It is often claimed by streetcar supporters that the project will pay for itself with increased tax revenue. Chris Bortz (C - Towne) has claimed the project would have a 14 to 1 return. He may also believe that if Cincinnati replaced all roads with rails, it would become by far the richest city on the Earth.
I don't doubt that a streetcar will drive some investment along the route (as other cities have experienced). This is why the landowners who support the streetcar do so. However, I think this development will mostly just be displaced investment that would have happened somewhere else locally, and the it will happen at the expense of other neighborhoods in the city that will have to pay for the system. So, why should Price Hill have to pay to enrich landowners in OTR? It doesn't seem fair to me, especially if it's a bad deal for the city overall.
The Enquirer had some stats in April story on the $64 million committment. This is how the city plans to pay for that $64 million committment that was just made yesterday:
- $28 million will be paid for by new bonds taken out by the city.
- $11 million will come from the sale of the Blue Ash airport.
- $25 million will come from expected proceeds of a downtowne/riverfront TIF (Tax Increment Financaning). i.e. the city could borrow against the future expected increased taxes revenues from new development along the streetcar route.
So, if I understand this correctly, streetcar backers are only willing to count on $25 million of the $128 million spent by the city being recouped in additional tax revenue. This may be a conservative estimate, but that's an awful deal for the city. Of course, it's still a great deal for those with property along the route (Even if you include their lobbying expense, they only pay a small percentage of the overall expense yet reap about all of the benefit). It's also worth noting that city council has a bad history of forecasting expenses for projects and future revenues, almost always being too optimistic.
Supporters seem to believe that the streetcar will make the city significantly more cosmopolitan and prosperous - just like the artist's renditions of the plan. I think the streetcar will be most like a bus on rails (that is a slightly worse bus). I doubt there will be much benefit. I think the way a city looks after a streetcar system is built is basically determined by how it looked before. Portland has some cool stuff along its route, but they would have had that stuff anyway, just spread the city around a little differently. The streetcar didn't produce the Decemberists. On the other hand, Buffalo's huge mass transit spending had mostly served to exacerbate the city's budget problem, with little apparent benefit.
Tom Luken says he wants to put this funding issue on the ballot. I think that is an excellent idea. I would consider this a special interest issue - Policy should not be made by the few politicians on council who are more easily swayable by the beneficiaries of the project and the activists who are willing to show up to speak at council meetings. It would better be decided by the whole of the city's taxpayers who will have to fund the project. The draconian Issue 9 received 44% of the vote in 2009, I think a direct challenge to spending on this streetcar project would stand a strong chance of success. The city should at least be allowed to decide.
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