'Just the facts, ma'am'
Benefits and Costs of DARTing Forward
Last month, members and guests at the Taxpayers Association of Central Iowa’s “Ideas on Action” series were given an overview of the benefits of the Des Moines Area Regional Transit (DART) in central Iowa, and about the future of DART services.
The group learned that DART has made some impressive gains in service and ridership over the three years since the DART Forward 2035 plan was adopted, and it heard about even more ambitious plans for the future. Specifically, a $25 million project called “Bus Rapid Transit” is planned to improve frequency and shorten travel times along the University Ave./Ingersoll/downtown loop route.
But the value of DART cannot be understood without also looking at both sides of the ledger, and by looking at the question of who pays.
All transit systems depend on revenue sources beyond what users alone can pay, both because of user needs but also because of the extra benefits that public transit generates for the community as a whole. For example, in comparison with automobile travel, public transit confers public health benefits. It requires more exercise, may generate less pollution, results in fewer traffic injuries, and provides improved mobility for non-drivers. And surveys have shown that millennial workers believe a good transit system is an important community service.
But are these extra (beyond the user) benefits worth the extra cost?
Let’s look at the financial model on which DART has been operating since 2011 (when DART Forward 2035 was adopted):
- Annual operating costs have risen by 37 percent (to $28.5 million);
- Annual operating revenues have remained constant (at $7.8 million); and
- Annual property taxes have doubled (to $13.1 million).
Despite a nearly 20 percent increase in ridership over this period, there has been no associated increase in fare-based revenue. If more millennials are riding the bus, why aren’t we seeing an increase in operating revenue? The absence of growth in operating revenue suggests that all of the recent improvements in service and ridership have been funded by non-users, i.e. from increases in property taxes. Are we okay with this model? How far should we go with it?
State legislation in 2008 gave DART the authority to raise property tax rates in every community in Polk County (and in rural Polk County) up to a maximum of 95 cents per thousand dollars of taxable value. We’re about half way to the maximum compared with where we started, so we can expect property taxes in most communities to continue to go up for the next several years until they reach about $20 million per year (in today’s dollars).
With several years of experience to review and certainly before such a large financial commitment is made to Bus Rapid Transit, now is a good time for a gut check. Are the additional benefits to the community at large from increased transit ridership sufficient to justify additional community investment by property taxpayers? In this day of UBER and apps that can make it easier to use alternatives to single-occupant vehicle travel, do we know that public transit is the most efficient and effective way to promote the use of alternative transportation in a lower density city like Des Moines? Perhaps the answer to both questions is “yes,” but we should ask and answer the questions explicitly.
These and other questions like them will be considered as the DART Board reviews its progress this fall. It will be important for the broader community, including property tax payers, to weigh in.
Gretchen Tegeler is President of the Taxpayers Association of Central Iowa.