Saturday, October 16, 2010

Budget goblins: the phantom menace

I've been meaning to write something about the shenanigans across the river with the "ARC Tunnel." I agree with a lot of the people who've said that the current plan with it's "deep cavern" under Macy's basement was a disaster, and I hope that eventually what will be done is to feed the new tunnels directly into the current Penn Station tracks, along with a sensible through-running plan to maintain decent frequencies. But I wanted to say something about the significance of the decision.

After Chris Christie gravely wounded the ARC Tunnel, there was no shortage of critical commentary. But most of it (Freemark, Renn, Herbert, Sollohub) focused on how Christie had "thrown money away" by giving up federal grants and the possibility of a significant infrastructure improvement for the short-term payoff of not having to raise gas taxes or tolls. And that's a legitimate point, but it's not the real story.

Paul Krugman is generally good at looking beyond the flimflam to find out what politicians are actually doing. In August, he ripped away the "deficit reduction" disguise from Paul Ryan's plan to cut taxes for the rich and benefits for the middle class. And Krugman, who lives in Princeton and regularly takes New Jersey Transit, will be directly affected by Christie's actions. It's disappointing, therefore, that Krugman's conclusion simply echoed those of the other commentators.

In order to get behind this particular flimflam, we need to go to Steven Higashide of the Tri-State Transportation Campaign. Just as Krugman used the Tax Policy Center's analysis to show that Ryan's plan was not about deficit reduction, Higashide noted that the New Jersey Turnpike Authority is borrowing two billion dollars to widen the Turnpike and the Garden State Parkway (at a total cost of $3.6 billion). Christie's decision is not about fiscal responsibility.

Higashide and his colleagues at Tri-State, simply, have been paying attention to what Christie is doing. They've written extensively on the double standard that Christie maintains for transit and driving - as seen in Christie's 11% cut in the NJ Transit budget, which resulted in a 25% fare hike for Transit riders, while the gas tax stays the same. In April, Tri-State's Zoe Baldwin pulled this gem out of an interview with the Star-Ledger:
Editorial board member: What’s the difference between a gas tax hike and a fare hike, besides who it lands on?

Christie: That’s the difference.

What's the difference between cutting the ARC Tunnel and cutting the Turnpike widening, besides who has a shorter commute?

I have to be honest here: if I were governor of New Jersey, I would do the same kinds of things Christie has done, but in the opposite direction. I don't care how many studies they've done, or how much digging or construction, I would stop a massive highway project dead. I would raise tolls and the gas tax, and try to hold train and bus fares down. I'm guessing that most of the folks at Tri-State would too.

There are two important differences, though. One is that I wouldn't lie about it like Christie has, cry about the attacking budget goblins, and slather it in fiscal-responsibility flim-flam sauce.

The other difference is that I would be promoting transit because it's used by New Jersey's poorest residents. I would be promoting transit and cutting roads in order to get people out of their cars, which would decrease pollution, increase efficiency, reduce carnage, combat obesity and strengthen the downtown cores of New Jersey's many beautiful towns and cities.

As far as I can tell, Christie doesn't care about pollution, energy dependency, carnage, obesity or downtown businesses. He's cutting transit and promoting driving because "we" (he and the people who voted for him) drive, and "they" take the train. He's perfectly happy to pay for infrastructure and state services, but only for "us."

The Christian Science Monitor recently contrasted the ARC Tunnel cancellation with the breakthrough in the construction of the Gotthard Base Tunnel under Switzerland. Like the commentators I listed in the second paragraph, they get it exactly wrong: "The difference between the Swiss and New Jersey examples is this: One shows vision and a commitment to invest in the future, while the other shows shortsightedness." No, the difference between the Swiss and New Jersey examples (as well as the other examples they give in California and Pennsylvania) is that in Switzerland, "we" ride the train, but for Christie, for Meg Whitman in California, and for the Pennsylvania legislature, trains are for "them." We're still building lots of nice things for drivers.

Just as with Paul Ryan's tax cuts for "us" and sacrifices for "them," these budget goblins are a phantom menace, aimed at distracting us from the real issue: the upper classes want more services and don't want to pay for them, and they don't think the lower classes deserve what they're getting. That's what this is about, and you can see it if you don't have transportation myopia.

22 comments:

jazumah said...

Chris Christie wants to shrink the size of government because the state needs to shrink itself to continue to be able to borrow. The low gas tax is offset by high property and school taxes.

The Turnpike Authority pays its own way. In addition, a 50% toll hike is scheduled for 2012.

EngineerScotty said...

I guess you just blew your chances of being elected governor of New Jersey, Cap'n. :)

Raționalitate said...

jazumah - the problem with "offsetting" low gas tax revenues with general taxes is that the general taxes are levied in all New Jersians, whereas gas taxes are paid for only by drivers.

- Stephen Smith
Market Urbanism

PS Cap'n Transit - have you ever thought about allowing anonymous/non-login comments? I've found that it encourages more comments, and the blogspam that you get is minimal.

Alon Levy said...

The difference between Switzerland and New Jersey isn't just the mentality. It's how rail is used. Partly due to geography and partly due to good service planning, Switzerland has a strong rural regional network; rail is still used more in urban areas than in rural areas, but the difference is smaller than in other countries, so the perception that rail is for other people is weaker. Hence of the four major parties, only the SVP is pro-road.

On top of it, there's the fact that Switzerland $10 billion pays for 57 kilometers of base tunnel, whereas in New Jersey $8.7 billion pays for 5 kilometers. As a result, Swiss fiscal conservatives are not as anti-infrastructure as American ones; while the Social Democrats are still the most pro-rail party, the FDP supports an expansion of public transportation as well as electric cars.

Adirondacker12800 said...

I hope that eventually what will be done is to feed the new tunnels directly into the current Penn Station tracks,

The new tunnels are too far underground to feed into the current station. ( at a cost that wouldn't take your breath away, even in the context of 10 billion or so )

Wave a magic wand and make it possible there would be the immediate problem of pedestrian access to the station and platform crowding. The deeper problem is redesigning interlocking A and still maintaining service.

Part of the project is adding additional entrances and exits to the station so everybody doesn't have to funnel through the ones designed in the 60s. They'll have additional capacity for a decade or so allowing them time to do things like take inadequate platforms out of service and remodel them. Might even have enough capacity to redo interlocking A.

Cap'n Transit said...

No, Joel, the state needs to have expenses that are in line with its revenues in order to borrow. Christie doesn't have to cut anything; he could raise the gas tax or tolls, or other taxes, but he chooses instead to cut transit funding. The Turnpike Authority may pay for the Turnpike and the Parkway, but who pays for the "free" highways?

Scotty, I will not accept if nominated, and will not serve if elected.

Stephen, I did at one point allow anonymous comments, and I got tired of all the spam. I get enough comments, thanks. ;-)

Alon, my point is that Christie is still paying for infrastructure; it's just not transit infrastructure.

Adirondacker, do you have documentation for that assertion about the tunnels?

jazumah said...

It doesn't work that way.

Taxes are really high in NJ and you have an odd situation there where the higher income areas have transit service that is head and shoulders above the poorer areas. The rail passengers are usually richer than the bus passengers and the bus passengers to NYC and Jersey City/Weehawken are much richer than the typical intrastate NJ rider.

I know that the image of NJ drivers are BMW driving upper middle class yuppies. However, I have put in many miles in NJ and I can tell you that many parts of NJ have residents that are treading water in 1980s vintage automobiles. Warren County and large chunks of south Jersey have poverty problems and the land usage makes demand for NJT bus service sparse. These people are finished if fuel climbs.

I am not saying that raising tolls and the gas tax would be bad. I am simply saying that most of our transit advocates have transportation myopia that causes them to misunderstand their respective markets. Christie has done his best to protect the people that don't have much and he is doing it again.

Alon Levy said...

The really high taxes in Jersey are local taxes for schools, and go to pay for one of the best public school systems in the country. It doesn't mean that other state services have to suck.

Stewart said...

jazuma writes:

I know that the image of NJ drivers are BMW driving upper middle class yuppies. However, I have put in many miles in NJ and I can tell you that many parts of NJ have residents that are treading water in 1980s vintage automobiles. Warren County and large chunks of south Jersey have poverty problems and the land usage makes demand for NJT bus service sparse. These people are finished if fuel climbs.


Then NJ had better start subsidizing gasoline prices. Because the increase in retail price recent years is many times more than any proposed gasoline tax, and once the global recession is over, it will only rise more.

henry said...

Complaints about Governnor Christie forging ahead with some highway project that 'happens' to be politically helpful to him smacks of Claude Rains' "shock" at discovering gambling at the Casablanca nightclub. The governor's critic, and not the governor, is the cynic. Whether the ARC project is sound or ill-advised is a question that stands alone.

jazumah said...

The governor has no responsibility for oil shocks caused by speculation and a depreciating dollar. The invisible hand has massive biceps too.

Some people intentionally lowball infrastructure costs so that government becomes obligated to fix it (Robert Moses did it). When the FTA says "check your numbers", they are politely saying "we don't believe your numbers". There are few projects that the FTA doesn't like and they don't complain unless they must.

A potential $5 billion overrun is a big deal at such an early stage in the process.

Adirondacker12800 said...

Adirondacker, do you have documentation for that assertion about the tunnels?

It's buried in the documents on the ARC site. The initial geo-engineering had them building the new platform cavern closer to the surface. The detailed geo-engineeering done in later phases made them move the cavern deeper into more stable rock.

The initial plan was to have connections to the current Penn Station. Moving the cavern deeper means the new tunnels are deeper. The grade between the new tunnels and the existing Penn Station would be too steep.

djkeddie said...

New Jersey has a miserable long-term fiscal situation. The state pension fund is on track to run out of money in 2019 with a $14.4 billion gap the following year that will annually consume 34% of state revenue.

http://finance.yahoo.com/tech-ticker/11-state-pension-funds-that-may-run-of-out-money-535516.html?tickers=^dji,^tnx,^gspc,spy,dia

The current level of taxation is high enough to be counterproductive to overall revenue by encouraging businesses and residents to leave the state.

http://www.nj.com/business/index.ssf/2010/02/nj_loses_70b_in_wealth_over_fo.html

I can personally attest to knowing friends, both rich and poor who relocate across the state line into Pennsylvania to find affordable housing (in the case of the poor) and lower taxes (in the case of the rich). Just look at the need to replace the Scudders Mill Bridge on I-95 and you see some of the local impact of New Jersey's unfavorable tax environment and unaffordable housing.

While I hope to see improved rail service and a wholesale change in zoning to allow densification and transit oriented development, I can't argue with Governor Christie's decisions. The rail service is used primarily by wealthier residents, with poorer residents dependent on intrastate buses which depend on road investment. The turnpike is self-financing, so while you may disagree philosophically with highway improvements you must recognize that the vast majority of Americans (or Europeans for that matter) use their cars to get to work and fiercely oppose dense development.

So long as transit improvements aren't paid for by user fees, or the closest approximation possible, and remain dependent on subsidies from those who don't directly benefit there's little hope to see much investment. So long as New Jersey's budget is consumed by public employee pensions and with the tax payers in open tax revolt there's no hope for major increases in rail infrastructure investment.

Cap'n Transit said...

Nice argument, DJ, but you're showing a bit of transportation myopia there. The Turnpike may be self-financing, but I-78, I-80, I-287, I-295, I-195 are not, and neither are Routes 17, 21, 3, 46, 22, 1, 9 or any of the other "free" highways in the state.

djkeddie said...

I prefer to think of it as transportation realism. You're right that to truly make transit feasible beyond older parts of cities that have retained their density there would need to be a total disinvestment in the highway system. That's certainly true given the mobility superiority of the car where land is used promiscuously, parking is abundant and roads ample.

However, the vast majority of people rely on the highways, whether in cars or buses. It seems utopian to think that there will ever be political support for systematic road disinvestment so as to force people through frustration to use transit. The roads get funded because, as you pointed out in your post, "we" use them. It would be better if we could move to a direct user-fee system for roads through a VMT, but the preference for cars over transit is strong enough that tolls can be levied to not just cover the cost of tunnels and bridges but also to provide the principal financing for transit improvements. The extent of the preference for cars over transit was brought home to me by a visit to relatives in Scotland. Even with dramatically higher petrol taxes, limited parking, land-use that favors density and prevents sprawl, no urban highways and congested roads, the old neighborhoods have been overrun by (small, fuel-efficient) cars with residents parking illegally everywhere possible and just swallowing the fines. If Moscow and Beijing have skyrocketing car use despite excellent transit systems and unbelievable congestion, how possible is it to truly get people out of their cars?

I would like to see the freedom to build at higher density and the accommodation of walking and transit in design but I find it hard to justify arguing for policies that go directly against peoples expressed preference. If fellow citizens choose to drive who are we to compel them out of their cars against their wishes? Don't we have the burden to convince rather than to compel?

That said, I appreciate and enjoy your blog :)

Cap'n Transit said...

Everyone likes to think of themself as the realist. There will be systematic road disinvestment, whether we want it or not. The question is whether we'll have a smooth transition to a functioning transit and walking infrastructure, or whether we'll wind up looking like Brasilia, with expensive car infrastructure for a tiny few, and shitty transit for the majority of the population.

I would also suggest that many people say they want cars because they think cars bring prosperity, independence, and comfort (or are prosperity, etc.). If you show them that they can have prosperity, etc., without cars, most people will take it.

Alon Levy said...

The initial plan was to have connections to the current Penn Station. Moving the cavern deeper means the new tunnels are deeper. The grade between the new tunnels and the existing Penn Station would be too steep.

False. At this stage NJT does not claim a connection to Penn is technically infeasible. It claims that Penn is at capacity so all trains would have to go to the cavern, making a track connection not useful. In response to suggestions for adding more staircases as the LIRR did and improving passenger circulation on the lower concourse, it brushes off all ideas by saying Penn is an old station, without further elaboration.

Adirondacker12800 said...

At this stage NJT does not claim a connection to Penn is technically infeasible. It claims that Penn is at capacity so all trains would have to go to the cavern, making a track connection not useful.


Claiming that the new terminal won't be underutilized, assuming they claimed that, doesn't make the climb up to the existing Penn Station less steep.

The documents are freely available on the ARC website. Anyone can read them. I did, over a year ago. I'm not going to again. Feel free to cite with links to references.

Cap'n Transit said...

Adirondacker, I looked for some documentation of your assertion and couldn't find any. Their site is really lousy. I believe you that someone at some point said something like this, but I would really like to see the details before accepting that the price difference would be truly breathtaking.

George K said...

Just one comment about roads andbuses-if there are a lot of buses using those roads, one way to help people who rely on buses to get around because they can't afford to take the train is to either build new bus lanes or convert some lanes into bus lanes (if not enough buses use them, they could be HOV lanes). Not all investment in transit necssarily has to be in rail.

Adirondacker12800 said...

see the details before accepting that the price difference would be truly breathtaking.

The riverfront in most of Manhattan is landfill. To improve shipping they built a bulkhead along the shore. Nice stone thing set on piles deep under the stone. Completed in the 1890s if I remember correctly.

Tunneling across the river is going to cost more or less the same amount no matter how deep or shallow it is. Go shallow and you have to breach the bulkhead. To assure you don't have a flood under the West Side Yards or into Penn Station before you start that work you have to build a cofferdam in the river. Work can go on in air instead of underwater. That gets pricey. If I remember correctly billion dollars of so to build it, put a hole in the bulkhead and do the work to support the holes and then remove it. Risky too because gawd only knows what interesting industrial waste they'll find buried in the sediments.

So they went deeper. But 34th Street didn't cooperate with the preliminary plans. So they had to go even deeper to get into stable rock under Macy's and the New Yorker etc. All of it buried somewhere someplace on the ARC site. Foamers love to dig up tidbits and post them on places like Railroad.net. There's been a flurry of it lately. Might want to check it out there.

Alon Levy said...

I'm really impressed with how you're making an argument that sounds stronger than what the official PR flaks are saying. They're not saying going through the foundation pilings is technically impossible; they're saying they can't do it because the entirely-underground pilings have historic status. Not the same thing.