Government & Politics
 

The streetcar is nice, but we've missed the train

After the announcement earlier this week that New Orleans won a $45 million federal stimulus program grant to build a new streetcar line on Loyola Avenue, I reminisced about the role of citizen watchdogs in ensuring that the Regional Transit Authority  didn’t capitulate to tourism industry interests that wanted only  to apply for a route to service tourists at the Convention Center.

It makes sense that the Loyola Avenue line was appealing to federal administrators. Not only does it connect the Union Passenger Terminal to Canal Street, but it also seems to be a logical starting point for future extensions to the Ninth Ward along Rampart Street and St. Claude Avenue, or to Central City along O.C. Haley Boulevard. By making the Union Passenger Terminal a municipal transit hub, New Orleans has opened the door for a route to the airport and the expansion of passenger rail service across the Gulf region.

Especially with that enticing possibility in mind, this seized opportunity also brings to mind one that was badly missed.

The stimulus program also asked states to apply for  high-speed rail money to build networks between cities. New Orleans could be a critical hub for the Gulf Coast system. In a delightful twist, according this map of a proposed system from the Federal Railroad Administration, Houston would be dependent on New Orleans for rail network access.

Yet, after then-Secretary of the Louisiana Department of Transportation and Development William Anker instructed his agency to begin assembling an application to build a route between New Orleans and Baton Rouge, Governor Bobby Jindal ordered the process to halt. He called the rail project unnecessary pork. Anker has since resigned.

The streetcar grant award for New Orleans comes during a week in which the entire stimulus program is being re-evaluated at its one-year anniversary, after it was passed over nearly unanimous Republican opposition. The GOP has argued vehemently that the program merely pays for pet projects under the auspices of job creation, spreading money around without little regard for the merits.

Yet, the programs for public transportation and rail projects are not typical block grant programs in which states or municipalities are given a predetermined bunch of money with little oversight. Rather, cities and states compete for cash based on the sophistication and value of their proposal.

Bobby Jindal may have found it critical to the maintenance of his political principles to put the kibosh on the state’s application for high-speed passenger rail service, but voters are starting to see real-life infrastructure projects in their backyards after so many years without significant federal contribution. The governor might yet come to regret day he turned down “free” federal money high speed rail. Though there is little evidence he will pay a short-term political price, these kinds of decisions to eschew innovative opportunities may not be so easy on the conscience over the long term.

Help us report this story     Report an error    
The Lens' donors and partners may be mentioned or have a stake in the stories we cover.
  • jleuenbe

    Although DOTD is 100% OK with receiving money for the highway system. I’m glad we don’t have to maintain the highways after their constructed.

    http://www.recovery.gov/

  • mike

    Monorail, monorail, monorail……………….

  • Courrèges

    In a delightful twist, according this map of a proposed system from the Federal Railroad Administration, Houston would be dependent on New Orleans for rail network access.

    It’s not so much delightful as it is stupid. Having Houston as a hub between New Orleans, Dallas, San Antonio and Austin would make a great deal more sense for the simple reason that it’s the largest city in the region. New Orleans makes for a good hub towards the east coast, but the further these lines extend the less effective they become.

    Even if this weren’t the case, high speed rail is a cost-ineffective transportation medium in virtually all areas outside of the northeastern corridor. The fact that the federal government nevertheless may elect to fund it says nothing about whether it’s fiscally prudent, and Jindal was probably correct when he argued that the line would have a massive annual operating loss.

  • New Orleans has one of the largest (freight) rail networks East of the Rockies. Far larger than Houston. We already have the right of ways. We have more Class I railways (heavy weight, fully double tracked) than anyone else in the South.

  • Courrèges

    Clay,

    It’s also a fairly congested network (getting into the “gateway” takes several hours), and there’s little space to grow it to accommodate a passenger hub. Moreover, if we’re more concerned about existing freight networks than passenger demand, then the ridership simply won’t be there.

  • Once gas gets to $5 a gallon and beyond after this recession I want to see a “conservative” call a passenger rail system a “boondoggle” or “pork.”

  • sobieski

    “The fact that the federal government nevertheless may elect to fund it says nothing about whether it’s fiscally prudent, and Jindal was probably correct when he argued that the line would have a massive annual operating loss.”

    Ok, so the feds fund it (i.e. print the money for it) which is debt and deficit we with the rest of the country still owe for it, aaaannnnd LA gets to pay for the yearly cost from here on out. Thanks!

    I like high speed trains, loved and used them in Europe and in the Northeast. But this sounds like a federal program that just loads another debt on the states who are already weighed down with debt and budget issues.

    Here’s a question: why don’t we just give some Euro or other company a right of way an franchise for as long as it takes for them to make a sufficient profit (heck, give them a 99 year lease for $1 and let them get 100% of the profits as long as they handle the costs) and let them build it???

  • The whole franchising/contracting idea falls flat if you take in to consideration that the government is going to have to buy what was once private land to put the train on. Ultimately it’s the kind of sweetheart deal we bitch about our politicians making.

    We wouldn’t have had to print more money had we not run up a huge deficit during years of economic growth.

    When we had a budget surplus we should have paid off our debt, instead we cut taxes, expanded medicare benefits, and went to war twice. When someone can explain to me how that’s “fiscal conservatism” then I might take more of the doom and gloom about the deficit to heart.

    What used to be the capitalistic mindset was when a company hits a downturn they take out loans, reinvest and make their product better and become profitable again. Now we have this conservative “capitalist” mindset to simply cut the budget and layoff to the bare bone to keep profits up. Ultimately the company’s product becomes a steamy pile of shit and it either gets bailed out by the government because the executives are still filthy rich and call in favors or the company just goes under.

    Think of America as a business as you conservatives like to do, sure we can just decrease spending to be budget neutral with the lower tax revenue, or we can take out loans, reinvest and make this country a better (and more profitable) place, again.

  • The land issue is a big reason why Japanese train networks tend to be completely in the black (100+% farebox recovery). They get large rights of way that include land adjacent to the tracks that they can develop into malls, etc. to help pay for the large up-front capital costs of building new lines. They are some of the largest landholders in all of Japan (and land prices there are incredibly expensive…).

    http://en.wikipedia.org/wiki/Farebox_recovery_ratio

    If third parties make the profit out of the increased land values and not the train owner/operator, it will require substantial government investment, but that’s not such a bad thing. After all, value IS being created.

  • sobieski

    Clay, thank you.

    It makes total sense.

    We get a high speed train at a fixed cost (probably way below whatever this government plan would have cost), and if someone else gets the profits and hires people here to boot — who cares? Bully! Excellent!

  • Courreges

    Clay,

    How is value being created? You might succeed in reorienting some development, but I see no argument as to why more commerce would occur and more wealth created simply because you built some trains.

  • Eli is absolutely right that we’re missing the boat. I also believe that the projections on the traffic between BR and NOLA are severely underestimated. The fact of the matter is that we call spending money on highways “investing” and spending money on transit “subsidies.” So not only do I not accept the $18M number from Jindal’s consultant, I also would pose the question regardless of operating deficit or surplus: “well, if it drives hundreds of millions in private investment around the termini in BR and in NOLA, is it worth it?” I’d say yes.

    Clay, what do you think about a TIF district around the Union Passenger Terminal to help cover the costs, akin to what you are mentioning for. I think that idea has legs, especially in light of the streetcar announcement and the City Council’s impulse to reform the city’s TIF policies to be more geographic/district based, and the amount of development that could happen. Also, the UPT is owned by the NOBC, so regardless of what we think about Sean Cummings, it is at least in the public domain.

    I actually have heard from a number of folks that BR should be bypassed completely on the connection between NOLA and Houston–just going along freight rail corridors directly through Lafayette, with BR merely a spur from NOLA or on an HSR route along the old Illinois Central corridor, but BR would never let that happen.

  • Courreges

    Jeff,

    The fact of the matter is that we call spending money on highways “investing” and spending money on transit “subsidies.”

    I’d argue that we can, because highways aren’t as subsidized as transit. Well over 80% of highway funds are covered by gasoline taxes, which are paid by motorists at the pump. I believe that fairbox recovery for transit averages around 25%, or at least a minority percentage.

    “well, if it drives hundreds of millions in private investment around the termini in BR and in NOLA, is it worth it?” I’d say yes.

    It might do so, or it might not (I lean towards “not”). However, even if it did it would merely be reorienting development. It wouldn’t be creating wealth, it would just be shifting it around. This has nothing to do with how much it costs, and there are probably less expensive ways of encouraging redevelopment near the terminals.

  • Hi Courreges:

    Thanks for your thoughtful points. 80% of direct costs associated with highway funds might be covered by the gas tax, but that’s not an apples-to-apples comparison with transit box-fare revenues for transit. A much better comparison would be the amount of highway expenses covered by toll roads; gas taxes come from all drivers, not just highway drivers, and I would bet that tolls would cover far less of a percentage of road construction and maintenance costs than for a similar investment in transit. Regardless of where that falls, the point is still the same–highways are a massive public works program and their creation was a deliberate policy decision (or rather set of policy decisions), and drivers bear only a fraction of the costs of the roads they drive on. The same can be said of other forms of transit, but we should at least be talking apples-to-apples.

    Why would new development around the Union Passenger Terminal just be “shifting wealth around?” If the UPT were a hub, you would have hundreds of thousands of new travelers arriving at that destination that weren’t there before, which could drive a host of new development activity, growing the city’s tax base. If there are other good ways of promoting investment there, why has Loyola Ave and environs been a sea of surface parking lots for two generations? And even if this were just “shifting wealth around,” I think you could make a number of really good arguments that we should be promoting development in the downtown core, which is a dense and sustainable and culturally vibrant area of the city, as opposed to sprawling out into the backswamp.

  • Courrèges

    Jeff,

    A much better comparison would be the amount of highway expenses covered by toll roads; gas taxes come from all drivers, not just highway drivers, and I would bet that tolls would cover far less of a percentage of road construction and maintenance costs than for a similar investment in transit.

    That’s unreasonable. Virtually all drivers use freeways at least occasionally. Honestly, do you know a driver who has never been on a freeway? Furthermore, all drivers benefit from the presence of freeways. Freeways are the primary means by which freight is transported and are also the primary means for evacuations. They also free up surface roads from through traffic.

    Regardless of where that falls, the point is still the same–highways are a massive public works program and their creation was a deliberate policy decision (or rather set of policy decisions), and drivers bear only a fraction of the costs of the roads they drive on.

    Yes, but that fraction is very high — over 80%. The subsidy is very low. This is the opposite of the case with transit, where the vast majority of the funding comes from people who don’t use transit at all, even occasionally. Furthermore, the ancillary positive effects of transit are minimal. Transit doesn’t keep many cars off the road, and may actually inhibit freight travel.

    This isn’t to say transit shouldn’t be subsidized, but it should show that transit should be managed in the most cost-effective way possible. Huge capital projects that yield nominal benefits, like new rail systems in areas with low population density, should be avoided.

    Why would new development around the Union Passenger Terminal just be “shifting wealth around?” If the UPT were a hub, you would have hundreds of thousands of new travelers arriving at that destination that weren’t there before, which could drive a host of new development activity, growing the city’s tax base.

    They’d be arriving at that specific destination, sure, but I doubt it would encourage many more people to come to the New Orleans area on a daily basis. We already have low freeway congestion, and most people own cars. That’s always going to be the most convenient travel option.

    If there are other good ways of promoting investment there, why has Loyola Ave and environs been a sea of surface parking lots for two generations?

    There’s already a great deal of investment in that area. It’s largely built out with office buildings. There are numerous surface lots, but that’s largely due to the demand for parking, particularly near the Superdome. In any event, the only thing that will cause those lots to go away is new white-collar jobs in the CBD, and I don’t see how rail will accomplish that kind of sea-change. In fact, I think that rail will encourage the lots to stay, because people are going to want to be able to park near the station. Unless the city tries to force the surface lots out through zoning changes, they aren’t going anywhere.

    And even if this were just “shifting wealth around,” I think you could make a number of really good arguments that we should be promoting development in the downtown core, which is a dense and sustainable and culturally vibrant area of the city, as opposed to sprawling out into the backswamp.

    A preference for inner-city development over suburban development is a poor reason for supporting multi-billion dollar rail projects, IMO.