Metropolitan Sytems Information Statement 1989

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service in the corridor to feed into the light rail transit system. If this is accomplished properly, the savings from reoriented bus service could offset most or all of the additional operating costs of light rail. If light rail transit increases transit use in a corridor by 30 percent, but increases the operating costs of transit (bus plus light rail) in that corridor by 50 percent, no efficiency is being gained in the regional transit system. Conversely, duplication of bus and light rail service could result in high operating costs. Table 1 reflects the magnitude of possible operating needs for transit services in general and service in particular caused by potential light rail implementation. Efficient operating strategies, as discussed above, could lower the operating costs per passenger from its current level of approximately $1.35. However, inefficient strategies could dramatically increase operating costs of the system and threaten the ability to meet transit service needs in other corridors of the region. For that reason, the region needs to achieve prudent planning of light rail services. Funding Implications A well -planned light rail system can protect the region from future expenditures. The potentially lower operating cost of light rail transit reduces the future impact of inflation on the transit operating budget to the point where the savings eventually offset the capital investment. However, this efficiency is lost if extensive bus service reorientation to light rail transit lines results in a large increase in the overall transit system operating deficit. Transit service levels in one part of the region should not be negatively impacted by light rail transit implementation elsewhere. An light rail transit system will require an annual capital investment larger than the $23 million needed to maintain an all -bus system. However, operating efficiencies and the increased ridership level would offset this larger initial investment if the system is -cost effective. The addition of capacity to the transit system helps reduce the need for costly additions to the highway system, including the need for parking structures in a land -constrained downtown area. The non -petroleum fuel source of light rail as well as the higher capacity would help to reduce the impact of a gasoline shortage on the region's economy. Numerous additional economic, environmental and other benefits are possible with light rail as a component of the regional transit system, but the costs of achieving these benefits must be carefully considered. It is appropriate to consider sources ranging from the federal government to local and private -sector sources. Transit, in general, and light rail transit in particular, can have benefits to federal and state governments' economic efficiency and highway investment neMs. Regional benefits include a more efficient transportation system. Local benefits can include economic development and tax base increases due to development opportunities and property value increases near stations. The investment required for a regional light rail transit system will likely exceed the ability of the federal and state governments to provide capital funding. It is therefore important that a share of regional/local funding, commensurate with the amount of light rail investment required, be an explicit part of any financial plan for the development of light rail transit in the region. When determining the type of regional/local funding source, and the method of administration, attention needs to be given to using sources that reflect the benefits of light rail transit. Funding should come from sources that are equitable, consistent with the Metropolitan Development and Investment Framework and the transportation funding principles in Section 6 of this guide. Whether sources are considered "regional" or "local" is secondary to the equity in how funds are generated. Equity in a funding source for light rail transit is achieved when the costs of the system are paid by those who directly and indirectly benefit from the improvement, in proportion to the benefits received. Furthermore, equity considers individual's ability to pay. While perfect equity may be impossible to achieve, the funding sources selected should be as fair as possible in reflecting equity principles. 6