Another neighbor's view on the adequacy of a streetcar

The latest issue of the Charles Villager contains quite an article by Peter Duvall touting the proposed Charles Street trolley.  Like just about all articles in the Charles Villager, it only presents one side of the issue, and one could conclude from the article that there is no opposition to the proposed trolley.  Therefore, i would like here to discuss three problems with the proposed trolley: the design and route, the method of financing the construction, and the operating costs.


The Design and Route:  The proposal is for the trolley to operate almost entirely on one way streets and for the trolley to share its entire roadway with cars, trucks and buses.  The trolley will travel north mostly on Charles Street, go east on University Parkway, go south on St. Paul Street, go west on Mt. Royal Avenue (crossing Charles Street), go south on Cathedral Street, and go through the Inner Harbor using a route that I need not discuss here.  Thus, the route is basically a figure eight with the crossover point at Charles Street and Mount Royal Avenue.  Therefore, if anything blocks the route for a significant amount of time, for example if there is a car accident on the track or if a streetcar breaks down, half of the route will be shut down, either the northern part above Charles and Mt. Royal, or the southern part below that intersection.  Unlike a bus or the Circulator, the trolley cannot go around a blockage or an accident.  In fact, Charles Street has been closed down just north of North Avenue due to a water main break.  If the trolley were in operation, that would have shut down the northern part of the route.  When the Metro or the Light Rail is blocked, the MTA runs buses to fill the gap; will that happen with the proposed trolley?

The streetcars that I remember in Washington, DC were on wide two way streets and occupied the center of each street.  There were two parallel sets of tracks, one for each direction, and the route was shared with cars, trucks and buses only at intersections.  If a streetcar broke down, following streetcars could temporarily use a section of the other track.  This is similar to how the Light Rail had only a single track for much of its route when it was first built until it could be expanded.


The Financing of the Construction:  When the trolley was first proposed, the plan was to use tax increment financing, and Peter Duvall's article makes clear that that is still the plan for covering construction costs.  Tax increment financing has three parts.  First, the City Council would pledge that the increase after a certain date in real estate tax collections in a specified area around the trolley (the tax increment), or a fixed percentage of that increase, would be pledged to pay for the construction of the trolley.  Secondly, in order to begin construction in a timely fashion, the City would issue bonds to be paid off using the tax increment.  And thirdly, the City would set up a backup special tax district to kick in if the tax increment should prove insufficient to make the bond payments.

If real estate values go up sufficiently, this can seem like a way to pay for the trolley with what essentially is free money.  The downside, however, is that the tax increment will be used to pay off the bonds rather than being available for education, public safety, sanitation and the other numerous needs of the City.

The big problem comes if the tax increment is not sufficient.  We recently have seen revenue from the City real estate tax in Charles Village go down and not up.  Unless real estate values soon take off again, there is no way that there will be a sufficient tax increment to finance construction of the trolley.  Instead, we who live near the proposed trolley can expect to be hit with an additional surtax.

David Funk, a lawyer who has worked with the Charles Street Development Corporation and who drafted possible state legislation for the trolley, has said that there is no requirement that tax increment financing include a backup special tax district, and I have no reason to doubt what he has said.  However, it is hard to imagine that investors would buy tax increment financing bonds without a backup special tax district unless they were promised a huge interest rate, and even then, it is doubtful that they would buy the bonds.  Indeed, at a hearing in Annapolis that I attended concerning a bill to abolish all special tax districts (the bill was to solve a problem in Prince Georges County, but a bill could not apply to only one county), a  representative of the City government testified that the bill would kill all tax increment financing.  In short, if tax increment financing is used for the construction of the trolley, we are at risk of another surtax, and that surtax may be sizable.

Peter Duvall's article hinted at 50 year bonds, but bonds are rarely issued for such a long period.  Moreover, the interest rate is generally higher on longer term bonds.


The Operating Costs:  When I represented the Abell Improvement Association on a task force charged with examining details of the trolley proposal, we were given figures from the consultant hired by the City to refine the proposal for the trolley.  The plan was to have the same rate structure as the MTA so that passengers would be able to get day, weekly and monthly passes that could be used on both the MTA buses, Metro and Light Rail and on the trolley.  With such a plan, and with the assumption that the money that the City now spends on the purple line of the Circulator would be contributed to the operating costs of the trolley, and with the assumption that the MTA would contribute an amount equal to what it would save by no longer having to serve the riders who would use the trolley, and with the assumption that the City would raise its parking tax citywide to further subsidize the trolley, there still was a need for a special tax district to cover a deficit in the operating costs for the trolley.

Note too that by law, the MTA is required to get 40% of its operating budget from its fare boxes, with the rest coming from a subsidy from the State.  The MTA barely meets that requirement.  Can anybody believe that we will not be taxed a sizable amount to subsidize the trolley?  Or will there be another source of funds?

Note too that if, as the article states, long term continuation of the Circulator is iffy, then so is a City contribution to the trolley of an amount equal to what the City now spends on the purple line of the Circulator.


In short, the Charles Street Trolley is a bad deal for us in Charles Village and for the City.  The purple line of the Circulator, if it is extended north to University Parkway, will do everything for us that the trolley would do.  It will have a comparable operating cost and will avoid the construction cost of the trolley.  It certainly will not cost that much more than the present purple line which goes only as far north as Penn Station.


Steve

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