Capital Construction

Has MassDOT Reached the End of the Road for Internal Reform?

Two Fridays ago, Governor Deval Patrick stated that he would unveil a proposal later this month to raise the necessary money through taxes or fees to fix the financially beleaguered transport network. Today, the details of where the money would be coming from and how much were revealed by the Governor and MassDOT.

The original Globe article on the issue highlighted that the annual gap between actual needs and what is actually raised and spent amounts to nearly $1 billion annually. This comes even after many years of reform that have consolidated a number of state agencies under MassDOT and produced efficiencies that have saved the state countless hundreds of millions of dollars over the years.

As temperatures dip far below freezing once again, it becomes painfully clear to many commuters that our aging transit system is in dire need of investment that no amount of structural reform will provide. MBCR spokesman Scott Farmelant notes, 'There is only one way to prevent cold-weather delays: increased capital investment into the infrastructure, in particular signals, switches, and bridges.'

Likewise, there are many transit, commuter, and even high speed rail agencies that operate in similar climates in Europe that have overcome[PDF] sub-zero temperatures. By investing in weather-resistant infrastructure that is engineered to anticipate winter conditions and maintaining a modern fleet of trains, service impacts remain low. Sometimes, even the older equipment gets pulled out to help battle snow, much less extreme cold conditions, as happened in Sweden in 2010.

That said, it's no wonder the MBTA encounters such severe weather-related issues, even without snow. No amount of consolidation or reorganisation of the MBTA or MassDOT can generate the amount of money to buy new signals, trains, or track needed to even prevent equipment-related delays on a sunny spring day. It's time to make the hard decisions and start raising new revenue or increasing the amount that comes from existing revenue sources.

New revenues in the short term can come from a new vehicle miles travelled tax, congestion pricing, and new road tolls. Unfortunately, America's road users are conditioned to object to paying for any road maintenance out of pockets and with good reason. For decades, the expectation has been that income taxes and the gas tax alone was enough to maintain the growing glut of roads we've built out:

If you actually make people pay out of pocket to get a faster trip, people aren’t willing to spend that much. We have two bridges across Lake Washington. One has to be replaced. They put a toll on it to help pay for the project, and immediately traffic plummeted. People are driving around to get to other side, driving on the other road, sitting through congestion, timing their trips differently in order to avoid tolls. People really, if they have to pay out of pocket for a quicker trip, they don’t place much value on it.

So we’re expecting taxpayers to foot the bill for things the drivers themselves will not pay for.

With that in mind, why shouldn't transit riders also be made to pay more out of pocket for transit improvements? The truth is that we, as a state and a nation, have been subsidising roads more than transit by a large margin for decades and those public investments have done little to provide effective core services. In fact, T riders pay more in fares ($451 million in 2011) to run the T than drivers pay in tolls across the Tobin Bridge and entire Turnpike ($350 million in 2011) to pay for a much larger and more expensive system.

Overview of the sources and expenditures of the MassDOT budget from Transportation for Massachusetts' report 'Maxed Out'

Taking the long view, it cannot be said enough that MassDOT and the MBTA can better capitalise on their existing properties by developing on them instead of selling them outright. Selling property and air rights is one way to gain revenue but is not a viable long-term solution.

Property is the most valuable asset of any railroad and Japan's railroads have known this for years. Build homes and businesses in a walkable pattern around your stations and your network and its destinations become that much more accessible. In the long run, you have a steady stream of income from property rentals and fares from riders who depend on your system. Somerville's Assembly Square mega-project is the best example of this type of destination-creating redevelopment that is fuelled by transit. My only issue with the project is the alarming 7,500 parking spaces that will be constructed for such a walkable development adjacent a new $57 million Orange Line station.

Furthermore, building more transit-oriented development and strengthening those neighbourhoods has the potential to address the growing demand for market-priced units and outstanding need for affordable housing. The impact of new user fees on the impoverished who need to drive to work is an unfortunate reality. This can only be mitigated by providing quality, transit-accessible neighbourhoods with good access to affordable housing, jobs matched to the skills of those residents, and quality schools that provide them and their children access to upward social mobility. As more opportunities arise for people to live in areas better able to serve transit, the case for outward growth and maintenance of far-reaching transit routes declines as the case for road-based user fees increases politically.

Value capture taxes are also another way to revenue from development around stations. In addition to adding value to our existing transit system, new developments bring higher property values. Value capture capitalises on this rise in property values by enforcing fees or taxes on developers or landowners in the area of redevelopment and can go right back into maintaining the very infrastructure that serves that neighbourhood.

Ultimately, it's long-term, smart growth strategies championed by MAPC and MassDOT's mode shift initiative that will limit the amount of new infrastructure that we'll have to borrow to spend and maintain. They will also allow us to derive more value from the infrastructure we've already built and are currently paying for. New road construction cannot continue to be used as an argument for continued debt spending under the prospect of economic development when our crumbling core infrastructure is inhibiting in-place economic growth.

In the short term, there are several ways the state can improve the sorry state of affairs with transportation funding, but most involve making tough decisions about new taxes or fees. Even less can be done in the near term to reduce the need for additional spending to maintain our crumbling infrastructure.

What's In a Name? MBTA Sells Out Boston In Its Naming Rights Plan

The question is on the table again as the MBTA moves forward with its interest in selling naming rights as IMG Worldwide as been announced as the firm that will conduct a 'a thorough analysis to determine if there's a market for naming rights and what the value would be', according to Joe Pesaturo of the MBTA.

Boston is not unique in its operating budget issues, nor is it unique in some of its attempts to close the funding gap. About a year ago, Boston joined New York, Chicago, Philadelphia, Austin, Toronto, and New Jersey in the growing list of North American transit agencies trying desperately to close operating gaps with a funding concept that is an illusion and hardly effective for actually raising the revenues that agencies claim.

To bring it home, one of my followers on Twitter brought to my attention a sponsorship from 1997 to 2000 by Citizens Bank to rename State on the Blue and Orange Lines to State/Citizens Bank. The sponsorship eventually failed and the station's name was reverted.

Ben Kabak in New York has written numerous posts on the issue (in the numerous links above), so I won't bother rehashing a topic. I will however highlight one particular public-private partnership that Chicago capitalised on, which was the $4 million rehab of the North/Claybourn station, all paid for by Apple. If we're going to be selling the system to private entities, why not work with them to refurbish the system or even build out revenue-generating properties without selling the property or rights to profits (Chicago lost $11 billion from a poor leasing agreement of its parking meters to Morgan Stanley)?

While we shouldn't necessarily be relying on commercial entities to be paying for and completely refurbishing our public infrastructure just so they can use them as their own vehicles for advertising, public transport is in an ailing state. Budgets are tight and will continue to get tighter until the costs (of construction and maintenance) are reined in and publicly owned property can be made more profitable.

Of the latter, these public-private partnerships could be used to capitalise on unproductive, low revenue-generating properties owned by the state, such as station head houses, rights of way, and station platforms themselves. Looking at just Porter Square, why is the Shaw's located so far away from the public transport hub that likely brings in the majority of its business from commuters picking up their groceries on their commutes home? Why is there not a passage under Somerville Ave to connect to a basement level of CVS or another business and provide a safer crossing of the major boulevard? This is the ultimate form of not only transit-oriented development, but also leveraging MBTA property as convenient and profitable real-estate to developers. We may be far from Japan's platform-side malls and ramen shops, but it's high time the MBTA start pushing its property and really engaging with developers and private entities to serve the public more directly.

I'd rather be able to grab a fresh bowl of ramen and groceries conveniently on my commute home than ride through Apple/Copley Square or Macy's/Downtown Crossing, especially if I know that one initiative is more likely to keep the trains running, the lights on, and the buses well-maintained.

A Muddled Call to Arms by the MBTA Rider Oversight Committee as MBTA is Forced to Consider Fare Increases

It may soon cost you more to walk through these gates, but a fare increase shouldn't be the only option on the table.

As the looming fare increase and service cut proposals gain more public awareness in the wake of yesterday's MBTA board meeting, Boston residents, and perhaps the Commonwealth itself, are forced to mull over what options are on the table to deal with the growing gap in the MBTA's operating budget.

Eric Moskowitz from the Globe lays out the situation accurately and succinctly:

If the T does nothing, it faces a projected $161 million deficit for the fiscal year that starts July 1, as costs such as utilities, health insurance, and federally mandated paratransit service rise faster than MBTA revenue, the chief sources of which are fares (about $450 million a year) and a percentage of the state sales tax (worth nearly $800 million).

The T faced a similar situation last year but avoided a fare increase by implementing one-time measures such as selling future parking revenue to investors for a lump sum. The T has also tightened pension eligibility, streamlined labor costs (including switching from two operators to one operator on multiple subway lines), auctioned surplus property, and sold ads on everything from station walls to its website.

The T last raised fares Jan. 1, 2007.

Just in time to be a part of this discussion, the MBTA Rider Oversight Committe has released a plea to riders to speak to their representatives and advocate for better MBTA funding, which will hopefully run in tomorrow's Metro:

Riders, now is the time for us to stand up and speak out. The T’s red ink is much worse than you think. Next year, without increased funding, your bus or train could be the one that stops coming. Do we want the transit system we can afford or the transit system that we need? Rally round, and get engaged! Come join us at the public meetings and support the MBTA. Help us by calling your local and state representatives to insist they finally address the T’s funding gap. Fellow riders, it’s our T. It’s time for us to defend it.

In their letter, they speak to the better senses of the public, as does much of the press, trying to inform and arm the public with information to help advocate for a better solution, but many of the more radical options have been left out of the conversation, at least outside of twitter.

The last time New York City had to face these issues a few years ago, local politics included more vocal pushes for alternative funding vehicles to prevent a massive fare increase and service cuts. (They happened anyway because New York politics is a mess and has been one for a while.) Beyond typical ignorant ranting of government largess and inefficiencies, there were calls to start congestion pricing, tolling East River crossings, and even tax local businesses' payrolls (which has not gone over well).

Suffice it to say, all of these seem to be third rail topics that neither the press nor local advocates are willing to propose. While the ROC and others, including Secretary Davey himself, are pointing at the Commonwealth's legislature for relief, the fact remains that none of them are standing behind a unified message of what to ask for from the legislature in terms of bridging the funding gap, especially considering the Commonwealth is already trying to deal with a tight budget for every other state agency.

From my experience on twitter lately, it seems riders are more concerned with the platform experience more than the funding mechanisms behind the MBTA, more quick to bash it for inefficiency and waste than grant the agency a shadow of a doubt and look into reports about the funding situation. Advocates and members of the public in the know need to step up, do a better job to make the facts and options more accessible to riders, and stand behind a more cohesive message.

All I'm seeing is repeated messages of what we don't want and what we don't feel comfortable bringing up. I'll start by throwing my weight behind moderate fare increasescongestion pricingparking reform (market pricing), and better long-term real estate deals on MBTA/state owned property. Perhaps we could get started on making public-private partnerships to assure funding, quality construction, and well-capitalised reconstruction of ageing stations and the Green Line extension, because simply selling naming rights of stations to corporations is really selling out the system.