CHICAGO: Transit Developments

[TR Devlin]

Question:

Would you vote for a significant city tax increase ($500 million per year or more) if the money was dedicated to transportation projects? Yes or no.

[Vlajos]

No, city government is already too costly and we have massive pension debt to get under control. Any tax increase should be solely dedicated to reducing debt.

[ardecila]

^ Absolutely I would vote for new revenues. It would depend on the details though. I think the sales tax is already overburdened, any higher and it will continue to suck business activity out of outlying neighborhoods. It is just one more reason why the South and West Sides are food and retail deserts, we should not make this problem any worse.

On the other hand I think congestion pricing is much needed especially on the expressways (incl. LSD) and the central area. Use the revenue to fund 20-minute service on all Metra lines; this is the cheapest and fastest way to extend high quality transit to areas that don't have it, at least in Cook County. Also roll out speed cameras on a much wider basis, including expressways. Put 3/4 of the camera revenue into a lockbox for transportation purposes, and the other 1/4 into a lottery for drivers that don't have any violations. In order to sell this to voters you'd probably need a specific list of projects like Measure R in LA.

[k1052]

More transit TIFs tied to specific projects might be a better way to scare up revenue in the city without raising already high taxes (which is likely to be unpopular).

[VKChaz]

Originally Posted by Busy Bee

It's almost like there should be a line that connects those spokes, no? Maybe call it the Circle Line or or Mid-City Transitway or something

The irony is that it must be easier to get things built in areas with fewer riders. Start trying to weave rail through more densely populated areas and deal with more land acquistiion, nimbyism and engineering challenges. Instead, we end up taking the path of least resistance.

[Busy Bee]

^ And least utilty

[TR Devlin]

Originally Posted by Vlajos

No, city government is already too costly and we have massive pension debt to get under control. Any tax increase should be solely dedicated to reducing debt.

I agree that the city and state should both raise taxes to get the pension debt under control and I was sorry when the graduated income tax was voted down last fall. But I don’t think either voters or aldermen would approve a tax increase for the pension debt. Unfortunately, I think it will take some kind of crisis to get Springfield and City Hall to deal with this.

On the other hand, people will vote to raise taxes for transportation. Voters in LA have approved a series of tax increases, the last of which was in Nov 2016 and approved by 71% of the voters. The LA tax increases are funding an $80 billion, 30-year transportation infrastructure plan. And last fall voter in Austin voted to raise taxes to pay the city’s share of a $7.1 billion transit plan, including a subway through downtown. The difference between transportation municipal pensions is that people see tangible benefits to a transit plan; they see benefits that will make both the city and their own lives better. With pensions, however, people don’t see payments to fund pensions as making their lives or the city any better. A lot of people fell like the teachers (for example) can go to hell.

Now LA ran a very good promotional/marketing campaign to convince people vote for the tax increases. And if Chicago did the same, I think people would probably approve it.

Secondly, I’m assuming that the feds would pay for half of a transportation plan. A plan to spend $60 billion over thirty years would require $1 billion a year from the state/city. My argument for allocating more of the state’s transportation budget to Chicago is this: Areas of the state that are growing need to spend more money on infrastructure than areas that aren’t growing. And downtown Chicago is the only large area of the state that’s growing.

We’re not going to get any money from the feds or the state to pay for city’s municipal pensions

Thirdly, if the city raised its share of $60 billion over 30 years with no borrowing and if that supported a 300,000 increase in downtown jobs, the city would be in a much improved financial position.

[TR Devlin]

Originally Posted by ardecila

^ Absolutely I would vote for new revenues. It would depend on the details though. I think the sales tax is already overburdened, any higher and it will continue to suck business activity out of outlying neighborhoods. It is just one more reason why the South and West Sides are food and retail deserts, we should not make this problem any worse.

On the other hand I think congestion pricing is much needed especially on the expressways (incl. LSD) and the central area. Use the revenue to fund 20-minute service on all Metra lines; this is the cheapest and fastest way to extend high quality transit to areas that don't have it, at least in Cook County. Also roll out speed cameras on a much wider basis, including expressways. Put 3/4 of the camera revenue into a lockbox for transportation purposes, and the other 1/4 into a lottery for drivers that don't have any violations. In order to sell this to voters you'd probably need a specific list of projects like Measure R in LA.

I agree with you regarding both the sales tax and new revenues. In addition to what you mention, I’d add an increase in the city ride sharing tax. But even with these new revenues, we’d still need a large tax increase.

The best would be a city income tax; say 1% on incomes between $50,000 and $150,000 and 2% above that. But that would require approval from Springfield and maybe even an amendment to the state constitution. So that leaves real estate taxes. It’s hard to imagine Chicago aldermen passing a large real estate tax increase, but if voters approved it in a referendum, then I think they’d do it.

I also agree with you regarding the revenue going into a dedicated lockbox, so that could only be spent on approved transportation projects. The lockbox would be required to have an annual audit.

[TR Devlin]

deleted

[TR Devlin]

Originally Posted by k1052

More transit TIFs tied to specific projects might be a better way to scare up revenue in the city without raising already high taxes (which is likely to be unpopular).

I’m not opposed to TIFs in all cases but when a city’s credit rating is junk, I think the responsible thing to do is to raise taxes rather than continue to borrow more and more money. And Chicago is probably the most irresponsible city in the country when it comes to its finances.

TIFs have been called an “innovative method of financing”. But selling the parking meters and the skyway were called innovative when those deals were done and look at them now.

And if TIFs are such a good way to finance infrastructure, then why does Chicago use them far more than other cities. Do LA and Austin like raising taxes? No. They want major upgrades to their transit system and they want to be responsible in how they fund it. LA and Austin are investing in the future. Through its use of TIFs, Chicago is mortgaging its future.

Finally, I think that a $60 billion, 30-year plan funded by tax increases would make Chicago more, rather than less, attractive as a place to do business.

[ardecila]

Originally Posted by TR Devlin

I’m not opposed to TIFs in all cases but when a city’s credit rating is junk, I think the responsible thing to do is to raise taxes rather than continue to borrow more and more money. And Chicago is probably the most irresponsible city in the country when it comes to its finances.

I'm not sure what your point is. Any form of financing for capex will involve some form of borrowing, but you need it to be tied to a dedicated revenue source to access the best interest rates. That revenue source can be anything, whether it is TIF, sales tax, etc.

And if TIFs are such a good way to finance infrastructure, then why does Chicago use them far more than other cities. Do LA and Austin like raising taxes? No. They want major upgrades to their transit system and they want to be responsible in how they fund it. LA and Austin are investing in the future. Through its use of TIFs, Chicago is mortgaging its future.

LA and Austin are both far more desperate for transportation improvements than Chicago. We have congestion problems and crumbling infrastructure, but our population is stagnant and our existing rail system is vast. LA would love to have the rail system we do, and they are set to get it, joining only DC and SF as the only cities to successfully build a comprehensive regional transit system post-WW2.

Chicago politicians can't necessarily count on support for taxes no matter how noble the goal. Voters are fed up and have zero trust in government. This is why TIFs became so popular - they are a backdoor property tax increase, not just in the TIF district but citywide. Politicians make it seem like only the users pay - the people living in the TIF district - but really everyone's taxes need to go up to make up for the shortfall, since the overall tax levy remains the same before and after the creation of a TIF.

[TR Devlin]

Originally Posted by ardecila

LA and Austin are both far more desperate for transportation improvements than Chicago. We have congestion problems and crumbling infrastructure, but our population is stagnant and our existing rail system is vast.

You obviously don't understand the problem.

I googled "what US city has the worst traffic" and the first thing that came up was a US News article titled "The 10 Most Congested Cities in the US". Chicago was ranked #2. LA, #6.

I think the reason for Chicago' congestion has to do with the downtown job growth. In 2010, there were 479,000 jobs in downtown Chicago. In 2020, there were 631,000 - an increase of 152,000 jobs in ten years.

How many downtown jobs will be created over the next 20 years? Conservatively, let's say 200,000. Is our transportation system adequate to handle another 200,000 people commuting downtown every day? No. It's nowhere close. And nobody has anywhere near a realistic plan to deal with this.

[ardecila]

OK, if we've added 150,000 jobs downtown in the last 10 years, why have CTA and Metra ridership fallen over that same period?

CTA: https://www.civicfed.org/sites/defau...railtrends.png
Metra: https://metrarail.com/sites/default/...standalone.pdf (Page 2)

It the jobs numbers are true (I don't doubt there was growth, but seems suspect to me that the country's 2nd largest CBD grew by 33% in just one decade) then it suggests people are finding ways to get to work that don't involve transit. That doesn't mean they're driving, either - plenty of people use rideshare, bike, Divvy, walk to work, etc.

We have also not seen a large expansion in parking supply downtown that would enable people to drive. If anything, the parking supply's been going down due to redevelopment.

The region has a lot of challenges, and improving commutes for rich downtown workers isn't near the top of anyone's list. To the extent that regional leaders care about transportation, it is focused on solving other problems. CTA's president wants to build flashy projects on the South Side to bring jobs and investment. Toni Preckwinkle wants to make the existing transit system more equitable and usable on the South Side. Lori Lightfoot doesn't seem to care about transportation issues. Suburban leaders want road widenings or extensions of Metra into the cornfields. The governor does not have a strong vision for transportation beyond shoveling more money into roads. Etc etc. Who will champion this?

Actually Toni Preckwinkle did support Transit Future a few years back which was exactly this kind of proposal, even if it kind of withered... as much as I find her a deeply weird person (unsettling even) she might be the person who could champion a big transit initiative. BUT no way that happens while her mortal enemy Lightfoot is mayor. Maybe we should recruit Phil Washington to move back to Chicago and run for mayor...

[TR Devlin]

Ardecila:

First, I apologize for being snippy in my previous post.

The source for my job numbers is an annual report titled “Where Workers Work”, prepared by the Illinois Department of Employment Security. Here are the reports for 2010, 2015 and 2020. Comparing 2015 to 2020, downtown jobs grew by 68,000 or 13,600 per year - a little lower than my previous ten-year number of 152,000 or 15,200 per year, but still very strong. Based on these numbers, I’ll stick with a conservative estimate of 200,000 new downtown jobs over the next 20 years.

To check my numbers, go to page 30 of each report and add the numbers for CBD and Outer Business Ring. For example 210,014 plus 421,743 equals 631,757 total downtown jobs in 2020. And please post whatever thoughts you have.

[SIGSEGV]

I think uber/lyft are responsible for a huge share of traffic problems in downtown. I guess I should check to see if the city has posted new data and update some of the charts I made a while ago, in the nebulous future where I have time to do that...

[Vlajos]

I imagine a lot of people now live and work downtown so walking is likely up.

[glowrock]

Originally Posted by Vlajos

No, city government is already too costly and we have massive pension debt to get under control. Any tax increase should be solely dedicated to reducing debt.

Thankfully, there will eventually come a time when the pension debt finally starts declining. For better or for worse, that will happen when the elderly pensioners start dying off.

Given the ridiculous engrainment of the pension system into the Illinois Constitution, there's not much that can be done with this massive albatross around our financial neck, short of a municipal bankruptcy. Hopefully we can somehow keep things afloat until the situation I just described starts occurring.

Aaron (Glowrock)

[the urban politician]

Originally Posted by glowrock

Thankfully, there will eventually come a time when the pension debt finally starts declining. For better or for worse, that will happen when the elderly pensioners start dying off.

Given the ridiculous engrainment of the pension system into the Illinois Constitution, there's not much that can be done with this massive albatross around our financial neck, short of a municipal bankruptcy. Hopefully we can somehow keep things afloat until the situation I just described starts occurring.

Aaron (Glowrock)

^ Something very much can be done. The Constitution can be amended.

The albatross is not the pension debt, it's the political special interests who prevent the leaders that they control from doing the right thing for the public.

The pension debt is being treated by some as if it's an absolute thing--sort of like a star, a planet, or an asteroid. It's not: it's a human abstraction. We created it through a bunch of documents and made a monumental miscalculation--all we need is to modify those same documents to correct the blunder. That's all that is needed to fix this problem.

[ardecila]

Originally Posted by SIGSEGV

I think uber/lyft are responsible for a huge share of traffic problems in downtown. I guess I should check to see if the city has posted new data and update some of the charts I made a while ago, in the nebulous future where I have time to do that...

Yes, this has been part of the trend of declining transit use, but is it the primary cause or just a sideshow? Uber and Lyft are now charging close to the real cost for trips now that they aren't being subsidized by investors, so their usage should fall quite a bit and maybe transit ticks back up. But it will be impossible to separate out that effect from the long-term effects of Covid and rise of working remotely.

Originally Posted by Vlajos

I imagine a lot of people now live and work downtown so walking is likely up.

Yep, this is surely part of the answer also. But with transit usage falling even before Covid and downtown growth chugging along regardless, maybe further investments in a downtown-centric transit network aren't the best use of scarce funds. Or at least, that seems to be the reason why our leaders do not have the same urgency about transit systems that LA, SF, NYC, etc have.

Personally I do not have much optimism about the potential for new transit service to decongest highways. First, that line of thinking centers drivers instead of transit users. Second, transit is most appealing when there is severe congestion to discourage driving. Third, a lot of the people on the road simply can't use transit. Semi trucks, contractors, people that need to visit multiple sites for their job, etc. Strong transit ridership comes from growing the kinds of jobs that are compatible with transit - basically any job with a fixed place of employment, concentrated at high densities.

[ardecila]

Finally some movement on the long-promised State/Lake project... yet they still don't include a direct connection to the Red Line.

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