Special tax not in plan to fund light-rail line operations

[begingri]

By Bill Shea

An analysis of the project prepared for the council forecasts the line will carry 1.8 million riders annually, or 22,000 daily riders -- a number kept flat through 2030 in revenue and expense projections as a conservative estimate, White said.

The city's plan to cover the line's cost breaks down as:

• $2.8 million from fares [[at $1.50 per rider).

• $5 million from federal Congestion Mitigation and Air Quality grants.

• $2 million from the state's Public Act 51, which is transportation project funding.

• $5 million from other state pledges.

• $1 million from federal Section 5309 Fixed Guideway Modernization Funds.

• $2 million from city's general fund.

The state in 2008 approved an annual appropriation of up to $8 million for the line's operational costs.

http://www.crainsdetroit.com/article...ine-operations


Note: If you want to view the whole article and you don't have a subscription to Crain's, just Google the headline and click on the article from there.

[Hermod]

"• $2.8 million from fares [[at $1.50 per rider)."

Total operating cost about $17.8 million

This one looks like it will rival the Florida Tri-Rail as the worst rail line for re-coupment of operating costs from the fare box.

In other words, for every $1.50 that the rider drops into the fare box when he gets on board, the taxpayer will drop in $8.03.

[coracle]

Another shear waste of other people's money. I remember the People Mover was predicated on 75,000 riders per day. What a joke that was [[is), The revenue and expense projections are certainly not consevartive estimates, they are more pie in the sky democrat machinations to be modified always upwards when it don't work out. Another loss leader paid for by bankrupts.

[NorthEndere]

There is literally a thread a few threads down already covering the new news on this.

[Bham1982]

22,000 riders is pathetic for a rail line. I hope they're being very conservative with their ridership projections.

I would imagine the Woodward buses already carry quite a bit more than 22,000 weekday passengers.

[ghettopalmetto]

Something seems off, or these figures are extremely conservative.

The operation costs assumptions are assuming a 14% annual increase in operating costs??? On what basis?

And 22,000 daily passengers--while a respectable number for a light rail line of this length--does seem low for Woodward. I'm fairly certain that the 53 bus already eclipses this figure.

Excluding Saturdays and Sundays--which tend to be lower ridership days--22,000 passengers a day would generate $8.5 million a year in revenue at $1.50 a pop.

[mwilbert]

I agree with everything in ghettopalmetto's post. I don't see how they could have screwed up the fare math that badly--all you have to do is multiply three numbers.

The 53 bus alone has over 13,000 riders/day. Then you have the 73 and the SMART buses. I've seen figures indicating over 30,000 riders along Woodward weekdays, but I don't know how that was computed or where they began/ended their trips. 22,000/day for the LRT seems fairly conservative.

[EL Jimbo]

Something is VERY off in those numbers. They just don't add up.

1.8 million riders annually/ 365 days in a year = 4932 riders/day
1.8 million riders annually x $1.50 fare = $2.7 million/year

22,000 riders/day x 365 days in a year = 8.03 million riders annually
8.03 million riders annually x $1.50 fare = $12.045 million/year

If the top pair of numbers is accurate, then M-1 is a BAD idea. If the bottom pair of numbers is accurate, M-1 is a great idea. I think the bottom numbers are more accurate.

[Hermod]

Something is VERY off in those numbers. They just don't add up.

1.8 million riders annually/ 365 days in a year = 4932 riders/day
1.8 million riders annually x $1.50 fare = $2.7 million/year

22,000 riders/day x 365 days in a year = 8.03 million riders annually
8.03 million riders annually x $1.50 fare = $12.045 million/year

If the top pair of numbers is accurate, then M-1 is a BAD idea. If the bottom pair of numbers is accurate, M-1 is a great idea. I think the bottom numbers are more accurate.

Maybe the missing ten million is the "skim" for the clowncil and their buds?

[ghettopalmetto]

Never mind that the budget forecast assumes ZERO ridership growth for a whopping 15 years--something unheard-of with new light-rail systems.

[casscorridor]

The Hiawatha Line in Minneapolis [[2004), considered very successful, opened with a goal of 24,800 riders per day and achieved that goal within two years [[2006). By third quarter 2008 it was carrying 35,500 daily riders. 2008 saw a total of 10.2 million riders.

I would expect Detroit's Woodward Line to have slightly less ridership, but 22,000 riders per day sounds reasonable. 8 million riders per year also sounds about right.

Eventually, after Transit-Oriented Development is given a chance to take hold, and more choice riders begin to regularly use the line, I'm sure we could also experience 35,000 riders per day as well. If our line opens in 2015, I would say we could achieve this goal by 2020 or 2025 at the latest.

[bailey]

Never mind that the budget forecast assumes ZERO ridership growth for a whopping 15 years--something unheard-of with new light-rail systems.

Maybe they've finally grasped the concept of under promising and over performing?

[Genesyxx]

Could it be time for a MI sales tax hike?

[Bham1982]

Could it be time for a MI sales tax hike?

Why a MI sales tax hike? This investment involves one municipality.

It Detroit thinks it's a huge priority to replace bus service with rail service, it should receive legislative approval in Lansing to hike their sales tax [[or another tax of their choosing).

There's absolutely no reason to force folks in the U.P, for example, to fund such an intensely local expenditure.

[mwilbert]

There's absolutely no reason to force folks in the U.P, for example, to fund such an intensely local expenditure.

I don't think a sales tax increase for something like this is either needed or appropriate, but the state funds all kinds of local transportation expenses. There isn't any particular reason they shouldn't fund this one. Why should the people of Detroit fund Ft. Wilkens State Park in Copper Harbor? I'm pretty sure more tourists will ride the light rail than get up to Copper Harbor.

[detmsp]

El Jimbo, you're numbers might be a bit high. I'm guessing that the 22,000 daily riders estimate is for weekdays only.

[Bham1982]

I don't think a sales tax increase for something like this is either needed or appropriate, but the state funds all kinds of local transportation expenses. There isn't any particular reason they shouldn't fund this one. Why should the people of Detroit fund Ft. Wilkens State Park in Copper Harbor? I'm pretty sure more tourists will ride the light rail than get up to Copper Harbor.

This is all true, but these tax-funded expenditures are very rarely hyper-targeted to a single geography.

For example, there could likely be a Michigan tax paying for statewide open space and conservation, but it would be very unlikely that 100% of the revenues would go to a single town in the U.P. There would be a legislative process of distributing the benefits.

Similarly, there could be a statewide transportation tax, but it would be for statewide improvements. Certainly, given the transit mode share in the state, for every dollar paid for a Detroit light rail line, at least $10 would have to be paid for statewide road improvements. That would be the bare minimum of reasonableness.

Take New York State. The transportation tax that funds the NYC subway also funds other transit modes in all counties where the tax is assessed [[and the tax is on downstate counties only).

[rjlj]

Study says DC Streetcar could add $10-15 billion in value


http://newurbannetwork.com/article/w...on-value-14461

[EL Jimbo]

El Jimbo, you're numbers might be a bit high. I'm guessing that the 22,000 daily riders estimate is for weekdays only.

Even with only counting weekdays[[260 weekdays per year), that's an annual ridership of over 5.7 million a year. That 1.8 million number is a joke.

[EL Jimbo]

This is all true, but these tax-funded expenditures are very rarely hyper-targeted to a single geography.

For example, there could likely be a Michigan tax paying for statewide open space and conservation, but it would be very unlikely that 100% of the revenues would go to a single town in the U.P. There would be a legislative process of distributing the benefits.

Similarly, there could be a statewide transportation tax, but it would be for statewide improvements. Certainly, given the transit mode share in the state, for every dollar paid for a Detroit light rail line, at least $10 would have to be paid for statewide road improvements. That would be the bare minimum of reasonableness.

Take New York State. The tranportation tax that funds the NYC subway also funds other transit modes in all counties where the tax is assessed.

If there was a small transportation portion added to the sales tax, I would like to see it kept for transit. No road projects.

[Melocoton]

There's absolutely no reason to force folks in the U.P, for example, to fund such an intensely local expenditure.

No one's talking about a sales tax hike, and it's clearly not an "intensely local" [[whatever that means) expenditure since Detroit is part of a metro area and this should be part of a future metropolitan transit system, but for argument's sake...

There's no reason for me, a Detroit resident, to fund MetroParks, cause I don't go to them. Nor is there any reason for me, someone who doesn't go to MSU, to support MSU. Nor is there any reason for me, who doesn't go to Grand Rapids, to fund the highway to Grand Rapids. Nor is there any reason for me, who is an idiot, to fund libraries in Troy.

[Detroitnerd]

There's absolutely no reason to force folks in the U.P, for example, to fund such an intensely local expenditure.

If that's so, then there's absolutely no reason to force folks in metro Detroit to pay for all those snowplows and roads up there!

[Bham1982]

There's no reason for me, a Detroit resident, to fund MetroParks, cause I don't go to them. Nor is there any reason for me, someone who doesn't go to MSU, to support MSU. Nor is there any reason for me, who doesn't go to Grand Rapids, to fund the highway to Grand Rapids. Nor is there any reason for me, who is an idiot, to fund libraries in Troy.

None of these are comparable. MetroParks aren't a state expenditure. MSU's benefits are equally available to all state residents. Highways are funded statewide, not locally. And libraries are funded based on local property taxes.

[Bham1982]

If that's so, then there's absolutely no reason to force folks in metro Detroit to pay for all those snowplows and roads up there!

Why not? Roads and snowplows are statewide expenditures. Detroit has many state-maintained roads.

Light rail has zero benefit to anyone in the U.P. Not a penny in tax dollars would go to the U.P.

[Detroitnerd]

Why not? Roads and snowplows are statewide expenditures. Detroit has many state-maintained roads.

Light rail has zero benefit to anyone in the U.P. Not a penny in tax dollars would go to the U.P.

Bham, I'm just trying to point out to you that we're all in this together. I don't mind paying for those massive, highly specialized snowplows that ONLY run in the U.P. I don't begrudge them the roads that I will never drive upon.

Then again, that is an increasingly alien concept in "I got mine" America. :/