Fixing VTA Goes Beyond Governance Reform
Randal O'Toole of the Thoreau Institute, in this exclusive analysis for Opportunity Now, provides a clear-eyed perspective about the problems facing the worst-performing transit agency in America, and how recent kerfuffles around VTA's governance deflect attention from the real causes of the transit agency's woeful status.
VTA’s problem is the same as described in the Hay Group report: instead of providing transportation, it is fixated on benefitting special interest groups such as certain neighborhoods (including downtown San Jose) and contractors and consultants by building urban monuments. This is a problem that afflicts many other large transit agencies, but VTA is one of the most extreme cases.
VTA’s problems will not be solved by redefining how its board of directors is selected or by hiring a new CEO or CFO. Those actions would be merely rearranging the deck chairs. Instead, VTA requires a wholesale restructuring.
The congestion management agency should be split away from the transit agency, thus ending the conflict of interest. The transit agency should be completely disbanded, ending all bus and rail service, and replaced by a new entity, with new people, new goals, and new activities. This agency should not be in the transportation business, but in the problem-solving business, specifically focused on problems related to transportation. For example:
• Problem: Some people are transit-dependent because they don’t have enough income to buy even a used car, partly because banks charge nearly 20 percent interest to people with poor credit ratings who want to buy a car. Solution: Santa Clara County should start a program of providing low-interest loans to low-income people who want to buy a car. In fact, interest should be completely waived to low-income borrowers who make their payments on time. Studies show that car ownership, not transit subsidies, will do far more to help people out of poverty because, in the San Jose area, a 20-minute auto drive can reach twice as many potential jobs as a 60-minute transit ride.
• Problem: Some people are transit-dependent because they can’t drive, either because of age, disabilities, or they lost their license. Solution: Provide such people with means-tested transportation vouchers that they can use on transit, systems like Uber or Lyft, or other common-carrier transportation.
• Problem: The California legislature has set a target of reducing greenhouse gas emissions. Solution: Santa Clara County could join the state in providing tax credits to people who buy electric or plug-in hybrid electric cars.
• Problem: Congestion is still a serious issue in Santa Clara County. Solution: Congestion is a problem because roads are poorly priced. Moreover, highways have the unique attribute that their productivity declines when demand increases. Freeway lanes that can move 2,000 or more vehicles an hour in free-flowing traffic can only move 1,000 or fewer vehicles an hour in congested traffic. That means that road pricing can effectively double the capacity of highways during rush hour. Instead of tolling people off the road, as toll critics complain, road pricing effectively tolls people onto the road. One caveat: the revenues from road pricing should be dedicated to highway maintenance and, if a surplus is available, new road construction and not, as it is now, diverted to subsidize VTA or other transit agencies.
If Santa Clara County were to get out of the business of providing subsidized transit, private transit would take its place in some corridors. This might be in the form of “Google buses” provided by specific employers or by private transit companies such as Bridj and Chariot, both of which attempted to provide bus services in major cities but failed because they couldn’t compete against heavily subsidized transit agencies.
For the most part, however, transit in general and transit subsidies in particular are not the solution to the region’s transportation issues. Transit subsidies do not help poor people who disproportionately end up paying the taxes needed to provide those subsidies. Transit subsidies do not produce greener transportation, especially when the transit vehicles are nearly empty. Transit subsidies to not relieve congestion; in fact, they may actually make it worse if they put nearly empty buses and light-rail cars in the streets.
This may sound drastic, but realistically VTA is a failed agency in a failed industry that is based on an obsolete business model that only worked when there were a lot of centrally located jobs, such as in America of more than 100 years ago. It’s time to recognize this failure and develop something that works.
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Image by Danny Howard