Rapid Silver Line: FAIL

It’s fantastic news for taxpayers and for fiscal sanity in the Grand Rapids area. Last night the expensive and redundant Rapid “Silver Line” tax increase request went down in flames. The overall vote total was 52% against and 48% in favor, but when looking at the six cities in the Rapid service district, we see that a majority of the cities rejected the request:

Grand Rapids – 53% yes, 47% no

East Grand Rapids – 64% yes, 36% no

Grandville – 36% yes, 64% no

Kentwood – 46% yes, 54% no

Walker – 32% yes, 68% no

Wyoming – 36% yes, 64% no

As you can see, Walker, Wyoming, Kentwood, and Grandville all soundly rejected the tax increase request and even Grand Rapids was closer than expected.

The pro-Silver Line people are predictably dour. The comments of Peter Varga, executive director of the ITP (Rapid), sum up their attitude perfectly. He said it was rejected simply because voters didn’t understand the request. Right. Voters heard from this blog as well as other groups (including our friends at KCFFR) who exposed the bad plan of the Silver Line. The Rapid folks tried their hardest to limit the information available on this request, but active citizens exposed the Rapid and let voters know the facts. This web site alone received thousands of visits from people searching for more information.

The message was clear:

• This new Silver Line was a duplicate of already-existing bus services
• The Silver Line would cost tens of millions of dollars (just for buses)
• The Silver Line would have cut off traffic on Division by shutting down lanes and dramatically increasing congestion
• The Silver Line was slower than existing bus services (see our previous posts on the issue)
• The claims of spurred development and “new jobs” were based on speculation and conjecture

In summary, bravo for the voters of the four cities who rejected this request. Make no mistake, they will be back, asking for more. Their next request will be for more than $100 million for an even more inefficient light rail line.

The only detail the post card has on the Silver Line is as follows:

Silver Line is more like a light rail system than a traditional bus. A proven solution in other communities, it will maximize ridership opportunities, economic development, and travel-time savings. Silver Line vehicles will use:

• Dedicated lanes during peak times
• In-station fare collection to speed boarding
• Intelligent transportation system applications such as signal priority, allowing quick travel between stations

That’s it? Yes, that’s it. As previously stated, they don’t want you to understand all the details.

What is the Silver Line really? As we’ve previously reported, it is a Bus Rapid Transit line that will dedicate one lane each way on Division Avenue from 60th street to the Rapid Station for use only by these new buses. This means that Division will be limited to one lane each way for regular vehicular traffic during peak traffic hours (rush hour). You heard that right. Division will turn into a traffic nightmare, likely pushing traffic to side streets to find better ways to get where they are going.

They say that this new “traffic priority” system will allow for these buses to travel much faster than current buses (which already travel the same exact route as the proposed Silver Line). How much faster? Well, we don’t really see any improvement. The Silver Line’s route would be 9.8 miles long and would take the new buses 36 minutes to travel. Huh? Yes, that’s right, 16 miles per hour. We don’t honestly understand how they can call this a Bus Rapid Transit line.

But wait, it gets better! This whole project is a $70 million tax increase – all so that they can duplicate the bus route they already have. No kidding: they already have a bus that travels this route. There’s no reason to raise taxes by $70 million just to duplicate what’s already there.

If you are a resident of East Grand Rapids, Grandville, or Walker, you will see no benefit from this line at all. If you are in Kentwood or Wyoming and happen to live near Division street, you might be able to use this new line conveniently, but as said before, there already is a bus line on this route. Basically, very few residents of any of the six ITP cities will see any benefit, yet will be expected to pay for it.

In the same vein as the near-informationless post card, the Rapid’s pro-Silver Line web site lists one source for their claim that the “investment” in the Silver Line will create jobs and produce a return on investment through new development. They reference an article named “Bus Rapid Transit: A Powerful Real Estate Development Tool” by William Kaplowitz. They don’t provide a link to this article, nor the text of it. So we did a simple Google search and came up with the text of the article. Read it for yourself here. The article makes a couple of simple, poorly-documented claims about development, and that’s it. That’s what they use to try and get residents to raise their own taxes by $70 million.

What they don’t discuss is that most of the time this “new” development was already happening or happened only because government created tax incentives to do so. In other words, they confuse correlation with causation. Just because development occurred around same time as the bus system’s implementation, it doesn’t mean that the buses caused the development. For example: there already is a lot of development going on along Division. It is likely that the Silver Line people would say that the Silver Line caused that development if they try and tout the “benefits.” But once again, since there already is a bus line along Division, it’s hard to understand how new buses would suddenly spring up more development.

But this is how the ITP/Rapid works. They don’t release their budgets. They don’t make true ridership numbers (by route, etc.) easily available. They don’t release the true operational statistics of their system. They don’t release the minutes of their board meetings, as the City of Grand Rapids does. They operate as though they don’t need to be accountable. But they’re a publicly-funded body and they need to operate transparently. The Rapid operates secretively so that you don’t understand how they operate. It’s all part of their contempt for taxpayers and efficient operations.

Don’t forget for vote on Tuesday, May 5th if you live in Grand Rapids, East Grand Rapids, Wyoming, Kentwood, Walker, or Grandville.

Read more on this issue:

• Rapid Silver Line: Another Waste of Money
• Rapid Silver Line – Bus “Slow” Transit
• ITP Watch
• ITP Watch: Rapid Silver Line Blog

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.

First, he starts with cooperation between the city schools and the city government. Nevermind that his 2004 state of the city touted cost savings as a primary goal of collaboration between the two entities, now he says that they’re working together just great in building new schools. You know, bureaucrats are holding hands around the table. Wonderful news.

Second, the mayor reviews his commitment to reduce illiteracy in Grand Rapids. It’s a good and important goal. He says he wants to reduce illiteracy by 50% over the next 10 years.

The mayor then skips everything else he proposed in the 2004 state of the city, preferring not to review the things he did not accomplish, such as the education renewal zones. He also skips over his desire to strengthen the unaccountable Grand Valley Metro Council’s central-planning powers when it comes to land use, as well as his intense desire to expand wasteful and expensive mass transit systems, such as light rail.

He then moves on to a review of his second state of the city, in 2005, which was essentially a blabber-fest about pollution and saving the world’s environment, all from City Hall. He touts all the wonderful things the city government is doing without mentioning much in the way of specific end points. He does mention, however, the new hybrid electric busses which the ITP will be purchasing at the bargain basement price of $500,000 each.

The next portion of the speech focuses on the Grand Rapids economy and its growth. This is certainly good news. Several anecdotal items are cited as examples of local companies which are expanding.

However, the following section is where the mayor goes completely wrong. He makes the following statement:

Before I talk about our course of action for economic development, I want to address our “ship’s” fuel reserves and our prospects for refueling on our way to our destination of economic health. I want to talk about the city’s budget.

Does anyone notice something wrong? We’ll tell you if you haven’t figured it out. As we’ve previously pointed out, the mayor doesn’t distinguish between the health of the city and the revenue of city government. He says in his speech that City Hall is what keeps the “ship” of Grand Rapids moving forward. He doesn’t understand that city government is usually the road block to further economic growth, not the reason for growth.

However, Mayor Heartwell does go on to explain the Lean Thinking initiative the city government is using to improve operating efficiency. It’s good to see that they are working on making the government operate better within its means.

Then comes the big stink bomb. More taxes. Heartwell goes on, complaining about lost “state revenue sharing,” which has been reduced over the last several years. It’s the usual complaint from city governments. As the Michigan economy limps along, the politicians and bureaucrats want more money. Well, it’s not coming down the pike. Perhaps they haven’t looked at the unemployment rates in Michigan lately.

The point of this speech:

[W]e are rapidly approaching the time at which we must bring a tax increase question before the voters.

Yes, that’s right. Hang on to your wallets, again.

But! Here comes the logical fallacy that the mayor is so wonderful at espousing. Out of one side of his mouth he says that taxes need to be raised. But lo and behold, he then goes on to propose tax abatements for industrial facilities. Nevermind that manufacturing is going the way of the telephone operator, the real point is that he implicitly recognizes that tax reductions help economic development. If tax abatements didn’t spur growth, why would they use them? But, at the same time, he proposes a general tax increase to prop up the bureaucracy. Which one is it, Mr. Mayor? Growth of government or growth of the economy?

Finally, Heartwell closes his speech with a promise to build a sustainable business park. He want to provide everything anyone ever wanted for development: high-speed internet, wireless internet, rail transportation, green space, on-site recycling, storm water capturing, and even a chicken in every pot. Wait, he didn’t say the chicken part, but the mayor promises everything else. Perhaps he’s never heard of what the free market is. Should city government be in the internet service business? How about rail transportation? Is your wallet getting lighter?

Essentially, the speech was, once again, about further government expansion and tax increases, although this year the tax increase part was explicit. The mayor only proposed one item which reduces government – the lean thinking initiative. Hopefully, one day, the mayor will realize that the size of city government is inversely related to the economic health of the city.

However, as bureaucrats and politicians do, they ignore the fundamental conditions that are necessary for the creation of good jobs. That solution involves fewer bureaucrats and politicians, so that one’s out of the question.

Of the respondents that are actually going to stay in Michigan after college, 12% want to move to the Detroit area and 8% want to move to the Grand Rapids area. Notice we say “area.” We did a little analysis on the tax rate in Grand Rapids city and came to an interesting conclusion.

The city of Grand Rapids currently has a property tax millage rate of 26.6998 mills, which means that for every $1,000 of taxable value of a home, the owner pays $26.69. According to the US Census Bureau, the median home value in Grand Rapids is $91,400, which means that the owner of the median home in the city pays about $1,220 in property tax per year. The GR kleptocrats love to point to the fact that Grand Rapids has one of the lowest millage rates in the county. They’re right… but there’s a catch.

Grand Rapids residents have the privilege of paying a city income tax! The median household income in the city is about $37,000 and the average household is 2.57 people. For our purposes, we’ll make it three people. That means the average household is paying about $451 in additional city income taxes. If we translated that into mills for a $91,400 home, it would mean an additional ten mills, and suddenly we have an effective millage rate of 37.7 mills! That’s the dirty secret. Now suddenly the tax burden in Grand Rapids is higher than in the Northview, Forest Hills, Caledonia, Kentwood areas… and the list goes on. About the only municipality with a tax rate higher than in the city is for residents of East Grand Rapids who are also in the East Grand Rapids schools district.

So, back to cool cities. Instead of suggesting that taxes be lowered to attract those who are affected most by high taxes – the middle and upper classes – they want to spend more taxes on determining what’s cool. Bureaucrats are much better at determining what’s cool than the average folks who spend their money they way they want to. Sure.

The newly-installed Grand Rapids mayor George Heartwell gave his second state of the city speech last week at the Rotary Club downtown. His message? More government is needed to improve the regional economy.

He essentially outlined three initiatives that included more funding for downtown, a bigger regional mass-transit system, and more centralized land-use planning.

First, the mayor wants to continue the improvement of the GR downtown district. Sure, downtown’s been doing well over the last decade, but the best way to continue that improvement is to keep taxes low. The continuation of renaissance zones seems to be the most effective tool to increase investment. In fact, renaissance zones should be expanded to all of downtown – or even all of the city… then we’d see some enormous growth rates in Grand Rapids. However, the mayor prefers to use taxpayer dollars to subsidize new business growth – as the governor proposed at her state of the state address. No one seems to realize that this $500 million in proposed venture capital has to come from somewhere… and when was the last time bureaucrats were successful in conjuring up the best investment avenues for money?

Second, and perhaps most laughably, even the new mayor is stumping for light rail service. Nevermind the fact that light rail in most urban and suburban areas is a colossal waste of money, except for in the most densely-populated cities – we need to go for it! (See Myths of Light Rail Transit) And where is the money for this going to come from? That’s right! Not the people riding the system, but you and I, the faithful taxpayers of the Interurban Transit Partnership (ITP) service area. The current system subsidizes each rider with taxpayer dollars to the tune of $6 per rider – only 13% of revenue is generated by bus fairs.

Finally, the mayor wants further expansion of the Grand Valley Metro Council, the regional super-government wannabe organization. Wyoming has smartly refused to join, and kudos to them for that decision. The mayor wants to strengthen the GVMC’s land-use powers. In other words, they want to be able to tell you where you can and can’t live. As the mayor talks out of one side of his mouth about regional planning, which drives up the cost of housing for everyone, he also talks about affordable housing. One government-caused problem (a housing shortage, which drives up prices), needs to be solved by more government! A perfect circle. Who said politicians don’t do everything they can to make themselves important?

I thought we had learned our collective lesson that increased government spending and revenue is a gigantic drag on the economy – but apparently not. Is it any wonder that Michigan, a high-tax state, has an unemployment rate way above the national average? Maybe it’s time to study a little economics and let the market correct our past public policy mistakes.