The headline was "Voters deserve honest on transit's real costs". The author complimented Andrea Neal for her recent editorial, suggested folks read Wendell Cox's Urban Transport Fact Book, Breach of Faith: Light Rail and Smart Growth in Charlotte. His last paragraph struck a cord with me:
As for Indy Connect, I have yet to read anything but the most rudimentary estimates of cost to the taxpayers and no discussion about ongoing operational costs. Before we go to the ballot on this high-cost, high-risk question, taxpayers should be provided with this information as well as ridership estimates and break-eaven opertational costs. What will happen if there are shortfalls, as Neal suggests? Raise the county income tax again? Higher sales tax? Or higher property tax? Local politicians and the promoters owe taxpayers an honest discussion.Amen.
I have been trying for over 4 years to get more than the cursory numbers regarding the series of mass transit plans. My latest effort was Saturday, when McANA's guest speaker was Lori Miser, Director of DPW, who promoted the current mass transit plan. We shall see if any real financial information is ever given to the public.
Here is what limited information I've been able to find. IndyConnect.org has so little financial information, it should be a crime. The entire funding page text fits in one screen, and mentions the 0.3% income tax, the $1.35 billion 10-year buildout, and $1.38 million per year operating costs after phase I is complete.
IBJ reporter, Chris O'Malley ferreted out the most detail. In his December 13, 2011 article (yes over one year ago) he had this breakdown of revenue that he attributed to the Central Indiana Task Force:
Capital revenue (in millions)
Long-term bonds $481.8
Federal New Starts $294.6
Operating revenue contribution $179.4
Federal Grants to IMPO $159.6
Federal urban funds (1) $135.4
Tax-increment revenue (2) $ 42.4
TOTAL $1.3 billion
Annual operating revenue in 2021 (in millions)
Transit tax (0.3%) on income $89.3
Fare receipts $28.8
Marion County property tax (3) $21.0
State transit funding (3) $12.6
(1) includes money already allocated to IndyGo bus systemSo, they ARE intending, and in fact relying, upon TIF districts sucking up all of the economic development benefits that might be spurred by the rail line. It is interesting that the annual operating costs are significantly higher in this estimate, than the $135 million per year being tossed around in other articles and sources.
(2) generated from tax increment financing revenue at stations
(3) largely what currently is allocated to IndyGo
O'Malley also notes that about half of all the cost will be due to the lone rail line proposed for phase I:
— Operate a 22-mile rail line between Union Station and Noblesville atop the Nickel Plate rail corridor by 2021. This is the most expensive element in the $1.3 billion plan, at $625 million.
In an article just one month earlier, O'Malley dissects the fare box contribution to operating expenses.
“We anticipate that we’ll receive fare box revenue equal to about 25 percent of operating costs,” said Ehren Bingaman, executive director of the Central Indiana Regional Transportation Authority.If you grab your calculator, you'll see that the estimate from the Central Indiana Task Force was for fares to support 19% of the annual operating costs.
That would be an improvement over what Indianapolis’ bus line, IndyGo, received from fares last year—amounting to 17 percent of its $57.4 million pot of operating money. Most of that $57.4 million came from local, state and federal tax dollars. Capital projects are funded separately, mostly from federal grants.
In theory, the more money raised from the fare box, the less public subsidy is needed. With an estimated cost to build of $2.5 billion and annual operating budget estimated at $135 million, the issue is not insignificant.
And here are some fun facts.
>>Looking back through O'Malley's various reports, we find the average taxpayer contribution to be consistently $180 per year, even though the plan is scaled back repeatedly over time.
February 10, 2010 - $6.7 billion plan - costs $180 per taxpayer per year
November 8, 2010 - $2.4 billion, 25-year plan - costs $180 per taxpayer per year and half the cost would come from federal grants
November 19, 2011 - $1.3 billion, 10-year plan - costs $180 per taxpayer per year
>>Currently before the Legislature is HB1011, the mass transit bill. The Legislative Services Agency does an analysis of the state and local government financial impact of each bill. They find some interesting things about HB1011.
In 2011, 16% of IndyGo's operating budget came from fares>>The bill itself (page 47 of the pdf) anticipates and allows a TIF district to be created 1/2 mile on either side of any rail line made a part of the mass transit system - which amounts to 15-16 square miles in Marion County alone for the single line planned for phase I - with the revenues split between the transit authority and the City of Indianapolis. Unfortunately, LSA did not analyse the TIF aspect of this bill.
In the next few years, a 0.3% increase in income taxes for Marion and Hamilton County residents would generate about $85-90 million
>>On page 38 of the pdf of HB1011, you'll note that even though the newspapers are reporting a referendum in 2014, the bill itself authorizes a special election on November 5, 2013.
Any taxpayer who wants to be informed about the costs of the mass transit proposal has to do a hell of a lot of digging on their own and then decide if the information is out of date. The mass transit proponents have an ethical duty to have the most current, most accurate financial breakdown readily available on their website. I'd just advise that the public not hold its breath waiting.