November 15, 1995
Watch out Colorado. The Regional Transportation District (RTD) has an insatiable appetite for tax dollars and they are eyeing the state coffers. They have a plan to divert $40 to $50 million of state highway funds to extend light rail to Littleton.
RTD got its first taste of state revenues when they received a windfall from outside the district that allowed them to build the Light Rail Demonstration Project in downtown Denver. Now they want a massive tax rate increase of 67% plus $50-60 million from the highway fund. This kind of irresponsible behavior is a signal to policy leaders that it is time to engage in serious analysis of Colorados transportation problems and the role of structures like RTD.
Our reliance on government run mass transit started in the mid 1950s as trolleys went out of business and private bus systems attempted to fill the void. However, as automobile ownership grew, buses eventually became subsidized operations. To protect their revenue stream, regulations were adopted that prohibited competition. As usual, this did not solve the problem and municipal bus systems are today even more unprofitable. The U.S. Census Bureau data from 1980 and 1990 show a nationwide decline in mass transit ridership from 7.0% to 5.4%; and a Denver decline from 6.2% to 4.2%. Because ridership has declined so severely the need for tax subsidies has increased and costs have skyrocketed.
The federal government has realized after pumping over $100 billion into mass transit that free money cannot reverse trends and will never yield a return on investment.
Colorado taxpayers have also been extremely generous. Within the regional transportation district, taxpayers spend almost as much money on mass transit subsidies (.6% sales tax = $300 per family per year = $150 million) as they do to operate and maintain the entire 10,000 mile metro area road network! We have been coughing up huge sums in the hope that somehow big, bureaucratized government agencies can reduce traffic congestion and move millions of us around without polluting the environment.
This line of reasoning does not take into consideration the massive changes that have occurred in our society over the last decade. We have become more diverse, flexible and free. Government planners have, for the most part, not come to grips with this phenomenon. Transportation experts who propose the expenditure of billions of dollars to build systems on the industrial model of fixed routes, fixed schedules and serving concentrations of population have not yet made the intellectual transition into the technological age.
More and more people, inside and outside of government, have come to the realization that there is something very wrong with the way we are attempting to address our transportation problems in Colorado. Some have suggested that perhaps the problems are structural in nature and propose to change the elected board of RTD back to an appointed board or merge it into another giant bureaucracy the Colorado Department of Transportation (CDOT). Then, it is posited, this massive, dysfunctional bureaucracy would suddenly become compassionate and efficient. Another version of the bigger-is-better idea is a merger of RTD, the urban drainage district, the cultural district, the baseball district and others with the Denver Regional Council of Governments (DRCOG).
The concept of removing local control of such functions to a massive central control bureaucracy is also an industrial age idea and one thoroughly discredited. That is why we should not turn away from an elected board of mere citizens. Although there is no guarantee they will not become pawns of the bureaucracy, an elected board gives us a fighting chance to reshape the old system.
We believe the answers lie in the opposite approach. For instance, a Boulder consulting firm has released a study that proves that smaller, more frequent buses decrease costs and increase ridership substantially (about 200%). We also have the positive results of privatization. When forced by the Colorado legislature to contract for 20% of its bus routes, RTD recognized initial savings of 45% even though routes, stops, schedules, fares and equipment were fixed by the bid specifications. If RTD were a rational organization, it would have immediately privatized all of its bus routes or cut its budget in half.
Of course, exposing the benefits of privatization to a government agency is like forcing a vampire to stare at the sun. It is, however, time to open the curtains.
Dennis Polhill is a Senior Fellow with the Independence Institute, a think tank in Golden, Colorado.