Today we are revisiting a story from this spring, a story that – like big government – refuses to go away. This one is about government-run mass transit, more specifically the fiscal disaster known as the Silver Line of the Washington, DC metro system. Here is what I wrote about it in April:
Are you ready for another government planning disaster? This time it’s the Dulles Rail project in suburban Virginia. It was carefully planned about a decade ago by the usual suspects of mass transit advocates and overconfident politicians. Since this is a government project, its costs have run amok and are now causing a bit of a political panic. The project is taking a toll – literally – on taxpayers. The Washington Metropolitan Airports Authority (WMAA) was given control over the Dulles Toll Road to raise part of the funds for the rail line. As a direct result, the WMAA has doubled the tolls on the Dulles Toll Road, an increase that of course was not part of the original plans for the project. To prevent a taxpayer uproar in an election year and a possible derailment of the entire project, Virginia Governor McDonnell has promised to write a $150 million check, courtesy of his taxpayers.
Before we move on, let me just remind everyone that mass transit was once a thriving, profitable private industry. This is a point worth keeping in mind when we delve in to today’s story in the Washington Examiner, which reports that this train wreck is still on the wrong track:
The price of a round-trip ride on the Dulles Toll Road could rise by $1 next year and go as high as $9 by 2015. The airports authority in charge of the Dulles Toll Road gave preliminary approval to toll increases Wednesday as part of its effort to fund Metro’s $6 billion Silver Line to Washington Dulles International Airport.
Stop and think about this for a moment. They are raising a highway toll to provide a steady stream of income for a rail line. This toll hike rests on the assumption that there will be no drop in traffic on the toll road as a result of the increase. This is the same type of assumption that motivates addiction taxes: governments tax, e.g., cigarettes because they want more money for their regular budgets, thus expecting smokers to not give up their addictive habit.
In other words, when government wants to use our taxes for something virtuous, they expect us to not respond negatively to the tax. When, on the other hand, government has a different purpose with the same tax, then it expects us to respond in the way that government intends for us to do. If, e.g., government raises the tobacco tax to discourage smoking, then the expectation is that smokers give up their cigarettes.
The toll road hike in Virginia works the same way. If the toll went up by $1 to discourage driving, then government would expect drivers to cut down on driving and start using the metro line instead. But that is not why the WMAA is raising the toll – they need drivers to not respond negatively to the toll.
You don’t need a Ph.D. in economics to realize how ridiculous it is to expect different responses depending on the motive behind the tax or toll hike.
Back to the Washington Examiner story:
The Metropolitan Washington Airports Authority signed off on a 50-cent increase for one-way tolls next year, up from $2.25 to $2.75. Tolls would rise to as much as $3.50 in 2014 and $4.50 in 2015 under the plan. An earlier estimate from the authority suggested tolls could rise to as much as $4.50 next year. But the increases will be less because Virginia agreed to contribute $150 million toward the project’s costs, offsetting the need for higher tolls, officials said. Authority members said the increases shouldn’t surprise drivers, though they still expect opposition. “People are aware … that tolls are going to have to go up,” said airports board member Bob Brown. But “I think we will get some static.”
It seems a bit superfluous to make this point, but if these politicians did not insist on using tolls to fund the expansion of the metro, then they would not have to raise the toll. What’s even better: if people stop driving on the Dulles Toll Road because they don’t think the higher tolls are worth it, there will be more people on the metro – which they can’t build because too many drivers have stopped using the toll road.
Only government can make this up…