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122 comments on How Will Local Governments Respond to Large Increases in Energy Bills?
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122 comments on How Will Local Governments Respond to Large Increases in Energy Bills?
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Further, how else does a country that is 9.4 trillion dollars in debt (at the federal level) reinvigorate its infrastructure (usually a state and local matter--and state and local entities have to keep a balanced budget, by the way) in such a way to cope with such phenomena as peak oil, climate change, and their impacts?
See the first comment.
At the ridership levels that Metro will be seeing at 5$ a gallon, do not be surprised if the METRO Authority starts pulling a profit. These profits could then in turn be used to upgrade their existing infrastructure.
Public transportation infrastructure cost way more then fares can compensate - it used for drivers and fuel mostly
I was going to guess that it was usually the other way around, that cities often take a loss on public transpo...but, if the entity itself is private (as in does not come out of the public/general fund) and turns a profit, your reasoning might hold.
Still, I am guessing that in most metropolitan areas, public transport is a part of the city budget, and therefore if it were ever to actually turn a profit, those funds would be directed elsewhere, especially in tough taxing or economic times.
I'm sure Mayor Cook or even Mr. Drake will no doubt have an answer to this. :)
Here's the METRO's budget page, if anyone is in the mood to figure out how closely tied to the District's budget it is: http://www.wmata.com/about/parp_documents.cfm?fromMenu=AboutMetro.5
Unfortunately, limited time (including an eMail to Dr, Goose).
I did download executive summary of 2008 budget.
Some tidbits.
Metrorail Operating Budget - $638 million, $505 million from fares (79.1%, low 80% is typical for DC Metro). Higher ridership > more fares
$500 million for labor, $46 million for electricity (remember escalators, lighting, HVAC, etc.) $47 million for services (mostly indirect labor I assume)
MetroBus Operating Budget - $453 million, $145 million from fares (32%, good for buses) Again higher ridership > More fares
For Metrobus, $380 million for labor, only $32 million for fuel (*assumed price not stated), $18 for services (mostly indirect labor I guess)
MetroAccess - Handicap/ADA - $63 million, $3 million from fares (4.8%) I am sure that Paul S would kick them to the curb first (need to repeal ADA first though).
Per Ed Tennyson, much worse bus service once had lower fare recovery %. In other words, buses are more economic if coupled to Urban Rail than as standalone.
WMATA has looked at going to 100+% fare recovery for operations of Metrorail, and it might be possible, but the additional burden on the roads & pollution from lost ridership make it "not worth it".
Sorry for Limited Time, Hopefully more later,
Alan
In a large majority of jurisdictions, the transit agency has a dedicated source of funding (1% sales tax in New Orleans). WMATA gets direct funding from DC, VA & MD.
The obvious variable is overhead per passenger mile - capital costs are pretty constant. For rail, costs per passenger falls as volumes rise.
The capital costs aren't shown - how would they compare to operating costs?
Variable costs also tend to fall as volume increases. 8 car trains take no more labor (one operator) than 6 car trains (OTOH cleaning crews are per car). Fully loaded cars use only slightly more electricity than nearly empty cars.
TOD takes time. Part of New Orleans success with streetcars (80+% to 100+% farebox recovery, is how well housing and living patterns are woven into the system (operating since 1834). The largest building in the city, 51 story One Shell Square, is in between the tracks of the St. Charles streetcar. After 5 PM it is hard to get a seat after the streetcar passes One Shell.
In addition, ridership increases on existing lines when a new line is opened. So the bigger the system, the more economic it is. Two lines are better than one line, Seven lines are better than six lines.
Best Hopes,
Alan
Best Hopes for Large, Dense Urban Rail systems,
Alan
Thanks!
Thanks Alan! Cool statistics. Do you have a number for how much money MetroBus pulls in as far as fares?
MetroBus Operating Budget - $453 million, $145 million from fares (32%, good for buses)
Thanks again, interesting to know. I would imagine that the 145 Million in Fares could easily double under higher gas price conditions.
Doubling riderhip, even with crush loads @ peak time/peak direction, would require some additional service and additional costs.
One simply cannot squeeze twice as many pax on-board a rush hour bus.
Alan
Public Operating Subsidy (not including Capital)
Rail - $133 million
Bus - $308 million
ADA - $60 million
Ridership (Note NOT pax-miles but just pax, rail riders travel MUCH further than bus riders on average)
Rail - 210 million
Bus - 134 million
ADA - 1.6 million
Capital Budgets vary widely year by year, and some are not broken down by mode (security, management improvements, debt service (mostly rail I guess))
In 2008 $182 million to run 8 car trains half the time (includes 184 new railcars, bigger transformers), Buses $48 million, Infrastructure (assume mainly rail, but buses take more than expected for mid-life rebuilds, shelters, garages, etc. City & States pay for most of bus ROW from another budget) $269 million.
In view of that same first comment, and in view of the fact that US "farebox recovery" ranges from mediocre to utterly dismal, something will have to give. (Oh, and one wheeze with those numbers is that they are "proportion of the amount of revenue generated through fares by its paying customers as a fraction of the cost of its total operating expenses", a loophole that a vast array of capital expenses can be driven through.)
There is currently a law that The American Consumer Must Never Be Asked To Pay For What He Or She Uses. It applies in spades to transit, which seems cheap only because that prize chump, the taxpayer, provides an essentially free ride (or literally free, in the case of the Staten Island Railway unless one rides all the way to the ferry) for the chosen few affluent enough to live and work within range of the transit system and privileged enough that they never need to work on the weekend or in the evening when the system is not running usefully (or not running at all.)
But nothing lasts forever. Perhaps, under more straitened circumstances, the no-pay law will just have to give way. Perish the thought, but instead of putting their fare on the government never-never as they do now, people might simply have to earn what they wish to consume, or else go without.
But not to worry, the freebies (and tax holidays and all the rest) will continue for the time being, as this is an election year.
As if your miles driven are not being subsidized.
That's history. It doesn't matter any more. The Great Money Pot is empty. No, it's beyond empty. It's gone negative. It's become the mother of all suction cups.
Plenty of taxes that can be raised !
WMATA gets part of the Virginia support from a 2% sales tax on gasoline & diesel in Northern Virginia. Make that 20% and significant funds could be raised :-)
Alan
Pols around the world are pandering to the public by promising to abate taxes on fuel. It appears a massive education job is needed first.
Please go ahead with this and tell us how it works for you.
In Manchester, England, the light-rail "Metrolink" service has a farebox recovery ratio of 1.43 (i.e. it's profitable).
In all of the UK (except London) the bus network is not run by local government - it was de-regulated in the 1980s and 1990s. Private companies run the buses and are free to set fares. In most parts of the country fares are noticeably more expensive than in London which is still regulated. This is despite London being more expensive for most other goods and services.
The upshot (from a Peak Oil point of view) is that all UK bus networks are profitable at the farebox level. There are no direct subsidies, except on some rural services and services deemed socially necessary. Local government pays only for bus shelters and signs. Central government provides free off-peak bus passes to people aged over 60. (This was introduced just before the general election in 2005; it was done for political rather than economic reasons). This £1bn/year scheme could be classed as a subsidy - it provides a significant source of revenue for the private bus operators.
But what level of service is provided ?
$8/gallon fuel does make bus more competitive with the private car.
Alan
Alan, the level of service on the light-rail is average for a city of its size. You'll find all the usual complaints about lateness, other passengers, and high fares. Same as any other city really. It helps that Manchester is a densely populated city; such a system wouldn't be profitable in less dense American cities.
My point was that public transport networks don't intrinsically require subsidies, contrary to popular opinion. The real challenge for local government is not how to pay for transit, but how to reduce the subsidies.
Alan, the level of service on the light-rail is average for a city of its size. You'll find all the usual complaints about lateness, other passengers, and high fares. Same as any other city really. It helps that Manchester is a densely populated city; such a system wouldn't be profitable in less dense American cities.
My point was that public transport networks don't intrinsically require subsidies, contrary to popular opinion. The real challenge for local government is not how to pay for transit, but how to reduce the subsidies.