Why the T is Broke

The Boston MBTA, the city’s public transportation agency which operates public ferries, buses, the subway, and commuter trains, is broke. The agency’s budget for last year was patched by a one-time payment of $160 million funded by a state sales tax increase, and the agency has over $8.5 billion dollars in outstanding debt. In addition, the system is falling into disrepair. The agency estimates they’d have to spend over $3 billion just to bring the subway up to a “state of good repair.” In FY 2010, $543 million in safety-critical maintenance projects were not funded.

Of course, transit watchers know despite record ridership in recent years, two other of the nation’s other large, old transit systems are in equally dire straights — Chicago and New York. Although some of the problems are similar, I wanted to know the causes of the crisis in Boston. A recent report by a gubernatorial-appointed commission laid out the stark facts. The report, completed by a group headed by former finance industry executive David F. D’Alessandro, was published in November. This post relies largely on this recent report, readers with alternative perspectives are welcome to post comments below.

In 1999, the Massachusetts state legislature dedicated 20% of the State’s sales tax collection, excluding meals taxes, to the MBTA. Starting in July 1, 2000 this “forward funding” plan meant the MBTA would have a regular revenue source going forward. The agency adopted a financial plan for a balanced budget for the years 2001 through 2008. In the words of the report, “The Forward Funding Finance Plan proved unrealistic in many of its assumptions and nine years later can be deemed a failure.” The authors conclude the main driver of why the plan failed was “unavoidable cost explosions.”

• Fuel and utilities: cost $256 million more than anticipated due to increasing energy costs for the agency’s vehicles. The agency buys huge amounts of fuel and electricity for buses and trains.
• Payroll and employee benefits: $113 million more than anticipated. Wage increases were comparable to the 3.5% rate of inflation, but health care costs increased by 73%.
• The Ride (a federally mandated door-to-door paratransit service for disabled riders): $95 million more than planned.
• Sales tax revenue: $150 million less than expected. The forward funding plan projected an annual growth of 3%, it has actually only increased at around 1%

The only categories where there was good news was Commuter Rail ($37 million under budget) and nontax revenues were $95 million higher than expected. The report concludes the additional revenue is the result of three fare increases, the report authors observer “the last (2007) fare hike actually exceeded the Plan’s target, in part because ridership grew despite the fare hike.”

The cumulative total across the eight years? A $558 million deficit. The report concludes, “A private sector firm faced with this mountain of red ink would likely fold or seek bankruptcy.” In short, to keep operating the agency balanced their budget by pushing off debt, restructuring $238 million in the last three years alone. They also neglected maintenance. Among 56 maintenance projects with a “10″ — the highest — on an internal safety rating, only 6 were funded last year. The authors conclude the agency tool other steps to control costs:

Contrary to not trying, we found evidence that the MBTA did make some hard expense choices. Across-the-board cuts were routinely made to departmental budgets. Periodic layoffs and hiring freezes restrained the headcount. Individual managers took pride in eliminating inefficiencies and redundancies, while embracing a new organizational ethic of customer service. Yet in the end, they could not pare staff below the number needed to move hundreds of thousands of riders across hundreds of routes each workday. Add the complexity and cost of sustaining the system’s aging infrastructure, and it became evident that the cost inflation and savings assumptions in the Finance Plan were never tested against the daily grind.

Against such a bleak picture, finding a “solution” seems like an insurmountable task. However, if any urban institution is “too important to fail” it’s the MBTA. I haven’t done a financial analysis, but the list below presents some steps that could be taken to improve the agency’s solvency.

1. Higher Fares, Pegged to Inflation
There are two general philosophies related to transit fares. One is to support transit from sales taxes or other general taxes, and keep fares low. (Transit as a public good) The other is to use fares to cover a much higher proportion of the actual cost of running the agency. (Transit as a private good) Massachusetts, like most places, has taken the first approach. However, as we have seen, this introduces problems with general tax revenues increase too slowely, and it restricts the agency’s ability to adjust fares to cover the increasing real costs of the inputs to transit (worker benefits, electricity, etc). I’ve struggled with this issue, and concluded I think fares should be increased, and at the very least pegged to inflation. In order to mitigate the equity effects, special subsidies could be implemented for low-income riders. Although I believe in the principle of transit as a public good, Americans generally don’t support the level of taxation to support high quality transit. Using fares for a larger proportion of revenue also means increasing ridership will increase revenues. (By raising the cost of transportation it can also have interesting land-use effects – something for another post.)

2. Debt Relief
The agency needs a large, one-time injection to pay off its sizable debt, some of which was “given” to the agency as part of the costs of the Big Dig. Paying it off now will save taxpayers money in the long run.

3. Federal Funds for Maintenance and Capital Costs
Lots of interests are already lining up for funding from the federal government’s next transportation bill. It should contain a revenue source for transportation infrastructure maintenance and improvement that can be used by agencies like the MBTA. The MBTA Review report describes how a huge proportion of the agency’s rolling stock of buses and trains will need to be upgraded or replaced in the coming years, with no funds in sight to pay for it.

4. Greater Rider Awareness
As I ride the T daily, I often wonder whether the other riders know about the agency’s shaky finances and massive maintenance backlog. I suspect most take the system for granted. Transit advocates — and perhaps the agency itself — should explain in clear terms why the numbers aren’t adding up. This work is as necessary as the others to create the political will for painful, long term solutions. Doing nothing means the discussion about solution will occur in response to a crisis such as an accident or strike. Crises can produce quick fixes, but rarely the type of long-term solutions that are needed.

How do you think the MBTA’s finances can be improved?

> MBTA Review Report (November 2009)
> U.S. PIRG Report – Derailed by Debt (October 2007)

Which Big City Has the Greenest Transportation Profile?

When I was in San Francisco in October, I met Chava Kronenberg, a bay area transportation planner and Metro Boston native. During our conversation she commented Boston’s quite extensive alternative transportation profile is often overlooked in national discussions. Instead, usual suspects like Portland, Oregon get all the credit for their green transportation systems. I decided to take a look at several transportation metrics to see just how green Boston was among big cities. Could it be the greenest city in America, as she claimed?

The three measures I chose were the overall percentage of workers using transit, bikes, and walking to work. I limited the analysis to the largest 30 “places” in the U.S. Census and used data from the 2006-2008 American Community Survey. Technically this is sample data, but I did not calculate margins of errors since for large cities they are generally small. Also, there’s an extensive and heated debate about exactly how green transit is. Most studies I’ve seen conclude busy buses or trains emit less pollution (including CO2) per passenger than private vehicles, but I won’t wade into the debate here. Here’s what I found.

Transit
For overall transit ridership to work, New York City (55%) and Washington, D.C. (37%) were winners, with Boston in third at 32% with San Francisco (32%) and Chicago (26%) rounding out the top five. Since this metric is for the center city only, I think Boston’s getting a bit short shrift. The region’s truly expansive commuter rail system (it goes all the way to Rhode Island — see below) carries an average of over 138,000 riders a day, more than all but two other similar systems in the nation — New York and Chicago. (Source: APTA ridership report (PDF))

Biking
What about zero-pollution biking? On this measure, the top five are Portland (4.7%), Seattle (2.5%), San Francisco (2.5%), and D.C. (2%) (which launched a bike-sharing system in 2008) and Denver (1.7%). Boston is only a few slots down at #7 with 1.2%. However, the city only recently saw the light and began pursuing bicycle planning aggressively. In fact, in the past it has been named one of the least bicycle-friendly cities in the U.S., although despite this bad reputation ranks way above dozens of other large cities.

The city’s 2009 State of the Hub report (PDF) reports 15 new miles of bike lanes (up from 0 in 2007), 500 new bike racks, a new bike map, and plans for a new bike sharing system moving forward. I should note plenty of smaller cities have larger shares of bike commuters. If Minneapolis were on the list, it would rank second with 3.5% of its commuters biking to work. If it were included, Boston’s neighbor Cambridge would be 5.8%, easily topping Portland.

Walking
Walking is another green mode available to most travelers, often overlooked for more exciting trains and bike facilities. However, making a city walkable can be tricky, as it depends on a subtle combination of good public facilities, urban design and density, and mixed land uses. On this measure, Boston tops the list at 14%, with Washington, D.C. just behind at 11.7%, and the rest of the top five New York (10.1%), San Francisco (9.52%), and Seattle (8.6%). It turns out some of the factors that make Boston such a bad city to bicycle — congested streets and a dense street grid — make it excellent for walking. Walking is so popular the city boasts an active walking advocacy organization — WalkBoston — and extensive trail networks along the harbor and through parks.

Next, I created a composite score for all three indicators. For each indicators, the cities were ranked with 1 going to the city with the highest (best) value and 30 to the worst. I then added the rankings together, weighing each equally. The lower the resulting score, the better. This score gauges the diversity of the mix, and isn’t an objective measure of pollution output. In this measure, Washington, D.C. ranks first with a score of 8, San Francisco and Boston tie for 2nd at 11, and Seattle fourth with a score of 15. New York, strong on transit and walking, falls to an overall place of seventh due to it’s low biking score (16th with just 0.7% of commuters reporting biking).

What can we conclude from this simple comparison? First, as Chava suspected some very bike friendly places like Portland may not have many transit riders or walkers. Any evaluation that stresses diversity, like this one, will rank them lower than older cities with well-developed transit and street networks. And although it comes as no surprise to me, Washington, D.C.’s high ranking may surprise some. Indeed, it is the result of many factors: excellent “bones” in a good street and sidewalk grid, decisions by city leaders in the 60s and 70s to stop as many highways as possible and invest heavily in transit, lots of government-related jobs concentrated downtown, and a city government aggressively pursuing improvements to bicycle, walking, and transit infrastructure in recent years.

Finally, I think Boston’s high walking score and surprisingly high biking statistics (despite little infrastructure and bad weather) show it is somewhat underrated. But is it the greenest city in America? That’s for you to decide.

Transit Apps, Visualizations, Data Plans Announced

Today I attended the MassDOT Developers Conference on transportation apps and data. The conference was organized by Chris Dempsey and Josh Robin, two Massachusetts state employees who have been spearheading work to publish transportation data and encourage third party developers to create apps in the state.

The big news at the conference was their announcement of a pilot project to provide real-time bus arrival data for several MBTA bus lines. They also announced the winners of competitions for apps and visualizations that used the published data. In addition to scheduling and spatial data, the data for the visualization competition included two datasets containing the time, method of payment, and location (bus route or subway station) for every rider payment for two days.

The winning applications were two iPhone apps containing schedule data. The winning visualization was this animation showing activity in the transit network. The runner-up, “A Day In the Life of the MBTA,” featured striking visualizations of the data showing activity patterns at different stations throughout the days. I also appreciated another entrant, “A Day of MBTA” who created a website with histograms for riders entering each T station.

During his talk, the NextBus’s Michael Smith observed RFID payment cards such as the CharlieCard can improve the bus riding experience by speeding passenger boarding. Riders of busy bus lines know how much one or two riders paying with cash can slow down the system. Although the visualization contest data included payment data, none of the entrants analyzed it. According to the key the state provided, the various payment types are:

• MBTA Old Tickets – This refers to magnetic tickets that are pre-encoded by a third party vendor and then distributed to T sales offices for sale to the general public. They are also distributed to Cubic, which is the vendor in charge of completing on-line and Corporate Program orders.
• Triplex Roll mag. Stripe (Large and Small) – This is the type of stock used to encode magnetic tickets that are issued from Fare Vending Machines and bus Fareboxes.
• PreCut Triplex w. mag. Stripe – This is the type of stock used to encode magnetic tickets that are issued for bulk production of magnetic tickets and retail sales terminals at 7-Eleven, Stop and Shop, etc.
• Smart Card Mifare 1k – This is the type of media on which Charlie Cards and IDs are issued.
• Regular Charlie Cards are purchased pre-encoded from a third party vendor and then distributed to subway stations, select bus terminals, T sales offices and retail locations for further distribution to the general public. Student Charlie Cards and IDs are issued from back-office devices located at 10 Park Plaza.

Using the data key provided, I created summary statistics for payment methods by bus route:

The result seems to show relatively high usage rates on most bus lines. The busy 1 bus, running from Cambridge to Dudley Square, had 77% riders paying with CharlieCards on September 8. I don’t know enough about the routes to pull out any other findings — but there are some curious patterns. (Why does the 429 have 32% paying with “other,” presumably cash?)

CharlieCard use on the subway is also high, ranging from 58% on the Silver Line to 72% on the Red Line. At the station level, the stations with the highest CharlieCard use rates are Wollaston, Davis Square, and Bowdoin, all at over 80%.

Do any readers see interesting patterns in the CharlieCard data? Did anyone else attend?

Notes and other materials will be posted on the following websites next week:

> MassDOT Developers Page
> MassDOT Developers Conference Website

Planetizen Post: American ‘High Speed’ Rail Will Be Regional and Slow

See my latest Planetizen article: “The Future of American High Speed Rail: Regional and Slow“

The Intercity Bus is Back.

You may have spotted an unusual sight cruising on an Interstate between many U.S. Midwestern cities or up and down the East Coast. Large, modern double-decker buses have been ferrying passengers between dozens of Northeast and Midwest cities. More than the “dirty dog,” these buses are shiny and sleek, with free wi-fi and halogen lighting.

They’re operated by Megabus, a British discount travel company that launched U.S. service in 2006. Although their experiment with Western service in California was canceled, the Eastern and Midwestern routes are showing strong demand.

On the East Coast of course, after Chinatown operators successfully challenged the hegemony of Greyhound, scores of private companies have popped up providing cheap service between cities. To combat the intense competition for some of their most profitable routes, Greyhound itself launched the Bolt Bus brand, offering cut-rate fares for express travel on new buses. After decades of declining popularity, is hopping on the bus back in vogue?

The answer is more nuanced than it might seem. Research by a team at DePaul University under the guidance of Professor Joseph Schwieterman documented the industry’s long decline. Their painstakingly created database of historical timetables shows the daily scheduled arrivals and departures by intercity buses in the US declined from around 1,862 in 1960 to around 635 in 2002, a staggering 66% drop. At the same time period the U.S. population grew, and other forms of intercity travel — namely driving and flying — exploded.

Starting in 2006, however, the researchers find intercity bus traffic is now increasing. After declining at an annual rate of 8% between 2002 and 2006, the industry recorded a 7.6% growth rate in 2007, and another 9.8% in 2008. The report cites several reasons for the reversal: Megabus launched Chicago operations in 2006 and nearly doubled service one year later in 2007, east coast operators (Chinatown buses, Vamoose, Washington Deluxe, DC2NY, etc), and expansion of established carriers like Peter Pan and yes, Greyhound.

I can’t help but note one carrier, not mentioned in the report but certainly in the data, is New England’s Concord Coach Lines, which has been doing a brisk business shuttling people from Maine and New Hampshire to visit the city or go to the airport since the early 1990s. When Amtrak Downeaster began service from Boston to Portland, Maine, they began operations out of the terminus station, the Portland Transportation Center, carrying passengers to points beyond. (Incidentally, a too-rare model of planned intermodalism)

Is the trend here to stay? Given how far the industry has fallen, the time seems ripe for service to stabilize and even improve. Central cities are more vibrant than any time in a generation, and demographic shifts mean the baby boom echo generation is reaching early adulthood. Last summer’s gas price spikes and instability and high fares in the airline industry didn’t hurt. The only negative part of the research team’s 2008 update is the note that service to small towns continues to decline and is missing the rapid passenger growth. Unresolved problems include the “curbside” operators causing congestion because they refuse to pay the fee to use existing stations, and remaining inconsistency on reliability, on-time performance, and comfort. Yet the tone is upbeat, concluding that the stigma of intercity bus lines is clearly changing.

Although (as far as I know) all the new service is on new diesel buses, it’s had a surpising positve environmental impact. Assuming an average load of 30 passengers, the bus gets 150 passenger miles per gallon of fuel. Fully packed, a Megabus gets much better than that, and the company claims as much as 500 passenger-miles per gallon. Using a simple mode shift calculation, they DePaul study estimates the growth of operations in 2008 alone saved an estimated 36,000 tons of carbon dioxide emissions.

A recent trip I took on Megabus demonstrated the wrinkles in the system. Departing Boston (6/26, 5:30 PM), the company’s representative wasn’t uniformed and hurriedly put me on a bus which turned out to be an early bus nearly 45 minutes delayed. The stop in Hartford, Connecticut included a 10-minute unexplained delay at the station. Entering Manhattan, we experienced another delay as the driver was ticked by police for for pulling down the wrong off-ramp coming into the borough, much to the passengers’ amusement. However, as we pulled up to the curb at Penn Station no more than 30 minutes late, considering the alternatives made the annoyances melt away. At the absurdly low price of $18 for the 211-mile trip, the trip cost me $.08 a mile with no parking costs. A flight would have risked unexpected delays, and not got me anywhere near as close to my urban destination. Like for a growing group of travelers, despite its imperfections the intercity bus is increasingly the best choice.

DePaul: Return of the Intercity Bus Report

Photos by Flickr users Somewhat Frank, Nick Busse, and Sidddd.

Planetizen Post: Why is it so hard to build a train?

I consider how our regulatory process affects transit planning in my latest Planetizen post.

National Journal Asks: Gas Tax $ For Bike Trails?

Here’s my answer to the question “Should the next surface transportation bill allow states and municipalities to use a greater share of scarce Trust Fund dollars on non-highway projects such as bike lanes and pedestrian walkways?” on the National Journal’s Transportation “Expert” Blog.

For more background, see my post “Fixing America’s Federal Transportation Policy.”