2020 Leg Session, Exclusives, Featured, Joshua Sharf, Transit, Transportation, Uncategorized

Sharf: RTD reform bill leaves taxpayers waiting at the station

The Regional Transportation District (RTD) is a mess, but a proposed Senate bill to increase state oversight risks leaving the average taxpayer waiting at the station.

It’s fair to say that something needs to be done about RTD. For years, it’s been suffering from declining ridership, rising fares, rising subsidies, and now, service cuts. In a pattern typical of transit systems across the country, too much money has been going to expensive and under-used light rail service, depriving cheaper and more flexible bus service of needed funds.

Reports are that RTD’s board is aware of this problem and would like to do what it can to address it. Instead of working with the board to make that happen, the bill seems designed to raise taxes and tie the system up in legal and administrative knots.

Senate Bill 20-151 has a lot of moving parts, but the three biggest provisions would

  • Ditch the requirement that 30% of operating costs come from fares
  • Add two new appointed members, one representing the disabled community and the other representing disadvantaged communities
  • Grant disabled or disadvantaged groups who felt they were underserved the ability to sue RTD.

The first requirement is the most troubling. The 30% requirement acts as a brake on costs by forcing the system to take into account its riders. That RTD managed to avoid doing so for so long was a result of booming population and attendant growing ridership.

But since 2000, the decision to build out the capital-intensive light rail combined with faltering system ridership has led to the current crunch. In 2017, system-wide bus boardings were still off their 2012 peak, with any growth in boardings coming from light rail, whose rides are subsidized at nearly twice the per-ride level of bus rides.

According to RTD’s Consolidated Annual Financial Reports, Operating Revenues (fares) are up 6.5% annually since 2000, and Sales and Use Tax revenue is up 6% per year, including a 0.4% rate increase approved in 2005. By comparison, Operating Expenses are up 5.4%, while Planning, Administration, and Development are up 6% annually. But Depreciation and Interest are up a whopping 12.5% and 9.6% annually, as the bills come due.

Increasing taxes would only enable further bad decisions, rather than forcing RTD to be accountable to its riders. And those tax increases would come largely at the expense of people who can least afford them, since sales taxes are almost always regressive as a percentage of income.

Likewise, the additional board members don’t do much for taxpayers, nor do they do much to increase overall public support, but rather serve special interests, even though they’re important ones. Better than putting a spendthrift state treasurer on the board, the legislature could create a citizen/taxpayer watchdog or a permanent citizen audit committee, as suggested by board member Natalie Menten.

What’s more, the ability for groups to sue for discrimination as protected classes may sound like a means of assuring service for all. If the past is any guide, it may just as likely lead to operating plans drawn up by and overseen by unelected judges, leaving the broader public even more disenchanted and frustrated with service. As recently as 2013, RTD had reason to be pleased with its record of serving disabled customers.

And while it’s entirely possible that minority commuters are getting disproportionately less service, that may or may not simply be a function of RTD persistently underserving cross-county commuters, as opposed to those commuting to and from the urban core. A recent study commissioned by the board showed Denver being subsidized by the ring counties, with the largest subsidies coming from Jefferson, Douglas, and Adams Counties. Those subsidies may or may not be a function of failing to follow the traffic, but little good can come from placing them in the context of identity politics.

This isn’t to say that the bill is all bad. RTD’s pension system, like all public pension systems, could stand a good investigation. The addition of the state Treasurer to the board at least makes it possible that the people as a whole may have some representation, although unlike with the Public Employees Retirement Association (PERA), RTD board members are already elected by the public. Whistle-blower protections, if not already afforded by law, may make it easier for legislators and the public to conduct needed oversight. And professionalizing the board, particularly through the broadcast of meetings, will aid those who are interested in following the proceedings.

On the whole, though, the bill ignores the fundamental dynamic at work: RTD doesn’t have high fares and misdirected service because it’s poor. RTD is poor because it has high fares and misdirected service. Adding additional layers of government, giving even more places for those responsible to point fingers, and putting operational and management decisions even more firmly in the hands of activists and bureaucrats does nothing to help the average commuter or taxpayer.

Currently, SB-151 is scheduled to be heard in the Senate Transportation and Energy Committee on February 11.

Joshua Sharf is senior fellow in fiscal policy at the Independence Institute and a regular contributor to Complete Colorado.

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