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Market-Based
Transportation Alternatives
For Los Angeles

by James E. Moore II
jmoore@usc.edu
Associate Professor of Civil Engineering
-and- Public Policy and Management
University of Southern California

Thomas A. Rubin
tarubin@earthlink.net

and

Shin Lee
shinlee@usc.edu


ABSTRACT

On January 14, 1998, the Board of the Los Angeles County Metropolitan Transportation Authority (MTA) suspended work on three rail lines, one of which (the Pasadena Blue Line) was already in an advanced state of construction, and decided to complete work on a single subway line currently under construction. Los Angeles County Proposition A passed in November of 1998 by a two thirds majority, prohibiting the MTA from spending sales tax revenues on new subways. We review a variety of market-based transportation alternatives to rail transit for Los Angeles, including busways, reducing barriers to entry to the market for transit services, and high occupancy toll (HOT) lanes.


 

I. Introduction

For many years, the health of Los Angeles' culture and economy has been equated with the health of its transportation system. From the Red Cars of the 1940s to the Car-Hops of the 1960s, to the Freeways of the 1970s, perceptions of Los Angeles as being either a futuristic city or a city in decay often involve the performance of the transportation system.

The Los Angeles metropolitan region experienced record growth during the 1980s, sparking a transportation agency response that included accelerated investment in rail transit during the 1990s. These developments are particularly important to Los Angeles because the rail plan is central to virtually all existing transportation development plans in the region. The MTA's rail plan is Los Angeles' longest-range plan, executed at the grandest scale. No other public project places such an enormous call on resources. Many promises ride on this plan: local officials have proffered it as the means by which Los Angeles will decongest roads, clean the air, reconfigure land use, and (prior to the current economic expansion) revitalize the economy.

The first elements of the system came on-line just as Los Angeles entered a period of intense challenge; and, despite large cost overruns, legal actions by transit riders, and a fiscal crisis that has halted rail construction, core political support for the rail plan has proved difficult to erode. Through a multi-year drought, an extended recession, a major correction in the housing market in 1990, the 1992 riot, several large fires, the 1994 Northridge earthquake, and the steady erosion of bus service, Los Angeles' leadership has kept its civic eye on the rail prize. This tenacity comes at high cost. While the residents of Los Angeles County have agreed to tax themselves ever more intensively to pay for rail-transit systems, the County's least fortunate residents have been squeezed into the most crowded buses in the United States.

Unfortunately, initial elements of the Los Angeles rail system performed poorly in terms of cost effectiveness relative to other North American rail systems and to bus modes (Rubin, Moore, and Lee 1999a; Rubin, Moore, and Lee 1999b). Table 1 summarizes capital costs per passenger and per passenger mile for each of the five Los Angeles transit modes. Table 2 shows the number of trips and passenger miles paid for by the same level of subsidy across the four modes. The data in these tables indicate that the Los Angeles experience -- like the experiences of other North American cities -- is that non-rail transit outperforms rail transit systems by a very wide margin in terms of passenger-trips and passenger-miles per dollar of public subsidy.

The low cost-effectiveness of Los Angeles' rail systems has negative impacts on the level of transit and transportation service available in the region. We contend that the most visible result has been the recent and rapid deterioration of the Los Angeles bus system. Like other new rail cities, Los Angeles discovered that optimistic cost and ridership forecasts used to justify construction of rail projects lead to budget shortfalls (Pickrell 1990). And like other cities, Los Angeles made up for those shortfalls by shifting resources from buses to trains, leading to unintended perverse results. Every dollar shifted from buses forces more riders off the system than new rail service can attract.

Troubles with rail transit

Urban rail transit once had an important role in American cities. Prior to the 1940s, public transportation was often the most common mode of urban transportation, especially for work trips. After World War II, however, mass transit companies lost ridership as a result of several factors, including increasing incomes, growing suburbs, cheaper automobiles, and changes in labor rules. Several transit subsidy programs were enacted during the 1960s and the 1970s to maintain public transportation services in the cities and metropolitan areas. The rationales for these investments included shaping urban growth; providing mobility for the poor, elderly, handicapped, and other transit dependent groups; preserving open space; conserving energy; improving air quality; and reducing traffic congestion (Jones 1985).

Table 1: Capital Cost per Passenger and Capital Cost per Passenger Mile for Los Angeles Transit Modes

Los Angeles Mode
Capital Cost per Passenger
Capital Cost per Passenger-Mile
Urban Bus
$0.25
$0.07
Light Rail
8.27
0.91
Heavy Rail
2.63
0.75
Long-Haul Commuter Bus
1.93
0.05
Commuter Rail
21.02
0.70

Notes
a. "Urban Bus" and "Light Rail" are Southern California Rapid Transit District (SCRTD) FY92 average bus and Blue Line, respectively.
b. "Heavy Rail" is the Red Line as per EIS/EIR and is understated.
c. "Long-Haul Commuter Bus" is FY92 actual for four such New Jersey bus operators, pricing the actual fleet size at $300,000 per bus, annualizing over 12 years, and adding 20 percent for non-bus capital assets.
d. "Commuter Rail" is the FY95 projection for Metrolink from the FY93 Metrolink Budget and is understated.
Source:
Los Angeles County Metropolitan Transportation Authority (LACMTA). A Look at the Los Angeles Metropolitan Transportation Authority. 1993.


Table 2: Los Angeles Public Transit Options Available for the Same Total Subsidy

Mode
Passenger Trips
Average Length
Passenger Miles
Urban Bus
100
3.83 miles
383 passenger miles
Heavy Rail
40
3.52 miles
141 passenger miles
Light Rail
10
9.4 miles
94 passenger miles
Commuter Rail
6
27.8 miles
167 passenger miles
Source:
LACMTA. A Look at the Los Angeles Metropolitan Transportation Authority. 1993.

By almost any normative measure, these transit-subsidy programs have been markedly unsuccessful. During the 1980s, the number of registered cars in the United States grew three times as fast as that of population (Chinitz 1991). The average vehicle occupancy for all trips has decreased from 1.9 persons per vehicle in 1977 to 1.6 in 1990 (Pisarski 1992). The growth of automobile access and use has contributed substantially to increases in average work-trip speed for all modes, from 29.1 mph in 1983 to 32.3 mph in 1990 (Pisarski 1992). Nationally, transit ridership has decreased steadily, and compared with transit ridership in other industrialized countries, can be considered insignificant.

In most respects, Los Angeles proved no exception to these national trends. Southern California Rapid Transit District (SCRTD) ridership fell from 396.6 million in fiscal year 1980 to 354.1 million in fiscal year 1982. SCRTD base fares increased from $0.55 to $0.85 during the same period.

An important exception to these trends occurred in 1980, when Los Angeles voters passed Proposition A, agreeing to impose a perpetual one-half cent sales tax dedicated to transit. This began the most successful transit ridership experiment in recent history. Beginning in fiscal year 1983, an allocation of approximately 20 percent of Proposition A tax receipts was used to reduce the SCRTD base fare from $0.85 to $0.50. Other fares were reduced as well, as was the price of monthly passes. Over the three years of the $0.50 fare program, District transit ridership rose over 40 percent, and was still increasing in the last month of the experiment. Very little about the bus system was changed except the fare. Revenue service miles increased only 1.5 percent, including special service added for the 1984 Los Angeles Olympics.

Beginning in fiscal year 1986, however, the Proposition A funds that had been used to subsidize the $0.50 bus fare were reallocated to rail construction. This change complied with the terms of the ballot issue presented to voters. The funds transferred away from the fare subsidy program paid for about 35-40 percent of the reported construction costs of the Blue Line. Blue Line ridership peaked in 1995 at 12 million passenger boardings after an earlier dip (LACMTA 1994). The MTA currently predicts an annual Blue Line Ridership of 13.5 million (LACMTA 1996). The addition of the Green line produced a total 1997 light rail ridership of 22.6 million (FTA 1999).

Bus fares were increased to $0.85 in fiscal year 1986 and then to $1.10 in fiscal year 1989. By fiscal year 1990, bus ridership had decreased by over 96 million passenger boardings per year, or 19.3 percent. District ridership has continued to sink further ever since. By 1995, the system had lost 133.5 million boardings per year, and had a ridership of 362.3 million across all modes. Bus ridership was 343.1 million. At this point, the lost ridership was more than ten times that gained by the Blue Line, and exceeded the entire patronage of the seventh largest urban bus system in the US. Losses appear to have to have stabilized. MTA ridership was 351.2 million in 1997, and 385.5 million across all modes (FTA 1999), though cumulative losses across all modes relative to the 1985 peak now exceed 1 billion boardings.

Fare increases are not, of course, the only possible causes for declining bus ridership. Other possible causes include a softening economy, reductions in the level of bus service operated (an outcome also related to rail construction), the low cost of gasoline, current slower County population growth, and perceived increases in street crime. The trend-lines shown in Figure 1 are adjusted for these effects in a limited way, showing average SCRTD/MTA fares in constant 1980 dollars and per-capita ridership on SCRTD/MTA buses, other Los Angeles County transit operators, and trains. Even after these adjustments, the trend toward diminished bus ridership is very clear. The rail system's contribution to the region's inventory of transportation services ranges from negligible to modest.

Because of these and related outcomes in Los Angeles and other cities, the Los Angeles rail transit plan has come under fire from a growing number of groups, with dramatic effect (Gomez-Ibanez 1985; Pisarski 1985; Kain 1988; Pickrell 1990; Gordon and Richardson 1989; Wachs 1989; Gordon and Richardson 1994; Moore II 1993). Congress has all but explicitly repudiated the federal government's Full Funding Grant Agreement with the MTA. There is considerable uncertainty regarding the extent of future federal participation in the program and the restrictions this participation might imply for rail construction, transit operations, and other MTA decisions (Rubin, Moore, and Lee 1996a; Rabin 1997) . The Congressional appropriation lobbied for so intensively by the Authority was reduced by more than half. In December of 1996 (former) Secretary of Transportation Frederico Pena and Federal Transit Administrator Gordon J. Linton threatened withhold $31 million in Department of Transportation funds allocated to the agency by Congress. The General Accounting Office reported that the agency does not have the fiscal resources to pursue its rail plan. In late October of 1996, the agency concluded two years of litigation by agreeing to mitigate the negative impact the MTA's rail plan has imposed on the bus services. US District Judge Terry J. Hatter, Jr. has signed a consent decree in a law suit against the agency that is effectively a victory for the Bus Riders' Union, a grass roots organization representing the MTA's largest client group. Former Chief Executive Joseph Drew, on the job less than a year following the firing of his predecessor, Franklin White, resigned under withering criticism from his own board of directors. The board's first candidate for a permanent replacement declined the position, which was subsequently accepted by corporate turn around specialist Julian Burke.

Figure 1: Ridership Per Capita on SCRTD/MTA Buses and Other Los Angeles

Figure 1:
Ridership Per Capita on SCRTD/MTA Buses and Other Los Angeles
County Transit Compared to Price Adjusted Average Fares.
Sources:
FTA (1994) Data Tables for 1994 National Transit Database Report Year. Washington D.C.: FTA.
FTA. (1993) Data Tables for 1993 National Transit Database Report Year. Washington D.C.: FTA.
LACMTA. (1995) National Transit Database Report (Section 15 Report) Fiscal Year 1995.
LACMTA. (1994) National Transit Database Report (Section 15 Report) Fiscal Year 1994.
LACMTA. (1993) National Transit Database Report (Section 15 Report) Fiscal Year 1993.
LACMTA. (1993) A Look at the LACMTA.
U.S. Department of Commerce, Bureau of the Census. (1995) Statistical Abstracts of the United States.
California Department of Finance, Demographic Research Unit. (1995) California Demographic. Sacramento: California Department of Commerce (July).


This combination of events brought the MTA to a crisis-point during 1998. On January 14, 1998, in an action that may mark the end of rail construction in Los Angeles, the MTA Board suspended work on three rail lines, one of which (the Pasadena Blue Line) was already in an advanced state of construction, and decided to complete work on a single subway line currently under construction (LACMTA 1998a). The three dissenting votes in the 10-3 action felt that the six month suspension did not go far enough. The dissenters wanted to terminate subway construction altogether (Simon 1998, Bloom 1998). November of 1998 saw the passage of Los Angeles County Proposition A by a two thirds majority. The passage Proposition A was widely described in the press as the end of subways in Los Angeles. In truth, Proposition A is a relatively weak measure that merely prohibits the MTA from spending sales tax revenues on new subways once the Red Line's North Hollywood extension is completed this year. MTA likely to circumvent Proposition A and the super majority who voted for it by issuing subway construction bonds against revenue sources other than sales taxes, the same way it used debt issued against farebox and other non-sales tax receipts to construct the Union Station Gateway headquarters building.

The agency now finds itself committed to the FTA and the California Transportation Commission to construct rail lines it cannot afford to build or operate, while simultaneously under court order to decrease bus fares and increase service. Even prior to the action by the Bus Riders' Union, the MTA did not have sufficient funds to complete both the current subway extension to the East San Fernando Valley and the Pasadena Blue Line extension, much less the other eight rail lines it identifies as priorities (LACMTA 1995a). The agency elected to finish the subway extension. Outraged State legislators backed the creation of a new (under funded) construction authority for the Pasadena Blue Line.

In the best case, the legal requirement to commit resources to bus service will force the MTA to acknowledge the trade-offs associated with rail Los Angeles construction and operation. If so, the MTA will finally be positioned to weigh seriously the advantages of a number of options it has ignored in the past. None of these options will keep the myriad promises made in rail's name, but nothing can.

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