The Looming Transit Breakdown That Threatens America’s Economy

Categories of maintenance needs, in billions of dollars, for America’s large transit agencies. Graph: RPA

While federal transit funding stagnates, the nation’s largest rail and bus systems have been delaying critical maintenance projects. Without sustained efforts to fix infrastructure and vehicles, the effects of deteriorating service in big American cities could ripple across the national economy, according to a new report from the Regional Plan Association [PDF].

RPA focuses on ten of the nation’s largest transit agencies — in Boston, San Francisco, Atlanta, Philadelphia, New York, Cleveland, New Jersey, Pittsburgh, Washington, D.C., and Chicago. Between them, these agencies face about $102 billion in deferred maintenance costs. To bring the systems into a state of good repair will require about $13 billion in maintenance spending per year — more than twice the current rate of investment.

These regions house about one-fifth of the country’s population and produce about 27 percent of the nation’s economic output. They also carry about 60 percent of the nation’s total transit ridership, up from 55 percent 20 years ago. That’s a reflection of how transit has become increasingly important in these regions, with passenger trips growing 54 percent over the same period.

That level of ridership growth can’t be sustained if the transit systems aren’t maintained properly. RPA cites a 2012 report from San Francisco’s BART that says if the system is allowed to deteriorate…

…the consequences will be drastically negative. BART’s aging infrastructure will fail more frequently, causing substantial declines in reliability and more crowding. In turn, BART ridership, which is expected to increase to half a million riders a day if current levels of service can be maintained, will stagnate or even decline.

The decline of the country’s big transit systems could have wide-ranging economic consequences, deterring growth in America’s most productive regions.

In 2013, about $5.4 billion in capital funding was available to these 10 agencies from the federal, state, and local governments, with another $1.9 billion coming from fares, tolls, and dedicated taxes. Of that $7.3 billion, about 80 percent, or $6 billion, was spent on maintenance, RPA reports. But even if it all went toward maintenance, that would fall far short of the $13 billion needed to repair and replace the systems’ core infrastructure.

The federal government isn’t about to step in. The transportation bill working its way through Washington right now will, at best, continue status-quo funding levels for transit over the next six years. If anything, the federal bill will aggravate the problem.

A late amendment from Washington Rep. Jaime Herrera Beutler eliminates the “Growing State and High-Density States Funding Program,” which helped deliver about $272 million in funding to some of the big transit agencies in the Northeast in particular, according to the Tri-State Transportation Campaign. It’s not clear whether the amendment will survive conference committee.

RPA Board Chair Lee Sander said that creating wider recognition that transit maintenance is a national problem, not just a local one, is an important first step.

“Hopefully this will give leverage to the individual transit properties… as they deal with their state legislatures and other legislative bodies,” he said.

Correction: This post originally reported Jaime Herrera represented Oregon in Congress. She represents Washington.

14 thoughts on The Looming Transit Breakdown That Threatens America’s Economy

  1. “While federal transit funding stagnates, the nation’s largest rail and bus systems have been delaying critical maintenance projects.”

    Following the “victory,” according to transit advocates, of getting permission to use federal funds for operating rather than capital expenditures during the recession. Five years after it ended, you don’t think anyone would go back to paying their operating costs, do you?

    That’s the problem with selling the future. It eventually becomes the present. I brought this up and the time, but it tends not to be what people want to hear. But the generations following Generation Greed will be dealing with the consequences the rest of their lives.

  2. But, from the teabag/libertarian/autocentric POV, none of these transit riders matters because as Mitt said they are “takers” unlike the drivers who merely “enjoy” the bounteous highway system. A minor trim (not a full haircut which is deserved) of the bloated DOD would fully fund these repairs and upgrades.
    Not holding my breath.

  3. All I need to read to know we won’t be able to fix much of anything: “Capital Asset”. How can a depreciating maintenance liability peice of infrastructure be counted as an “asset”?

  4. These so-called assets do not generate revenue and have a negative value throughout their entire life cycle. They are not transferable in anyway, outside of some small scrap value relative to their design and construction costs. It is all cost for the local government – sounds like a liability from day zero until the road cracks and disintegrates to me.

  5. Subways generate fare revenue. Parking generates parking meter payments.

    Roads? Well, theoretically they could generate tolls, property tax revenue, or sales tax revenue, but often they don’t…

    It’s still an asset even if you are, for some idiotic reason, giving away the use of it for free. Giving away the use of it is a constant loss, obviously. If it could be sold to a toll road company, however, then it qualifies as an asset.

  6. They were delaying maintenance projects before that. NYC has been delaying maintenance projects since, oh, the 1930s if I remember correctly.

  7. The infrastructure is an asset (or a bunch of them) that future benefit is derived from. Maintenance and financing costs are liabilities that must be balanced against possession of an asset.

  8. Saleability is irrelevant. Land is always an asset in accounting-speak. Cleanup costs or property taxes are liabilities in your scenario, not the land itself.

    In the case of transit, the liability that almost always drives a TA into unprofitability is labor costs. ROWs are pretty cheap to maintain by themselves, but paying train and (especially) bus operators is expensive.

  9. What future benefit for the agency constructing it and doing the accounting? It is all cost, it is all liability. There might be some small amount of money from users, but never enough to cover costs.

  10. Subways and parking lots and tolls generate revenue – but when compared with maintenance costs, these projects are almost universally money losers. These “assets” are all loss all the time for the agencies tasked with building and maintaining them – which sounds like a liability to me.

  11. No, it’s not. Being able to offer service in the future is a benefit for an agency. A liability is an obligation. An example of a liability for a transit agency would be infrastructure financing costs or labor expenses.

    An asset doesn’t need to be put to use to be an asset anyway. Fallow land, with a property tax liability attached, would still be an asset.

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