MARTA Service Cuts - an Example for Cincinnati

The print edition of the Economist has a good article about the Metropolitan Atlanta Rapid Transport Authority (MARTA), which runs the buses and trains for Atlanta and is often held up as an example of rail success. Facing a huge budget shortage next year, MARTA is eliminating 40 of its 131 bus lines, raising fares, cutting rail service by 14.2%, and laying off 300 people. Besides the revenue shortfall, MARTA faces problems with feuding local governments and restrictions on its Operating/Capital Budget distribution.

Whether or not you support rail spending (and MARTA appears to be one of the better functioning systems out there), a big drawback of rail is that it is much more capital intensive than buses. If you want to expand bus coverage, you just buy a new bus at a relatively low capital cost and start opperating it on a line. If you want to expand streetcar coverage, you spend $128 million in capital on a 4 mile line. Advocates often point out that streetcars have a lower operating expenses. However, counting the debt payments on this $128 million, they have a much higher ongoing cost than buses and so are more expensive to city (much more expensive per passenger mile).

Besides the price, the other problem with this capital intensity is that this budget structure is much less flexible than that of buses, as over half of its funds are tied up in debt payments. The Economist states that budget shortfalls are common now with "around 160 urban or regional transport systems in America cut service, raised fares or did both in 2009 or 2010." If, as happened recently, a budget cut is mandated - we may have to cut 10% of bus service in a bus only system. But an equal percentage budget cut to a streetcar system may require a 30% cut in service, as debt payments to cover the large capital expense cannot be cut (unless the city wants to default).

With buses and rail planned to be unified under Metro, I worry about budget problems being solved by deep cuts to bus service because that's what can be cut on an ongoing basis. That's how MARTA fixed it's operating budget - a 30% cut in bus routes. This will really hurt the large number of people who regularly depend on buses to get around.

Ohio Democrats' bizarre war on Wall Street

In the past, I discussed that the Ohio Democratic Party puts off an especially reactionary message, and that this has a terrible effect on the business climate and economic growth prospects of the state. Every commercial I see from Ohio Democrats complains about New York, Banks, and especially foreigners who are "taking our jobs".

Fortunately, Ted Strickland can't run on "outsourcing" in 2010 since he is now the incumbent. So, as far as I can tell Strickland's reelection campaign wants to sidestep his destructive policies and term as governor, and instead focus on the fact that John Kasich used to work for Lehman Brothers in Ohio. Presumably, Strickland is trying to distort facts (Kasich worked in Ohio... and as far as I can tell, was not a senior risk manager for the firm) and play on some prejudice of Ohioans against easterners and especially bankers. Needless to say, I find this creepy and especially provincial. Unfortunately, it bas been a successful election strategy for that bunch the last few years (while also being a terrible governing strategy).

So, I get some joy out of seeing this in the Enquirer:

The Ohio Republican Party released a list of $1.5 million in campaign contributions to Gov. Ted Strickland from financial advisers, including $25,000 from the Lehman family.

The Strickland campaign is claiming these donations came from another branch of the family. But that there is no connection between these investments in the Strickland campaign and Lehman's investment banking seems unlikely. I'll update if there is more info or that it comes out that Kasich convinced Dick Fold to go heavy into Mortgage-backed Securities. Until then, here's some tragic comic Ohio Democratic Party television adds:


Sherrod Brown complains about free trade with foreigners:


The Cleveland Democratic Party: