I came across a link to a segment of the PBS series Blueprint America just now. The segment examined the funding gap that most public transit systems are experiencing with the present state of the economy. I watched the clip, and thought it was interesting so I went looking for the next part of the series. Found it, and it exposes quite the story. Since I work in public sector finance, I know what it feels like for these agencies to be under massive pressure to cut budgets and services or raise rates or skip maintenance. However, many public transit systems are doubly screwed by the financial meltdown in a way I would never have expected. Here is the clip (embedding is not working for some reason).
My initial reactions:
- A single subway car costs $4 million?!
- Why is the federal government encouraging public agencies to foist their assets off on the private sector to circumvent the tax system? Shouldn't they discourage that type of behavior?
- Agencies should be able to depreciate their assets. If they are not paying taxes, give them some other kind of credit such as reduced interest loans...
- Why do they keep calling track maintenance a capital project? That clearly should fall under an operations budget (I'm no accountant...but I know that's not the way we do it.)
- STAY AWAY from anything labeled as an "Innovative Financing Technique"!!! Remember Credit Default Swaps and Sub-Prime Mortgage Backed Securities?
- What in the world are these agencies doing getting into contracts which contain provisions for $50 million penalties in the first place? No matter how unlikely that seems, that is a consequence most systems simply cannot handle (hence the court battle here).
- The disclosure of the use of public funds is being shielded by some agreement with the bank? Get ready to be sued over that when you deny the public disclosure request!
- The DC Metro system already has more elevator outages than they can get on a reader board most of the time. How can they possibly handle more?
- Oh crap, everything is even more screwed over (and by none other than AIG) than I thought!
This links to the first segement, which left me wondering: Ridership up = Budget Crisis, Ridership down = Budget Crisis. How can it be both ways? There must be a tipping point at which more riders cause a need for increased service etc, but up until then they should be helping the system. Also, raise the freakin' fares! It's ugly, but it has to be done.
