Smashed Metro Bus Windows

[elfs]

Smashed Metro Bus Windows

The other day I took the bus home from work, and saw that the two windows behind the driver's seat had been smashed. "I guess some people just don't like the bus," he told me. Even worse, it turned out that Metro knew about the problem and didn't have a bus to spare, so they pressed this broken bus into service, taping up the damage to warn people away from the potential harm.

Man, those are my tax dollars someone just smashed. His own, too.

I've always wondered why the most rabid anti-tax Republican is pro-road but not pro-transit. If the goal as "someone who governs" is to provide people-moving capabilities from one place to another, the mix of roads and mass transit would seem to be ideal: both are supplmented by non-transit, non-auto fees of some kind. I think roads are just so ubiquitous and seemingly invulnerable that we just see them, we don't think about them. It's the fragility and daily maintenence that gnaws on the conscience.

Metro just raised all prices by 25¢ to 50¢ depending on the route and time of day. The state's budget is taking a huge hit in the next two-year cycle; I hope that our county gets the mix right, because there's a lot of commuter pain coming down.

Comments

[resonant.livejournal.com]

I'm in Toronto, Canada - over 80% of the Toronto Transit Commission operating revenues are paid for by fares, so the demand and revenue curves match fairly well.

To get into this situation, we had to put some major investment into infrastructure (subways and elevated light rail). We also never got rid of our streetcars as most US cities seem to have done. The last time I saw the figures, a subway trip cost $0.09 per passenger, an articulated electric streetcar trip cost $0.23 per passenger, while a diesel bus trip cost $3.40. Adult fare is $2.75.

The city just announced a new capital investment program, adding about 150 kilometres of light rail lines (including two going right past my apartment - yay!). It's cheaper than expanding our highway system to handle projected growth, and is expected to pay for itself within two decades. Yes yes yes, an unacceptable rate of return if it were a commercial investment, but outstanding for a government infrastructure project.

http://www3.ttc.ca/About_the_TTC/Projects_and_initiatives/Transit_city/index.jsp

[fallenpegasus]

Is the money that pays off the bonds for those capitol improvements coming from fares? Or are the bond payments coming out of general revenue?

[elfs.livejournal.com]

Meta: Does the payoff of using mass transit rather than roads improve the tax base of those providing the transit such that it pays for itself?

[resonant.livejournal.com]

The recent Sheppard subway extension in Toronto definitely did. The mayor rammed the project through (even though other areas would have higher ridership, and even though there was a power line corridor just north of it, perfect for a light rail line), because North York property values would soar so much with a subway. He implemented a $2000-per-residence levy on new development along the subway route, on top of the 2.35% tax rate; despite that, condos are sprouting all along Sheppard Avenue.

Here's a view of the area just as the subway was being completed (Google Maps is a bit out of date) - if you look at the area now, it's a morass of construction cranes and excavators.

http://maps.google.ca/maps?q=sheppard+toronto&ie=UTF8&oe=utf-8&client=firefox-a&ll=43.769653,-79.376543&spn=0.00781,0.021973&t=h&z=16

Scroll north from Sheppard and you'll see the nice power line corridor that would have made good transit sense, but would have been less beneficial to tax revenues.

[fallenpegasus]

"improve the tax base" is a synonym for "can get away with increasing the tax rates before people start moving away", and thus I reject the axioms of the question.

If something cannot fund it's own capitol improvements out of it's own revenues, it's a real net loss to the entire system, even if it's a paper gain.

[resonant.livejournal.com]

Economics is not a zero-sum game.

Imagine you own some farmland. It's acidic, heavy clay soil. Your crops grow slowly in it. One year, you take money from your other activities (raising chickens, for example), and use it to pay to lay drainage tiles and spread lime. For the next decade, your crop yield is twice its original amount.

You take some of the profits from your field, and use it to build a sturdy shed for your chickens. You lose fewer chickens due to illness and predators, and your poultry profits rise.

Increasing the services provided to an area (roads, sewers, waterlines, subways) increases the utility of the area, and thus increases its value. Developers are willing to pay more for land, and are willing to pay additional development taxes, as potential homeowners and business owners are willing to pay more for dwellings or storefronts.

[resonant.livejournal.com]

We don't have municipal bonds in Canada, although by coincidence a senator just proposed a bill today to permit them:

http://www.canada.com/ottawacitizen/news/story.html?id=adf49ae6-b9c6-4761-8c8a-3d9c37aa5c2b&k=94051

Funding for TTC capital improvement projects can come from fares, the city, the province, and the federal government. The mix varies from project to project, depending on what politician benefits. The recent revamping of the downtown streetcar system was paid for entirely from the farebox, since it was politically boring. The recent Sheppard subway extension was a pet project of the city mayor (subways raise property values, and thus tax revenues), so the city paid for a large portion of it. The province paid for the current subway and LRT rolling stock, to create jobs at factories in Thunder Bay and Kingston. Various federal agencies also throw in funds whenever a project meets with their goals.

[fallenpegasus]

Jobs cannot be "created" by tax funding. They can just be moved in space and in time. For every job "created" by taxing or borrowing, at least as much value as that job generated has been removed from somewhere else.

[resonant.livejournal.com]

Let's say you came up with a great idea - an iPod that cooks waffles, or something even more marketable. You don't have enough money to build a factory. Do you let your idea sit idle?

You can sell your idea to others (outright, or as shares in a company) for startup funds. You can borrow money from the bank or the government, and pay it back with interest. Or, you can get a R&D grant from the government and pay it back via taxes. With the money you get from others, you build your factory and hire people to make your product. If your idea is a success, you'll increase the total value available in the world.

Economics is not a zero-sum game.

[resonant.livejournal.com]

The Ontario provincial government created a Crown Corporation[1] called UTDC in 1973 to employ people and make money by making transit vehicles. The corporation was originally funded with taxpayer money, but was expected to survive on its own after startup. It eventually grew and thrived, and was then sold 13 years later. The former taxpayer-funded business is now part of Bombardier, the world's largest manufacturer of rolling stock, and one of the largest employers (and sources of tax revenue) in Canada.

Taxes aren't zero-sum. In addition to shuffling pieces of paper around, you can also CREATE value.

[1] "Crown Corporations" are when the Canadian government sees entrepreneurs and venture capitalists getting rich, and decides to join in the fun.

[fallenpegasus]

The problem with such corporations is that they very strongly tend to capitalize on their government contacts over their ability to create value.

Bluntly, they use their government links to get powers and privileges that cannot be bought by their competition (public rights of way, various legal immunities, forced patent pools, deep capital reserves, and so forth) and also use their relationship to the government to, ehem, "discourage" competators.

Imagine some random Crown Corporation, that is doing reasonably well, is reasonably profitable, and is only reasonably slow and beurucratic. Then comes along some new hungry upstart startup that has a hungry staff and some new ideas, and starts doing the same job better, and starts taking profit away from the Crown Corporation (and thus away from "the public and common good"). What is the natural reaction of the managers of the crown corporation, thier government backers, and on the people who like to say they "prmot the public good" and "people over profits".

It's very simple. They will use the tools they have at hand to defeat the competition, and use their government connections to "reign in" this new upstart. They will impose new regulations, increase some key tax that the crown corp is exempted from, or obtain some government monopoly that the upstart can't access.

That's the way it works.

Just about the only way to compete with a "crown corporation" entity is to do it across national borders. Which is, I strongly believe, a driver of why there is so much pressure to try to set up "international agreement frameworks" to impose random business regulations across national boundaries. The proponents my claim they are doing it for good reasons, but at the end of the day, it's to impose costs on competitors to protect themselves.

[resonant.livejournal.com]

That's exactly what every other business out there is doing, too. If you have friends in government, things go your way.

Trentway-Wagar (a for-profit non-government business) just used its political connections to get PickupPal shut down.

Bell Canada (a for-profit non-government business) just used its political connections in the CRTC to justify its sabotage of competitor's internet bandwidth.

http://www.thestar.com/business/article/535185

http://www.google.com/hostednews/canadianpress/article/ALeqM5jLxqkhAVRuRJ1VTeFBqUd6ADrpzw

Which has nothing to do with the original topic of public transit.