I sometimes see a claim in comments here or on social media that the reason American costs are so high is that scarcity makes it hard to be efficient. This can be a statement about government practice: the US government supposedly doesn’t support transit enough. Sometimes it’s about priorities, as in the common refrain that the federal government should subsidize operations and not just capital construction. Sometimes it’s about ideology – the idea that there’s a right-wing attempt to defund transit so there’s siege mentality. I treat these three distinct claims as part of the same, because all of them really say the same thing: give American transit agencies more money without strings attached, and they’ll get better. All of these claims are incorrect, and in fact high costs cannot be solved by giving more money – more money to agencies that waste money now will be wasted in the future.
The easiest way to see that theories of political precarity or underresourcing are wrong is to try to see how agencies would react if they were beset mostly by scarcity as their defenders suggest. For example, the federal government subsidizes capital expansion and not operations, and political transit advocates in the United States have long called for operating funds. So, if transit agencies invested rationally based on this restrictions, what would they do? We can look at this, and see that this differs greatly from how they actually invest.
The political theory of right-wing underresourcing is similarly amenable to evaluation using the same method. Big cities are mostly reliant not on federal money but state and local money, so it’s useful to see how different cities react to different threat levels of budget cuts. It’s also useful to look historically at what happened in response to cuts, for example in the Reagan era, and spending increases, for example in the stimulus in the early Obama era and again now.
How to respond to scarcity
A public transit agency without regular funding would use the prospects of big projects to get other people’s money (OPM) to build longstanding priorities. This is not hypothetical: the OPM effect is real, and for example people have told Eric and me that Somerville used the original Green Line Extension to push for local amenities, including signature stations and a bike lane called the Community Path. In New York, the MTA has used projects that are sold to the public as accessibility benefits to remodel stations, putting what it cares about (cleaning up stations) on the budget of something it does not (accessibility).
The question is not whether this effect is real, but rather, whether agencies are behaving rationally, using OPM to build useful things that can be justified as related to the project that is being funded. And the answer to this question is negative.
For every big federally-funded project, one can look at plausible tie-ins that can be bundled into it that enhance service, which the Somerville Community Path would not. At least the ongoing examples we’ve been looking at are not so bundled. Consider the following misses:
Green Line Extension
GLX could include improvements to the Green Line, and to some extent does – it bundles a new railyard. However, there are plenty of operational benefits on the Green Line that are somewhere on the MBTA’s wishlist that are not part of the project. Most important is level boarding: all vehicles have a step up from the platform, because the doors open outward and would strike the platform if there were wheelchair-accessible boarding. The new vehicles are different and permit level boarding, but GLX is not bundling full level boarding at all preexisting stations.
East Side Access and Gateway
East Side Access and Gateway are two enormous commuter rail projects, and are the world’s two most expensive tunnels per kilometer. They are tellingly not bundled with any capital improvements that would boost reliability and throughput: completion of electrification on the LIRR and NJ Transit, high platforms on NJ Transit, grade separations of key junctions between suburban branches.
The issue of operating expenses
More broadly, American transit agencies do not try to optimize their rail capital spending around the fact that federal funding will subsidize capital expansion but not operations. Electrification is a good deal even for an agency that has to fund everything from one source, cutting lifecycle costs of rolling stock acquisition and maintenance in half; for an agency that gets its rolling stock and wire from OPM but has to fund maintenance by itself, it’s an amazing investment with no downside. And yet, American commuter rail agencies do not prioritize it. Nor do they prioritize high platforms – they invest in them but in bits and pieces. This is especially egregious at SEPTA, which is allowed by labor agreement to remove the conductors from its trains, but to do so needs to upgrade all platforms to level boarding, as the rolling stock has manually-operated trap doors at low-platform stations.
Agencies operating urban rail do not really invest based on operating cost minimization either. An agency that could get capital funding from OPM but not operating funding could transition to driverless trains; American agencies do not do so, even in states with weak unions and anti-union governments, like Georgia and Florida. New York specifically is beset by unusually high operating expenses, due to very high maintenance levels, two-person crews, and inefficient crew scheduling. If the MTA has ever tried to ask for capital funding to make crew scheduling more efficient, I have not seen it; the biggest change is operational, namely running more off-peak service to reduce shift splitting, but it’s conceivable that some railyards may need to be expanded to position crews better.
Finally, buses. American transit agencies mostly run buses – the vast majority of US public transport service is buses, even if ridership splits fairly evenly between buses and trains. The impact of federal aid for capital but not operations is noticeable in agency decisions to upgrade a bus route to rail perhaps prematurely in some medium-size cities. It’s also visible in bus replacement schedules: buses are replaced every 12 years because that’s what the Federal Transit Administration will fund, whereas in Canada, which has the same bus market and regulations but usually no federal funding for either capital or operations, buses are made to last slightly longer, around 15 years.
It’s hard to tell if American transit agencies are being perfectly rational with bus investment, because a large majority of bus operating expenses are the driver’s wage, which is generally near market rate. That said, the next largest category is maintenance, and there, it is possible to be efficient. Some agencies do it right, like the Chicago Transit Authority, which replaces 1/12 of its fleet every year to have long-term maintenance stability, with exactly 1/12 of the fleet up for mid-life refurbishment each year. Others do it wrong – the MTA buys buses in bunches, leading to higher operating expenses, even though it has a rolling capital plan and can self-fund this system in years when federal funds are not forthcoming.
Right-wing budget cuts
Roughly the entirety of the center-right policy sphere in the United States is hostile to public transportation. The most moderate and least partisan elements of it identify as libertarian, like Cato and Reason, but mainstream American libertarianism is funded by the Koch Brothers and tends toward climate change denial and opposition to public transportation even where its natural constituency of non-left-wing urbane voters is fairly liberal on this issue. The Manhattan Institute is the biggest exception that I’m aware of – it thinks the MTA needs to cut pension payments and weaken the unions but isn’t hostile to the existence of public transportation. In that environment, there is a siege mentality among transit agencies, which associate any criticism on efficiency grounds as part of a right-wing strategy to discredit the idea of government.
Or is there?
California does not have a Republican Party to speak of. The Democrats have legislative 2/3 majorities, and Senate elections, using a two-round system, have two Democrats facing each other in the runoff rather than a Democrat and a Republican. In San Francisco, conservatism is so fringe that the few conservatives who remain back the moderate faction of city politics, whose most notable members are gay rights activist and magnet for alt-right criticism Scott Wiener, (until his death) public housing tenant organizer Ed Lee, and (currently) Mayor London Breed, who is building homeless shelters in San Francisco over NIMBY objections. The biggest organized voices in the Bay Area criticizing the government on efficiency grounds and asserting that the private sector is better come from the tech industry, and usually the people from that industry who get involved with politics are pro-immigration climate change hawks. Nobody is besieging the government in the Bay Area. Nor is anybody besieging public transit in particular – it is popular enough to routinely win the required 2/3 majority for tax hikes in referendums.
In New York, this is almost as true. The Democrats have a legislative 2/3 majority as of the election that just concluded, there does not appear to be a serious Republican candidate for either mayor or governor right now, and the Manhattan Institute recognizes its position and, on local issues of governance, essentially plays the loyal opposition. The last Republican governor, George Pataki, backed East Side Access, trading it for Second Avenue Subway Phase 1, which State Assembly Speaker Sheldon Silver favored.
One might expect that the broad political consensus that more public transportation is good in New York and the Bay Area would enable long-term investment. But it hasn’t. The MTA has had five-year capital plans for decades, and has known it was going to expand with Second Avenue Subway since the 1990s. BART has regularly gotten money for expansion, and Caltrain has rebuilt nearly all of its platforms in the last generation without any attempt at level boarding.
How a competent agency responds to scarcity
American transit agencies’ extravagant capital spending is not in any way a rational response to any kind of precarity, economic or political. So what is? The answer is, the sum total of investment decisions made in most low-cost countries fits the bill well.
Swiss planning maxims come out of a political environment without a left-wing majority; plans for high-speed rail in the 1980s ran into opposition on cost grounds, and the Zurich U-Bahn plans had lost two separate referendums. The kind of planning Switzerland has engaged in in the last 30 years to become Europe’s strongest rail network came precisely because it had to be efficient to retain public trust to get funds. The Canton of Zurich has to that end had to come up with a formula to divide subsidies between different municipalities with different ideas of how much public services they want, and S-Bahn investment has always been about providing the best passenger experience at the lowest cost.
Elsewhere in Europe, one sees the same emphasis on efficiency in the Nordic countries. Scandinavia as a whole has a reputation for left-wing politics, because of its midcentury social democratic dominance and strong welfare states. But as a region it also practices hardline monetary austerity, to the point that even left-led governments in Sweden and Finland wanted to slow down EU stimulus plans during the early stages of the corona crisis. There is a great deal of public trust in the state there, but it is downstream of efficiency and not upstream of it – high-cost lines get savaged in the press, which engages in pan-Nordic comparisons to assure that people get value for money.
Nor is there unanimous consensus in favor of public transportation anywhere in Europe that I know of, save Paris and London. Center-right parties support cars and oppose rail in Germany and around it. Much of the Swedish right loathes Greta Thunberg, and the center-right diverted all proceeds from Stockholm’s congestion charge to highway construction. The British right has used the expression “war on the motorist” even more than the American right has the expression “war on cars.” The Swiss People’s Party is in government as part of the grand coalition, has been the largest party for more than 20 years, and consistently opposes rail and supports roads, which is why the Lötschberg Base Tunnel’s second track is only 1/3 complete.
Most European transit agencies have responded effectively to political precarity and budget crunches. They invest to minimize future operating expenses, and make long-term plans as far as political winds permit them to. American transit agencies don’t do any of this. They’re allergic to mainline rail electrification, sluggish about high platforms, indifferent to labor-saving signaling projects, hostile to accessibility upgrades unless sued, and uncreative about long-term operating expenses. They’re not precarious – they’re just incompetent.