Author: Michael Ennis

NearEmptyLightRail

State Auditor Confirms Sound Transit Light Rail Ridership Forecasts Are Unrealistic

In January, the State Auditor’s Office agreed to conduct a performance on a number of items related to Sound Transit. Part of the audit was based on a WPC request to reconcile some of the agency’s ridership and financial forecasting issues.

The SAO just released the results of that audit. Here are the key findings:

  1. The Sound Transit Board has not always taken action to fully address [the Citizen Oversight Panel’s] concerns. We question some practices related to COP selection and whether COP members fully understand their watchdog role. We found transparency to the public regarding the COP’s work can be improved.
  2. Sound Transit’s initial adjustments to its original [Sound Transit Phase 2] plan were sufficient and appropriate. However, it now has a smaller than recommended contingency to cover possible cost overruns.
  3. Except for its need to increase its ST2 project contingency, Sound Transit has an organizational structure, policies and procedures, expertise, and other resources in place to successfully accomplish most of the adjusted ST2 plan within budget. It has positively responded to previous audit recommendations.
  4. Sound Transit’s ST2 forecast requires a growth rate for Link light rail ridership through 2030 that appears to be challenging. Economic and employment forecasts indicate questions about its reliability. Sound Transit should adjust ridership assumptions that no longer are valid.

The full report can be found here: http://www.sao.wa.gov/AuditReports/AuditReportFiles/ar1008277.pdf

On the ridership issue, we found that PSRC officials estimate in their Transportation 2040 Plan that light rail ridership will be half of what Sound Transit officials told voters in 2008.

The audit found, “Sound Transit’s ST2 2030 Link light rail ridership forecast requires a growth rate that exceeds the growth rates achieved by most transit investments in other areas of the United States.” “For Sound Transit to meet its ST2 forecast of 86.5 million annual boardings in 2030, 2011 boardings for Link light rail (7.8 million) must grow at an annual rate of 13.5 percent for the next 19 years.”

Such a growth rate is unrealistic in good times and especially so during the current economic recession. This basically shows that PSRC’s estimate is more accurate and the SAO recommends that Sound Transit officials revise their ridership projections based on more realistic assumptions like those found in the PSRC plan.

This is little consolation to voters who have approved Sound Transit’s tax increases based on the agency’s inflated projections. This has been a troubling pattern for Sound Transit. Sound Transit officials continue to overestimate benefits and underestimate costs and once they receive approval from voters to increase taxes, their promises fall apart.

Combined with the other SAO finding that the Sound Transit Board has not always taken action to fully address concerns from its own Citizen’s Oversight Panel, WPC continues to recommend that the state legislature make Sound Transit’s board of directors an elected body, so voters can hold the agency accountable.

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[Reprinted from the Washington Policy Center blog]

CartBeforeHorse

WSDOT Starts I-405 Tolling Project Before State Revenue Study is Published

The proposed express toll lanes on I-405 will produce less revenue and lead to more traffic congestion than first thought, according to a state study. But WSDOT officials are moving forward despite the negative findings and before the study has even been published.

Earlier this year, the legislature authorized WSDOT officials to deviate from the original I-405 Master Plan and create an express toll corridor between Bellevue and Lynnwood. However, opponents were able to convince lawmakers to include a revenue study before construction could begin.

Officials with the Washington State Transportation Commission (WTC) have not published the study yet but it is complete and we have it available on our website: Eastside Corridor Independent Traffic and Revenue Study

Interestingly, the study is stamped with a completion date of September 24, 2012.

The WTC has not officially released the study and it cannot be found on the Commission’s website. WTC staff tells me Commissioners won’t even receive it until their November 13th meeting in Tacoma. The study has not been publically reviewed by the legislature, the Joint Transportation Commission or the WTC. And there have been no public hearings or input by any of the local cities or residents that will be impacted along the I-405 corridor.

But…

Here is a letter from the Director of the Office of Financial Management (OFM), acknowledging the study and releasing funds to WSDOT officials to move ahead with tolling I-405. The letter is dated October 1st, which is just seven days after the completion date found on the study.

WSDOT officials are moving ahead with the project before the study has even been published or vetted by the legislature, the public or local officials. This is significant because the study virtually confirms what opponents had been saying all along, and it paints a very different picture than what WSDOT officials first presented during the legislative session.

Among the results that are perhaps the most significant are these key findings:

  • “Narrower Range of Revenue Outcomes than Prior WSDOT Forecast.”
  • “Traffic growth drives revenue growth.”
  • “Demand will exceed capacity.”

To be fair, the legislative proviso requiring the state to complete the study did not attach any other conditions on the release of the funds for WSDOT officials to move ahead. Regardless of the findings, the bill only obligated the state to conduct the study.

This is probably little consolation to officials and residents from the cities of Bellevue, Redmond, Kirkland and Bothell, who now do not have any opportunity to read or provide input based on the new information before WSDOT officials start the project.

I mean what was the point of spending a year and $1.8 million on a study if state officials forge ahead without caring to hear from stakeholders on the new information?

The new study recognizes the project’s dirty little secret that traffic congestion in the non-tolled lanes must exist and get worse in order for the toll concept to work. This means only those drivers who pay the toll will experience better mobility, while everyone else is stuck in traffic. It also means that state officials now have a financial incentive (and perhaps a fiduciary obligation if the revenue stream is bonded) to maintain and even increase traffic congestion in the non-tolled lanes to achieve their revenue projections.

Instead of improving mobility for all drivers, like what was promised in the original I-405 Master Plan, the new tollways will only benefit the few who pay the toll, while making it worse for all others.

The I-405 Master Plan  calls for up to two general purpose lanes in each direction and according to the WSDOT include the following benefits:

  • Accommodating an additional 110,000 trips per day.
  • Reducing time stuck in traffic by more than 13 million hours per year – an average of more than 40 hours a year for each regular user of I-405.
  • Producing travel time savings valued at $569 million a year.
  • Removing chokepoints and weaving traffic movements will improve safety by reducing side and rear collisions.
  • Enhancing freight mobility with better interchanges, travel time savings and updated technologies.
  • Providing economic benefits through construction. Each $1 billion spent on transportation construction generates 47,500 jobs, according to the USDOT.
  • $5.40 returned to the economy in congestion savings for each $1.00 invested in highways, also according to the USDOT.

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[Reprinted from the Washington Policy Center blog]

GridlockTaillights

Cambridge Study: I-405 Toll Lanes Produce Less Revenue and Create More Traffic Congestion

In a new state study, the proposed express toll lanes on I-405 will produce less revenue and lead to more traffic congestion than first thought by WSDOT officials.

Earlier this year, the legislature authorized WSDOT officials to deviate from the original I-405 Master Plan and create an express toll corridor between Bellevue and Lynnwood. However, opponents were able to convince lawmakers to include a third-party feasibility study before construction.

Cambridge Systematics, INC. was chosen to conduct the study and present the findings to the Washington State Transportation Commission (WTC). WTC officials have not published the study yet but it is complete and it is available here: Eastside Corridor Independent Traffic and Revenue Study

Among the results are perhaps these most significant key findings:

  • “Narrower Range of Revenue Outcomes than Prior WSDOT Forecast.”
  • “Traffic growth drives revenue growth.”
  • “Demand will exceed capacity.”

These findings have to be considered a blow to WSDOT officials and lawmakers who support the tolled concept over the original I-405 Master Plan.

The Cambridge study recognizes the simple truth that traffic congestion in the non-tolled lanes must exist (and get worse) in order for the tolled lanes to work.

This means only those who choose to pay the toll will experience free flow travel while the vast majority of everyone else is stuck in traffic.

Worse, the proposed toll lanes would be paid for with existing gas tax revenue originally promised to be used for the anticipated general purpose lane expansion found in the I-405 Master Plan. This means that drivers, who paid the higher gas taxes, would not receive any benefit unless they fork over even more money and pay the toll.

With less revenue and higher traffic congestion, it will be interesting to see how lawmakers respond and if they pull the plug on an express toll corridor and instead implement the original I-405 Master Plan that was approved in 2002.

The I-405 Master Plan  calls for up to two general purpose lanes in each direction and according to the WSDOT includes the following benefits:

  • Accommodating an additional 110,000 trips per day.
  • Reducing time stuck in traffic by more than 13 million hours per year – an average of more than 40 hours a year for each regular user of I-405.
  • Producing travel time savings valued at $569 million a year.
  • Removing chokepoints and weaving traffic movements will improve safety by reducing side and rear collisions.
  • Enhancing freight mobility with better interchanges, travel time savings and updated technologies.
  • Providing economic benefits through construction. Each $1 billion spent on transportation construction generates 47,500 jobs, according to the USDOT.
  • $5.40 returned to the economy in congestion savings for each $1.00 invested in highways , also according to the USDOT.

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[Reprinted with permission from the Washington Policy Center blog; featured photo credit: short term effect]

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Eliminating Downtown Seattle’s Ride-Free Transit Zone is a Mistake

Mike Lindblom of The Seattle Times has a good article on how eliminating the ride-free zone in downtown Seattle hurts the poor.

Believe it or not, I actually like the concept of a ride-free zone in downtown Seattle and I think it’s a mistake to get rid of it. Just like with demand-response service, and all intra-city transit, while inefficient and expensive, it is the one area that should be subsidized by the public. These programs serve poor and disabled populations and provide mobility to those who would not otherwise have it. This is exactly what socialized public transit is meant for.

Where transit should not be subsidized is inter-city routes that target commuters and other passengers who are fully capable of affording their own travel behavior. Light rail, commuter rail and express systems that connect cities like Tacoma, Everett and Seattle are important, but they are expensive and siphon money away from the services transit is supposed to provide.

Why should taxpayers have to pay $14 per trip for a guy in Kent to ride the Sounder to his job in Seattle every day? He should be in a vanpool and paying his own way.

This does not mean that we should get rid of all intercity transit. Instead, we should focus on modes that are efficient (like vanpools) and programs that serve the poor and disabled populations.

It is also absurd that transit drivers continue to receive massive pay increases at the same time that officials do things like eliminate the ride-free zone. Transit is not a jobs program but a social service for poor and disabled populations.

In Washington State, transit agencies make over $2 billion per year in total revenue but officials expand service in ways that hurt the very populations they were meant to serve in the first place. Transit agencies make plenty of money but officials need to focus on what they were meant to do and stop building expensive fixed route programs that soak up all of their money to serve passengers who are not poor and who can afford to pay their own travel costs.

Taxpayers and the poor deserve better.

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[Reprinted with permission from the Washington Policy Center blog; featured photo credit: Oran Viriyincy]

TribalGasStation

State Supreme Court Rules Against Tribes in Gas Tax Case

In a blow to state Indian tribes, the Washington State Supreme Court just issued their decision in the tribal gas tax tax, siding with the plaintiff and sending the case back to the trial court to proceed without the tribes as a party.

In 2006, Governor Christine Gregoire negotiated an agreement with Washington State Indian tribes that exempts tribally owned fuel stations from paying 75% of state gas taxes. The compacts allow the tribes to spend the money on non-highway purposes, a clear violation of the 18th Amendment. A group called the Automotive United Trades Organization (AUTO) challenged the compacts and a lower court dismissed the case because the tribes had sovereign immunity. AUTO appealed to the Supreme Court.

Washington Policy Center filed an Amicus Brief asking the Supreme Court to accept direct review on this case, which they ultimately did. WPC also conducted a price survey of 18 tribal stations located in five metropolitan areas around the state. We found that tribal stations consistently charge less for fuel than non tribal operators and in one case we found the tribal station selling gas for up to 48 cents cheaper.

In the 5-4 decision, the majority opinion took significant issue with many of the States’ arguments defending the tribes and the compacts:

Citing Marbury v. Madision, the majority wrote:

Moreover, the notion that potentially unconstitutional government conduct must be redressed through the legislature is frankly astonishing given the bedrock principle that it is “emphatically the province and duty of the judicial department to say what the law is.”

And then this zinger:

Sovereign immunity is meant to be raised as a shield by the tribe, not wielded as a sword by the State.

The court concludes:

While the tribes are necessary parties whose joinder is not feasible due to sovereign immunity, in the circumstances of this case they are not indispensable.

We reverse the trial court’s order of dismissal and hold that this action can proceed without the tribes “in equity and good conscience” under CR 19(b).5.

Read the full decision here.

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[Reprinted with the permission of the Washington Policy Center blog; featured photo credit: Jibby! (Ambivalently Back)]

NearEmptyLightRail

Joint Transportation Committee Studies Whether Public Transit is Underfunded

During the legislative session and in response to our publication, Roadmap for Mobility, lawmakers funded a study to determine the financial health of public transit agencies.

Transit officials claim they don’t have enough money and lobbyist are quietly pushing Olympia to create a state level funding source. In Roadmap for Mobility, we looked at the data and found that public transit is not underfunded in Washington state.

There are 31 public transit agencies in Washington and they collected $2.05 billion in total revenues in 2010. To put this in perspective, the state only collected about half as much in total gas taxes in 2010. In the last five years alone, public transit has collected a whopping $12.6 billion! And this is remarkable when you consider that so-called “mass” transit only carries about 2.4% of all daily person trip demand statewide.

Obviously, the transit lobby disagrees so the legislature funded a study to take a closer look:

During the 2012 legislative discussion of the need for additional funding sources for public transportation, questions were raised about existing transit funding, and reserves currently held by transit agencies. To inform future discussions, ESHB 2190, the 2012 Supplemental Transportation Budget, directed the JTC to evaluate the fiscal health of public transportation in Washington and make a comparison to the fiscal health of state transportation funding.

Over at Transportation Issues Daily, Larry Ehl covered a Q/A on this topic earlier this year with myself and CEO of Spokane Transit and Chair of the Washington State Transit Association, Susan Meyer. This point-counterpoint format provides a good and quick summary on the issue.

Point-Counterpoint – No Need for More Transit Funding in Wash. State (Part 1)

Point-Counterpoint – No Need for More Transit Funding in Wash. State (Part 2)

It should also be highlighted that any new state level funding source would likely be paid by a single user group: drivers. Drivers have their own infrastructure needs, which are currently not being met. All transportation taxes and fees paid by drivers should be used for highway purposes only, while alternative travel modes should be funded by their own users (which reduces the public subsidy) or through local-option taxes that apply to the general public, like sales taxes.

Transit officials like to claim that transit ridership provides an indirect benefit to drivers because it gets cars off the road. But public transit does not serve enough trip demand (2.4%) to really make a difference to drivers. And when drivers have unfunded road needs, trading a direct benefit (road funding) for an indirect benefit (transit funding) is really no benefit at all and puts drivers in a worse position.

The Joint Transportation Committee study is due to be released in December.

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[Reprinted with permission from the Washington Policy Center blog; featured photo credit: Atomic Taco]

SoundTransitLinkLightRail

State Auditor Agrees to Investigate Sound Transit’s (Problematic) Forecasts

In 2010, I wrote how the Puget Sound Regional Council’s (PSRC) Transportation 2040 plan estimated passenger rail would carry half of what Sound Transit officials promised voters in their 2008 ballot measure to expand light rail. That post is available here: PSRC says light rail will carry half of what Sound Transit told voters.

I also made a formal request to the Washington State Auditor’s Office (SAO) to conduct an audit on the differences in the forecasts. In my letter, I asked the SAO to consider some of the following questions:

  • What are the differences between the two ridership models?
  • Sound Transit officials partly justified their taxing authority by how many riders would use their system. If Sound Transit’s demand projections are flawed, how does this impact their authority to impose taxes? Are there any accountability mechanisms for voters?
  • Are there any regulations, contractual obligations, internal controls or policies that require coordination between agencies? If so, were any of these policies violated?
  • Sound Transit is a member of the PSRC. Did Sound Transit officials raise concerns about the differences in ridership forecasts during the Transportation 2040 process?
  • Generally, transit agencies with ridership models based on assumptions different than the regional MPO cannot use those forecasts to apply for Federal grant funding. How do the differences in ridership projections affect the ability of Sound Transit to apply for Federal grant funding? How do these differences affect the Federal grant funding that Sound Transit has already received?
  • Almost all transit agencies and most MPOs create technical committees or peer review committees to provide independent assessments of their ridership forecasts. Does Sound Transit or the PSRC have such technical committees or peer review committees to provide independent assessments of their ridership forecasts? If so, do these bodies coordinate and how was such a large discrepancy missed?
  • The MPO must also review and approve applications for Federal transit grants, as well as Transportation Improvement Plans and Long-Range Transit Plans. How can the PSRC sign off on Sound Transit’s previous and future grant applications with such a large discrepancy between different ridership forecasts?

Yesterday, the SAO informed me they will perform the audit and they will likely choose a contractor next week. To their credit, the SAO also expanded the investigation to include the agency’s cost and revenue projections, which as we have pointed out, are also suspect.

The SAO estimates the audit will likely be completed by October.

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[Reprinted from the Washington Policy Center blog; photo credit: alexabboud]

TempofJustice

Washington Supreme Court Will Hear Tribal Gas Tax Case

The Washington State Supreme Court granted the motion to hear the tribal gas tax case, Automotive United Trades Organization (AUTO) v. State of Washington.

Read the Court’s motion here.

You might recall, WPC and others filed Amicus Briefs encouraging the Court to accept direct review. Read WPC’s Amicus Brief here.

In 2006, Governor Christine Gregoire negotiated an agreement with Washington State Indian tribes that exempts tribally owned fuel stations from paying 75% of state gas taxes.

This year the state will give Indian tribes approximately $22 million in state fuel tax revenue. And the amount will certainly grow as tribes continue to add more fuel stations. Taxpayers will pay approximately $621 million to tribes over the next 17 years.

Our research indicates that tribal stations use this refund as a subsidy to consistently charge less for fuel than non-tribal stations.

Of the fuel stations we compared, the largest price disparity occurred at two tribal stations in the Bremerton area where they sold diesel for 47.8 cents less than the Bremerton-regional average. That is a $143 difference for the average semi truck that holds 300 gallons of diesel!

This competitive advantage allows tribal station owners to undercut non-tribal fuel stations, and ultimately run them out of business. WPC’s full report on gas prices will be available later this month.

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[Reprinted from the Washington Policy Center blog; photo credit: Creative Commons license]

RetroGasPump

Preferential Tribal Gas Tax Subsidy Undercuts Non-Indian Stations

In 2006, Governor Christine Gregoire negotiated an agreement with Washington State Indian tribes that exempts tribally owned fuel stations from paying 75% of state gas taxes.

This year the state will give Indian tribes approximately $22 million in state fuel tax revenue. And the amount will certainly grow as tribes continue to add more fuel stations. Taxpayers will pay approximately $621 million to tribes over the next 17 years.

Appealing a lower court decision, a group called the Automotive United Trades Organization (AUTO) has filed a lawsuit requesting direct review by the Washington State Supreme Court.  Washington Policy Center (WPC) filed an Amicus Curiae Memorandum in support of AUTO’s petition for direct review.  The Washington State Supreme Court granted WPC’s motion and accepted the Amicus Brief on August 15, 2011.

WPC is asking the Washington State Supreme Court to review the prior decision of a lower court that dismissed AUTO’s lawsuit.  WPC has made this request because:

  1. The state’s payments of Motor Vehicle Fund monies (fuel tax revenue) to Indian tribes for non-highway purposes violates Washington’s constitution and harms local businesses.
  2. The secrecy inherent in the government’s compacts is improper and anathema to Washington’s established values of open government.
  3. The state cannot afford to unnecessarily provide Indian tribes with constitutionally protected transportation funds.

WPC research indicates that tribal stations consistently charge less for fuel than the regional average.  This competitive advantage allows tribal station owners to undercut non-tribal fuel stations, and ultimately run them out of business.  WPC’s full report on gas prices will be available in September, 2011.

Read WPC’s Amicus Brief here.

Battle Explodes as Business Challenges Indian Gas-Tax Deal (Washington State Wire article)

 

Michael Ennis is Director of WPC’s Center for Transportation. Before joining Washington Policy Center, he worked for the Washington State Senate and House of Representatives and was formerly a staff assistant for U.S. Senator Slade Gorton. Michael served in the U.S. Army with the 2nd Ranger Battalion and is currently in his third term on the Enumclaw City Council. He earned his Bachelor’s degree from the University of Washington and his Master’s of Public Administration degree from the Daniel J. Evans School of Public Affairs, also at the University of Washington.

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[Reprinted from the Washington Policy Center blog; photo credit: flickr]

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