Metro’s early take on the debt-ceiling bill

Below is an early analysis from Metro’s government affairs staff of the debt-ceiling compromise before Congress. Not surprisingly, it includes cuts in federal transportation spending:

The House and Senate are set to vote today on legislation that reduces our national deficit, raises the debt ceiling and avoids a technical default by the U.S. Treasury Department. The plan agreed upon last night by the House and Senate leaders and the White House has two parts or phases – with the initial impact being a nearly $1 trillion reduction in the national deficit and an increase of $900 billion in the debt ceiling. The second part of the bill would empower a joint congressional committee with the task of securing an additional $1.5 trillion in deficit reduction and raising the debt ceiling by a similar amount. Should the joint congressional committee fail to achieve significant debt reductions, the bill being considered today includes trigger mechanisms that would force across the board spending cuts.

As drafted, the legislation being considered by Congress today would impact federal transportation funding by placing statutory caps on discretionary spending. For example, federal transportation programs for Fiscal Year 2012 and 2013 would be funded at Fiscal Year 2011 levels. This is significant because the Fiscal Year 2011 funding levels were approximately 3.8 percent less than the previous year [Fiscal Year 2010]. Following Fiscal Year 2012, transportation spending and other non-discretionary federal programs would rise by about 2 percent per year from Fiscal Years 2014 to 2021. Please find attached a copy of the Budget Control Act that will be considered by the House and Senate later today. We will continue to carefully analyze the short and long-term implications of this legislation on our agency’s Board-approved legislative program.

It’s worth noting that many members of Congress — as well as President Obama — have in recent months also raised alarms about the nations deteriorating infrastructure.

There is also this angle, as pointed out by the New York Times: the initial strategy to help the nation’s economy by boosting government spending — i.e. the federal stimulus bill, bailouts of various firms — has turned into a strategy of big cuts to government spending.

12 replies

  1. We need a Measure R part 2. The average person is well aware that the federal government is not pulling its weight in regards to maintaining the nation’s infrastructure, and would likely vote for such a measure if it were on the ballot. If Washington is hanging us out to dry, we have to take care of ourselves.

  2. @Chris

    What makes you think Measure “R2” will gain enough votes? Americans have spoken that we’re sick and tired of taxes that don’t show immediate results.

    Metro should wake up that taxing everyone is not the answer to solve their problems. They need to wake up and face the fact that they need to be run like a business now.

    MOVE ONTO DISTANCE BASED FARES!

    • Hi Y Fukuzawa;

      The Measure R sales tax increase took effect on July 1, 2009. Among the transit projects that Measure R is funding: the Orange Line extension is under construction; the Foothill Extension Gold Line is under construction. The final EIRs for the Crenshaw/LAX Line, the Regional Connector and the Westside Subway Extension are scheduled for Metro Board approval in the next several months. The Expo Line phase II is scheduled to break ground later this year (some utility mapping and relocation work is already underway). Studies are also underway on the San Fernando Valley north-south bus rapidways, the South Bay Green Line extension and the Eastside Gold Line Extension. And that doesn’t include the road projects.

      No one said that all the Measure R work could be done overnight. But almost none of the above would be possible if Measure R had not been approved.

      Steve Hymon
      Editor, The Source

  3. @Y fukuzawa I noticed that a repeating pattern you say when the question of funding comes up and that’s distance based fares. Now I love Japan’s and europes rail networks very much and am not opposed to distance based fares do you really think metro Los Angeles is ready for them and whether these fares can actually fund the system? What would it do to ridership? Certainly I feel our system is no where near developed enough to break from flat fare though that may be needed in the future along with transfer changes. also metro isn’t a business nor will they be turned into one over night. I could support privatizing metro if everyone was well off and had universal healthcare (like they do in japan they also have high taxes) but Los Angeles is a different beast than Tokyo or other private rail networks. It takes a partnership.

    As much as the beltway would have you believe. Americans are very divided on taxes but occasionally positive (taxing the rich polls very well). When it comes to the debt people are nervous because they want their money used well. I feel this is a main reason measure r passed the major hurdle was because people rather raise their taxes while knowing where their money goes. Certainly a measure R2 is possible and will be needed one day but we cannot just count out the federal government entirely because a few political ideologues control the conversation on transportation and infrastructure. We need to promote funding from all sources to finally give LA the networks it Needs.

  4. The feds should have had a law like we passed here in California which literally slaps the hands of California legislators who want to go after transportation funding (eg.prop 22) and furthermore my idea to SOLVE the DEBT CRISIS is this…
    Example-you see someone take a pie out of the oven and you want a sample of it(5%), but the government wants to give you 50% of the pie(obviously there’s not enough for the rest of us) To Say the Least-if we ALL would NOT BE SO GREEDY and cut the pie giving all federally funded items 5% then with the rest of the pie you split it 50/50 where 50% goes to pay down the national debt, and the other 50% goes into a NATIONAL SAVINGS ACCOUNT that grows INTEREST. So while every program is being funded, our national debt is being chopped down and we are even saving at the same time. When the national debt is completely paid off, then you take the 50% and add it to our NATIONAL SAVINGS ACCOUNT. We all would have lots of money. One funding item that would be restored and never taken away would be a transit operation fund and this would help fund transit throughout our nation and this would possibly do away with any further strikes.

  5. 1. Flat rate makes no sense at all in a city the size of LA. It’s too big.

    2. Ridership is going to be increasing. Yet how do you expect Metro to fund all that? Ridership numbers alone will not recuperate the real cost of providing public transit on a flat rate scheme.

    3. What is the alternative then? More taxes? When’s it going to end? At 10% sales tax? 15%? 20%?

    4. Higher fares for everyone, say a instead of $1.50 flat rate, a $2.00 one? A $3.00 flat rate? A $5.00 flat rate? Does that sound fair to you that you now have to pay $5.00 for three blocks when another one riding it end to end for 20 miles pays $5.00?

    The only one that makes sense is to introduce distance based fares to control or even less taxpayer dependency.

    If you have a better idea that doesn’t keep public transit on being ever so beholden to tax payer subsidies, I’m all ears.

  6. There so many games that are always played at white house. The economy has already been bad for decades anyways and yet politicians play games.

    @Chris Loos, I disagree with Measure R part 2 tax. I think this Measure R taxation is theft and all a fraud.

    @Y Fukuzawa I agree, these taxes aren’t an answer.

    @Redebbm I agree with your idea about privatization, but I think the next mayor of LA and next Governor should look to dismantle Los Angeles Metro altogether.

    I disagree with the measure R2 idea, no more taxes. Enough is enough.

  7. @Redebbm I agree with privatization but of Metro bus routes (which would be taken over by private company), but if Los Angeles Metro gets shut down. The Metro Rail operations could be taken over by LADOT.

    Metro ain’t doing a good job with management.

    I don’t agree with no Measure R2 tax.

  8. @betterfuture Measure R was voter approved with 67.22% of Voters (You and neighbors) clearing. The LAST thing it is is fraud as you claim. Just because you don’t like taxes to improve infrastructure doesn’t mean you’ll always find those who agree. Also Privatization of metro routes doesn’t make any sense at the moment. Many are contracted already.

    @Y Fukzawa I am familiar with this argument, Slippery slope. Your not addressing the issues of today at all. Just some fantasy private L.A. Metro. All transit agencies have needed government help. Even the private ones. Trust me JR did NOT build those legacy rails and acquire those Right Of Ways. L.A. is big but the rail system is still small. Or are you talking busses too? and the fares aren’t fair. Im sure your familiar with the Union-Little Tokyo Ripoff compared to Long Beach – Downtown L.A. I said I agree with long distance based fares but you keep implying that it will make Metro ready to be a “business,” which I disagree and say it is NOT meant to be. Nor is it ready for long distance fares all over.

    Dismantling Metro and privatizing it is not in the cards nor would result in a better transit agency overnight. This is not a solution for today or the near future. Not to mention you guys need to look at the taxation of the places where Transit is privatized. Much higher than the U.S. its not the same. Apples and Oranges Its not a solution we need now.

  9. @Redebbm Well you do have opinions stated but they aren’t facts, the only fact you stated was Measure R being approved by voters but everything else you stated are your “opinions”.
    The only reason why that Measure R tax was approved is because many people felt for it and thought things were gonna improve but they didn’t. No, I didn’t support the Measure R tax. Measure R tax didn’t improve anything, wait til the City of L.A and Metro go bankrupted one day due to mis-management and then you will wake up to see the taxes were spent on wrong places.

    BTW Just because you like taxes since it’s like supporting communism/liberalism so much in city of L.A, doesn’t mean people will agree with you either.

    I mean your entitled to your opinions.

    I mean Metro always begs for money a lot, they need to reduce their spending themselves and cut the waste.
    I do think that Metro should remove the Transit TV monitors from the buses since it discourages some riders from taking Metro and find a new source of revenue.

    Besides, privatization makes sense and is good for economy rather you agree or disagree.

    Just remember, this is a capitalist country NOT socialist. So privatization is legal. As for contracted services, they owned by Metro, there not private, so there no point in the excuse for this.

    The contracted routes should be privatized IMO so Metro can stop wasting money on contracted services to save money.

    Actually, Metro ain’t that great itself, they are so poorly manged and aren’t good. I still support dismantling Metro and having the Metro routes being taken over by Private companies. The Metro Rail operations could be taken over by LADOT.

    I don’t care if people disagree or not, I’m not changing my opinions anytime soon.

    So stop thinking Metro or any Transit Authority is all that great because they are lots of mis-management and this is for a fact.

    The government itself failed big time, and the government agencies like Metro or any Transit Authority are no better then a private company, they are just bad as it is. It shows that Socialism doesn’t really work.

    Either way most people in America will anyways continue to use cars and no one can force them onto mass transit.

    Actually they are a certain Transit Agency in other cities/states that are gonna privatize their bus service due to inefficient performance such as Long Island Bus (Nassau County NY), Hampton Roads Transit’s routes in Suffolk, Virgina and Capital Metropolitan Transportation Authority (Austin County, texas).

    I will support privatization Metro bus routes and dismantling Metro if this ever happens one day. This is my opinion and it’s not changing anytime soon.

  10. “Either way most people in America will anyways continue to use cars and no one can force them onto mass transit.” And how do you think that was made possible?… America spends/spent most of its transportation money on auto infrastructure so yes, logically, more people will use cars because that’s what is much more available… duh!!! But if we had the same investment in mass transit that we had in roads, we would almost certainly see the percent of transit users go up proportionately, there is a reason that cities with a high amount of mass transit infrastructure virtually always have much higher transit use. I’m not against privatization as a principle overall, but I am against having that be expected for mass transit but not for highways and roads. That’s an unequal standard for transit funding. Unfortunately the reality is that the Federal government effectively took mass transit out of the private sector when they built the interstate highway system because it set a precedent for what mode of transportation Americans would use without regard to what the free market would actually provide which would have most likely been in the form of more dedicated mass transit, like it was before the 1950s. Private companies built the LA interurbans, the NY subways and the Chicago ELs, but that was all before the interstate highway construction which artificially induced demand for auto travel and now can’t be effectively competed with from the private sector in terms of transportation mode because no private company has the investment will nor the money to build a mass transit system that will lure Americans off the government highways. Not to mention the risk of litigation and NIMBY issues when it comes to acquiring existing ROWs or building new ones, its basically become impossible for the private sector to realistically invest in and build mass transit amidst a sea of government funded roads and highways. Unfortunately, If we depend only on the private sector now, nothing will get built, and Americans will always be stuck with that single mode of transportation and the traffic and capacity problems that come with it.