March 2, 1999
By Jon Caldara
The problem with any all-or-nothing approach is the very real possibility of getting nothing. There is no better example than RTDs attempt to build out rapid transit in all directions all at once. Heres the simple story: RTD has within its own means the ability, without a tax increase, to build one rapid transit line at a time. In order to do this RTD must decide which corridor goes first, which goes second, etc. Sounds like what we all have to do with our own major investments.
At home we invest in what we need the most first. Buying a house comes before buying the motorboat. At RTD, until about a month ago, building the Denver to Tech Center line came before any other project. Anyone caught in that parking lot called I-25 knows why its the first priority.
However, like a teenager with daddys credit card, RTD wants everything it sees, without any thought of how the bill gets paid. Last month RTD rescinded its policy that put all other major construction projects on hold until ground was broken on the southeast (Tech Center) corridor. The bloated transit agency is now free to pursue all the corridors it wants at the same time, regardless of priority or need.
You might have noticed that I have not used the words light rail, nor will I. Building a light rail system in Denver makes a much sense as building a canal system. A canal system would have the same effect in reducing traffic and air pollution in Denver as light rail (nil). The lawyers, consultants, engineers, contractors, and the almighty bonding firms would still all make out likewell, like themselves. And like a rail system, a canal system would give people something to believe in, something to look at, and something to pay for endlessly.
Unlike airports and stadiums, rail barely pays for a small fraction of its operation after its built; you and your progeny pay. However, I understand political reality. Rail will likely be the transit built to the southeast, and not H.O.V. (carpool) lanes or H.O.T. lanes (where single occupant cars can use the HOV lane for a toll), or bus lanes, or a guided bus system.
So, how will that line get built? Raising taxes is extremely unlikely. Only 16 months ago an RTD tax increase for such projects was overwhelmingly defeated. And only four months ago Referendum B, a billion-dollar proposal with half to be used for roads and transit, was slapped back at lawmakers like a spiked volleyball. Unlike his predecessor, Colorados new governor is not going to play ringmaster to another tax and spend circus.
The ultimate barrier to a transit tax hike is RTD itself. In order to have even an infinitesimal chance of wining a tax increase RTD needs to convince tax weary citizens that it can efficiently administer their hard-earned money. Bill Clinton has a better chance convincing mothers of girl scouts to let their kids go to a White House pajama party.
Is RTD fat? Until recently, RTD was spending $30,000 a year to give employees on-the-job back rubs (just like at your job I imagine). Even now RTD owns enough real estate to make Donald Trump blush. All RTD bus facilities include a pool table for the employees. Lets face it, when you think of a well-oiled machine, RTD doesnt spring to mind.
RTD has to be dragged kicking and screaming into cost-effectiveness. Only because of a 1988 state mandate, sponsored by Terry Considine and a young Bill Owens, does RTD contract out 20% of its regular bus service. That is, one out of every five RTD buses you see is operated by a private company, at the same if not better levels of service that RTD runs. Competitively contracting bus service, often call privatization, costs about 40% less than running the same service in-house.
With contracting, RTD still controls the route, the schedules, and even the private operators uniforms right downs to the color of their socks. But, competition (get ready for the big shocker) finds inefficiencies and lowers costs. If RTD contracted out the rest of its service, as is done in other cities and almost all of Europe, it could build a new rapid transit line every five years without any tax increase, fare increase, or a dime in federal money. If Washington matched RTDs funds, even more transit lines could be built.
Anyone who operates in the real world would think RTD would jump all over its potential savings to buy the toys it wants. But theres the catch. RTD does not operate in the real world.
Beyond the massive saving possible through competitive contracting, RTD has over $40 million in the bank, which could be the seed money needed for the southeast corridor. Of coarse, several members of the RTD board want to spend $16 million, or 40% of their savings, on yet more studies of other potential lines. These environmental impact studies (E.I.S.) have a shelf life of only a few years. If construction of those other corridors dont begin in short order, that money is wasted and the studies must be redone. And, if construction were to begin on those other routes, either a gargantuan tax hike to pay for them passes (next to impossible), or the Tech Center line gets called off (and the RTD board is lynched).
In Governor Bill Owens historic meeting with the RTD board he made his stance very clear. He will support rail from Denver to the Tech Center, and not kid himself that it will make a dent in traffic; for that we build roads. And the guv, like most taxpayers, expects RTD to rank its projects in order of importance, then pay for them with their own massive resources.
What some call pitting one corridor against another, I call getting our priorities straight. We elected these folks to make the tough decisions. They call it leadership. And its hard to find at RTD.
This is not an issue of the governor versus the RTD board, but the RTD board versus reality. Which would you put your money on?
Jon Caldara is the President of the Independence Institute, a free-market think tank based in Golden. He was also the Chairman of the Board for RTD and successfully led the efforts to defeat the RTD Guide-the-Ride tax increase in 1997 and Referendum B in 1999.