Kevin Flynn of the Rocky Mountain News reports:
RTD conceded Friday that it cannot deliver the FasTracks program as promised to voters four years ago.
The program, originally budgeted at $4.7 billion when voters approved a sales tax to support it, rose to $6.1 billion last year and is poised for a substantial increase next month during budget talks with the elected board. …
The program has been clobbered from two sides, with huge increases in the cost of construction materials and fuel, and a slowdown in the economy that has cut into the revenue RTD expected from the sales tax that underpins the financing.
Let’s go back to basics. There is absolutely no reason for rail to be tax-subsidized at all. If rail lines offer a real economic benefit, then people will gladly pay sufficient fares to keep them in business. Rail lines easily can exclude non-payers, so that objection is gone. If the concern is the small fraction of poor riders, then a market rail service is perfectly free to price discriminate, say by offering discounted passes to the poor. Especially for non-peak travel, such price discrimination would add to the rail’s revenues, as most costs are fixed. Alternately, those who wish to voluntarily subsidize transportation for the poor are perfectly free to do so. By relying on a sales tax, rail forcibly transfers money away from some poor people to some rich people, and that’s wrong even according to egalitarianism.
Atop those economic reasons rests the simple fact that it is morally wrong to force people who don’t use rail to subsidize those who do. People have the moral right to control their own income, to decide for themselves whether to fund rail, whether to use it, whether to invest in it, and whether to subsidize other people’s transportation.
Now TaxTracks has run into the problem that the sales tax, set as a percentage of sales in the region, is subject to economic downturns. Notably, a real loan is not. A real loan is what a marketized RTD should have obtained. A real loan is what RTD could have paid off with paying users, if its services actually are demanded. RTD is complaining also about increased costs, but at the same time, presumably, more people are riding rail to avoid the gas pump.
On a free market, perhaps RTD still would have had to cut back or restructure with changing economic conditions. But, on a free market, RTD would not have made promises to taxpayers that it cannot keep.
I’d be curious to see what the sales tax collections are versus RTD’s projections. Especially after learning they used the CPI and not a construction inflation index as part of their projections.