South Coast Rail not the way to go

Let’s invest in cities, not in transporting people out of them.

Residents of Massachusetts’ South Coast believe their region hasn’t received the state investment it deserves. They’re right. The Big Dig vacuumed money away from transportation projects across Massachusetts. More recently, the South Coast has not been a major focus of recent bridge repair projects. And, today, efforts are underway to plan new mega-projects like expanding the Boston Convention and Exhibition Center (already New England’s biggest building) at the expense of investments elsewhere in the state.

Yet, for 30 years, South Coast Rail has been a fixed destination for those interested in revitalizing the economies of New Bedford and Fall River. There are many practical reasons to question whether the project could be built or maintained by the state’s mass transit system; even were they resolved, there are even more reasons to question whether the pot at the end of the rainbow—economic revitalization by becoming bedroom communities for Boston—is a mirage.

There are more effective ways to bring vitality and opportunity back to these once-great cities—promises that can be delivered on now.

For 32 years, Congressman Barney Frank’s Fourth Congressional District included much of Greater Fall River. For the last two decades of his time in Washington, the district was expanded to include Greater New Bedford. Frank was an effective legislator, and in the final six years of his service a very influential one. Although Democrats controlled the House two times, there never was a serious prospect of advancing the kind of sizable federal investment that the South Coast Rail project would require; not even during the extraordinary circumstances of the Obama administration’s $800 billion stimulus package. Federal funding would likely need to account for more than half of the project’s cost; it is not coming anytime soon.

Even if federal money to build the project fell like manna from heaven and the project moved forward, the numbers tell us the resulting commuter rail would prove expensive and be marked by poor service. Current estimates put the cost of building South Coast Rail at $2.1 billion to build and about $40 million annually to operate. Just over 9,000 people are expected to board the trains daily (one person commuting each way counts as two boardings). That’s a big investment for a long line with few riders.

It’s important to put the proposed project in the context of the MBTA’s precarious financial condition. For a quarter of a century, the T has been the nation’s fastest-growing major transit system, even though it serves a comparatively slow-growing metropolitan area. The system paid for the expansions by borrowing money, and that has a way of catching up with you. Annual debt service payments will soon top $500 million annually; until the most recent fare increase, debt service costs rivaled the amount the T takes in from fares.

Debt service leaves little money for maintenance, leaving the MBTA with a staggering deferred maintenance backlog of over $3 billion. Much of the T’s rolling stock is either approaching or beyond its expected service life. Skimping on maintenance has a direct effect on service quality, which in turn depresses ridership and revenue.

The rail project’s low anticipated ridership will translate into trains that run infrequently, compromising the whole purpose of building the commuter rail line. It will also lower the rate at which costs can be covered by fares, which a 2011 Federal Transit Administration report pegged at 45 percent for MBTA commuter rail service. Ticket revenues today pay for just $135 million of the commuter rail system’s $301 million total operating expenses: Currently, taxpayers provide an additional $166 million to support commuter services in the form of state levies and local property tax assessments.

And once one considers capital costs, the T’s financial picture looks even bleaker. The state’s sale of $2 billion in bonds to fund South Coast Rail’s construction will add approximately $60 million in annual debt service payments. Combined with the expected high operating losses, state and local taxpayers could end up subsidizing 75 percent of the cost of each ride.

This domino effect of no federal funding, precarious operating and capital finances, and low ridership is precisely what we saw in the most recent T commuter expansion to Greenbush.

The MBTA’s bleak financial picture makes already unpromising federal funding even less likely. In 2010 during a speech in Boston, Federal Transit Administrator Peter Rogoff bluntly asked, “If you can’t operate the system you have, why does it make sense for us to partner in your expansion?”

Since the 1980s, the state of Rhode Island has sought to expand and extend rail service to Boston. The construction of a new station and service enhancements through the 1990s and 2000s came with the promise of improving the economic vitality of the Ocean State’s capitol.

The prospects of Providence have not materially changed, however. Until the mid-1990s, Providence’s unemployment rate looked more like Boston’s and at times stood six, even eight, percentage points below jobless rates in New Bedford and Fall River. Since 2000, Providence’s jobless rate isn’t just higher than Boston’s, it has hovered in the same range experienced by New Bedford and Fall River.

Providence is a useful cautionary tale that comes with sad chapters flirting with bankruptcy, schools in crisis, and high crime. Of course, a train link is not an elixir for these long-standing ills. But the larger point is that a city with many historic and economic similarities to the South Coast’s two flagship locations did not find a pot of gold at the end of the rainbow of tying the city’s destiny to Boston and its housing market.

The fact is that cities are not bedroom communities – they are destinations, they are economic clusters, if they want to succeed. If the strategy failed in Providence, with its ample stable of college graduates who might consider living in the city, it is far less likely to succeed in cities like New Bedford and Fall River, which have far fewer undergraduate and graduate student residents.

Given the quality of the schools and the continued concerns about public safety in the South Coast’s historic cities, it isn’t likely that older professionals will be eager to move in.

I’ve always found discussions about the South Coast Rail project distracting and stifling. It is a decades-long distraction for all of the reasons cited above; stifling because it feels like it’s put thinking about a vision for the South Coast on hold.

The fact is New Bedford and Fall River need action – and investment – now.

I believe a better approach has two elements. First, the Commonwealth needs to make sizable investments in the cities themselves on the basis of a plan that makes them central once again to the region’s economy. Rather than capping the destinies of New Bedford, or even Fall River, as bedroom communities for Boston’s office workers, state and local officials should aim higher in their vision for these once world-class cities.

And, second, any new investments have to be part of a partnership with the state to address longstanding issues that have led to the decline of the cities. That is, the investments should also serve as incentives that prod each of these cities to provide the kind of high-quality services that will draw in families and a more diverse population: better schools, safer streets, and new jobs and businesses.

Incentives can serve as a powerful tool to drive reform. For decades, state government agencies have spread numerous small grants to municipalities. Too often, these disparate grants were not for projects connected to an overarching strategy to revitalize the city in question.

We can do better. The fact is that the size of the grants to cities needs to be larger, and happily there is already state money for that purpose. Each year, about a dozen state agencies provide $60 to $75 million in grants to so-called Gateway Cities – older, medium-sized cities outside the Boston area. Rather than giving out numerous small grants, state agency grant funding should be bundled and coordinated, with multi-million dollar, block grants provided to cities to improve “anchor neighborhoods”—those neighborhoods in which a large investment can leverage significant improvement for the city.

With the right kind of planning and leadership, cities like New Bedford and Fall River would in a short span of years find themselves with tens of millions of dollars invested within the city limits.

In giving the grants the state should do two things. First, it should require a vision for the city—and a vision that seeks to revitalize its economic engine in particular. That would take community (and especially business) involvement to understand what infrastructure changes could help facilitate private sector business and job growth.

The second purpose of the larger investments would be to prod city leaders to make comprehensive reforms that would improve the quality of core local services like education, public safety, economic development, and fiscal management. Mayors competing for these larger grants would need to lay out (and be held accountable) for plans to drive up student achievement and drive down dropout rates, change policing strategies, improve their fiscal management, and streamline business permitting.

A model based on larger fiscal incentives to spur reform could be extremely helpful to cities like New Bedford and Fall River that have much potential and are beginning to show signs of improvement. It would put a strong wind at the back of mayors who can lay out a vision for their cities and who are willing to make modernize the way core public services are delivered.

New Bedford and Fall River are much more than one of the final stops on a lifeline to Boston. They are more than bedroom cities to the state capitol, more than cities with poorly performing schools and unfortunate levels of crime. The fact is that all roads do not lead back to Boston. Just ask Providence what that strategy has produced.

We do not need to wait for another two decades to do right by the South Coast’s great cities.

Meet the Author

Jim Stergios

Executive Director, Pioneer Institute
There is a shorter and more direct road to reviving New Bedford and Fall River. It runs through the heart of these cities—through their people and their aspirations for their children.

Jim Stergios is the executive director of the Pioneer Institute.