Michigan Land Use Institute

MLUI / Articles from 1995 to 2012 / 3rd STOP: RAISE THE MONEY


April 1, 2001 | By Kelly Thayer
and Dusty Fancher
Great Lakes Bulletin News Service

Rail systems are among the largest public infrastructure projects around, in a class with highways, runways, and sewer systems. The federal New Starts program will fund at least half the cost to build a passenger train line but will not pay to operate it. Cities across the nation have been pulling off the daunting task, however. They've convinced politicians, corporate leaders, and local residents to support moving some money from roads into transit projects and to back new taxes for well-planned rail investments. Local, state, and federal money, and some private dollars, have flowed into rail projects once cities started planning and champions got busy selling the cost savings and development benefits.

Portland, Oregon, for example, soon will add a $350 million light rail project to its extensive system with $30 million from the city budget, another $30 million in federal funds that the state shifted from its highway program, and about $35 million from a dedicated employer payroll tax. New Starts will contribute $257 million, or 74 percent. In Memphis, a $30 million light rail extension project is in line to receive 80 percent from the federal New Starts program, 10 percent from the Tennessee Department of Transportation, and 10 percent from the city.

Successful cities have seized on the broad appeal of transit to attract financial support. "There really is something for everyone with a light rail project," said Denver City Councilwoman Joyce Foster. "We were able to build a coalition of cities, counties, environmentalists, and the chamber of commerce. That kind of public-private support is exactly what Washington D.C. wanted to see."

Michigan, the nation's eighth-most populous state, last year received only $20 million, or less than one percent of $2.6 billion in federal funding for bus and rail. Why? Because federal funding is heavily weighted toward launching train systems, and Michigan isn't planning one.

The state instead has a policy of shortchanging transit while stuffing more money into road construction. Michigan directs only $230 million of its $2 billion state transportation budget to local transit agencies each year. Transit is eligible under the state Constitution to receive twice as much. Gov. Engler has not only blocked attempts to move any money from roads to transit but also cut transit out of new funding.

Local governments are doing what they can to support state-neglected transit systems. In west Michigan, residents and businesses pulled off a big win last year when their campaign for a property tax increase to improve the metropolitan Grand Rapids bus system passed with an impressive 65 percent approval. Still, the added funding was only enough to add some Sunday service and extend evening hours to 8 p.m.

In 1998, residents in Macomb County and portions of Wayne and Oakland counties overwhelmingly renewed a property tax that raises about $20 million to support SMART, suburban Detroit's bus system. For its part, the city of Detroit directs about $60 million a year to transit from its general fund.

Metropolitan Detroit's overall transit funding, however, is far behind that of other major cities. San Francisco spends $139 a year per capita on public transportation. Dallas spends $100 per person. Cleveland and Pittsburgh spend $70 to $80 per resident. Detroit spends $19.

Transit planners and public officials in both west and southeast Michigan have been unwilling to press for a major hike in property taxes to vastly overhaul bus systems or launch rail. "Michigan is the only state that relies on property taxes to the extent that we do to support transit," said SMART General Manager Dan Dirks. "A regional sales tax might be a better bet to raise more money than we do now."

Many U.S. passenger rail systems raise operating revenues by levying a regional increase in their state's sales tax. But metropolitan areas in Michigan cannot levy their own sales taxes without a constitutional amendment to allow higher sales taxes, which requires a major campaign just to get on the statewide ballot.

Despite the financial hurdles, Michigan can take many small, significant steps to boost current transit funding sources and work its way toward better bus service and rail lines.

It's a matter of momentum and vision. Bus systems that serve more people more reliably will build public awareness and support, which generates demand for expanding bus networks with rail options. Once a city starts planning for rail, federal New Starts money becomes a possibility.

Promising initiatives that could trigger the public planning and federal funding chain of events include the current SEMCOG visioning process, proposed commuter rail lines between Detroit and Lansing and from Detroit Metropolitan Airport to downtown, as well as the Metropolitan Affairs Coalition's rapid bus study for Detroit (see Take Action).

Alone or together, these efforts could generate the kind of transit plan that Michigan's Congress members must have in hand by 2003 to compete for New Starts study dollars. If Michigan misses the 2003 mark, it will have to wait until 2009 when New Starts begins another funding round. The timing is critical because cities must first obtain federal money to complete feasibility studies before they can get in line for design and construction funds.

Newly elected Senator Debbie Stabenow backed initial funding for the Lansing-to-Detroit rail study as a member of the U.S. House of Representatives. Now Sen. Stabenow is in an even stronger position to support transit with her appointment in January to the Banking, Housing, and Urban Affairs Committee, which oversees transit policy. "In Michigan, the senator sees a lot of need for public transit. Detroit needs new buses for instance. And the senator clearly is interested in rail as well," said spokesperson Dave Lemmon.

But Michigan's success with the federal government depends on whether the state does its part to improve transit and move away from sprawl. Greater state transit funding and land use planning can reduce congestion now and move Michigan toward advanced rail networks later.

This is the message that the Michigan Land Use Institute and the Michigan Environmental Council are sending lawmakers and local residents through a statewide coalition of transportation and environmental advocacy groups, disability rights organizations, and transit agencies. The coalition's first priority is to increase state gasoline tax funding to local transit agencies by more than 10 percent, or about $25 million per year. The coalition also is working with State Representative Judith Scranton (R-Brighton) to pass her House Bill 4002, which would redirect a portion of the existing use tax on auto leases to transit for an estimated annual boost of $23 million.

"We're putting too much money into roads to serve too few people," Rep. Scranton said. "Transit serves everybody's needs, whether you're young or old, don't own a car, or would rather read and relax and think instead of fight traffic."

The future of Michigan's cities rests on whether local and state leaders account for the great cost of relying so heavily on roads for everyday transportation and forcing air travelers to put up with the one-in-four odds of flight delay or cancellation.

Rail networks expand and energize bus systems, give taxpayers more transportation for their money, revitalize neighborhoods and local businesses, and spare farmland and clean air from the effects of sprawl and untamed traffic.

The vision of a better Michigan begins with lessons from Denver to Dallas and Portland to Pittsburgh. Citizens, politicians, and planners in these cities reached consensus that passenger rail service brings higher quality of life and greater prosperity. They now are reaping the benefits of years invested in planning, championing their cause, and raising the money to set it all in motion. Michigan would do well to look down the tracks and catch the next train.

CONTACTS: Brian Jackson, Federal Transit Administration, 202-366-8520, brian.jackson@fta.dot.gov; Michigan House Speaker Rep. Rick Johnson, 517-373-1747, rjohnson@house.state.mi.us; Michigan State Rep. Kwame Kilpatrick, 517-373-0844, kkilpat@house.state.mi.us; Carmine Palombo, SEMCOG, 313-961-4266 palombo@semcog.org; Grand Rapids Mayor John Logie, 616-459-6121, mayor@ci.grand-rapids.mi.us; Andrew Zeigler, MDOT, 248-483-5100, zeiglera@mdot.state.mi.us; Vicky Kovari, MOSES, 313-838-3190, jerproj@aol.com; Tom Leonard, WMEAC, 616-451-3051, wmeactl@
; Karen Kendrick-Hands, TRU, 313-885-7588, kdkhands@ voyager.net.

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