Tending to Transit: The Benefits and Costs of Bringing Public Transport in the Chicago Region into Good Repair Chaddick Institute for Metropolitan Development October 10, 2012 Joseph P. Schwieterman, Ph.D.* Laurence F. Audenaerd, Ph.D.** Marisa Schulz*** *Professor, School of Public Service and Director, Chaddick Institute **Visiting Scholar, Chaddick Institute ***Assistant Director, Chaddick Institute Schwieterman, the corresponding author, can be reached at [email protected] or312/362-5732 EXECUTIVE SUMMARY This study explores the status of public transit in the Chicago region and the costs and benefits of investments to bring the system into a state of good repair. By evaluating available data and research, the analysis shows the following: Strength of demand for transit service: After several years in which passenger traffic was hurt by recession, transit ridership is growing much faster than the rate of GDP expansion. Use of transit is more than 5% higher than it was in 2010—one the largest increases since 1999— while the level of public support for investment in improvements is strong. Backlog of Capital Projects: The condition of the transit system is deteriorating due to the recent downturn in capital investment. The system’s needs, adjusted for inflation, are approximately 20% greater than they were just two years ago. Without additional investment, system performance will be seriously impaired. Return on State of Good Repair Investment: Each dollar invested in transit generates $1.21 - $1.90 in benefits, not including factors that cannot be effectively measured, such as the role of transit in tourism and shaping the indemnity of the city. Enhanced agency sophistication: Agencies have enhanced capability to manage investments intended to bring their system into a state of good repair than during the public- transit crisis of 2009. More research should be done, however, to assess the benefits and costs of particular capital projects. These findings point to an urgent need for greater capital support to bring the transit system into a state of good repair. I. INTRODUCTION ublic transit systems require sustained investment to keep capital assets in a state of good repair. P In the Chicago region, however, much public and political discourse surrounding this issue has taken place without a clear understanding of the benefits and costs associated with such investment. As a result, there is a heightened risk that policy will not be properly aligned with the system’s needs. This report takes a critical look at the benefits and costs associated with investments to bring the transit system in the Chicago region into good repair. It considers a wide body of research devoted to this issue and provides new analysis about the payoffs of modernizing the region’s bus, rail rapid transit, and commuter rail systems. The report is organized into five sections. Section II explores the role and status of transit in the region and summarizes the condition of the system’s equipment and right-of-way. Section III evaluates the evidence that exists about the benefits and costs of bringing the system into good repair. Section IV provides perspective on how maintaining transit affects various types of transit users. The final section offers conclusions and recommendations. Readers will also find additional perspective and analysis in the Technical Supplement Section at the end of this report. The research for this report was conducted in two phases between July and October 2012. The first involved assessing the available research and the data used in these reports, as well as reviewing estimates about public opinion and costs. The second phase involved statistical analysis and stakeholder discussions used to provide new perspective on the issue. II. The Role and Status of Transit The Chicago region’s transit system, encompassing 735 miles of rail routes and 248 bus lines, carries more passengers today than it has at anytime in the last 20 years and more rail passengers than any other year in the past 40 years.1 Rising gasoline prices, worsening congestion and technological advances improving the ease of transit-riding have also fostered significant ridership gains.2 The vitality of downtown Chicago—in which approximately two-thirds of employees arrive to work by bus or train—has also kept transit at the region’s forefront. New markets for urban transit have also emerged as a result of housing development near the central core of the city.3 As noted below, however, the system faces serious challenges, and transit accounts for a diminishing share of total trips made by travelers in the region. The following four observations highlight key aspects of the Chicago region’s transit system and provide a brief synopsis of the opportunities and challenges that the region is now facing regarding sustained investment to this system. 1 Observation 1: The State of Illinois has historically had more intensive involvement in transit planning and capital improvements than most other states due to the enormous size and transit-dependency of the Chicago region. Our state ranks third among states in per-capita transit ridership, with residents taking an average of about 56 transit trips annually. The number of transit trips per capita in Illinois (55.6 annually) is exceeded only by New York (216.1) and Massachusetts (61). Residents in the Chicago region alone make an average of 84 trips per year. Such intensive reliance on transit is largely a function of historical development patterns in the Chicago region. Between 1850 and 1930, most residential construction was heavily concentrated along rail corridors. For more than a century, the region’s commuter-rail, rapid-transit, and bus routes have carried more riders than any other metropolitan region except New York. State government has been actively involved in transit planning and investment for most of the past century. The Chicago Transit Authority (CTA), created by the state legislature in 1947, received heightened financial support from Springfield in the following decades as concerns about the deterioration of service gradually increased. The state created the Regional Transportation Authority in 1974 to provide oversight and financing for the CTA, the commuter rail lines, and suburban bus system. More recently, in 2008, the state amended the act creating the RTA in 2008 to strengthen its oversight of the system while increasing revenues for transit through increased sales taxes, which have for decades been the predominant source of funds for transit operations. Observation 2: The push to bring the transit system into a state of good repair draws vitality from renewed optimism about the passenger-carrying potential of this system. Transit ridership in the region is more than 5% higher than it was in 2010, restoring the sense of momentum that was lost during the recent recession. Transit ridership has been strong this year at each of the three “service boards” under the auspices of the RTA, which include the CTA, Metra, and Pace Suburban Bus. The CTA is reporting its highest ridership levels in 20 years, with year-over-year gains averaging about 4%. Pace traffic was up about 2% during the first half of this year. Metra posted its third-highest ridership ever in 2011 and is reporting a modest 0.4% decline in ridership in so far this year in the wake of a 25% increase in fares taking effect in February, the largest in Metra’s history. 2 Fig. 1: Passenger Trips on Public Transit Since 2000 Expressed as % of Base Year 135% CTA Rail 125% CTA Fare Increase Red/Brown Line Metra Fare Reconstruction Increase 115% Metra Pace 105% CTA Bus 95% Post 9/11 Start high- Economy fuel cost Recession period 85% * projection based on year-to-date data The increasing transit demand over this past summer and a modest rise in employment suggest that annual growth across the system (by our estimate) will be up more that 2.5% for the second straight year—the first time this has happened since 2000. Such growth is taking place despite soft ridership on certain CTA bus routes, several of which remain the weakest performers of the system and are targeted for elimination. On the whole, the sense of momentum that was lost in 2009 and 2010 as a result of recession-induced ridership declines has been restored. Recent improvements, such as the opening of two new CTA rapid transit stations in May, the elimination of certain slow zones, the impending introduction of bus-rapid- transit service (linking the Loop to South Chicago), and improvements to Bus Tracker and Train Tracker (providing information about departures on mobile devices), have boded well for next year’s ridership levels. Please refer to Figure 2 for a summary of notable recent capital projects. 3 Notable Capital Projects on Rail Routes 2006 - present LEGEND Metra Commuter Rail CTA Train Lines Parks City Boundaries North Central Line added Downtown Inset capacity + 4 new staons in 2006 UP North Line Reconstrucon starts 2013 Red Line “Red Ahead” Project started 2012 Brown Line Capacity Project from 2006-’09 UP West Line Elburn Extension in 2006 Rock Island District’s Englewood Flyover Project starts 2013 RedRed LineLine DannRyan Ryan Branch Rehab startss 2013 Southwest Service Extension + Added Service in 2006 *Not all Projects or Lines Shown Observation 3: The Chicago region’s system performs well relative to its peer group in other cities with respect to both the service provided, the share of cost paid through the fare box, and the efficiency of that service. Nevertheless, powerful historical forces have greatly impaired the system’s success in serving markets that do not involve travel to and from downtown Chicago. Comparisons show the Chicago region’s system is favorable among 10 peer systems, with respect to: Service Coverage: measured by such factors as transit capacity per resident and passenger trips per resident.