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Rail Disasters 2005

IP-7-2005 (June 2005)
Author: Randal O’Toole

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Executive Summary

This update to Great Rail Disasters, which was published in February 2004, traces transit ridership from 1982 through 2003 in nearly all U.S. urban areas that had rail transit in 2003. It also reviews preliminary data for 2004, compares the growth of transit usage with the growth of driving in these regions, and presents an overview of the transit industry as a whole. Each transit system is given a letter grade, A through F, based on its growth in transit ridership relative to region’s growth in driving. Major findings include:

  1. The eight “old rail regions” — that is, regions with rail transit throughout the twentieth century — received an average grade of F+ because all but Boston have suffered declining or stagnant transit ridership over the past two decades.
  2. Fifteen :new rail regions” — that is. regions served by bus-only transit in 1970 that have built new rail lines since then — received an average grade of D- because most of them have had stagnant transit ridership growing either slower than the growth in driving or that transit grew before the region built rail lines. Only two of these regions, San Diego and Washington, received a grade higher than D.
  3. In contrast, eight fast-growing regions served by buses only through 2003 received an average grade of B+ for their ability to attract new transit riders much faster than the growth in regional driving.
  4. The high cost of rail transit produces two major threats to transit systems. First is when high construction costs and cost overruns force transit agencies to cut back on bus services and/or raise fares, depressing transit ridership. This is best illustrated by Los Angeles, which lost 25 percent of its transit riders when building rail transit between 1985 and 1995, but similar circumstances can be found in Portland, Sacramento, and Salt Lake City, among others. Second is when a recession reduces the tax revenues that subsidize transit, forcing transit agencies to cut transit service to avoid defaulting on rail construction bonds. This is best illustrated by San Jose, whose transit ridership dropped by a third in response to service cuts made since 2001, but similar circumstances can be found in San Diego, San Francisco, and Washington, among others.
  5. Experience in cities that have built new rail transit suggest that the opening of a new rail line can produce a one-time increase in transit readership, but dose not increase — and often reduces — ridership growth. Even the one-time increase is not guaranteed and depends on the agency not being forced to cut bus service to pay for the rail construction.
  6. In a few regions that have highly concentrated job centers, such as Boston and Chicago, heavy rail or commuter rail has increased transit passenger miles even id transit readership has remained flat or declined. While this may sound like good news, in some cases it indicates that transit is seving middle-income suburbanites at the expense of cutting service to low-income inner-city residents. In any case, neither heavy rail nor commuter rail have worked in areas with dispersed jobs, such as Baltimore, Dallas, Miami, and Los Angeles.
  7. Inflation-adjusted subsidies to the transit industry have grown from $20 billion per year in 1992 to nearly $31 billion in 2003. These compare with subsides to highways of $6.6 million in 1992 growing to $15.2 billion in 2003. Yet highways produce nearly 100 times as much passenger transport plus far more freight transport than transit.
  8. Transit ridership in 2004 was less than in 2001 and 2002. Even when transit ridership has been growing, it hasn’t grown as fast as improvements to transit service. Achieving a 10-percent increase in transit service. This helps explain why subsidies to transit have grown about four times as fast as ridership.
  9. The growing cost of transit is in part due to the high cost of rail transit. Although rail transit carries only 36 percent of transit trips, it consumes 66 percent of transit capital funds. Light rail is particularly wasteful, producing only 3.6 percent of transit trips yet consuming 12 percent of transit capital funds.

Transit’s fundamental problem is that Congress has given transit agencies incentives to overspend on high cost transit systems rather that to provide the most efficient transit service to the industry’s core market of low-oncome and other transit-dependent people. The result is more hardship for such low-income people while transit is increasingly a subsidy to well-off suburbanites. Fixing this problem will require major changes to the federal transportation funding process.