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The Transit Connection

Buses, trains key to Michigan's competitiveness

May 8, 2002 | By Kelly Thayer
Great Lakes Bulletin News Service

  Unlike many places across the nation, Michigan and its communities have spent the last decade laying more pavement without providing more transportation choices, such as world-class bus and train service, like this light rail line in Portland, Oregon.

The rapid movement of people, goods, and ideas propels the economy more now than at any time in history. Commuters crisscross entire metropolitan areas, products pour across open borders, and information races instantaneously around the globe on the Internet.

In contrast to the warp speed of bytes and boxes, however, are the daily delays that millions of Americans face in snarled traffic. Like many across the country, Michigan’s residents and business leaders are recognizing that gridlock and road rage frustrate everyday life and constrict free-market momentum.

But unlike many places across the nation, Michigan and its communities have spent the last decade laying more pavement without providing more transportation choices, such as world-class bus and train services. Other states, meanwhile, are diversifying their transportation portfolios with commuter rail, express buses, and other transit innovations. Their leaders see rapid transit as an opportunity to use tax dollars more flexibly and efficiently and to compete globally for business investment and top-flight employees.

Rails to Sales
Across the nation, states are confirming that public investment in world-class bus and train service attracts significant private capital to new and improved transit corridors. A 1999 study by Cambridge Systematics, a consulting firm, estimates that every $10 million investment in public transit generates 300 jobs and a $30 million boost in local sales.

Michigan has plenty of opportunity to stimulate such growth if state and regional officials get on board and help new transit ideas become reality. A proposed commuter rail line between Lansing and Detroit, for example, is expected to generate 378 local jobs and increase property values by $127 million within three to five years of the line’s potential 2005 debut.

Downtown redevelopment also benefits. In 2001, Columbus, Ohio — one of the fastest growing cities in America — put $2 million into building a transit center in a blighted area. Within a year, the investment brought another $10 million in development to the location. Similarly in Denver, a 1994 light rail line (electric streetcars) through a low-income neighborhood spurred $50 million in redevelopment projects by 2001.

"Having a transit line is like having another big street in front of your shop," says David Chandler, a policy specialist at the Chicago-based Center for Neighborhood Technology. "Another 20,000 people a day come by with the capacity to stop."

Only by putting commitment and creativity into funding transit can Michigan make good on an important goal that the state’s legislative and business leaders set in 2000, say economists and urban specialists. As described in a major policy report, the state aims to develop — within a decade — North America’s "premier integrated system of highways and public transit services."

The state’s report recognizes that Michigan needs more effective and convenient transportation options to shift the economy into high gear. Its recommendations fail, however, to make transit a key part of Michigan’s transportation future.

Just as stocks balance bonds, public transit balances the risks of a highway-only transportation plan, which promotes long-distance living and forces people into cars for every household or business need. Adding first-rate transit to Michigan’s transportation future will create more opportunity for the state’s communities and their economies.

States that value public transit as an engine for economic growth and urban revitalization provide strong and stable funding to their bus and train services. Michigan’s transit spending, in contrast, has bounced up and down since 1990 like a passenger on a poorly maintained bus.

Case Study: Michigan and Illinois
A glimpse at Michigan and Illinois reveals the difference state policy makes on transit development and service.

Though comparable to Illinois in demographics, economics, and even culture, Michigan spends roughly one-third as much per capita on transit: About $21.50 versus Illinois’ $58 per resident. Not only does Illinois beat Michigan in public transit, its funding for bus and train systems is in a league with transit-rich, densely developed states, such as New York, New Jersey, and Pennsylvania.

As a result, Illinois’ cities offer a menu of transit options ranging from shuttle vans to express buses to Chicago’s famed elevated train system. Chicago, in turn, enjoys more urban redevelopment than Detroit, in part, because of convenient and comprehensive transit offerings.

The message sent by the Michigan Department of Transportation, however, is that cities and citizens cannot count on the state to treat transit as a vital link in Michigan’s transportation system. As a result, communities struggle to keep basic transit systems functioning and fail to plan and build 21st-century transit options.

Like any business, public transit cannot serve its customers efficiently and effectively with meager and unstable financial support. Michigan must put substantial state-level backing behind local transit efforts by maximizing transit’s share of existing funding sources, such as the gasoline tax, and by developing new revenue streams.

Bypassing Transit
The period from 1997 to 2001 offers a revealing snapshot of Michigan’s debilitating attitude toward its urban and rural bus systems.

At every opportunity for new transit funding during this time, Michigan Governor John Engler and the Legislature directed revenues to roads instead. In addition to undercutting transit, this policy also stimulated the kind of suburban growth that spreads people and destinations farther apart, undermining the workability of bus and train service.

In 1997, Gov.Engler and the Legislature raised the tax on gasoline by 4 cents a gallon, generating an additional $200 million annually. By law, public transit should receive about 10 percent of the gas tax and, as such, was in line to reap some $20 million more each year. It would have been a vital boost after Gov. Engler and the Legislature cut transit’s budget three times in the early 1990s to curb state spending. Instead, state politicians bypassed transit completely and directed all the new gas tax proceeds to roads and bridges. This left state support for transit in 1997 nearly unchanged since the beginning of the decade, while spending on highways soared.

One year later, citizens learned that the Michigan Department of Transportation had failed to disburse all of the funding available for local transit dating back to 1990, quietly accumulating a $58.5 million surplus. Rather than infuse transit with this critical cash, however, the governor and Legislature sent $25 million of the transit surplus to the highway program. Local transit agencies received just a bit more than half of their own money, which they sorely needed to catch up on deferred maintenance and service upgrades.

Even so, this one-time 1998 spike in transit funds has since emboldened the governor and legislators to reduce transit funding again, as if levels were too high. In reality, transit’s annual budget regularly falls well short of the full 10 percent of certain transportation tax revenues allowed it under the state constitution. Transit’s share in 2001 would have been about $25 million higher if it had reached the 10 percent cap.

Survival Mode
Michigan’s local bus agencies have survived the state’s bumpy funding ride only by cutting routes, reducing hours, and postponing maintenance. They have not been able to put planning for world-class transit at the forefront of their activity.

Now, rather than boarding sleek trains or express buses, Michigan citizens remain stuck in the same old traffic. And those who rely on transit to get to work sometimes go without a bus ride or, in some cases, without a job. In the city of Detroit, for instance, one-third of households don’t own a car, and underfunded buses are notorious for frequent breakdowns and scheduling backups. Few employers can afford to tolerate an employee who regularly arrives an hour or more late.

Urban traffic congestion also worsened and air quality suffered during the 1990s because of the state’s low regard for transit. Meanwhile, state officials continued laying plans for new and ever-wider highways, failing to account for the toll such over-reliance on cars puts on family budgets, community quality of life, and the state’s economic competitiveness.

Economists and urban specialists argue that Michigan cannot possibly become North America’s leader in seamlessly connected highways and transit systems while pouring cash into pavement and demanding transit do more with less. Yet that’s exactly the vision the state unveiled in 2000 with its Transportation Funding for the 21st Century report.

The report recommends cutting guaranteed funding to transit agencies by 50 percent, lumping the other half in a funding pool, and then requiring local agencies to compete for the remainder of their basic operating funds. Total state transit funding would not change. But some bus systems would face certain loss of financial support. All would suffer from still greater uncertainty.

To solve the problem, say authorities, state leaders need to:

  • Mandate 10 percent of all state transportation funds — including a share of the 1997 gas tax hike and any future increases — go to public transit.

  • Direct an additional 10 percent of state transportation dollars to a transit incentive fund.

  • Ensure that all transit money actually goes to bus and train service and on a timely basis.

Kelly Thayer is a journalist and Transportation Project Manager for the Michigan Land Use Institute. Reach him at kelly@mlui.org. For more of the Institute’s first rate reporting and commentary on land use, transportation, communities and the environment see www.mlui.org

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