Reject the “Jobs” Justification for Transportation Projects

I fully agree with Robert Poole's article which in part reads as follows:

• On a tour of China, government officials took renown economist Milton Friedman to a major construction site, where Dr. Friedman expressed surprise at seeing legions of workers digging away with shovels. When his host responded that a major purpose of the project was to create jobs, Friedman replied that if that was the case, they should equip the workers with spoons instead of shovels.

• That point was underscored in a report issued last month by the Bipartisan Policy Center. “Strengthening Connections Between Transportation Investments and Economic Growth”, written by economist Douglas Holtz-Eakin and civil engineering and urban planning expert Martin Wachs.

• Instead of focusing on short-term construction job-creation, the authors argue for a focus on long-term returns from infrastructure investment. “Over the long-term, higher productivity—the ability to generate more output and income from each dollar of capital or hour of work—is the key to higher labor earnings and improved standards of living,” they write.

• Hence, infrastructure policy should select projects that do the most to enhance long-term productivity—as did the creation of the Interstate Highway System, which dramatically lowered the cost of personal and freight transportation, leading to the world’s most productive logistics system.

Speaking of highways, three California Congressmen are asking that the funds of the California high speed boondoggle be diverted to correct the ills of SR 99. Part of their positions is as follows:

• The economic and environmental benefits of SR 99 improvements are strongly contrasted by the uncertainty of California’s now infamous bullet train, which has been described by the national press as “the train to nowhere.” Providing the state the option to redirect high speed rail funding to SR 99 will give state and local leaders the opportunity to step-back from what is likely to become a bottomless pit of spending.

The bottom line is government needs to invest taxes in productive and necessary infrastructure. For Hawaii this means road repairs, water and sewer line repairs, and airport and harbor upgrades within our ability to borrow and pay. All these are necessary projects and with proper scheduling and financing they can get done without breaking the citizens' backs.

The airport modernization, and the Middle Street merge fix projects that Gov. Abercrombie wants to do should be done asap. The Mufi/Carlsisle rail boondoggle needs to be thrown in the trash. The accumulated rail funds should be used immediately for the Middle Street construction, the Honolulu airport upgrades and for the design of the secondary treatment facility mandated by the EPA for our Sand Island effluent treatment plant. Now these are construction and engineering jobs worth paying for.

Albert Einstein and Neil Armstrong Discuss Honolulu's Rail

Click to see my short movie for your infotainment.

Sorry, this very popular animation no longer exists. XTRANORMAL, the free service on which I developed it went out of business.

Did Honolulu City Council Get the Memo from U.S. Congress?

Minutes ago I sent this message to our City Council:

Dear Council Members,

On Tuesday House Transportation Committee Chairman John Mica, R-Fla. said this: “Rather than focusing on the Northeast Corridor, the most congested corridor in the nation and the only corridor owned by the federal government, the Administration continues to squander limited taxpayer dollars on marginal projects.”
Source: http://transportation.house.gov/news/PRArticle.aspx?NewsID=1065

By this statement it is clear that:

(1) Mica urges focus on the Northeast Corridor and he does not seem interested in preserving funds for the Florida ("his own") rail project.

(2) If it comes to a choice for Mica between SunRail and Honolulu's rail, he would most likely opt to save SunRail. It does not matter that SunRail is an FRA project and Honolulu Rail is an FTA project. It's all coming from the federal budget, specifically, the Highway Trust Fund. (Indeed, more rail projects does mean more potholes and falling bridges.)

(3) Mica knows that projects are rated good, marginal or poor. He's not interested in marginal and poor projects. Honolulu's overall FTA rating is medium (marginal) and our financial plan is defective and the population projections used to derive ridership are wrong.

At a minimum, the Honolulu City Council must not approve any expenditures on rail construction until the FFGA is concluded and the contribution is the promised $1.85 Billion.

After that point, the responsibility of adding $4 Billion debt onto Oahu taxpayers will be all yours.

Aloha,
Panos

Who Opposes Honolulu Elevated Rail?

Pearl Johnson lists some of the groups opposing the elevated rail proposal in the letter to the editor of the Honolulu Star Advertiser copied below. Quite a few!

Additional groups include the HonoluluTraffic.com group, the Fix Now Campaign of yours truly and many architects, engineers and planners. Let's not forget that Bishop Estate favors light rail. Also Federal Judges oppose the rail route using Halekawila Street.

The Sierra Club and Blue Planet Foundations have not had time yet to assess the colossal environmental and pollution impact of this boondoggle, but they are welcome to join when they peel off rail's pseudogreen labels and discover all the soot.

============================
Groups oppose elevated rail

Recent media portrayal of the growing opposition to the city's rail transit plan was unfortunately reduced to a political dust-up between former Gov. Ben Cayetano and Mayor Peter Carlisle. It obscured our shared belief that the city's proposed elevated heavy rail project will destroy mauka-makai view planes, create a physical barrier between the city and our famed waterfront and disturb native Hawaiian burial grounds along its right-of-way.

We consequently are united in opposing the construction of an elevated heavy-rail system through historic downtown Honolulu and strongly urge consideration of a less destructive and more neighborhood-friendly system.

"We" includes the League of Women Voters of Honolulu, The Outdoor Circle, Hawaii's Thousand Friends, Life of the Land, Residents Along The Rail, Save Oahu Farmland Alliance, Friends of Makakilo, Hoa'aina o Hawai'i'imiloa of Leeward Community College and Donors of Irwin Park.

Everyone must learn about the realities of the city's plan and the steamroller process that is propelling it. There's much more to come.

Pearl Johnson
League of Women Voters of Honolulu

Where is The Money for The Rail

Where is the Money? is one question everyone should be asking of the Carlisle Administration.

The other is: How dare you start construction with no guarantee of the federal monies?

Today Minneapolis/Saint Paul concluded their funding agreement with the FTA for Light Rail. See article below.

Notes relevant to Honolulu:

• Twin Cities did not start before they got their money.
• Their cost is under one billion. Ours is close to six billion for one third the population!
• They got a 50% match like we got in 1990. Now our match is about 30%.
• Over the last few days I contacted experts who said that rarely if ever a city starts construction before the Full Funding Grant Agreement is concluded.
• Except for Honolulu. Mayor Harris and Transit Planner Hamayasu (also in charge of the rail project now) jumped the gun with the BRT. In a case of national embarrassment, the FTA withdrew Honolulu's Record on Decision. (History has a way of repeating itself...)
  

Hot off the press: Twin Cities’ light rail project clears money hurdle

Minneapolis — The Metropolitan Council and other local agencies finally have the news they have been seeking: The Federal Transit Administration has sent to Congress the grant agreement for the Central Corridor light rail project.

The move launches a 60-day review various officials described as a courtesy, meaning Congress is expected to approve the grant agreement in early April.

That will let the FTA and the Met Council sign the agreement contract that guarantees the federal government will pay for half of the $957 million light rail project. Officials in Washington, D.C., had delayed delivery of the grant agreement several times, but it was not clear why.

The Central Corridor, the biggest public works project in Minnesota history, will connect the downtowns of St. Paul and Minneapolis via an 11-mile route when it opens in 2014.

Rail Will Cost About $3 Billion

I would like to preserve this gem from August 19, 2006 for historical purposes because The Honolulu Advertiser is history and its server may disappear. Please read it and then take a look at my four 2011 updates at the end.

======================================

MAYOR WILL INSIST CITY LIVE WITHIN ITS MEANS

As the City and County of Honolulu proceeds with its analysis of O'ahu's transportation future and holds community meetings to solicit public input, the cost of a proposed fixed guideway is a common topic of discussion.

As is their role, the professional planners and engineers involved in this Honolulu High-Capacity Transit Corridor Project are gathering data, making analyses and evaluations, and preparing recommendations for the City Council, which will make the final selection of a transit alternative later this year. The planners and engineers are envisioning a system where money is not a primary factor, a transit network that accommodates all needs well into the future, a world-class fixed guideway that rivals those of the great cities around the world.

That is not the world in which we live. It is my responsibility to balance needs with resources. This has meant that we've had to make some tough fiscal decisions over the past year-and-a-half, foregoing the nice-to-have for the need-to-have.

The transit system the city ultimately will support will meet our immediate needs and our budget, estimated at around $3 billion. This is called a "minimal operable system" in the parlance of transportation engineering. Yes, a multifaceted, multimodal approach to solving our growing traffic mess falls within the need-to-have, but I want to be careful that we do not exceed our financial limits.

If revenues from the general excise tax surcharge provide more money [1] for our transportation coffers, or if private partnerships [2] generate a major infusion of cash, or if we receive any financial windfalls [3] for mass transit, then we can consider spending more money to expand the system.

Until then, I will continue to insist that we live within our means.[4]

Mufi Hannemann
Mayor

======================================

I inserted four notes in the concluding part to provide 2011 updates:

[1] The surcharge provided over $100 million LESS than expected between 2007 and 2011 and as a result TheBus budget was raided to sore up the "budget."

[2] Hannemann knew he was kidding with this one. No private monies are available for rail transit. Rail projects are money pits. On the contrary, developers are expecting tax breaks (which means taxpayer monies) to develop around stations.

[3] Here the expectations went to the wild side. Windfalls were expected while the 2011 Congress is all about cuts.

[4] The current version of living within our means (as Hannemann put it), or getting our house in order (as Carlisle put it) is furloughing the City's own employees, operating under an EPA mandate that is expected to cost well over $4 Billion, and at the same time pursuing a train that has doubled in cost!

By the way, the Minimum Operating Segment that the letter refers to is now what we present as the planned 20-mile system from Kapolei to Ala Moana Center, the first six miles of which is the train to nowhere starting over half a mile outside Kapolei and ending in Pearl Highlands, going through Oahu's last prime agricultural lands. This video produced by the City shows the destruction of agriculture and the prevailing low densities that are inappropriate for elevated heavy rail. The picture below shows the destruction of Waipahu.

Honolulu's Boards: A Black Humor Sample

The Sunday (Jan. 30, 2011) newspaper editorial explains that the Transit Authority will be a powerful volunteer board that oversees billions. Of course I find it entirely unnecessary.

"At the most we would need a separate division at the city within the Department of Transportation Services," Prevedouros said. "The largest problem is lack of accountability."

Mayor Peter Carlisle disagrees.

Amusingly, on the cover of the same newspaper on the same day(!) we see this:

Federal regulators have raised serious questions about the actions of the volunteer board overseeing the state's second-largest credit union while the directors are facing increasing internal criticism about the level of benefits they are giving themselves. (This board oversees over one billion dollars in assets.)

And let's look at the performance of another board that oversees the state Employees' Retirement System pension fund. See the graph below. They started with 9.9 billion in 2000 and ended up with 9.8 billion in 2010, while the number of pensioners has increased. We now face roughly a 10 billion dollar underfunding.

So what's the verdict on unelected boards managing billions? Broken Trust should be a good hint understood by those who have at least a casual appreciation for history. Carlisle excluded, of course.

Malama Aina? No! Can Start Construction? No!

Two great articles were published in Hawaii Reporter today.


Honolulu Rail May Stop Traffic | Hawaii Reporter

Hawai`i is a place where uncommon nature has been patient with common humanity for hundreds of years. Though we have run over it with concrete, it still engages us with views of towering mountains, and the beautiful blue sea.

So when we who love Hawaii think about just it is what we love, I wonder how much thought has been given to the incompatibility of the steel-on-steel rail, atop massive slabs of concrete to the Hawaii we love?

Malama Aina? ... We have done our beautiful islands enough harm. Now, more than ever, we should be their keepers. If we love Hawai`i, if we love O’ahu, if we love Honolulu, how did we say yes to rail?

Is the City Allowed to Start Construction on Honolulu Rail? | Hawaii Reporter

The terminology used by the FTA to outline these two levels of construction authority is Pre-Award Authority and Letter of No Prejudice.

The city has not come out and explained these requirements to the public. Therefore, it is time for the city council and the media to ask for clarity.

Here are some questions to ask the city to get them to explain where they are in the FTA New starts process:

1. Please explain the difference between the Pre-Award Construction Authority that is applied when Honolulu receives its Record of Decision and the construction authority that comes with a Letter of No Prejudice?

2. Please tell us when you are going to apply for permission to enter into Final Design? Please tell us what the city needs to do in order to make this application?

3. Please tell us what will be accomplished in Final Design and why it will take almost a year to complete?

The Bills are in the Billions

Hawaii.StateBudgetWatch.org has issued a report on the financial state of the state which may be summarized as follows.

+$19,555,468,000 Assets
-$13,244,809,000 Capital Assets (we can't sell roads and bridges to pay bills)
- $2,381,139,000 Restricted Assets (law does not allow the sale of these assets)
+$3,929,520,000 Available Assets to Pay Bills

-$10,218,595,000 Reported Liabilities (these appear in the biennial budgets)
-$11,903,857,000 Unreported Retirement Liabilities (these are hidden in the biennial budgets but very much real liabilities: pension funds and coverages for state employees)**

+$18,192,932,000 Money Needed to Pay Liabilities

$39,600 Each Taxpayer’s Financial Burden

The report does not include city's projected liabilities which easily top
+$11,000,000,000 for Rail and Sewers alone

Each Oahu taxpayer's liability today is well over $60,000.

Here is a comparison of how bad this is: Greece is near bankruptcy. Greece's debt is about $440 Billion (over 300 Billion euro) and there are about 11 million Greeks. So the current liability for each Greek is about $40,000.

To cope with the repayment of the debt, sales taxes in Greece exploded to 23% and added gasoline tax increased price from $5 per gallon in early 2010 to $8 per gallon in mid-2010.

Meanwhile in Hawaii a thoroughly rotted political structure supported by myopic large businesses and entertainment-focused media is piling on bad projects, bad laws, bad decisions and colossal debt.

** Update (1/28/11): Hawaii makes national news by having the highest debt. "Hawaii's debt, for instance, is $5.2 billion. But so is its pension obligation. Combined, the dual obligations make up 16.2% of the state's economy, according to a report released Thursday by Moody's Investors Service. That's the nation's highest total liability as a share of the state's gross domestic product." This seriously jeopardizes Hawaii's to issue bonds at favorable rates.

Decrepid Infrastructure Must Be Number One Priority

It seems that this message is loud and clear. People get it, Congress seem to get it and President Obama has started speaking more strongly about maintenance. But words must turn into acts.

America's capital investment deficit is a great recent article from the Washington Post. I quote this:

"The two deficits are more alike than people realize. Larry Summers, the outgoing director of the National Economics Council, explains it well: You run a deficit both when you borrow money and when you defer maintenance that needs to be done. Either way, you're imposing a cost on future generations. A dollar in delayed road repairs and a dollar in borrowed money are not, in other words, that different: Both mean someone is going to have to spend a dollar later. In 2011, America should stop passing that buck."

Meanwhile, Honolulu has terrible roads, poor facilities at parks and beaches, it operates under an EPA consent decree, it has over 365 water main breaks per year, and has a current deficit of about $100 million.

Unfortunately it also has a mayor who turns his back at the avalanche of existing liabilities and focuses on starting a rail boondoggle that under best scenario estimates will cost us $300 million per year for 30 years, on top of everything else.