Monday, July 28, 2008

Grand Rapids: The Next Stop for the Light Rail Boondoggle Train

This weekend's Grand Rapids Press had an article about the ballooning cost of a potential "light rail" system that is in the works for Grand Rapids. The project hasn't actually even begun, but already the potential cost has jumped from $69 million to $79 million - in the span of one year. The Rapid is ready to spend $800,000 of taxpayer dollars just on studying the concept.

What would this light rail system look like? The plan is to have one rail route, from the Sixth Street/Monroe intersection, south on Monroe Avenue, to the Rapid bus depot. That's a grand total of about 3 miles. $24.8 million per mile.

The plan also calls for up to 2,900 passengers per day. The $1.30 cost of riding the streetcar would cover only about one third of the annual $1.75 million cost to continue operations.

Never mind the rediculous re-engineering that Monroe would need to build this thing (seven lanes wide?), why can't buses accomplish the same thing? We're no fan of the inefficient fixed route bus system that The Rapid employs, but good God, anything would be better than the joke that this light rail system would be.

Of course, the magical benefits of this system are touted, such as $5 in development growth for each $1 spent on the system. Where do they get that number? They often point to Portland's light rail system, which supposedly spurred so much development. But did it really? A recent report from the Cato Institute looks at just that question. A couple of telling excerpts:
[W]hen Portland’s first light-rail line opened for business in 1986, the city zoned much of the land near light-rail stations for high-density development. Ten years later, city planner Mike Saba sadly reported to the Portland city council, “we have not seen any of the kind of development—of a mid-rise, higher-density, mixed use, mixed-income type—that we would’ve liked to have seen” along the light-rail line.


Over the next decade, the city experienced a boom in high-density developments, virtually all of which were [taxpayer] subsidized.


Measured by value, the vast majority of the $1 billion of investments supposedly stimulated by the [Portland] light rail consists of government buildings, some built in response to executive orders by President Clinton and Oregon’s Governor Barbara Roberts that all federal and state agencies should relocate to downtown areas.44 One government-funded building supposedly stimulated by the lightrail line was a $5 million downtown parking garage. If light-rail works so well, why is a new garage needed and in what sense did light rail stimulate the construction of that garage?

Laughably, The Rapid's web site has on its FAQ page the following item:

  • Why not change the current bus system instead of spending new money on streetcars?

  • Streetcars have several desirable features for downtown areas. First, with metro dwellers and workers nationwide demonstrating a strong preference for rail transit, streetcar systems draw more riders than equivalent bus systems.

  • Second, streetcars have no vehicle emissions and therefore help improve air quality.

  • Third, while streetcars have a higher initial investment, their operating cost is typically lower than equivalent bus systems. Higher operating cost for buses is attributed to escalating diesel costs, and shorter service life. The average life span for streetcars is 25 to 40 years and 12 years for buses. This trade-off will be part of the feasibility study evaluation. Is it worth a higher initial cost to provide increased benefits for many years to come?

First, the idea that more people like streetcars because they are cooler than buses has got to be the worst possible reason to spend $79 million. Second, the idea that streetcars don't pollute is false, since they use electricity, and since much of our nation's electricity is generated by coal power plants (or natural gas), there certainly are emissions. And third, as we've demonstrated previously, the Rapid loses about $5.82 per passenger when they ride a traditional bus. The Rapid will lose approximately $2.60 per passenger when they use the light rail, and that doesn't include the capital costs. When you factor in a 30 year usable life for the initial capital costs, the loss per passenger rises to about $8.39 each. Where do you think that subsidy comes from? You guessed it... us, the taxpayers! That's hardly more efficient than a traditional bus.

What are these people thinking? Can they see the forest from the trees?

You can read more excellent points debunking the value of the Portland light rail system at the Antiplanner web site.

Friday, July 25, 2008

Charter School News for Grand Rapids and Detroit

There's some good news in regards to charter schools to report for both Grand Rapids and Detroit.

For some quick background - state laws define a "first class" school district, which only Detroit Public Schools qualifies for. This special status allows Detroit's school system some privileges in terms of funding, but also the state school code limits the types of charter schools that can operate in Detroit only to those chartered by public universities. As our readers may know, the number of university-chartered schools is capped at 150 statewide. However, a few other entities are able to issue charters as well, and that includes community colleges, intermediate school districts, and regular school districts. One of the privileges of "first class" status that Detroit Public Schools has enjoyed is a prohibition on any schools chartered by community colleges, intermediate school districts, and school districts. However, this is about to change.

The definition, in the school code, of "first class" district is any district that has over 100,000 students. However, because of the exodus of students out of DPS, the enrollment is expected to drop below 100,000 this year, meaning that community colleges, such as Bay Mills, will be able to finally open more charters in Detroit.

There was some confusion with the budget that was just passed for schools. At first it looked like the budget changed the definition of "first class" district in all state laws. The budget did change the definition of "first class" district to any district over 60,000 students, but that change in the law only applies to the School Aid Act, and not the school code. According to the Michigan Association of Public School Academies:
The newly defined "first class school district", at over 60,000 students, effects only those provisions of the school aid act.  At the same time, first class district provisions within the school code -- including chartering options for community colleges -- remains defined as a district with 100,000 students.  Also, a provision that Detroit Public Schools can stop other traditional school districts from operation within the city limits was stripped from the bill.

This means that, finally, more charter schools can operate in Detroit (soon). More students will finally have a choice, other than being stuck in perhaps the worst school district in the nation.

In another bit of good news, Grand Rapids is getting its first general-education charter high school.  Grand River Prepatory High School will open up this fall. It will be operated by National Heritage Academies and is an extension of Excel Charter Academy. Excel's eight grade students will get enrollment preference, but the enrollment process is open to all ninth-grade level students. The charter school detractors always harp on organizations like National Heritage for not operating high schools, but that's about to change. Hopefully this will not be the only charter high school in Grand Rapids. The parents of GR deserve to have more choices. Well, they are already choosing - to leave Grand Rapids. Maybe more charter schools in the City would retain young couples with school-age children. Yes yes, I know, the new High School isn't inside the city limits of Grand Rapids, but it's a good start.

Friday, July 18, 2008

Destroy Michigan Government Now!

As our readers probably already know, a state ballot proposal has been submitted to "reform" Michigan government. It has the title of the "Reform Michigan Government Now" proposal. It may or make not make it to the ballot, depending on how many signatures are validated. The interesting thing about this proposal is that it crept up out of nowhere and it's rather mysterious. No one's talking about who is backing it financially, and campaign finance reports aren't available yet. However, it has become clear who the proposal will benefit.

The proposal, which consists of 11 pages of fine print, sprinkles in a few items that most people support with items that start to look a little too targeted. For instance, the proposal would "strengthen the ban on illegal aliens’ ability to register and vote," "require post-election audits of election procedures," and "enact anti-fraud measures to protect the integrity of Michigan’s election process." Those sound like reasonable reforms, and they are probably added into the proposal to make it easier to support. However, when one starts looking at the other legislative and judicial reforms, one sees that governmental representation is dramatically decreased. For instance, the Senate would be reduced from 38 members (1 Senator per 260,000 Michigan residents) to 28 members (1 Senator per 353,000 Michigan residents). In addition, it would decrease the state House from 110 members to 82. This would further strengthen the political party machinery grip on state elective positions, making it even harder for newcomers and non-politicians to get elected. Not to mention that this is a clearly anti-democratic step in the wrong direction. We would prefer to see an increase in both houses of the legislature, so that there are fewer citizens per representative, making for a truly citizen-oriented elected body.

Next comes the axe drop on the Judicial branch. The proposal would reduce the number of Supreme Court justices from seven to five and the number of appeals court judges from 28 to 21. As though the courts weren't clogged enough already, this would make it even harder to work a case up through the appeals process.

If this all seems strangely targeted... well, it is. The Michigan Democratic party is solidly behind this measure and we're finding out more about the motivations behind this measure every day.

What sort of motivations? This week, the Mackinac Center, a free-market think tank in Midland, uncovered the plan on the United Auto Workers' web site. They had posted a PowerPoint presentation explaining the proposal and its effects. Check out the link for the full report, but here are some highlights:

Essentially, this is a proposal to ensure total Democratic Party control over the legislative, executive, and judicial branches of state government. We here at Grand Rapids Pundit want to be quick to point out that we are not Republicans. We do not think that this would be a good idea if it worked in the Republicans' favor. Instead, we prefer split government, where no one party controls all the branches of government. This proposal is a thinly-veiled attempt by the Democratic Party of Michigan, in heavy collaboration with the United Auto Workers, to fundamentally change the structure of state government in their favor.

Hopefully voters will do their research before voting on this proposal, should it make it to the ballot.

Tuesday, July 15, 2008

More Jobs NOT Coming to Michigan

Today Volkswagen announced that they will not be building a new car factory in Michigan. They opted to Tennessee instead. According to the article:

Chattanooga won the site because of incentives and tax breaks offered by Tennessee and better infrastructure, the person said. Alabama was a close second while Michigan had been out of the running for some time, according to the person. (Emphasis ours)

Does this surprise anyone? With Michigan's newly-formed business tax mess, the strangling environment of unionization, and a dismally-performing public school system, no wonder jobs, people, and businesses are not choosing Michigan. When will Lansing wake up and tackle the real economic challenges in this state?

Just for fun, we compared state population growth in the United States with state tax burden levels. The top 20 states that had the highest population growth between 2000 and 2007 are below:

State            Percent  Rank

Nevada 28.41 1
Arizona 23.5 2
Utah 18.5 3
Georgia 16.6 4
Idaho 15.9 5
Texas 14.6 6
Florida 14.2 7
Colorado 13.0 8
North Carolina 12.6 9
Delaware 10.4 10
South Carolina 9.9 11
Washington 9.7 12
Oregon 9.5 13
Alaska 9.0 14
Virginia 8.9 15
New Mexico 8.3 16
Tennessee 8.2 17
California 7.9 18
New Hampshire 6.5 19
Montana 6.2 20

Below are the 20 states with the lowest tax burdens:

State           Tax Burden    Rank
Alaska 6.58% 1
New Hampshire 8.01% 2
Tennessee 8.49% 3
Delaware 8.75% 4
Alabama 8.83% 5
Oklahoma 9.00% 6
South Dakota 9.02% 7
Texas 9.30% 8
Wyoming 9.46% 9
Montana 9.74% 10
New Mexico 9.80% 11
North Dakota 9.90% 12
Florida 9.96% 13
Oregon 10.03% 14
Nevada 10.09% 15
Idaho 10.12% 16
Missouri 10.12% 17
Virginia 10.20% 18
Georgia 10.27% 19
Arizona 10.34% 20

Surprise! 14 of the 20 states with the lowest tax burdens are in the top 20 states for population (and job) growth. Conversely, the five states with the highest tax burdens are in the bottom 15 states for population growth.

For your information, Michigan is number 45 in population growth between 2000 and 2007 (1.3%), and has the 14th highest tax burden in the United States. That was calculated before last year's gigantic tax hike, so I'm sure our state has climbed up the list since then.

Discuss this post (and other topics) in the GR Pundit forums.

Tuesday, July 1, 2008

Michigan Economy Update

The latest House Fiscal Agency revenue consensus report paints a grim picture for Michigan. Here are a few important bits of information:

Although the US has gained more than 480,000 jobs over [the last year], employment in Michigan fell by more than 78,000 jobs.

That's right - Michigan has had a net loss of over 78,000 jobs in the last year alone. What's the total damage? According to page 6, Michigan has lost a total of 474,000 jobs since 2001.

It's time to get serious about fixing our state. Taxes need to be cut dramatically. Right to work legislation must be passed to attract new employers. The nickle and dime "job creation" that the Michigan Economic Development Corporation claims is a corporate welfare joke. The only way to turn this state around is to make it attractive to employers. With the choking union-dominated atmosphere and choking tax rates, Michigan will continue to bleed jobs.