In a new op-ed for Complete Colorado, Randal O’Toole argues that governments that run transportation systems should build rapid-bus lines rather than rail lines. Rail is expensive, and rail lines serve only particular routes. He concludes, “Transit agencies that want to build-light rail are wasting their taxpayers’ money. Cities that haven’t yet built light-rail should plan rapid-buses instead. Cities that have light rail should expand their systems with rapid buses and plan to replace the rail lines when they wear out with more efficient buses.” Someday I hope to write an in-depth essay about the history and theory of government-run transportation systems and their free-market alternative.
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.
Referendum C is the net tax hike passed in Colorado in 2005. For background, see my “Referendum C Central.”
In Colorado, tax dollars collected in excess of what may be legally spent must be returned to the taxpayers, under the Taxpayer’s Bill of Rights. But Referendum C allowed the state government to keep all of the excess dollars for several years, regardless of the amount. (That is why I call it a net tax hike.) The amount has risen dramatically, as The Pueblo Chieftain recently pointed out:
When it was pitched to voters, supporters of the measure initially said it would raise an additional $3 billion over five years – then the figure quickly was raised to $3.75 billion.
We believed the figure would be closer to $7 billion, based on the additional bounty the federal Treasury was bringing in as a result of the economic boost from the Bush tax rate cuts. But we were being too conservative.
Last week the office of Gov. Bill Ritter released its quarterly economic and revenue forecast. That document admitted that our prediction was closer to the truth.
So now we will go boldly where no one has gone before and predict that Ref C will result in an increase in state revenues of $10 billion over the five-year period.
The exact figure will not be known till after the fact, but obviously it will be billions of dollars more than Referendum C’s supporters originally predicted.
Although the ref C advocates dishonestly described ref C as as “temporary” “five-year” “time-out” from the Taxpayers Bill of Rights, the effect of ref C will be a permanent increase in state government taxing and spending levels allowed under the state Constitution. And yet, $10 billion extra dollars, over five years, plus billions and billions more in perpetuity, is not enough for the tax consumer lobby, which is gearing up to push another tax increase on the 2008 ballot.
It’s not clear exactly when or how the tax-hikers will make their move, but they obviously want to figure out a way to take even more of other people’s money by force. Apparently, to them the refrain, “just a few billion more,” never gets old.