Proposed Rail Creates 1,000 Local Jobs and Destroys 4,000 Jobs

Here is my analysis of jobs due to Honolulu's proposed rail system. The rail has not cleared any important environmental hurdles, so it is over a year away from construction. However, the City propaganda on rail jobs must be challenged.

RAIL JOBS

The City claims that rail will create 4,500 construction jobs and 10,000 total jobs. Take a look at this Internet video http://www.youtube.com/watch?v=mZPJ0n5AvKM.

UH economists estimate that first year rail construction job count will be about 360 jobs and only in peak years the construction job estimate will reach about 2,000 jobs. But most of them will be unsuitable for carpenters that are suffering the brunt of construction sector unemployment now. Also almost all of the rail construction materials and technology comes from off-island sources, so at best 1,000 of these jobs are local. The City estimates for rail jobs are false. They are advocacy estimates.

The other half of the story is that rail jobs are paid by tax dollars, mostly local. Taxes reduce people’s incomes and shrink the economy. Read below why the rail tax destroys at least 4,000 jobs.

TAX and SPEND?

The "multiplier effect" like 4,500 construction jobs and 10,000 total jobs is fantasy. It’s rooted in depression era economic theory. If this was true, then Honolulu should build a rail system that costs ten times more and yields 45,000 construction jobs and 100,000 total jobs!

Unfortunately tax and spend does not work. Look at Greece and California now; both are broke. Oahu will be in 2020. California Legislative Analyst’s non-partisan office said that "the scale of the deficits is so vast that we know of no way that the Legislature, the Governor, and voters can avoid making additional, very difficult choices about state priorities." This means deep cuts, severe hardship for low income people, and higher unemployment.

Spending public money on the wrong project leads to huge loses. Here is a good example. Spain spent $19 billion to create so called green jobs; 6,825 direct jobs and 8,175 related jobs were created at a cost of $1.4 million per job. For every "green job" developed by government money (taxes), 2.2 jobs were lost from the general economy. The proposed Honolulu rail will be far less productive than green technologies, so many more that 2.2 jobs will be lost for every 1 rail job.

From TAX to UNEMPLOYMENT

Taxation prolongs the downturn. Here is an analytical example. Washington State contemplates a 1% increase in state sales tax to fund its ambitious transportation program. The economic impact of a 1% increase tax can be summarized as follows.

Private employment would drop by 19,400 jobs, and public sector employment would increase by 8,100 jobs. The net effect would be a loss of 11,290 jobs. The job losses, combined with the increase in the cost of goods, would lead to a fall in real disposable income by $1.85 billion. So their overall state economy will suffer more if the tax is added.

What does this mean for Oahu's 905,000 population and 0.5% general excise tax surcharge for rail? Every man, woman and child on Oahu pays about $500 per year for the rail which based on the Washington State model and proportioned for Oahu destroys a net of 4,000 jobs for every year that the GET surcharge is levied. So rail will create a maximum of 2,000 jobs and regularly destroys 4,000 jobs.

To build rail we need trains, rails, escalators, elevators, electric lines, switches, computers, ticket machines, air conditioners, rebar and concrete, and heavy rail maintenance equipment. All the fed contribution and much of our local taxes for rail will go out of state to purchase the rail stuff. And to pay for mainland rail experts and technicians like those who design it now. So less than half of the 2,000 rail jobs will be island jobs.

CAN WE AFFORD IT?

(February 1, 2010) Denver’s $6.6 Billion FastTracks rail can't be completed within budget. It needs an extra $2.4 billion. Similarly, Honolulu cost estimates are not credible. They are advocacy estimates. City said $2.7 billion in 2006, $4.6 billion in 2008 and $5.3 billion in 2009. The real cost will be at least $6.4 billion for the first 20 miles.

Do you doubt that the City, its consultant and the Federal Transit Administration are wrong? Let’s look at a recent rail project on an island. San Juan in Puerto Rico had the same consultant as Honolulu and the same FTA oversight. The forecasts and real outcomes are as follows.

The consultant predicted a cost of $1.25 billion. FTA approved it. San Juan’s actual cost was $2.25 billion. The consultant predicted 80,000 riders. FTA approved it. San Juan’s rail carries fewer than 40,000 riders after several years in operation.
How about this reality vs. fantasy: San Juan has a population of 2,509,000 and Honolulu has 905,000. San Juan’s rail carries 38,700 daily riders. For Honolulu, the hired “experts” forecast 97,000 riders on opening day and 130,000 riders in 2030.

Let me also clarify what it means for Honolulu to enter a Full Funding Grant Agreement with the FTA. It means that FTA will give Honolulu X amount of dollars and Honolulu is mandated to complete the agreed upon system. Honolulu can't stop short if the money runs out. It must collect more local taxes and finish the job. Like Denver and all the others. The average cost overrun for FTA projects is 40%.

Worse yet, Honolulu already is deep in the hole. “U.S. Environmental Protection Agency is requiring the city to upgrade its two major waste-water treatment plants, which could cost up to $1.2 billion.” City lost both the lawsuit and the appeal. So on top of degraded water, sewer and road systems, Honolulu has a current $1.2 billion budget liability for developing secondary sewage treatment.

If ever-increasing property taxes, sewer fees, and other taxes or fees become politically unsustainable, the State will have to bail the City out. Ever higher City taxes drive out businesses and shrink State revenues. A bankrupt City (with roughly 80% of the state’s population) diminishes both City and State ability to issue bonds and get projects done. Are you not seeing a tax black hole?

BOTTOM LINE

Was any of this information available in the 2008 elections and the taxpayer funded rail commercials? In 2008, a slim majority voted in favor of a fake "light rail" that cost under $5 billion and went through Salt Lake. The bases of 2008 are false in the 2010 proposed rail. Is the 2008 vote valid now? No. Instead we have heavy rail, fake ridership, fake costs, and fake jobs gains. Only the future economic calamity due to the rail is certain. Each local rail job will cost $2.6 million in local taxes!

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SAMPLE SOURCES

Washington State Model
http://www.insideronline.org/summary.cfm?utm_source=Newsletter&utm_medium=Email&utm_campaign=Insider%2BOnline&id=12108

Green Jobs in Spain
http://www.juandemariana.org/pdf/090327-employment-public-aid-renewable.pdf
http://www.washingtonpost.com/wp-dyn/content/article/2009/06/24/AR2009062403012.html

University of Hawaii Economic Research Organization, Hawaii Construction Forecast Update: Global Downturn Hammers Construction, UHERO, March 6, 2009

Are Urban Rail Systems Good for the Society?

You'll have to agree that this is a great question.

The good thing is that two of the nation's top economists evaluated urban rail systems and have an answer.

In their 2006 study, economists Winston of the Brookings Institution and Maheshri of the University of California at Berkeley concluded as follows:

"We find that with the exception of BART in the San Francisco Bay area, every system actually reduces welfare and is unable to become socially desirable even with optimal pricing or physical restructuring of its network. We conclude rail’s social cost is unlikely to abate because it enjoys powerful political support from planners, civic boosters, and policymakers."

What does their conclusion mean in plain words?

• Urban rail systems have a negative value for the society, even if a rail system selects the best route and the best fare price.
• The only reason city rail systems get built is because politicians and special interests are promoting them forcefully. They make a (short term) profit at the expense of society.

Romy Cachola’s Scoops on the Rail

Councilmember Romy Cachola has provided a useful summary of findings after meeting with the Federal Transit Administration on March 9, 2010 along with Councilpersons Apo, Anderson and Kobayashi.

The partial summary of Cachola's findings from this fact finding mission in Washington, DC are copied below and his entire report is available at the city's docushare (see link at bottom.) Of course Cachola’s report, without saying it, makes a case for rerouting the rail route through Salt Lake Boulevard. Unfortunately, this is one of many omissions in the Draft EIS, and several months of study are needed to assess those impacts, plus time for public review and comment.

Rather foolishly the FTA approved that the City enter Preliminary Engineering, so now we are spending money engineering a rail route that is impractical. This is but a small piece of evidence why rail proposals are “gravy trains” for architects, planners and engineers … the more the mistakes, the more the taxpayer financed fees to professionals to fix those mistakes.

Note that these significant objections do not even address the multitude of problems between the airport and Waikiki (Dillingham Boulevard, Chinatown, downtown, Ala Moana.)

My conclusion has been that even if Hannemann serves his entire term as mayor, there will still be no rail on the ground by 2012, or ever, if a recent survey by Hawaii News Now is to be believed.



Cachola's summary points:

• The FTA won’t give special treatment to any jurisdiction that applies for federal funds for transit. Everyone will be treated the same way. Thus, the airport route, until resolved, is unlikely to receive special treatment as hoped for by the administration.
• The governor has every right to review the Final Environmental Impact Statement (FEIS) based not only on federal guidelines but also state laws governing environmental review. The FTA stressed to council members that without the governor’s approval, the project cannot proceed.
• A main sticking point on the Final EIS is that the transit alignment is encroaching too close to the runway protection zone. FTA officials also stressed that the Federal Aviation Administration (FAA) will not sign off on the Final EIS until the airport issue is resolved.
• To resolve the encroachment on the runway protection zone, the FTA stated the following alternatives:

1. Move the alignment to the mauka side of the viaduct.
2. Move the alignment onto the median of the viaduct.
3. Extend the affected runway(s) to the opposite direction (makai) so that it would no longer encroach on the runway protection zone.

• Based on the FTA’s statements, the following may need to be done:

-- Amending the alignment may require a supplemental EIS to determine the impacts and other considerations.
-- Since Honolulu International Airport is under the state’s control, any extension of the runway needs state approval. The state may not agree to any extension until an EIS is completed and approved by HDOT. Without the State’s approval, the City will be forced to look at other alternatives.

Link to Romy Cachola’s report

Better Pavements for Safety and Low Noise

On a recent trip in a driving rainstorm on Interstate 80 and I-680 (California), there were a variety of pavement types. Some seemed to collect a thin layer of water that was tossed into the air by cars and trucks, creating a blinding fog, which made for near-zero visibility. However, on some blacktop sections with equally heavy rain, there was no layer of water and no wall of spray coming off other vehicles. The visibility there was excellent. Why the difference?

The latter is open-graded asphalt, which Caltrans (the California Department of Transportation) now uses on most paving projects, and it is wonderful. It allows water to drain off the surface and into a top permeable layer — almost eliminating the spray kicked up on older pavement.

This asphalt uses pieces of gravel 3/8 of an inch thick. Underneath are 2 inches of rubberized asphalt, flexible material that withstands the wear and tear of heavy big rigs twice as long as conventional asphalt.

The uniform pieces of gravel on top do not bind as tightly as varied sizes used in other paving, so water seeps through the first few inches of pavement and drains off.

When open-graded asphalt was used on a curvy stretch of Highway 17 a few years ago, crashes dropped 41% in the first three months. On I-880, where a 26-mile repaving job ended in 2002, crashes fell 15%, from 3,172 in 2000 to 2,696 in 2004.

When you saw water being kicked up by traffic, you probably ran into an older section of I-80 that will get the better pavement this spring.

(Source: http://www.mercurynews.com/news/ci_14779911?nclick_check=1)

Unfortunately neither open-graded asphalt or rubberized asphalt are common practice on Oahu.

There is an additional advantage of open-graded asphalt that Caltrans did not mention: Noise reduction.

Environmentally, open-graded asphalt reduces road noise for drivers, passengers and those who work, live or play near a busy highway. Studies have found that open-graded asphalt pavements, when compared to traditional dense-graded asphalt pavements, reduce road noise by 3 to 7 decibels (dBA) which make them a viable alternative to noise walls for areas with moderate noise problems.

Source: Asphalt Intitute, http://www.asphaltinstitute.org/public/engineering/PDFs/Construction/Open_Graded_Asphalt_Surfaces_Offer_.pdf)

Island Sustainability Primer: Trends on Income, Energy, Tourism*

The goal of this on-going research project is to collect and summarize rich data sets and data sources for world’s islands. Fifty islands for which complete data could be collected are currently in the database. Islands may be part of a country or a country. Islands with population of less than 50,000 people were excluded.

Nine major variables were used for each island: Population , Area (km2), Density (citizens/km2), Political Status (independent country or part of a country), Gross Domestic Product or GDP (million U.S. dollars in 2008), Annual Electricity Consumption (Terra Watt hours), Carbon Dioxide or CO2 Emissions (million metric tons), Annual Tourist Arrivals, and Combined Road and Rail length (km per 1000 people). Some of the early results are highlighted below.

For developed islands the incremental cost and needs to serve large numbers of tourists are relatively small, thus tourism can be quite cost effective. But for small and less developed islands the cost to provide for tourism is high in terms of energy and pollution.

In general, the higher the GDP per capita is the higher the electricity consumption. For electricity consumption higher than 6,000 kWh per person, the relationship curve flattens. Also, electricity consumption per person is proportional to CO2 emissions per person.

When electricity consumption is in the range of 6,000 to 11,000 kWh per person the CO2 emissions appear to be low for a group of islands (9 to 11 metric tons per person) and higher for another group (16 to 19 metric tons per person). The islands in the low group of carbon emissions have approximately equal GDP with the islands in the high group of carbon emissions. The high group of islands consists of the Hawaiian Islands (Oahu, Maui, Big Island), Bahamas and Australia whereas the low group consists of European islands (Ireland, Iceland, UK, Cyprus) as well as Japan and New Zealand. Availability of hydro and nuclear power is likely what makes this large difference in carbon footprint.

Japan, with the highest population of all islands, has the 9th highest GDP per capita; however, it is 44th in tourists per capita, 12th in infrastructure per capita 10th in electricity consumption and 13th in CO2 emissions.

New Zealand is 16th in GDP per capita, 30th in tourists per capita, 4th in infrastructure per capita, 8th in electricity consumption and 16th in CO2 emissions per capita. As shown below, Oahu has woefully inadequate infrastructure when compared with Japan and New Zealand.

Similar to both New Zealand and Japan, our extremely large Pacific Ocean “neighbor,” Australia, is the largest island in the list, is in 7th place in GDP per capita, 37th in tourists per capita, 3rd in infrastructure per capita, 4th in electricity consumption and 5th in CO2 emissions per capita.

Table 1 summarizes the Hawaiian Islands rankings out of 50 islands with population over 50,000 people. Oahu, Maui and Big Island make the population cut, but Kauai does not.



In terms of GDP, Oahu ranks very high at 5th highest, with Maui and Big Inland in 17th and 18th position, respectively. In terms of income, Hawaiian Inland residents fare much better than average compared to other island populations. The Hawaiian Islands are major international tourism destinations: Tourists per capita shows that Maui is in the top spot, followed by Big Island on 5th and Oahu on 8th.

When it comes to road and rail infrastructure to accommodate residents and tourists, the Hawaiian Islands fall far short of their island counterparts. Only the Big Island makes it to the top 10 in the 7th place, Maui is another seven spots down at 14th and Oahu is near the bottom at 41st having too little land transportation infrastructure for its population. The result is its abundant congestion that threatens its long term quality of life and tourist attractiveness, which, in turn, degrade its sustainability.

The advanced quality of life in the Hawaiian Islands and the fact that they host over six million tourists per year results in a large consumption of electric power. Both Maui (3rd highest) and Oahu (9th highest) make it in the top 10 and Big Island is close to them at 13th. Hawaiian island dependence on oil is worrisome and the presence of fairly large population of residents and tourists does not bode well for low productivity sources like solar and wind energy. The latter has some potential but its visual impact is usually too large for Hawaii’s scenic landscapes.

Wave and tidal energy is difficult to harness and requires large shore structures, which again render then unappealing although some deployments may be feasible. This leaves nuclear as a major sustainability choice, either with small power plants (like the seven to twelve 110 megawatt nuclear units in large Navy submarines stationed in Pearl Harbor on any given day) or a largely invisible large floating platform 10 to 12 miles offshore.

As expected, an advanced life style and energy generation from coal and oil translate into a high environmental impact in terms of carbon dioxide emissions. All three Hawaiian Islands examined are in the top ten among this set of 50 islands. However, due to the vastness of the Pacific Ocean and the strong prevailing winds, local air pollution is not a problem in the Hawaiian Islands.

Two future changes can dramatically reduce CO2 emissions in Hawaii: Electric vehicles charged overnight by large scale wind farms or smaller neighborhood wind turbines, and nuclear power for the bulk of daytime power needs.

(*) Based on Research by Lambros Mitropoulos, Panos Prevedouros, and Michelle Coskey at University of Hawaii, Civil Engineering, Traffic and Transportation Laboratory