Friday, January 27, 2012

Rail to Loudoun Has Something for Everyone

Playing "Infrastructure Roulette" with your tax  dollars?

Loudoun County may soon join the high stakes game of "Infrastruture Roulette,"
gambling big, in spite of studies that show the possibility of a return is just about zero. In fact paying to extend rail into Loudoun will be worse than a complete waste of money.
 How could that be? The answer is that after incurring the massive cost to build the rail line and terminals, next comes mandatory annual  subsidies to operate and maintain it; not just  the 2.3 miles in Loudoun, but the entire 100+ miles of the worn-out, under-maintained and union-run Metro system. Make no mistake, if Loudoun opts in, it's forever and it is expensive.

As in any game there are winners and losers, but win or lose, "Rail to Loudoun Has Something for Everyone."

Taxpayers - These are the people politely refered to as "The Backstop" of the Rail to Loudoun financial arrangement. I guess that means they just stand still and take a beating regardless of what hits them. Being the backstop also means paying out a variable share when the other participants have fixed shares. That would be great in a high-yield investment but is not the place to be in this deal. Taxpayers will be permanently shackled to this ball-and-chain with a stroke of the pen by our current Board of Supervisors, yes, that's right, forever, if we opt in. Taxpayers would pay again and again and again. Commuters who live in Loudoun, for example, will be paying thousands more per year at the toll booth and thousands more in property taxes if rail goes through. That's paying if you're coming, paying if you're going, and paying if you never ride the rail or use the toll road.

Commuters - Are taxpayers who end up back in line to pay again at the toll booth. Metropolitain Washington Airports Authority (MWAA) seems to regard commuters and taxpayers as their “cash cows”. They (commuters) are the people that, if MWAA has their way, will be paying soaring tolls.  It's that toll-tax revenue that allows MWAA, a body of  un-elected and un-accountable members, to venture outside their area of core competence (cronyism) into things like building trains for non-driving commuters.

Metro - We don’t hear much about them, but don't skip over this Metro connection. Metro, which is run by WMATA (another unelected body), never seems to have enough money. That’s why they would love to get Loudoun County on the hook for yearly subsidy payments that become mandatory if you opt in to rail. How much you ask? WMATA has a magic formula which is somewhat arbitrary. Fairfax’s payment was about $42 million in 2004, and, by 2010, that was up to over $87 million/yr. Because WMATA is short about $6.5 billion through 2020, expect Loudoun to be billed about $50-$100 million per year FOREVER. That’s in addition to Loudoun’s $20 million/yr. mortgage payment for construction of the rail.

Criminals – Commuter rail can provide mobility for criminals, allowing them to expand their clientelle as they commute out of the city and into the suburbs, affordably, conveniently, and discreetly. Metro doesn’t advertise this much, but as the picture shows, they’re ready for it.
The likelihood of crime exceeds the national average outside 28 of 29 big-city airports in the study and outside all 26 central train stations, Rosemary Erickson, a criminologist and security expert, says.

A review of the Houston Police Department's online statistics for crimes within a half mile of the Amtrak station indicates that during the first five months this year, more than 200 crimes were reported to police, says CAP Index Vice President Stephen Longo. The crimes included two murders, three rapes, two robberies, 16 aggravated assaults, 15 auto thefts, 14 burglaries and more than 150 thefts, Longo says.

Unions - Tony Howard, President & CEO Loudoun County Chamber of Commerce, said this about union agreements on Phase 2 of Rail to Loudoun construction,
“Given that 90 percent of Phase 2 of the Dulles Rail Project is funded by Virginia's taxpayers, commuters and businesses, I cannot fathom why a Loudoun Supervisor would support this type of discriminatory treatment against Virginia's contractors and construction workers.”
Metro is also a union-run operation. They recently lost a $100 million lawsuit to union labor and have since announced plans to hire 1000 more union employees.

No-Growth -  If rail goes through, the present population of the county is far below levels needed to sustain ridership as projected. The only logical way to make up the difference will be to open up western Loudoun to expanded development. I guess they think it's time to start Fairfaxing Loudoun again.

Schools - The biggest single expense in the county budget is schools. If Loudoun supervisors opt in to this risky experiment, all spending will compete with the new recurring mega-expense item; rail. Opting into rail may trigger the downgrade in Loudoun's bond rating that Moody's warned about late in 2011. A lower bond rating will raise the cost of all borrowing for Loudoun.

Just how expensive is this project?
 "... the Dulles extension would be one of the most expensive new transit projects ever conceived." 
 Ronald D. Utt, the Herbert and Joyce Morgan Senior Research Fellow at the Heritage Foundation. 
 Another dubious distinction of Rail to Loudoun is that few projects the size of Phase II have ever been undertaken without federal money. Many programs will be on the chopping block if rail finds its way into the budget.
Developers - These are business people who own valuable property near proposed rail stations. They are attempting to game the system by enlisting the help of elected officials. Many of these business people not only believe in doing business in Loudoun, they have also invested heavily in our local government through their generous contributions to candidates.

What remains to be decided is whether our elected leaders will try to stimulate business activity by spending taxpayer's money to accelerate the rate of commercial development on and around these developer's properties. A study that was done for Loudoun less than a year ago showed little net financial benefit from rail. 

So bad is the financial outlook for rail that in order to show a return after 30 years of losses, the largest expenses, debt repayment,  maintainance and overhead were left out of the analysis. To the credit of the study's presenter, this omission was noted in a separate part of the study. If these three cost items were identified correctly, the real result would show rail as a perpetual money black hole, not an economic stimulus. 

 Development is important to our future. But asking taxpayers to bankroll the infrastructure to improve private property values is ridiculous. Taxes should support necessary services, not high-risk speculation.

Rail promoters shown at an event where they gathered to give each other plaques and plan strategies.
The developers and their lobbyists are selling this hard to our supervisors. You may want to tell your supervisor that gambling with Loudoun's future is not their job. Loudoun will prosper and grow just as Tysons Corners and other counties have, without rail.

David LaRock

Hamilton Virginia

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