Increasing supply of transit won’t create more demand

You’ve heard a variety of reasons why November’s roads and transit ballot measure failed.

“The package cost too much.” “There were too many roads or there was too much transit.” And the apocalyptic prediction from the Sierra Club that Proposition 1 will lead to more global warming and the demise of more polar bears.

Instead, the answer is much simpler. Prop. 1 failed because it did not provide the one solution voters want most: traffic relief. The architects of Prop. 1 wanted to spend $47 billion in the name of transportation policy, but experts estimated congestion would double by 2030, with or without Prop 1.

Voters had an easy choice. They could either spend $47 billion and double congestion, or not spend $47 billion and double congestion. Quite logically, voters decided to save their money.

So where do we go from here?

Policy makers are sure to propose a new plan. Whether it’s another regional approach or a more segregated model where local agencies are left to themselves, our research indicates a winning transportation policy must be based on certain core principles. Among these are:

1) Spending for transportation should be tied to congestion relief. 2) Efficiency is also important, and the space between cost and benefits should be small. 3) Finally, as with a business, investments should follow market demand.

It may surprise you to learn that congestion relief is not a policy goal or an “investment guideline” in Washington state. There are no policy statements, benchmarks or required performance measures that link transportation projects to traffic relief for drivers.

In fact, the state Auditor’s Office found that spending on transportation projects is not based on congestion relief. Instead, the money is spent on “other agendas.”

Prop. 1 failed because of its close relationship to these “other agendas.” Policy makers are scrambling for direction, but it should not be surprising that traffic congestion continues to worsen, because they spend money on things that have no effect on reducing it. Prop. 1 continued this pattern. Until policy makers present a plan that links spending with traffic relief, the public will continue to withhold support.

The state already plans to spend nearly $6 billion for transportation over the next two years. Asking to spend more, whether at the state level or from special districts, must be contingent on congestion relief.

Policy makers should also judge future investments on whether the resources are based on what people are choosing to use.

In economics, supply is a function of demand. This means a willingness to use a service must exist before a supply of that service is created. Boeing does not make 300 airplanes knowing it will only sell 100.

Likewise, governments should not spend a disproportionate amount of taxes in low-demand sectors, where the willingness to use the service does not justify the investment.

European transit systems are a good example of how these economic concepts apply.

In Switzerland, for example, light rail is successful, not because of the amount of service or infrastructure, but because the country has certain demographic and economic characteristics that induce demand.

In other words, there is an existing market with a customer base, and Swiss policy makers responded with proportional infrastructure investments. As a result, mode share, ridership and fare box recovery are high.

Here in Washington, transit resources are distributed in just the opposite way.

Under the “build it, and they will come” theory, many policy makers think that increasing the supply of transit will somehow create more public demand. This approach is failing because Washington cities do not possess the underlying demographic or economic characteristics that create enough voluntary consumers for light rail.

Despite years of spending increases, the share of commuters using public transit in Seattle actually fell to 6.8 percent in 2000 from 7.5 percent in 1980.

Using market principles shows that building excess transit capacity before there is a willingness to use it leads to an underperforming system. As a result, mode share, ridership and fare box recovery are low and the space between costs and benefits is high.

Mobility is a fundamental principle in transportation, and policies that infringe on this freedom threaten people’s ability to live and work where they choose. Policy makers should keep these values in mind if they expect voters to support a transportation package in the future.

Michael Ennis is director of the Center for Transportation at Washington Policy Center, a non-partisan public policy research organization in Seattle and Olympia (washingtonpolicy.org).