Hotline # 738 December 22, 2011

The Senate failed to include an extension of public transit benefits in the legislation the body passed to extend lower payroll tax rates and unemployment benefits.  Thus, even if the House passes the bill and it is enacted, the transit benefits that employers can provide tax-free will be slashed from $230 to $120 per month.

This is particularly frustrating for workers using transit because the parking commuter benefit was increased from $230 to $240, to account for inflation.  As NARP’s Malcolm Kenton pointed out on the NARP blog today, this sets exactly the wrong goals for our transportation network:

Just when more and more professionals are moving into cities and relying on public transportation to get to work, Congress’s lack of action on an extension of provisions in the 2009 Recovery Act means that the maximum pre-tax transit benefit allowed to employees will be cut in half come January 1—while the maximum parking benefit will increase. At the same time, decreased revenues and state and local funding cuts due to the recession are forcing many transit agencies to raise fares. For many Americans, my generation especially, this will be a painful double-whammy. It will encourage some commuters to switch to driving—precisely the wrong message to send when we’re also trying to ease congestion and pollution in our urban areas—but for most transit commuters, it will make the struggle to make ends meet harder and force difficult tradeoffs.

“Three in four newcomers in recent years have been between the ages of 18 and 34,” said the Washington Post article that Kenton refers to.  “They have zero interest in the suburbs.”

It’s been a bad few weeks for transit in Michigan.

First, Detroit canceled a roughly $528 million plan to build 9.3 miles of a light rail network, a project local business leaders believed would connect the city’s centers of activity and spark economic growth.  The line was the product of activity by Detroit’s corporate leaders, who are trying to breath life back into the city’s downtown.  Together, they gathered around $100 million in private sector capital to fund a $225 million, 3.4 mile network.  Political leaders engaged with the program, expanded the plan, and helped secure a $25 million federal TIGER grant for the project. 

Last week, however, Detroit Mayor Dave Bing announced he was canceling the project.  Instead the, city will now focus on a Bus Rapid Transit (BRT) system that will connect the suburbs to downtown through a series of dedicated bus lanes. 

This move seems to ignore current trends among young professionals working in major metropolitan areas, who are less interested in commutes from suburban homes, and more attracted to revitalized urban areas with mixed-use zoning.  If Detroit hopes to reverse its notorious population decline, it seems increasingly likely that investing in sprawl is not the answer.

[Check the NARP blog (linked above) for more on the relationship between transit, youth, and healthy cities.]

The city’s business leaders are unhappy with the decision, and haven’t been shy about expressing their frustration with City Hall.

“Detroit has a chance to make a decision: does it want to be a second-class city or a first-class city?” asked Quicken CEO Dan Gilbert, one of the business leaders who helped get the project off the ground.  “These kinds of decisions, like we are seeing right now, won’t allow us to compete as a first-class city.”

Transportation Politic’s Yonah Freemark has a thought-provoking piece on the twists and turns of the light rail-to-BRT saga.  The article pushes back both against the notion that light rail can singlehandedly save a struggling economy, and that BRT can cheaply provide the same benefits as a light rail system.  Freemark conclude that the decision to kill the line is a failure of municipal ambition in the Motor City:

None of these funding dilemmas have prevented private and non-profit supporters of the rail project, who had collectively submitted $100 million for the line, from complaining about the needs of the downtown. They suggest that a 3.2-mile line, costing $225 million and running from the river to New Center, could be funded with federal New Starts funding. Yet the U.S. DOT seems to have made clear that there will be no dollars for light rail in Detroit.

Meanwhile, Mayor Bing, unfortunately, continues to use fantastical rhetoric when it comes to promoting the BRT system: “With Detroit’s rich history of innovation,” he wrote in the Free Press, “There is no doubt we can build a system that competes with other successful BRT lines in Cleveland, Pittsburgh and Los Angeles.” Yet the development of the BRT plan should have little to do with competition; its primary purpose must be to serve the transit-dependent population of the city. Will it get the chance to do so, or be relegated to the dustbin like most other transit plans for Detroit?

Gilbert, along with other members of M-1 Rail Inc.—a group of corporate leaders who initially pushed the light rail plan—say they won’t let the Mayor’s decision dissuade them from continuing to work to turn their initial vision of a shorter light rail line into reality.

Artist’s rendering of a similar station
in nearby Dearborn [via MARP]

Directly on the heels of the termination of the light-rail line in Detroit, Troy—a suburb of Detroit—saw its City Council vote 4-3 on December 19 to kill a brand new multimodal transit center and reject $8.4 million in federal funds.

Mayor Janice Daniels is a leader in the local Tea Party movement, and has successfully spearheaded a campaign to kill the transit center, citing the national debt.

“I understand the nature of tax dollars, and I’m not opposed to it if we weren’t $15 trillion in debt,” Daniels said. “We need to recover the economy before we take on additional debt money.”

The city’s private sector expressed deep frustration about the City Council’s vote, criticizing it as short-sighted and bad for Troy’s economy. 

“We are already experiencing some fallout and disinvestment in Troy, and we need to preclude that from happening,” Troy Chamber of Commerce President Michele Hodges explained to the Detroit News. 

Some business leaders were less sanguine about the lack of investment in the city’s infrastructure.  The Detroit News got its hands on an email sent by a representative of Magna International, an auto-parts maker that employs over a 1,000 people in the community, to Hodges.  Since it’s release, the scathing missive has gone viral:

It is also sad to see that the City of Troy has a Mayor who is not there to advocate for the future growth of the city and the betterment of the resident but who[se] narrow view only speaks to her personal agenda and discriminatory practices, I am drafting a memo to all Magna group presidents and our Magna corporate executives strongly recommending that Magna International no longer consider the City of Troy for future site considerations, expansions or new job creation. I have also recommended that where ever and when ever possible we reduce our footprint and employment level in Troy in favor of communities who act in the best interest of both the residents and business and not simply use their public position to advance their own private agenda.

Some elected officials are stepping up to make sure the transit funding—and the jobs that investment will bring—stay in Michigan.

“The transit center would have provided access to new high speed Amtrak rail along the Wolverine Corridor, as well as transfer points to SMART bus services, taxi and sedan connections, and connectivity options for patrons of the Oakland/Troy Airport,” Representative Gary Peters (D-MI) wrote to Transportation Secretary Ray LaHood.  “While I am deeply disappointed, I know that there are many cities in southeast Michigan that support regional transit and want to see it succeed.”

Image: United Streetcar

In an example of transit investment stimulating economic growth in the U.S., the District of Columbia reached an $8.7 million agreement this week with Portland, Oregon’s United Streetcar for the purchase of two streetcars for the District’s streetcar line, set to begin operation in 2013.

The first three cars were purchased from Czech company Inekon.  The U.S. rail transit equipment manufacturing industry virtually disappeared in the late 1900s, forcing transit agencies to look to Europe and Asia when buying equipment.

United Streetcar was founded in 2005 by Oregon Iron Works, which looked at the steady transit investment being made by the City of Portland and saw a viable market.  United Streetcar is the only company in the U.S. making modern streetcars (as opposed to light rail equipment), and is the first company to manufacture streetcars in the U.S. since the 1950s.

The Portland-based company says it will be able to manufacture the two 144-passenger vehicles for $8.7 million, successfully underbidding Inekon which submitted a bid of $9.5 million.

Amtrak announced the next leg of its 40th Anniversary Train’s tour of the country, with stops in Texas, Oklahoma, and Louisiana.  NARP members will be on hand to talk about the importance of our advocacy in maintaining a strong passenger rail network; we encourage you to stop by and take part in the fun.

“In celebration of the 40th anniversary of Amtrak, America’s Railroad is offering the public an opportunity to view an Exhibit Train, a unique traveling display showcasing the railroad’s history,” said Amtrak in a press release.  “In January, it will make two stops in Texas and one stop each in Oklahoma and Louisiana.”

The train’s schedule for January is:

Amtrak will be selling 40th anniversary merchandise on the train, including a 144-page commemorative book that chronicles the history of the railroad with rare photographs, and a documentary DVD that provides an exclusive look at Amtrak’s history.

Virginia Railway Express officials say that a drop in state support means riders and served municipalities will be paying more to keep the successful train running.

VRE expects state and federal funding to decrease by $5 million in 2013.  To offset that, the commuter agency’s executives are proposing a three percent increase in fares and jurisdiction fees (paid by Stafford County, Fredericksburg County, and Spotsylvania County).  VRE officials say it could have been much worse, but high ridership numbers have brought in a generous revenue stream, softening the budget crunch.

The increase will have to be approved by the Northern Virginia Transportation Commission and the Potomac and Rappahannock Transportation Commission.

All of us at NARP wish you and your family a safe and happy holiday season and a bright start to the new year!

- Ross Capon, Sean Jeans-Gail, Malcolm Kenton and Mary Beth McCall