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Switching Tracks

Publicly Funded Light Rail Will Fail in
Las Vegas--But There are Alternatives

by D. Dowd Muska

he denizens of Sin City are a notoriously eclectic bunch, but they agree on one thing: Traffic in Las Vegas is a nightmare. Southern Nevadans may never embrace a Portland-style, command-and-control scheme to address their region’s explosive growth. The consensus among drivers, though, seems clear. Something—anything—must be done about the valley’s gridlocked roads.

Motorists aren’t complaining without cause. Last November the Texas Transportation Institute released its annual report on traffic congestion in 70 of the nation’s urban regions. Las Vegas ranked 11th worst. The Institute’s conclusion was not even based on recent information, as "recent" is defined in Vegas time—it used figures from 1996.

Help is on the way. The Regional Transportation Commission of Clark County has a plan to deal with drivers’ frustration. Actually, four plans. In October 1997, the agency approved the recommendations of the Resort Corridor Major Investment Study, a report prepared by the firm Parsons Brinckerhoff Quade & Douglas (PBQ&D). The study outlined four strategies for alleviating traffic congestion in central Las Vegas.

The most sensible tactic is something Las Vegas taxpayers have been funding for some time: more and better roads. The city’s roads were not designed to carry the number of vehicles they currently do, so when major upgrades are complete—including improvements to the Spaghetti Bowl and completion of the Las Vegas Beltway—some relief will finally arrive. PBD&Q’s study also called for the promotion of "modes of transportation that will move more people via fewer vehicles," as well as expansion of the Citizens Area Transit (CAT) fleet to 500 buses. The final item on the study’s list is something Las Vegas planners and elected officials have long lusted after: an elevated train.

Is a billion-dollar "fixed guideway system"—planners’ name for the project—right for Las Vegas? The city’s political leadership and transportation bureaucrats certainly think so. But while the concept of rail-borne mass transit enjoys almost universal support in Southern Nevada, the most important question about the proposed system—who will pay for it—has yet to be settled. Ample evidence from other cities suggests that taxpayers will live to regret a decision to use public funds for a rail system. Fortunately, Las Vegas decisionmakers have options their colleagues elsewhere lack. Several private-sector interests have offered to take part in, or take over, the city’s elevated train proposal.

Light Rail Headed

et’s start with the worst-case scenario: a publicly funded light-rail system. Light rail has been the transit technology of choice in recent decades, and it’s also the one currently favored by RTC Director Kurt Weinrich. Between 1980 and 1993, nine cities constructed light-rail systems, and many cities are currently considering whether to expand theirs or construct new ones.

The "light" in light rail refers not to the weight of the rail, but that of the cars riding atop it. Usually powered by overhead electric wires, light-rail cars are elevated or travel along the ground at speeds of up to 45 miles per hour. (In contrast, heavy-rail systems—such as those in New York or Washington, D.C—typically travel underground, at quicker speeds.)

Boilerplate claims about faster commutes, cleaner air and unclogged roads is always a part of light-rail boosterism, but economic arguments are a big component as well. Light rail is said to be cheaper than other transit options, because it has higher passenger capacities.

Theory is one thing, presentation another. In a 1998 Reason Public Policy Institute study, James V. DeLong wrote that light rail:

is promoted with glitzy literature that usually combines "vision," "high-tech," and "long-term solution" all in the same paragraph. The pitch is always backed by elaborate projections, multicolor charts and graphs, consultants with imposing arrays of academic credentials, and promises of federal grants. And it is accompanied by extravagant promises about ridership, costs, and effects on traffic congestion and urban form. Not surprisingly, local officials are finding this siren song quite seductive.

Seduction is an apt metaphor, because when the honeymoon is over, publicly funded light rail systems stick taxpayers with a hefty bill. Study after study has documented light rail’s fiscal reign of terror. "A systematic analysis of data … shows … that in most cases investment in light rail has worsened overall transit-system financial performance while providing little or no gains in public-transport ridership," Harvard’s Jonathan E. D. Richmond recently concluded.

In 1989, the U.S. Department of Transportation—the same federal agency which subsidizes and promotes public transit in all its forms—concluded that new light-rail systems’ actual construction costs were about 30 percent higher than original estimates. Operation costs were greater, too—by 16 percent. Need more recent data? For light-rail lines opened since its study, the DOT found capital cost overruns of 86 percent.

Operation cost overruns are easy to understand, given how few people use light-rail systems once they are built. In testimony before the Oregon Legislature’s Light Rail Task Force, Cascade Policy Institute President Steve Buckstein offered his assessment of light-rail naiveté: "[Light rail cars] hold such promise that our neighbors will jump aboard, leaving us free to drive to work in peace and comfort. The truth, however, is that our neighbors often have the same preferences we do." In 1994, Portland’s light-rail and bus systems combined accounted for only 5.4 percent of commutes, and 2.6 percent of all travel. (Other light-rail cities posted similarly bleak percentages.) Between 1986 and 1995, notes Goldwater Institute Research Fellow Robert Franciosi, "average daily trips on a main Portland freeway increased by 38 percent despite a parallel rail line."

The ridership data is all the more jolting when one looks at the optimistic estimates usually made before a light-rail system comes on line. The DOT’s 1989 study found that new light-rail lines attracted 65 percent fewer riders than projections. It’s a gloomy number, but it could be an understatement. Transportation bureaucrats, as light-rail critics note, often cook the books. DeLong argues that fudging the numbers is part of the "siren song":

… shortfalls in [light-rail] ridership are not well known to the public or to municipal officials. They are obscured by a practice reminiscent of the bait-and-switch tactics used by fast-talking retailers. Optimistic ridership forecasts are used when a project is first under consideration. Then, after the funding is obtained and the construction is well under way, the forecasts are revised downward drastically. After operation begins, the transit authority happily announces that ridership "exceeds forecasts" without noting that this refers to the second, revised forecast, not to the original predictions used in selling the project.

When faced with the harsh statistics on ridership, light-rail supporters often claim that the few passengers who do get on board are former drivers—so it may be costly, but it’s worth it. However, research consistently shows that the miniscule number of commuters who choose light rail aren’t leaving cars behind—they’re abandoning buses. For example, a 1996 study of public transportation in Los Angeles found that 63 percent of all rail passengers had switched from buses to trains. Sixteen percent had walked, gotten rides from someone, or would not have taken their trips at all. Only one in five rail passengers were former drivers.

Why are commuters eschewing light rail? Mostly because it is not a viable alternative to driving, even in cities with severe traffic problems. Contrary to the claims of its proponents, light rail is not fast. In Portland and Los Angeles, light rail’s average speed is about 20 miles per hour. Average commute times on rail systems nationwide are more than double the 21-minute average commute time for drivers. (The Texas Transportation Institute’s report found that during non-peak times a cross-town trip in Las Vegas takes about 20 minutes. Driving during rush hour adds about 10 minutes to the trip.)

Why does a commute on "speedy" light rail take so long? Because the time spent on board is only one step in a lengthy process. Unless one lives next to a station, using light rail means a walk or a trip in a car. Getting to a station, waiting for a train, travelling at a fairly slow pace, transferring to another rail or bus line and then walking from the final stop to work usually takes the same amount of time—or more—than driving. If that’s the case, why bother?

The final nail in the coffin of light-rail ridership is the harsh reality all forms of public transportation face: Americans’ preference for personal mobility. Despite billions of dollars in transit subsidies and interminable preaching from the global warming worry league, Americans aren’t willing to give up the freedom of a personal vehicle for the inflexibility of bus or rail transit. It’s hard to find a city where public transportation’s share of commutes and general-purpose travel exceeds single digits. Trains are especially undesirable, since they have even more limitations than buses. As urban planning critic Joel Garreau puts it, "I want to live in one place, work in a second place, and play in a third. … Trains just don’t cut it. Trains require you to go where someone else wants you to go when someone else wants you to go."

Light rail’s undeniable failures should put massive doubts into the mind of any city councilman or county commissioner who’s considering the technology as a means to solve traffic congestion. Yet most of the time, they don’t. And now, the light-rail virus has spread to Las Vegas.

Sin City is Tempted

he RTC’s approval of PBQ&D’s 1997 traffic-management plan meant that if the money can be found, rail-borne mass transit will someday be a reality in Las Vegas. The RTC currently plans to build 18 miles of track with 25 stations and three "end-of-line terminals with park and ride lots." The tracks will extend from Cashman Field to Russell Road and Las Vegas Boulevard South—right through the heart of the city’s resort corridor—and include a station at McCarran International Airport.

Last year a separate report by the RTC’s consultants examined four possible technologies for the system: light rail, automated guideway, large monorail and personal rapid transit. Light rail was annointed the winner, scoring highest in "cost differences, number of manufacturers, service-proven systems, marketplace trends and deployment, demand responsiveness, and expandability."

While RTC commissioners have not yet agreed on which technology to choose for the fixed guideway system, the agency’s staff has made up its mind. "We recommended the technology that we believe will serve Southern Nevada today and into the future," Weinrich declared in an agency newsletter. Light rail, he concluded, was "proven in a mass-transit, urban environment."

One wonders how Weinrich defines "proven." Leave aside light rail’s colossal failings in other cities. Even a cursory look at the prospects for a taxpayer-supported light-rail system in Las Vegas yields a multitude of additional concerns. The most obvious is the city’s weather—are Las Vegans really eager to hoof it to and from stations in 110-degree heat?

And of those that might be, how many live within walking distance of the system? According to PBQ&D’s numbers, half of the valley’s jobs are located within the resort corridor. But only 11 percent of the valley’s residents live in the same region—a number that will fall to 7 percent in 2020. Thus, the vast majority of possible passengers will have to drive to station parking lots. (The RTC has a long-range plan for that problem, though. Staff members are researching ways to extend the fixed guideway system beyond the resort corridor to the northwest suburbs—an addition which is estimated to cost between $665 and $720 million. That’s right: RTC bureaucrats are already spending money studying ways to expand a mass transit system that has not even been built, much less proven to be effective.)

And then there’s the little matter of where to find the revenue for all this. Last year’s reauthorization of the Intermodal Surface Transportation Efficiency Act—the mother of all transit-pork bills—included a $155 million authorization for the first phase of the RTC’s fixed guideway system. That’s certainly a sizable sum, and according to the agency, several of its "transportation funding resources currently are projecting a surplus."

But the full project—under current estimates—will cost well over $1 billion to build. Since surpluses won’t make up the entire difference, where will the rest of the money come from? The RTC doesn’t have an answer yet. One possible source is another hike in Clark County’s already sky-high sales tax. Last spring Weinrich suggested that Southern Nevada taxpayers would be happy to contribute to rail transit. "I think it has been exemplified time and again that the public in Southern Nevada can support increasing taxes if they see a bona fide need," he told the Las Vegas Review-Journal.

Weinrich’s modest proposal met a chilly reception. Ridiculed by the Review-Journal’s editors, the idea was even rejected by RTC Chairman Bruce Woodbury. "The sales tax balloon was a joke," says columnist John Ralston. "It was filled with lead and is no more."

My Monorail, My Money

ight rail’s misfires do not mean that an elevated train system has no place in the resort corridor. Otherwise, why are some in the private sector interested in building one? That’s the question posed by RTC Planning Manager Lee Gibson. An unapologetic believer in mass transit—to Gibson, it’s desirable despite its small ridership—he nonetheless admits public transportation’s shortcomings. (He places much of the blame on union-influenced regulations which drive up costs for transit authorities.) A bureaucrat who actually keeps his eye on the bottom line, Gibson touts the competitive-contracting and federal-subsidy-free process which gave birth to the valley’s public bus system as taxpayer-friendly transit policy.

Gibson isn’t convinced—as some Southern Nevada politicians seem to be—that a publicly funded fixed guideway system is inevitable for Las Vegas. With three private-sector players currently on the scene, he told Nevada Journal, the city has a chance to become a "laboratory for the free-market experiment with a fixed guideway system."

Earlier this year, Mitsubishi presented the RTC with an intriguing proposal. The $71 billion multinational corporation offered to raise money from investors—and possibly the Japanese government—to build and run an automated guideway system for the city.

Mitsubishi’s got a competitor, though. A privately financed plan was presented to an RTC subcommittee by Hawaii-based Transco last year. Ron Watson, the company’s CEO, is a fast-talking businessman who believes he can build the RTC’s proposed system without using a dime of any government’s funds. Watson told Nevada Journal that unlike Mitsubishi, Transco does not finance, build, and operate transportation projects by itself, but rather puts "the players together." His company is currently overseeing 14 monorail projects in China, but has not yet built a system in America.

Watson claims his British-built monorail system would cost six to eight times less than the cost of a light-rail route. That’s enough savings, according to him, to keep rail transit in Las Vegas in the black. Merrill Lynch seems to agree—it’s offered to provide financing for Watson. Transco’s boss speaks of a productive meeting with city council members, including Mayor Jan Jones, but is less sanguine about his standing with the RTC. When he spoke to Nevada Journal, he had not yet heard back from the agency, and the executive was feeling a little jilted.

Although Watson’s lack of an operational system in the U.S. should raise eyebrows, he clearly has a firm grasp of the perils of building large transportation projects. "You have to pay your bills in the private sector," he insists. Of course, the private sector’s obligation to deal in economic realities can’t obliterate America’s car culture any more than the public sector’s mushy good intentions. A private fixed guideway system in Las Vegas could still leave taxpayers holding the bag if too few ex-drivers use it.

But not all drivers are created equal—at least not in Las Vegas. Tourists, quite obviously, account for a significant number of vehicles in the resort corridor, and they have very different needs than residents. A smaller-scale fixed guideway system that caters to tourists may be just the thing for those who spend most of their time along the Strip.

At least some proof of this has been provided by the small, privately owned monorail which already exists in Las Vegas. The 0.8-mile system, which runs between the MGM Grand and Bally’s, opened in 1995. Using two cars purchased from Disney, the monorail ferries about 5 million passengers between the two casinos each year. And now, an MGM Grand-Hilton Hotels partnership lead by former Clark County Aviation Director Bob Broadbent wants to make tracks for casinos to the north. It’s working on a $350 extension to the Las Vegas Hilton, and possibly the Sahara.

While the project still faces many hurdles, the Clark County Commission has been largely supportive. In December, it awarded the Broadbent group a monorail franchise agreement. Now the most significant hurdles to the expanded monorail aren’t a result of the public sector. For years, incessant squabbling amongst casinos has kept the Strip’s major players from building their own mass-transit system. And with Broadbent’s effort fairly close to fruition, a homeowners group has joined the sniping. Residents of Desert Inn Estates have filed suit against the county for its approval of a monorail they say will devalue their homes. The Desert Inn and Venetian want nothing to do with the monorail, either—leaving the project with a tricky, if not insurmountable, quandary about what path the monorail will ultimately take.

Going to Market

anding the risks of rail transit in Las Vegas off to the private sector has implications beyond simply getting taxpayers off the hook for another billion-dollar government boondoggle. It also means the opportunity cost for building and operating a light-rail system would vanish: If not returned to taxpayers, the tax revenue which would have been earmarked for light rail could instead be put toward effective traffic-fighting measures in Southern Nevada. Widening roads and building new arteries could be intensified, but resources could also be devoted to study and implementation of the newest solutions to traffic congestion.

While some in Southern Nevada are pushing urban transit policies of the past, a revolution of sorts is occurring in transportation policy itself. Led by a group of libertarian economists and reformed urban planners, the new thinking discards the dogma that large-scale, monopolistic public projects are the best way to meet the mobility needs of city dwellers. From congestion pricing (whereby drivers pay a premium for accessing key roads at peak times) to fully competitive markets for buses, jitneys and vans, fresh perspectives are entering the old debate over what to do about traffic congestion. Nations abroad (including Singapore, which cut rush hour traffic by 65 percent through congestion pricing) and even a few experiments in America have confirmed that market-based solutions to clogged roads work.

Officials in Las Vegas have a unique opportunity to put their city in the forefront of forward-thinking solutions to traffic congestion, and thus avoid the mistake so many others have made. The truth about publicly funded transit, and light rail in particular, hurts. But there are alternatives—if politicians and transportation bureaucrats alike just look a little farther down the road.  NJ

D. Dowd Muska is contributing editor of Nevada Journal.

News to Use
Reason Public Policy Institute Transportation Program
http://www.rppi.org/infratran.html
Cascade Policy Institute Light Rail Debate
http://www.cascadepolicy.org/transit/rail.htm
D. Dowd Muska

ddm@npri.org

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