Legal Commentary

Houston Metro in a few years

By Tom Kirkendall

Houston?s Metropolitan Transit Authority has been on the receiving end of well-deserved criticism lately regarding its dubious finances (see here, here and here).

But it?s always nice to realize that things could be worse. For example, we could be dealing with the San Francisco Bay Area?s Metropolitan Transportation Commission, which actually is one of the models that Metro has used in establishing its absurdly inefficient light rail system. Check this out:

The 2009 annual report from the Metropolitan Transportation Commission (MTC) is a bombshell, a wake up call, a Klaxon - choose whatever metaphor you like - if you care about public transit in the Bay Area, this report is probably going to affect your life.

It shows, more clearly than any of the reports of budget woes coming from the individual transit agencies, that the entire system is unsustainable.

Think the fare hikes and service cuts are bad now? Just wait. The MTC added up the projected budgets of the agencies and found that operating costs would exceed revenues by $8 billion over the next 25 years (emphasis supplied), while planned improvements (like new buses, and the Warm Springs BART station) will require someone to dig up an additional $17 billion in spare change from under the couch.

And that?s not even the worst of it:

In the last decade [Bay Area residents] almost doubled the amount of money [they] put toward transit, while increasing service only 16 percent and ridership only 7 percent.

Meanwhile, Houston Metro is currently proposing to sell $866 in general obligation bonds, yet it does not have non-tax revenue that is even close to covering debt service on that level of debt. Metro has not even floated what credit enhancement it proposes to provide in order to sell those bonds.

Hopefully, Houston?s leaders will nip this type of lunacy in the bud. If they need any incentive, then the Bay Area MTC is a useful reminder of the even bigger mess that Metro could be.

Full post as published by Houston's Clear Thinkers on April 20, 2010 (boomark / email).