.  The state rejected this, however, and then congratulated itself for bargaining the $800 million down to “only” $250 million.

But now we see that the overall amount to be paid the private firms building the rail line will be $3.9 billion.  Fluor was evidently right (even conservative) in its claim that building the project will cost more.  But the $3.9 billion it will now cost is $1.1 billion more than the $2.8 billion they would have paid had the state agreed to cover the $800 million (which probably could have been bargained down some as well).  This hardly looks like smart negotiating by Governor Hogan and his state officials.

Put another way, state officials refused to pay an extra $800 million for the project, insisting that that cost was too high.  They then negotiated a contract where instead of paying $800 million more they will pay $1.9 billion more – for the same work.  And then they sought praise for negotiating a new agreement where they will pay “only” an extra $1.9 billion.

Furthermore, the re-negotiated contract will not only pay $1.9 billion more for the construction, but also higher amounts for the subsequent 30 years when the concessionaire will operate and maintain the line.  Maryland had agreed to pay a total of $2.3 billion for this over the 30 years in the original 2016 contract, but in the re-negotiated contract will now pay $2.6 billion, an increase of $300 million.  Governor Hogan had earlier asserted that under its “innovative” PPP contract, the state would not have to cover any cost increases for the rail line operations over those 30 years – but now it does.  In addition, due to the now far higher construction costs and the proportionately much higher share of those costs that will be funded by borrowing (as the up-front grants to be provided will be largely the same – $1.36 billion will now be provided, vs. $1.25 billion before), the total financing costs over the life of the contract will now be $2.8 billion versus $1.3 billion before, an increase of $1.5 billion.  Thus the total contract will now cost $9.3 billion versus $5.6 billion before, an increase of $3.7 billion (which equals the $1.9 billion on construction + $0.3 billion on operations + $1.5 billion on financing).

It is difficult to see how there is any way this can be interpreted as smart negotiating.

b)  Don’t Blame the Lawsuit for the Problems

The politicians responsible for the Purple Line, starting with Governor Hogan, blame the lawsuit brought by opponents of the Purple Line for all the problems that followed.  This is simply wrong, and indeed silly.  The ruling by Judge Richard Leon delayed the start of construction by less than 9 months.  This cannot account for a delay that will now be at least 4 1/2 years (assuming no further delays).  Nor can it account for a project cost that is now $3.7 billion higher.

Judge Leon ruled in August 2016 that the State of Maryland had not fulfilled the legal conditions required for a properly prepared project.  The primary issue was whether a project such as this, with the unavoidable harm to the environment that a new rail line will have, is necessary to provide the transit services needed in the corridor.  Could there be other options that would provide the services desired with less harm to the environment?  If so, the law requires that they be considered.  The answer depends critically on the level of ridership that should be expected, and the State of Maryland argued that only a rail line would be able to handle the high ridership load they forecast.  Many of the Purple Line riders would be transferring from and to the DC Metrorail lines it would intersect, and the State of Maryland claimed that the DC Metrorail system (just Metro, for short) would see a steady rise in ridership over the years and thus serve as a primary draw for Purple Line riders.

Judge Leon observed that in fact Metro ridership had been declining in the years leading up this case (2016), and ruled that Maryland should look at this issue and determine whether, based on what was then known, a less environmentally destructive alternative to the Purple Line might in fact be possible.  If Maryland had complied with this ruling, they could have undertaken such a study and completed it within just a few months.  There would have been little surprise if such a study, under their own control, would have concluded that the Purple Line was still warranted.  The judge would have accepted this, and they could then have proceeded, with little to no delay.  Construction had only been scheduled to begin in October 2016.

Instead, the State filed numerous motions to reverse the ruling and to be allowed to proceed with no examination of their ridership assumptions.  They argued in those motions that there would be a steady rise in Metro ridership over time, and that by the year the Purple Line would open (then expected to be in 2022) Metro ridership would have been growing at a steady pace for years, which would then continue thereafter.  When Judge Leon declined to reverse his ruling, the State appealed and then won at the Appeals Court level.  The judges in the Appeals Court decided that the judicial branch should defer to the executive branch on this issue.  Construction then began in August 2017.  The Purple Line contractors said that they were delayed by 266 days ( = 8.7 months) as a result of Judge Leon’s ruling.

We now know that Judge Leon was in fact right in raising this concern with the prospects for Metro ridership.  Ridership on the system had in fact been falling for a number of years leading up to 2016, and it has continued to fall since then.  Metro ridership peaked in 2008, fell more or less steadily through 2016, and then continued to fall.  Ridership in 2016 was 14% below where it had reached in 2008 (despite the Silver Line opening with four new stations in 2015), and then was even less than 2016 levels in 2019.  And all this was pre-Covid.  Metrorail ridership then completely collapsed with the onset of Covid, with ridership in 2020 at 72% below where it was in 2019 and in 2021 at 79% below where it was in 2019.

Judge Leon was right.  Even setting aside the collapse in ridership with the onset of Covid, Metro ridership declined significantly and more or less steadily for more than a decade.  It was not safe to assume (as the state insisted in its court filings would be safe to assume) that Metro ridership would resume its pre-2008 upward climb.  And now we have seen not only the collapse in Metro ridership following from Covid, but also the near certainty that it will never fully recover due to the work-from-home arrangements that became common during the Covid crisis and are now expected to continue at some level.

In addition and importantly, while the Purple Line contractor noted that the judicial ruling delayed the start of construction by 266 days, this does not mean project completion should have been delayed by as much.  As Maryland state officials themselves noted, while the ruling meant construction could not start, the state could (and did) continue with necessary preparatory work, including final design work, acquisition of land parcels that would be needed along the right of way, and the securing of the necessary clearances and permits that are required for any construction project.  The state was responsible for each of these.  With the extra 9 months they should have been able to make good progress on each, and with this then ensure that the project could proceed smoothly and indeed at a faster pace once they began.

This turned out not to be the case.  Despite the extra 9 months to prepare, the Purple Line contractors cited each of these as major problems causing delays and higher costs.  Final designs were not ready on time or there had to be redesigns (as for a crash wall that has to be built for the portion of the Purple Line that will run parallel to CSX train tracks); state permits were delayed and/or required significant new expenditures (such as for the handling of water run-off); and the state was late in acquiring “nearly every” right of way land parcel required (there were more than 600) – and “by more than two years in some cases”.

An extra 9 months for preparation should have led to fewer such issues.  That they still were there, despite the extra 9 months, makes one wonder what the conditions would have been had they started construction 9 months earlier.  The extra time to prepare the project – where these were later revealed still to be major problems – likely saved the project money compared to what would have been the case had they started construction earlier.  It simply makes no sense now to blame that extra 9 months for the difficulties when they in fact had an extra 9 months to work on them.

c)  Diversion of MARC Revenues to Get Around Maryland’s Public Debt Limits

Under the Purple Line contract, the State of Maryland will be obliged to pay the concessionaire certain set amounts over 35 years, starting with a payment of $100 million when operations start (in a planned 4 1/2 years from now), but especially then for the following 30 years when the concessionaire will operate the line.  The state will be obliged to make those payments for those 30 years on the sole condition that the rail line is available to be operated (i.e. is in working order).  Hence those payments are called “availability payments”.  The payments will be the same regardless of ridership levels.  Indeed, they will have to be made (and in the same amount) even if no riders show up.  A major share of the availability payments will be made up of what will be required to cover the principal and interest on the loans that the concessionaire will be taking out to finance the construction of the project, with the repayment then by the state through the availability payments.  The concessionaire is in essence borrowing on behalf of the state, and the loans will then be repaid by the state via the concessionaire.

These long-term budget obligations are similar to the obligations incurred when the state borrows funds via a bond being issued.  Indeed, this can hardly be disputed for the borrowing being done by the concessionaire to finance the construction, with the state then repaying this through the availability payments.  it is also, at 35 years, a longer-term financial obligation than any bond Maryland has ever issued.  Governor Hogan will be tying the hands of future governors for a very long time, as failure to repay on the terms he negotiated would be an event of default.

Due to concerns of excessive government borrowing undermining finances, many states have set limits on the amount they can borrow.  In Maryland, the state has set two “capital debt affordability ratios”, which limit outstanding, tax-supported, state debt to less than 4% of Maryland personal income and the debt service that will be due on this debt to less than 8% of state tax and other revenues.

If the 35-year long Purple Line obligations were treated as state debt, then there could be a problem of Maryland running close to, and possibly exceeding, these debt affordability ratios.  This is discussed in further detail in an annex at the end of this blog post, with illustrative calculations.  Exceeding those limits would be a significant issue for the state, and might conceivably put it in violation of conditions written into the contracts for its outstanding state bonds.  To avoid this, or even if the Purple Line obligations would bring it closer to but not over those limits, Maryland would need to limit its public sector borrowing, postponing other projects and programs due to the limited borrowing space that the Purple Line has used up.

The issue is not new.  It already arose in the contract signed in 2016.  But it will be even more important now due to the higher cost of the concession  – $9.3 billion to be paid to the concessionaire vs. $5.6 billion before.

Lawyers can debate whether the payment obligations (or a portion of them, e.g. the portion directly tied to the debt incurred by the concessionaire on behalf of the state) should or should not be included in the state’s capital debt affordability ratios.  But to forestall such a debate, MDOT has chosen to create a special trust account from which all payments for the Purple Line would be made.  That trust would be funded by Purple Line fare revenues (whatever they are) and grant funds received for the project (primarily from federal sources).  But MDOT acknowledges that such funding would not suffice for the financial obligations being incurred for the Purple Line, at least for some time.  And if direct support to cover this was then provided from the Maryland state budget, where revenues come primarily from taxes, the Purple Line obligations would be seen as tax-supported debt and hence subject to the borrowing limits set by the capital debt affordability ratios.

So instead of openly providing funding directly from the state budget, they will channel fare revenues collected on MARC (the state-owned commuter rail system) in the amounts necessary to cover the payment obligations on the Purple Line.  But MARC does not run a surplus.  Like other commuter rail lines it runs a deficit.  Each dollar in MARC fares channeled to cover Purple Line payment obligations thus will increase that MARC deficit by a dollar.  But then, for reasons that make little sense to an economist but which a lawyer might appreciate, those higher MARC deficits can be covered by increased funding from the state budget without this impacting the state’s capital affordability limits.  The identical payments if sent directly to cover the Purple Line obligations, however, would be counted against those ratios.

But this is just a shell game.  The funding to cover the Purple Line payment obligations are ultimately coming from the state budget, and routing it via MARC transfers simply serves to allow the state to bypass the capital debt affordability limits.  It also reduces transparency on how the Purple Line costs are being covered.

Nor are the agencies that assign ratings to Maryland state bonds being fooled by this.  S&P, for example, noted specifically that it will take into account the payment obligations on the Purple Line when they compute for themselves what the capital debt affordability ratios in fact are.

d)  Role (or Lack of It) of the State Legislature

Under the new contract Governor Hogan and his administration have negotiated, a total of $9.3 billion will be paid to the concessionaire, or $3.7 billion more than the $5.6 billion that was to be paid under the original contract.  The state legislature will apparently have no say in this.  While it will bind future administrations to make specified payments over a 35 year period, with payments that must be made regardless of ridership or any factor the state has control over (the rail line needs merely to be “available”), the only recognized check on this is apparently a vote in the Board of Public Works.  But there are only three members on this Board, only two votes are required for approval, and the governor has one of those two votes.  The legislature has no role.

I find this astonishing.  The state legislature is supposed to set the budget, but no vote will be taken on whether the further $3.7 billion should be spent.  Indeed, it appears the legislature would have no role regardless of how much the current governor is binding his successors to pay (Governor Hogan will be long out of office when the payments are due), nor for how long.  Suppose it was twice as much, or ten times as much, or whatever.  And while this commitment will be for 35 years to 2056 (five years past what was in the original contract), it appears the same would apply if the revised contract were extended to 50 years, or 100 years, or whatever.  Under the current rules, it appears that the legislature has accepted that the governor can commit future administrations to pay whatever he decides and for as long as he decides, with just the approval of the Board of Public Works.

This is apparently a consequence of the state law passed in 2013 establishing the process to be followed for state projects that would be pursued via a Public-Private Partnership (PPP) approach.  The Purple Line is the first state project being pursued on the basis of that 2013 legislation, with the legislature approving also in 2013 the start of the process on the Purple Line.  This legislative approval was provided on the basis of cost estimates provided to it at the time.  MDOT then issued a Request for Qualifications in November 2013 to identify interested bidders, a Request for Proposals in July 2014, and received proposals from four bidders in November and December 2015.  Following review and final negotiations, MDOT announced the winning bidder on March 1, 2016.  Only then did they know what the cost (under that winning bid) would be, and the state legislature was given 30 days to review the draft contract (of close to 900 pages) during which time they could vote not to approve.  But no vote taken would be deemed approval.  Then, with just the approval of the Board of Public Works as well (received in early April 2016), MDOT could sign the contracts on behalf of Maryland.

However, there will be no such review by the legislature of any amendments to that contract.  Amendments apparently require nothing more than the approval of the Board of Public Works, and with that sole approval, the governor is apparently empowered to commit future administrations to pay whatever amount he deems appropriate, for as many years as he deems appropriate.  The increase in the future payment obligations in this case will be $3.7 billion, but apparently it could be any amount whatsoever, with just the approval of the Board of Public Works.

Based on this experience, one would think that the legislature would at a minimum hold public hearings to examine what went wrong with the Purple Line, and what needs to be done to ensure the legislature retains control of the state budget.  The current legislation apparently gives the governor close to a blank check (requiring only the approval of the Board of Public Works) to obligate future administrations to pay whatever amount he sees fit, for as many years as he sees fit.

Central also to any legislative review of a proposed expenditure is whether that expenditure is warranted as a good use of scarce public resources.  One can debate whether the Purple Line was warranted at the initial cost estimates.  As will be discussed below, at those initially forecast costs even the state’s own analysis indicated it was at best marginal (and inferior to alternatives).  But even if warranted at the then forecast costs, it does not mean the project makes sense at any cost.  Based on what we now know will be a far higher cost, no unbiased person can claim that the Purple Line is still (if it ever was ) a good use of public resources.

Yet remarkably, it does not appear that any assessment was done by any office in Maryland government of whether this project is justified at the now much higher costs.  The issue simply did not enter into the discussion – at least in any discussion that has been made public.  Rather, at the Board of Public Works meeting on the project, Governor Hogan praised MDOT staff for continuing to push the project forward despite the problems.  Indeed, the higher the increase in cost for the project, the more difficult it would be to proceed, and hence the more the staff should be commended (in that view) for nevertheless succeeding in pushing the project through.  This is perverse.

Legislative review is supposed to look at such issues and to set overall budget priorities.  Yet under the PPP law passed in 2013, the legislature apparently has no role to review and consider whether an amended expenditure on such a project is a good use of the budget resources available.

D.  Fact Checks

a)  The Lack of Economic Justification for the Purple Line

The column includes the statement:

Even the state’s own assessment recognized that such a rail line was marginal at best at the costs then envisaged.  With the now far higher costs, no unbiased observer can deny that the project is far from justified.

This statement is based on the results of the state’s analysis reported in the Alternatives Analysis / Draft Environmental Impact Statement, released in September 2008.  The Alternatives Analysis looked at seven options to provide improved public transit services in the Purple Line corridor – an upgrading of existing bus services (labeled TSM for Transportation System Management), three bus rapid transit options (low medium, and high), and three light rail options (low, medium, and high).  All would provide improved public transit services in the corridor.  The question is which one would be best.

The summary results from the analysis are provided in Chapter 6, and the primary measure of whether the investment would be worthwhile is the “FTA cost-effectiveness measure” – see tables 6-2 and 6-3.  The Federal Transit Administration (FTA) cost-effectiveness measure is calculated as the ratio of the extra costs of the given option (extra relative to what the costs would be under the TSM option, and with both annualized capital costs and annual operational and maintenance costs), to the extra annual hours of user benefits of that option relative to the TSM option.  That is, it is a ratio of two differences – the difference in costs (relative to TSM) as a ratio to the difference in benefits (again relative to TSM).  Thus it is a ratio of costs to benefits, and a higher number is worse.  Hours of user benefits are an estimate of the number of hours saved by riders if the given transit option is available, where they mark up those hours saved by a notional factor to account for what they say would be a more pleasant ride on a light rail line (which biases the results in favor of a rail line but, as we will see, not by enough even with this).

The FTA issues guidelines classifying projects by their cost-effectiveness ratios.  For FY2008 (the relevant year for the September 2008 Alternatives Analysis), the breakpoints for those costs were (see Table II-2 in Appendix B of the FTA’s FY2008 Annual Report on Funding Recommendations):

High (meaning best) $11.49 and under
Medium-High $11.50 – $14.99
Medium $15.00 – $22.99
Medium-Low $23.00 – $28.99
Low (meaning worst) $29.00 and over

The Alternatives Analysis estimated that the Medium Light Rail Line option would have a cost-effectiveness ratio of $22.82.  This would place it in the Medium category for the FTA cost-effectiveness measures, but just barely.  This was important, as the FTA will very rarely consider for federal grant funding a project in its Medium-Low category, and never in the Low category.

The other two light rail options examined had worse cost-effectiveness ratios ($26.51 and $23.71 for the Low and High options respectively) that would have placed them in FTA’s Medium-Low cost-effectiveness category, and thus highly unlikely to be accepted by the FTA for funding.  Not surprisingly, the Governor of Maryland (O’Malley at the time) selected the Medium Light Rail option as the state’s preferred option, as the other two light rail options would likely have been immediately rejected, while the Medium Light Rail choice would have been within the acceptable limits – although just barely so.  And while in principle they chose the Medium Light Rail option, they then added features (and costs) to it that brought it closer to what had been the High Light Rail Option, while not re-doing the cost-effectiveness analysis.

Maryland should also have considered any of the three Bus Rapid Transit options, as their cost-effectiveness measures were uniformly better than any of the light rail options (with cost-effectiveness ratios of $18.24, $14.01, and $19.34 for the Low, Medium, and High options respectively).  They were better even without the scaling-up of user benefits (by a notional factor for what was claimed would be a more pleasant ride) that biased the results in favor of the light rail options.  And most cost-effective of all would have been a simple upgrading of regular bus services, introducing express lines and other such services where there is a demand.

These were all calculated at the costs as estimated in 2008.  We now know that the costs for the light rail line option chosen will be far higher than what was estimated in 2008.  That cost then was estimated to be $1.2 billion to build the line, and an annual $25.0 million then for operations and maintenance.  Adjusting these figures for general inflation from the prices of 2007 (the prices used for these estimates) to those of December 2021 would raise them by 34%, or to $1.6 billion for the capital cost and $33.5 million for the annual operational and maintenance costs.  But under the new contract, the capital cost will be $3.9 billion, or 2.4 times higher than estimated in 2008 (in end-2021 prices).  Also, the annual operational and maintenance costs (including insurance) in the new contract will be $2.6 billion over 30 years.  This payment will be adjusted for inflation, and the $2.6 billion reflects what it would be at an assumed inflation rate of 2% a year.  One can calculate that at such a 2% inflation rate, the annual payment over the 30 years in the prices of end-2021 would be $58.0 million, or 73% higher than the $33.5 million had been forecast earlier (also at end-2021 prices).

Putting the capital cost in annualized terms in the same way as was done in the Alternatives Analysis report, and adding in the annual operational and maintenance costs, the overall costs under the new contract (with all in end-2021 prices) is 2.3 times higher than what was forecast in 2008, when the Medium Light Rail option was chosen.  To be conservative, I will round this down to just double.  To calculate what the FTA cost-effectiveness measures would have been (had the forecast costs been closer to what the new contract calls for), one also needs ridership forecasts.  While we know that those forecasts are also highly problematic (as discussed in this earlier blog post, they have mathematical impossibilities), for the purposes here I will leave them as they were forecast in the Alternatives Analysis.

Based on this, one can calculate that the FTA cost-effectiveness measure would have jumped to $50.55 had the capital and operating costs been estimated closer to what they now are under the new contract.  This would have put the Purple Line far into the Low category for cost-effectiveness (far above the $29.00 limit), and the FTA would never have approved it for funding.  And at more plausible ridership estimates, the ratio would have been higher still.

b)  For the Cost of the Purple Line, One Could Double Bus Services in Suburban Maryland, and Stop Charging Fares

Resources available for public transit are scarce, and by spending them on the Purple Line they will not be available for other transit uses.  The Purple Line will serve a relatively narrow population – those living along a 16-mile corridor passing through some of the richest zip codes in the country, providing high-end services to a relatively few riders.  The question that should have been examined (but never was) was whether the resources being spent on the Purple Line could have been used in a way that would better serve the broader community.

A specific alternative that should have been considered would have been to use the funds that are being spent on the Purple Line instead to support public transit more broadly in Montgomery and Prince George’s Counties.  What could have been done?  The alternatives can then be compared, and a determination made of which would lead to a greater benefit for the community.  Only with such a comparison can one say whether a proposed project is worthwhile.

Specifically, what could be done if such resources were used instead to support the local, county-run bus services in Montgomery and Prince George’s Counties (Ride-On and The Bus respectively)?  They already carry twice as many riders as what the Purple Line would have carried in the base period examined (according to its optimistic forecasts), had it been in operation then.  As we will see below, with the funds that the State of Maryland will make in the availability payments on the Purple Line (and net of forecast Purple Line fare revenues), one could instead end the collection of all fares on those bus systems and at the same time double the size of those systems (doubling the routes or doubling the frequency on the current routes, or, and most likely, some combination of the two).  With unchanged average bus occupancy, they could thus serve four times the number of riders that the Purple Line is forecast (optimistically, but unrealistically) to carry.

The services would also be provided to the entire counties, not just to those living along the Purple Line’s 16-mile corridor.  Especially important would be service to the southern half of Prince George’s County, where much of its poorer population lives.  The Purple Line will not be anywhere close to this.  Ending the collection of fares would also be of particular value to these riders.

For the comparison to the cost of running the county-run bus systems, I used data on their operating costs, capital costs, and fare revenues from the National Transit Database, which is managed by the Federal Transit Administration of the US Department of Transportation.  The data was downloaded on February 1, 2022.  The data is available through 2020, but I used 2019 figures so as not to be affected by the special circumstances of the Covid-19 pandemic.

The bus system costs in 2019, along with what the Purple Line costs will be, are:

(in millions of $)

County-Run Bus Systems (for 2019):
Operating costs $157.6
10-year average K costs $17.1
  Total costs $174.7
Fares collected $22.0
  Total to double capacity and no fares $196.7
Purple Line:
Annual availability payments $240.0
Less fares collected (forecast) $45.3
  Net Costs $194.7

The two bottom-line figures basically match, at around $195 million.  The net payments that will be made on the Purple Line over its 30-year life would be $194.7 million, based on the announced availability payment averaging $240.0 million per year less forecast average annual fares to be collected.  That average fare forecast is undoubtedly optimistic (as the ridership forecasts are optimistic), and is based on what was provided in 2016 when the original contract was discussed with the legislature.  I have not seen an updated forecast, but MDOT staff stated (at the Board of Public Works meeting on January 26 to discuss and vote on the new contract) that fares would not be changed from what was planned before.

The cost of doubling the size of the county-run bus systems would have been $157.6 million for the operating cost (based on the actual cost in 2019) plus $17.1 million for the capital cost (based on the 10-year annual average between 2010 and 2019, as these expenditures fluctuate a good deal year to year), or a total of $174.7 million.  It is assumed that government will continue to spend what it is spending now to support these bus systems, so the extra funding needed for doubling the systems would be those costs again (for that second half), plus what is received in fare revenues in the system now (the $22.0 million) as fares would no longer be collected.  Thus the net cost would be $196.7 million, very close to the amount that could be covered by what will be provided on a net basis to the Purple Line (and assuming, optimistically, fares averaging $45.3 million a year).

In addition to this, a total of $1.36 billion will be provided in grants to the Purple Line.  At the lower cost of the earlier, 2016, contract, a portion of those grant funds ($1.25 billion before) would have been needed to cover a share of the costs of doubling the capacity of the bus systems and ending the collection of fares.  One could in principle have invested those grant funds and at a reasonable interest rate have generated sufficient funds to close the remaining gap.  But with the now far higher costs of the renegotiated contract, there would be no need for a share of those grant funds for this, and they could instead be used to provide funding for other high-priority transit needs in the region.

E.  Conclusion

The Purple Line has long been a problematic project, and with the now far higher costs in the renegotiated contract with the concessionaire, can only be described as a fiasco.  After rejecting a demand from the contractor to pay $800 million more to complete the construction of the rail line, they will instead now pay $1.9 billion more to a total of $3.9 billion for the construction alone, or close to double the originally negotiated cost of $2.0 billion.  They will also now pay more for the subsequent operation of the line.  It is all a terribly wasteful use of the scarce funds available for public transit, and comes with great environmental harm on top.  Funds that will be spent by the state under this concession contract could have been far better used, and far more equitably used, by supporting the public transit systems that serve the entire counties.

Despite the much higher costs, there does not appear to have been any serious assessment of whether the Purple Line can be justified at these higher costs.  At least there has not been any public discussion of this.  Rather, MDOT staff appear to have been directed to do whatever it takes, and at whatever the cost it turns out to be, to push through the project.  But that is in fundamental contradiction to basic public policy.  A project might be warranted at some low cost, but that does not then mean it is still warranted if it turns out the cost will be far higher.  That needs to be examined, but there is no evidence that there was any such examination here.

We should also now recognize as obvious that forecasts of ridership on fixed rail lines are uncertain.  Ridership on the DC Metro rail lines not only fell, more or less steadily, over the decade leading up to 2019, but then collapsed in 2020 and 2021 due to the Covid crisis.  Ridership in 2021 was almost 80% below what it was in 2019.  And it is highly unlikely that Metrorail ridership will ever recover to its earlier levels, as many of the former commuters on the system will now be working from home for at least part of the workweek.

Despite this, Governor Hogan has adamantly refused to look at alternatives to building a new fixed rail line, with this to be paid for via a 35-year long concession with private investors that will tie his successors to making regular availability payments regardless of whatever ridership turns out to be, and regardless of any other developments that might lead to more urgent priorities for the state’s budget resources.  The issue is not only that the ridership forecasts on the Purple Line are highly problematic, with mathematical impossibilities and other issues.  It is also, and more importantly, that any such ridership forecasts are uncertain.  Just look at what happened with Covid.  It was totally unanticipated but led ridership to collapse almost literally overnight.  And the effects are still with us, almost two years later.

The fundamental failure is the failure to acknowledge that any such forecasts are uncertain, and highly so.  There might be future Covids, and also other future events that we have no ability to foresee or predict.  For precisely this reason, it is important to design systems that are flexible.  A rail line is not.  Once it is built (at great cost), it cannot be moved.  Bus routes, in contrast can be shifted when this might be warranted, as can the frequency of services on the routes.

None of this seems to have mattered in the decisions now being taken.  As a consequence, and despite billions of dollars being spent, we do not have the transit systems that provide the services our residents need.

 

 

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Annex:  Details on the Diversion of MARC Revenues to Get Around Maryland’s Public Debt Limits

The State of Maryland follows a policy to limit its public borrowing so that state debt does not become excessive.  Specifically, it has set two “capital debt affordability ratios”:

1) Keep the stock of tax-supported state debt below 4% of personal income in the state;

and 2)  Keep debt service on tax-supported state debt below 8% of state revenues.

I am not sure whether these are limits have been set by statute, but as policy they will in any case be reflected in the state bond ratings.  It is also possible that representations, and perhaps even covenants, have been made in the Maryland state bond contracts stating the intention of the state to keep to them.  If so, then violation of those limits could have consequences for those bonds, possibly putting the state technically in default.

The commitments Governor Hogan will be making in signing the concession contracts for the Purple Line are in essence the same as commitments made when the state issues a bond and agrees to pay amortization and interest on that bond as those payments come due.  For the Purple Line, the private concessionaire will similarly be borrowing funds, but the State of Maryland will then have the obligation under the contract to repay that borrowing through the availability payments to be paid to the concessionaire for 30 years.  In addition to repaying (with interest) the borrowings made by the concessionaire, the availability payments will also cover the operational, maintenance, and similar costs over the 30-year life of the contract during which the concessionaire will operate the line.

Under the original contract, signed in 2016, these payments were expected to average $154 million per year for 30 years.  Under the new contract, they are expected to average $240 million a year.  One can debate whether all of the availability payment (which includes payment for the operations and maintenance) or simply some share of these payments should be considered similar to debt, but the payment obligation is fundamentally the same.  Governor Hogan is committing future governors (up until 2056) to make these payments, with the sole condition that the concessionaire has ensured the rail line is available to be used (hence the label “availability payments”).  In particular, they will be obliged to make these payments regardless of what ridership turns out to be, or indeed whether any riders show up at all.  That risk is being taken on fully by the state and is not a concern of the concessionaire (who, indeed, will find things easier and hence preferable the fewer the number of riders who show up).

These availability payments have all the characteristics of a debt obligation.  But if it were treated as state debt, it would have to be included in the capital debt affordability limits, and this could affect the amount that the state could borrow for other purposes.  One can debate precisely what obligations to include and the timing of when they should be included, but purely for the sake of illustration, let’s use the 2016 contract amounts and assume that the obligation to be repaid would have had a capital value of $2.0 billion (equal to the then planned construction cost, minus grants received for it, but plus the present discounted value of non-debt operating and other costs that have been obligated).  Assume also this would have applied in 2017.  Based on figures in the November 2021 report of Maryland’s Capital Debt Affordability Committee (see Table 1 on page 26), the ratio of tax-supported state debt to Maryland personal income was 3.5% in 2017, or below the 4% limit.  However, if the full $2.0 billion from the Purple Line would have been added in 2017, following the contract signing in 2016, that ratio would have grown to 4.1%.

Similarly, the Capital Debt Affordability Committee report indicates (Table 2A on page 28) that debt service on tax-supported public debt in 2017 was 7.5% of state revenues.  If one were to add the full annual $154 million payment that would be due (under the original contract) for the Purple Line already in 2017 (too early, as it would not be due until construction is over, but this is just for illustration), the debt service ratio to state revenues would have risen from 7.5% without the Purple Line commitments to 8.2% with it – above the 8.0% limit.  Of the $154 million, about two-thirds would have been used to repay the funds borrowed to pay for the construction (plus for the equity, which was a small share of the total).  If one argued that only these payments on the debt incurred (and the similar equity cost) should be included, and not also the 30-year commitment to cover the operational and similar other costs, then the ratio would have risen to 7.98% if it applied in 2017 – basically at the 8.0% limit.

Again, these figures are simply for illustration, and the actual additions in 2017 would have been less and/or applied only in later years.  But as a rough indication, they indicate that the Purple Line debt and payments due would be materially significant and hence problematic.

it was thus important that MDOT structure these payment obligations in such a way that it could argue that they are not for “tax-supported public debt”.  This would be the case, for example, if the fare revenues from ridership on the Purple Line would suffice to cover the debt service and other payment obligations incurred.  But even MDOT had to concede the Purple Line revenues would not suffice for that in at least the early years, although it did assert (unconvincingly) that ultimately they would.

MDOT therefore established a separately managed trust for the Purple Line, which would be used to make the payments due and into which it would direct not simply Purple Line fare revenues and grants to be received for the project (primarily from federal sources), but also sufficient revenues from the MARC commuter rail line (operated by MDOT) to make the payments.  It argued also that only the debt service component of the availability payment would have to be included (about two-thirds of the total payment obligation in the 2016 contract), with the operations, maintenance, and other such costs not relevant to the capital debt affordability ratios (despite being a long-term, 30-year, commitment).  The State Treasurer, Nancy Kopp in 2016, ruled that this structure was acceptable and that Purple Line debt should thus not count against the state’s capital debt affordability limits.

But while deemed not applicable for the capital debt affordability limits, the immediate question that arises is what then happens to MARC?  Commuter rail lines in the US do not run a surplus, and require subsidies from a government budget to remain in operation.  MARC is no exception.  If a portion of MARC revenues are diverted to cover payments on Purple Line debt, then MARC’s deficit will rise by that amount and Maryland’s subsidies to MARC will have to rise by that same amount.  And those subsidies will come from state tax revenues.  Hence state tax revenues are in reality covering the Purple Line debt payments, and routing it via MARC does not change that reality.  At a minimum, transparency is being lost.

Furthermore, and as noted before, the state bond rating agencies have made it known that they are fully aware of what is going on, and will include these Purple Line obligations into their calculations.  S&P explained in May 2016 that upon the signing of the Purple Line contract, they will include the net present value of the payments to be made by the state during the construction period in their calculations of the state’s tax-supported debt ratios, and that once operations begin will include in the ratios the full availability payments net of fare revenues collected on the Purple Line only.

Maryland’s payment commitments under the revised Purple Line contract are now expected to average $240 million a year, far above the $154 million expected before.  MDOT has once again made its case with the new State Treasurer (Dereck Davis, who took office on December 17, 2021, replacing the long-time former Treasurer Kopp) that these long-term payment obligations should not count against the state’s Capital Debt Affordability Ratios.  While I have not seen a formal ruling on this from the State Treasurer’s office, presumably he agreed with the MDOT view as otherwise it would not have been presented to the Board of Public Works on January 26.

Polling Results Should Indeed be Worrying for the Democrats

The Washington Post and ABC News jointly sponsor a regular poll of American voters on a range of political issues, including whom they would vote for in upcoming Congressional elections.  Their most recent poll, released on November 14, showed that registered voters nationally would favor a Republican over a Democrat in their local congressional district race, by a margin of 10 percentage points.  The pollsters noted that this margin is the largest margin Republicans have enjoyed in all the polls they have conducted asking this question, in a series that goes back decades.

Numerous pundits soon followed with commentary on this, with articles such as “Why the generic ballot is so ominous for Democrats”, and “Democrats face a 2022 superstorm”, and “Democrats Shouldn’t Panic.  They Should Go Into Shock”.  Viewed in a longer-term context, and not simply in terms of the current polling margin in favor of the Republicans, should there indeed be such a concern if you are a Democrat?  As we will discuss in this post, the answer is yes.

The chart at the top of this post shows the responses that have been given to this question in the Washington Post / ABC News polls over the last two decades.  The figures for the past polling results are provided online here.  The polls asking this specific question have been undertaken in the periods leading up to each midterm election, normally starting about one year before the midterm election date and then repeated every few months until the November election.  There is then a gap – normally of three years – before they start the cycle for the next midterm election.

The specific question asked is:  “If the election for the U.S. House of Representatives were being held today, would you vote for (the Democratic candidate) or (the Republican candidate) in your congressional district? Would you lean toward the (Democratic candidate) or toward the (Republican candidate)?”  They also allow for possible responses of some other candidate, or neither, or would not vote, or no opinion, which I have combined into a single “Other / No Opinion” category in the chart.

Some points to note:

a)  The swing in preferences seen in the current midterm cycle is not unusual.  One saw a similar swing in favor of the Republicans in the period leading up to the 2010 election, and in favor of the Democrats in the periods leading up to the 2006 and 2018 elections.

b)  The initial polling results (one year before the midterm elections) were generally a pretty good predictor of the final outcome.  The polling results generally fluctuated within a relatively more narrow range in the multiple polls in the year leading up to the midterm itself.  The year 2014 was an exception, where the early indication was that Republican support had declined, but with it then recovering prior to the election.

c)  The “Other / No Opinion” category generally fluctuated within a range of roughly 5 percentage points, and in an understandable pattern.  Uncertainty on whom (if any) to vote for generally rose in the three years since the prior midterm, and then fell as one got closer to the election date.

d)  The substantial swings (from three years earlier) found in the initial polls in several of the cases (for the 2006, 2010, and 2018 midterms), coupled with the relatively smaller fluctuations then found in the year leading up to the election, were thus highly predictive.  The electoral results were net gains for the Democrats of 31 seats in 2006 and 41 seats in 2018, and a net gain for the Republicans of 64 seats in 2010.

Based on this pattern, Democrats can expect to lose a substantial number of seats in the 2022 midterms.  The closest parallel is to 2010, for several reasons.  Both 2010 and 2022 were (or will be) the first midterms of a newly elected Democratic president (Obama and Biden).  In the period leading up to 2010, Democrats saw their polling result fall (in the initial poll one year before the 2010 midterm, from three years before) by 9 percentage points, while that of the Republicans rose by 7 percentage points.   In the new poll one year before the 2022 midterm, the Democrats have seen the same fall of 9 percentage points in their polling result, while the preference for the Republicans rose again by 7 percentage points.

The Democrats had a net loss of 64 seats in the House of Representatives in 2010.  These early polling results suggest they could expect a similar result in 2022.

There are, of course, a number of provisoes:

a)  As they always say when investing in the stock market:  “Past performance is no guarantee of future returns.”  While there may have been this pattern in several of the recent midterm election cycles, there is no guarantee that pattern will continue.

b)  Furthermore, that pattern is based on a very small number of cases.  There have only been five midterm elections in the last 20 years, and substantial swings in voter preferences in only three of them.  And only one case (2010) with a Democratic president in his first term in office.  it is dangerous to generalize from figures for such a small number of election cycles.  But it would not be helpful to go back further in time as the political environment has changed, with more of a left-right polarization now than one had before.

c)  There will also be an impact from the substantial gerrymandering of congressional district lines now being redrawn to reflect the new census numbers.  The Supreme Court in 2019 ruled that it would not intervene in this practice when it considered two cases brought before it (of North Carolina and Maryland).  Each had egregiously gerrymandered district lines, and there were open and public statements in each from the politicians who had drawn those district lines that they had done so for the greatest possible partisan advantage that they could manage.

The Supreme Court nevertheless ruled that gerrymandering was not reviewable by any federal court, on a 5-4 vote where the five in the majority were the five Republican appointees to the court.  As a result, a number of states are now redrawing district lines to maximize partisan advantage.  And the ruling heavily favored Republicans, given their control of a larger number of states where politicians are allowed to draw the district lines that they will then be running in.  Republicans at the state level have full control of redrawing the lines for 184 congressional districts this year, while Democrats have full control in states where lines for just 75 districts will be redrawn.  In part this is because several of the larger Democratically controlled states (including California, Washington, and Colorado) now use independent, nonpartisan, commissions to draw the district lines.

The consequences of this gerrymandering will be on top of what one should expect from shifts in voter preferences.  And the margin in seats in the House that gives Democrats control of the chamber is only five following the 2020 election.  Already by this point, with only a small number of states having completed the redistricting process, a mid-November analysis at the New York Times concluded that Republicans will pick up a net of five congressional seats, and thus gain control of the House, even if the voting numbers in each locale were the same as what they were in 2020.  It would simply be a consequence of the newly drawn lines.

Coupling the gerrymandering with the shift in the preferences for Democrats vs. Republicans found in the polling results, there is every reason to expect Democrats will lose control of the House.  This in itself is not surprising.  Since the presidency of John Quincy Adams in 1826, the party of the incumbent president has lost seats in the House in the midterm after their first term election in all cases other than the sole exceptions of Franklin Roosevelt in 1934 and George W. Bush in 2002.  With the Democrats holding a majority in the House of just five seats, most have expected that Republicans will gain control after the 2022 midterms.

But the polling results, on top of the gerrymandering as well as the historical norm, suggest the Democratic losses are likely to be large.  Furthermore, the losses are most likely to be in the more competitive districts, which are more likely to be currently represented by the more moderate Democrats.  Thus the remaining Democrats in Congress following the 2022 election are likely to be the ones further to the left.  That is, the center of the Democrats is likely then to be shifted to the left, just as the center of the Republicans has shifted in recent years to the right.

Polarization, already large, would grow.

There Have Been Real Consequences From Not Taking Covid Seriously

A.  Introduction

Earlier posts on this blog have documented that vaccination rates against Covid-19 have been systematically lower in accordance with the share of a state’s vote for Trump in the 2020 election, and that mask-wearing to protect the individuals and those around them have also been systematically lower.  The higher the share voting for Trump in a state, the lower the share vaccinated and the lower the share wearing masks.

Those choices have had consequences.  As shown in the charts above, it should not then be surprising that states with a higher share of their vote for Trump have seen, on average, a higher number of cases of Covid-19 (per 10,000 of population) as well as a higher number of deaths.  The relationship is statistically a very strong one.  While many factors affect the likelihood of being infected with Covid-19 and of dying from it (including factors such as urban density, extent of travel, health status of the population, adequacy of the health care system, and more), political identification by itself appears to be a strong and independent factor.

In what is literally a life and death issue, one would have thought that rational self-interest would have dominated.  It has not.  Following a review of the data, this post will discuss some possible reasons why.

B.  The Relationship Between the Incidence of Covid-19 Cases and Deaths and the Share Voting for Trump

The figures at the top of this post plot the relationship between the number of cases of Covid-19 in a state (per 10,000 of population), or the number of deaths (also per 10,000), and the share in the state who voted for Trump in 2020.  The Covid data come from the CDC.  It was downloaded October 26, but since case and death counts from the states may not be fully reported to the CDC for up to a week to ten days, I used October 15 as the end date for the analysis here.  “Cases” are confirmed cases, and “deaths” are deaths as a consequence of Covid-19, both as defined in the CDC guidance for how these should be recorded.

For the start date I used July 1, 2020.  This came at the end of the first wave of Covid-19 cases and deaths.  Cases and deaths in this first wave were excluded for two reasons.  One is that the first wave arrived suddenly in mid-March and with an intensity that surprised many.  The nation was unprepared, with little done to prepare for the disease that was spreading around the world as Trump was claiming it was all under control, that it was “going to disappear”, and that it would soon “go away”.  Also, the CDC had bungled the initial testing (where testing was more readily accessible in parts of Africa than in the US in the key initial months), so the full extent of the developing problem was not clear until it hit.  The response, and the then only possible response, was to quickly institute lockdowns, and this was soon done in all 50 states.  The lockdowns were effective, albeit costly, and by late April the approach had succeeded in starting to bring down the daily number of new cases.  Case numbers continued to fall in May and into June.

But starting in early May, disparate decisions were taken across the different states on how fast to lift the lockdown measures.  Some opened up early and with little guidance on or advocacy for the wearing of masks, while others opened up more cautiously.  But with the opening up, and the refusal by a significant share of the population to wear masks and to follow social distancing recommendations, the daily number of new cases stopped falling and by around mid-June began to rise again.  The daily number of deaths followed a similar pattern but with a lag of about two weeks, and so began to rise around the end of June. Thus July 1 can be taken as a turning point – the end of the first wave and the start of the second.  While differences across the states had already started to develop from early May (when decisions were taken on how rapidly to open up), the consequences of the varying approaches only became clear as the second wave started to build.  On average across the nation, this was around July 1.

The second reason to exclude this first wave is that the quality of the data for that initial period was poor.  The Trump administration was slow in launching and then ramping up testing, with testing limited even well into April to those who showed obvious symptoms or who had been in close contact with someone with a confirmed case.  Thus many cases were missed.  While testing has been far from perfect throughout this pandemic, it was much worse in the earlier months than it was later.  For this reason as well, excluding the estimates from the earlier months will provide a better measure of how successful or not the different states were as they responded to the pandemic in their different ways after the initial lockdowns.

Excluding the first wave leads to the exclusion of 6% of confirmed cases and 18% of deaths from the overall totals as of October 15, 2021.  Most thus remained.  Note also the disparity in these figures.  That the official figures recorded that just 6% of the confirmed cases in the US (as of October 15) were in this initial, first wave, period, while this same period recorded 18% of deaths, strongly suggests that cases were significantly undercounted in that first wave.

The charts then show the incidence of total confirmed cases of Covid-19, or deaths from it, per 10,000 of population, over the period from July 1, 2020, to October 15, 2021, with this plotted against the share of the vote that Trump received in that state in 2020.  The relationship is a strong one:  The higher the share of the state vote for Trump, the higher the incidence of Covid-19 cases and of deaths.  Taking averages, the average number of confirmed cases over this period per 10,000 in the states won by Trump was 1,461 (i.e. 14.6% of their population) vs. 1,113 in the states won by Biden.  That is, there were on average 31% more cases in the states won by Trump.  The number of deaths from Covid-19 came to 21.2 per 10,000 in the states won by Trump vs. 15.3 in the states won by Biden, or 38% more in the states won by Trump.

But averaging across all the states won by Trump or by Biden is not terribly meaningful as there will be a mix of voters in every state.  Furthermore, there were a number of states where the vote was close to 50/50.

It is thus more meaningful to examine the trend across the different states, as a function of the share voting for Trump.  This trend is provided in the regression line shown in each chart, where simple, linear, ordinary least squares regression was used.  The statistical relationship found was very strong, and especially so for the regression for the number of cases of Covid-19.  The R-squared (a measure of how much of the variation in the values is accounted for by the regression line alone) was extremely high for such a cross-state sample as here – at 0.63 for the number of Covid-19 cases and a still high 0.36 for the number of Covid-19 deaths.  (R-squared values can vary between 1.0, in which case the regression line explains 100% of the variation across states, and 0.0, in which case the regression line explains none of the variation.)

The higher correlation (the higher R-squared) observed in the relationship for the number of cases than in the relationship for the number of deaths is what one would expect.  To die from the disease, one must first have caught it.  Hence this will depend on the number of cases in the state.  But deaths from it will then depend on additional factors such as the age structure of the population, general health conditions (obesity rates, for example), as well as the availability and quality of health care services (hospitals, for example).  These factors will vary by state, and hence add additional variation to that found for the number of confirmed cases.

The slope of the regression line is an estimate of how many additional cases of (or deaths from) Covid-19 to expect (per 10,000) for each 1% point higher share of the vote for Trump.  For each additional 1% point in the share of the vote for Trump in a state, there were on average 23.8 more cases (per 10,000 of population) of Covid-19 during the period examined, and on average 0.36 more deaths (per 10,000).  The t-statistics for these slope coefficients were both extremely high, at 9.1 for the number of cases and 5.2 for the number of deaths.  A t-statistic of 2.0 or higher is generally taken to be an indicator that the relationship found is statistically significant (as it implies that in 95% of the cases, the slope is something different from zero – a slope of zero would imply no relationship).  A t-statistic of 3.5 would raise that significance to 99.9%.  The t-statistics here of 9.1 and 5.2 are both far above even that mark.

One can also use the regression lines to address the question of what the impact would have been on Covid-19 cases and deaths if everyone behaved as Biden voters did (or as Trump voters did).  The regression lines look at how the incidence of cases or deaths change based on each additional percentage point in the vote for Trump.  If one extrapolates this to the extreme case of zero votes for Trump (and hence a “pure” Biden vote), one can estimate what cases and deaths would have been if all behaved as Biden voters did.

This is a straight line, i.e. linear, extrapolation of the effects, and the limitations from this assumption will be addressed in a moment.  But using linearity, the effects are easily calculated by simply inserting zeroes for the Trump share of the vote into the regression equations, so that one is left with the constants of +96.94 for the number of cases (per 10,000 of population) and -0.69 for the number of deaths.  That is, there would have been a predicted 97 (per 10,000) cases of Covid-19 over this period in the US rather than the actual figure of 1,261 (per 10,000).  This is 92% lower.  And the number of deaths would have been essentially zero (and indeed would have reached zero with still some share voting for Trump – based on the regression equation coefficients it would have been at the 2% point share for the Trump vote).

Are these results plausible?  Would cases and deaths have fallen by so much if all of the population had behaved (in terms of wearing masks, social distancing, getting vaccinated once vaccines became available, and other such behaviors) as the Biden voters did?  The answer is yes.  Indeed, the linear extrapolation is conservative, as infectious diseases such as Covid-19 spread exponentially.

If in some state each infected person infects, on average, two further people, the number infected will double in each time period for the disease.  This is exponential growth, with a reproduction rate of two in this example – a doubling in each period.  For Covid-19, the time period from when a person is infected to when that person may, on average, spread it to another, is a week and a half.  A person becomes infectious (can spread it to others) about one week after they became infected with the disease, and then can infect others for about a week (with the average then at the half-way point of that week).  Thus 100 cases of active infections in some region would double to 200 in that time period of a week and a half, then to 400 in the next time period, and so on.  If, in contrast, responsible behavior (such as vaccinations and mask-wearing) reduces the reproduction rate to one-half rather than two, then 100 cases will lead to 50 in the next time period, to 25 in the next, and so on down to zero.

In any given state there is a mix of Biden voters and Trump voters.  While there are many factors that matter, if these two identities reflect, on average, differing shares of people that do or do not choose to be vaccinated, wear masks, and so on, then the average reproduction rate will vary depending on the relative shares of such voters.  That average reproduction rate will be lower in states with a higher share of Biden voters, and for a sufficiently high share of Biden voters (a sufficiently low share of Trump voters), there will be an exponential decline in new infections from Covid-19.  The linear extrapolation based on the regression equations would thus be a conservative estimate of the number of cases to expect when most of the population behaves as the Biden voters have.

There are, of course, many factors that enter into whether a person is infected by someone with Covid-19, and whether they then die from the infection they got from someone.  But the charts and the regression results suggest that the share of the population in a state voting for Biden or for Trump is, by itself, strongly correlated with how likely that was.  Why?

C.  Personal Behavior and Political Identity

The fact of, and then the consequences from, this political divide for infection by Covid should not be a surprise to anyone.  As noted before, Trump voters are far less likely to be vaccinated or to wear masks to protect themselves and others from this highly infectious, and deadly, disease.  This then translates into higher infection rates, and the higher infection rates then to higher deaths.

One sees this unwillingness to be vaccinated also in surveys.  The most recent of the regular surveys by the Kaiser Family Foundation (published on October 28) found that 90% of Democrats had received at least the first dose of the Covid vaccine, while only 61% of Republicans had.  Furthermore, 31% of Republicans declared they would “definitely not” be vaccinated, while just 2% of Democrats held that view.  Gallup surveys have found similar results, with a survey from mid-September finding that 92% of Democrats had received at least the first dose of the Covid vaccine, but that only 56% of Republicans had.  And 40% of Republicans in that survey said they are not planning on being vaccinated ever, while only 3% of Democrats said that.

Not surprisingly, one then sees this reflected in state politics.  Republican governors (such as Abbott of Texas and DeSantis of Florida) have gone so far as to issue executive orders to block private companies from protecting their staff and their customers from this disease, and even to prohibit local school boards from taking measures to protect schoolchildren.

The direct result is that the virus that causes Covid-19 has continued to spread.  An infectious disease such as Covid-19 will only persist as long as it is being spread on to others.  It cannot survive on its own.  The issue, then, is not just that someone refusing to wear a mask or to be vaccinated is highly likely to catch the disease, but that that person is likely to spread it to others.  While Republican governors such as Abbott and DeSantis have said this is a matter of “personal freedom”, it is not that at all.  No one is free to do harm to others.  It is the same reason why there are laws against drunk driving.  Drunk drivers are more likely to cause crashes (not all of the time, but often), and those crashes will harm others, up to and including killing others.  Spreading Covid-19 is similar, up to and including that those who become infected may die from it.

For whatever causal reason, the facts themselves are clear.  But why has a significant share of the population chosen to behave this way?  This is now more speculative, and goes into an area that I openly acknowledge is not my area of expertise.  With that proviso, some speculation.

It is clear that political identity has played a central role, where Trump from the start treated the then developing pandemic as an issue where you were either with him – and his assertion that he had it all under control – or against him.  This started with Trump’s assertion in an interview on January 22, 2020 (from Davos, Switzerland) that he had no worries, that “we have it totally under control”, and that “It’s going to be just fine”.  This claim continued through February (as cases were growing in the US), where on February 27 he said “It’s going to disappear.  One day it’s like a miracle.  It will disappear.”  And in campaign rallies in February, he claimed to his cheering supporters that he had been doing a superb job in stopping the virus and that any charge to the contrary was simply a “hoax” coming from the Democrats.

Thus, from the start, Trump made the issue a political one.  If you were a true supporter of Trump you could not treat the disease as something of concern – Trump had taken care of it.  Any assertion that the developing pandemic was in fact serious, and needed to be addressed, was a “hoax” perpetrated by the Democrats.

Trump then continued to assert all would soon be well, saying on March 10 that “it will go away”, on April 29 that “This is going away.  It’s gonna go.  It’s gonna leave.  It’s gonna be gone.”, on May 11 that “we have prevailed”, on June 17 that “It’s fading away.”, and on July 19 that “It’s going to disappear”.  But more than 600,000 Americans have died since July 19, 2020, not far short of the 651,000 Americans who have died in battle in all of America’s wars since 1775.  From the start of the pandemic, more than 750,000 Americans have now died.

Trump’s politicization of Covid-19 was then amplified when, at the April 3 press conference in which he announced the CDC recommendation that everyone should wear face masks when going out, he immediately then added that he would not himself wear a face mask.  Face masks are highly effective in hindering the spread from person to person of the virus that causes Covid-19, and until vaccines became available, were the best way to hinder that spread.  But wearing a face mask is also highly visible.  For those who saw themselves as supporters of Trump, and believed what he said (that the virus was going away, that he had it under control, and that any concerns over this were merely a hoax promoted by the Democrats), then it was not surprising that many would follow Trump’s highly public example and not wear a mask either.  Some even went so far as to shoot, and kill, store personnel when told they should wear a face mask inside some store.

It is not surprising that such views would then carry over to vaccination.  Having rationalized not wearing a mask, it is easy to rationalize a refusal to be vaccinated.  And rationalizations could easily be found just by watching Fox News.  In the six months from April through September this year, for example, Fox News chose to air a claim undermining vaccination on all but two of those more than 180 broadcast days.  Many were also exposed to claims that can only be described as truly bizarre, such as that the vaccination will be secretly inserting a microchip into your body for the government to track you, with Bill Gates behind it all; or that it will make you magnetic with this managed through 5G telecom towers; or that it will re-write your body’s DNA; and more.

One can therefore easily come up with rationalizations not to be vaccinated, of varying degrees of plausibility, if you are predisposed against it.  But many of those providing such rationalizations must have realized that their rationalizations often did not make much sense.  Rather, their decisions appear to have been driven more by a visceral or emotional reaction (vaccinations just “feel” wrong) than as an outcome of a rational process.  That is, the decision not to be vaccinated was made first, based on emotions or feelings, with the rationalizations then arrived at later to justify a decision that had already been made.  (Such a process is in accord with the “social intuitionist” model of Jonathan Haidt, where decisions are made first, in a visceral reaction based on emotion, while rationalizations then come later to justify that decision.)

In the case of Covid-19, those decisions on vaccination (and earlier on wearing masks) were made in accordance with political identity – a perceived loyalty to Trump – rather than in recognition of the very real risks that would follow if one contracted Covid-19.  Wearing a mask or accepting a vaccination would simply be “wrong” and disloyal.

I have found it astonishing how strong this emotional reaction has apparently become.  Covid-19 is new (it did not even exist just two years ago), it is deadly (where on average about 1.5% of those infected have died – with a much higher fatality rate than this average for those who are older or who have other health issues), and may have serious long-term ill effects even for those who do not die from it.  Yet this visceral reaction appears to have been so powerful that many supporters of Trump still refuse to be vaccinated, despite the risk of genuine life and death consequences.

I should hasten to add that not all voters for Trump have refused to be vaccinated.  Indeed, according to the surveys, about 60% (a majority) have as of October.  There are also highly vocal partisans on the left who have refused to be vaccinated.  Their reasons are likely very different from that of the typical Trump voter, but the underlying cause appears still to be intuitive – the feeling that such vaccinations are simply “wrong”.  But the issue is that the relative shares of the two groups have been very different:  A far higher share of those who voted for Trump have refused vaccination than is the case for those who voted for Biden.  The consequences are as shown in the charts at the top of this post.

As noted before, the cause for this relationship cannot be known with certainty, and what I have presented here should be viewed as speculative on my part.  There may well be other explanations.  For example, a related but somewhat different explanation would be that a common third factor explains both the tendency of some to vote for Trump and also to be resistant to vaccinations.  Those in this group may put faith in conspiracy theories (including, but not limited to, terrible consequences from being vaccinated), distrust authority, proudly but stubbornly insist on doing the opposite of whatever is recommended, and for such reasons not only refuse to be vaccinated but also vote for Trump.

Whatever the explanation, the results have been tragic.  This has also been a lesson in how strongly some will keep to a held position, even as they have seen prominent figures, and sometimes friends or even family members, come down with this disease.  When an issue becomes one of identity, it appears that even with such tragic consequences there will be many who steadfastly refuse to change.