Tuesday, May 19, 2009

Ghiz Sees the Light of Oncoming Train Wreck

Today Councilmember Leslie Ghiz renounced her prior support of Cincinnati's streetcar proposal. City Council got the news yesterday of an $11 million tax shortfall this year and a deficit of up to $40 million next year. "My support for this project came at a much different economic time," Ghiz said, "I'd love to continue this support but in good conscience cannot considering our financial predicament."

Keep in mind we're also $1.2 billion behind in our pension fund, we're facing $2-3 billion in sewer projects to comply with a federal court order, revenues are down, and Mayor Mallory raided the emergency fund in the last budget cycle to cover basic operating expenses.

Council's authorization was contingent on private donations of $32 million. So far less than $3,000 has been raised. To close the gap, the Mayor has proposed selling our street lights, airport, and water works (i.e. essential city assets). Last year he proposed to sell the traffic lights and tax trash collection for the 1st time ever, but citizen outrage shut him down.

There's no point spending $185 million on a luxury when we can't meet our obligations for necessities.


  1. At some point you have to figure out a way to grow your revenues instead of constantly trying to cut, cut, cut in order to make ends meet. I don't know of any company out there that would suggest that you can cut your way to prosperity.

  2. So true Randy. You invest your way to prosperity.

    But no investment is possible when you consume every dollar you take in. City government has been living hand-to-mouth, and needs to first cut consumption to produce a surplus.

    Then we can afford to bet on things likely to produce a return. Bet right, and there's more to invest. Bet wrong, and you're back to cutting again; which is where we find ourselves now.

  3. Randy -
    The streetcar is a risky investment by any standard. There is a possibility that it may spur investment, but there is much debate about how much, if any.

    The only thing we know for sure is what the proponents' plan tell us - that the streetcar will have a huge operating deficit very single year. Millions of dollars in the hole each and every year it operates.

    That's not growing revenues.

  4. This is more than just streetcars. Indiana, Pennsylvania, and New York Departments of Transportation are working on rail systems that will connect with Ohio's ODOT 3C Hub system. This ballot initiative is so short sighted and can't see the bigger ramifications. The initiative to put rails on the ballot is like taking a map and cutting out a square where Cincinnati is, because it won't matter anymore. It will be another time that we missed the boat.
    I am one of the 'creative class' that came back to Cincinnati for the opportunity. I bought property in Over the Rhine because of the streetcar plan. I see the vision of what the city can be and if you can't see how it is on the upswing, you haven't been paying attention. Kill this initiative and you kill the momentum.

  5. Hey anonymous -
    First, I'm glad you brought up the rail effort and particularly Ohio's proposed 3C rail link. It all looks vaguely familiar to something already in existence - Amtrak. You know Amtrak right, the rail system that only exists due to massive government subsidy. On average Amtrak receives $100 in federal subsidy per rider. We can't afford an Ohio Amtrak.

    Second, I frankly don't care about your property purchase in OTR. Why should my taxes be raised to endure that you get a return on your private investment?

  6. Bris Chortz:
    Well, you know what? I didn't get a vote for going to war in Iraq. I also didn't see any ballot initiative by you guys on that one. Thanks, that one cost me $6,400 and cost Cincinnati alone $807,000,000 (if you consider how much the city is going to pitch in for the streetcar system I would say that's over 20 times the investment). So, thanks for being on your toes about that one.

    I would also like to ask where you live? That way I can start an initiative that will put any public spending that involves your community to come to a vote. Why should I pay for anything that will protect a return on your property? It is the same argument right? I at least realize that if something is good for your community and you live near me, I am going to benefit.

    Do I really think you should pay for your own water filtration, sewers, electrical lines, libraries, and roads? No, but that's fair right? If you don't want them paid for, just opt out. Pull yourself off the grid and quit wasting my tax money.

    I don't want to vote on every initiative for your neighborhood, it destroys our elected official's ability to efficiently make decisions without all the bureacracy you guys hate. It is the democracy we have in place. If you need a new school in your neighborhood, what does it do for me to shoot it down? It hurts me in the long run, so I say build and create what your community needs, take my tax money use it.

    Do you really think that if we add people to the city center that your taxes won't be less because of more tax revenue? More people working and spending money= more tax revenue. And do you really think that if Cincinnati is cut off from the rest of the Midwest your property value is going to be worth more than less? This isn't just about my property, I just put my own money where my mouth is for this streetcar. If you want to be an armchair quarterback, that's cool.

    This isn't Amtrak and don't kid yourself that the times haven't changed.

  7. Anonymous -

    I know you'd like to blame Haliburton for all of the world's ills, but please try to stay on point. I know that'll be hard for you, but try to keep the spector af a Dick Cheney Boogeyman out of your mind for just a moment and focus on the topic at hand. I'm not exactly sure what petition effort you would have liked a LOCAL group to do, and how that would have stopped the war, Furthermore, don't assume you know where I stood on the war in the first place, because you have no idea.

    For the record, I live in Westwood. If City Council proposes putting a trolley line in on Harrison Avenue feel free to start a ballot intitiative. Hell, I'll help you. If you feel like you want to do something to stop the city from providing police/fire, street maintenance, garbage collection, etc in my neighborhood then go ahead. See how far you get. I predict that once again, you will do NOTHING besides bitching and moaning on a blog.

    I'm glad you put your moneyt where your mouth is. Now if you could just pull your head out of where your ass is we'll be getting somewhere. You say this isn't Amtrak, and you offer as evidence to support that assertion absolutely nothing other than the fact that you say it is so.

    I don't believe for one second that the trolley will spur enough private investment to cover the massive capital costs involved with its construction. In addition, the streetcar proponents' own plan estimates an operating deficit of millions of dollars every single year it runs, and that's using very, very rosey ridership numbers. The only thing we know for sure is that we don't have the money to build it, and once in place, we'll have to subsidize its operation to the tune of millions of dollars a year.

    You're right, times have chaqnged. The times when people in this City let the nine idiots on City Council make decisions that steal money out of their pockets without putting up a fight is over. Don't fool yourself.

  8. Yeah, OK. This will just be tit for tat. I guess I need to start canvassing Westwood. Thanks.

  9. I'll be waiting Anon. I won't hold my breath waiting for you and the rest of the "creative class" to get off your asses and start a canvassing effort in Westwood though! Loser.

  10. You are so cordial, I'm sure in person you are even more charming.

  11. http://www.usatoday.com/news/nation/2007-01-08-streetcars_x.htm






  12. In response to Bris Chortz's response to Anonymous:

    He states:
    "You say this isn't Amtrak, and you offer as evidence to support that assertion absolutely nothing other than the fact that you say it is so."

    But, there is a lot of information online (if he would just go read about it) the difference between high speed rail and Amtrak. Also, he must not know that in 2008, Amtrak recorded its 6th year of continuous, record high ridership. Though the United States has minimal ridership compared to Europe, the national trend is toward better public transit, not away from it.

    Then "Chortz" makes his own unfounded assertion that he doesn't think that streetcars will give a return on money invested. What evidence does he provide other than "he doesn't think so"? Nothing.

    Again, if we would investigate the research done on the topic, perhaps he would see why the feasibility study shows a return of 14:1 for each invested dollar. The research does not show that the system will run deficits indefinitely which is what it seems he is implying.

    If new businesses weren't started unless they turned a profit their first year, there would be a lot less businesses getting started. Look up capitalism as a reference for how this works.

    Another error for "Chortz" is:
    "The times when people in this City let the nine idiots on City Council make decisions that steal money out of their pockets without putting up a fight is over."
    Evidently, Chortz is an activist who hates democracy and freedom. Because that is the democratic process that we have in place.

    If he does not like the decisions that his elected officials make, he can vote them out of office. To change the way that the city is managed is more than just putting issues on the ballot because you don't like them.(Reference California's problem with ballot initiatives.)

  13. Thanks Anonymous -

    According to the CATO institute, the average taxpayer subsidy per Amtrak rider is $100, or 40 percent of the total per-passenger cost. Big deal about their record ridership - it's easy to ride the train when your fellow taxpayers are picking up 40% of the bill for you.

    Evidently you are also an "activist that hates democracy and freedom." The Charter Amendment process was put together by our elected City leaders that you love and trust so dearly so that citizens could have a say in how this city is run. If you don't like it, then work to get rid of the Charter Amendment process. Don't complain when citizens utilize the methods of recourse that our government gave us.

  14. In response to Chortz:
    The charter amendment process that you mentioned is a process that could potentially also put on the ballot for a vote that every Cincinnati resident would get a check for a million dollars annually.

    This is a facetious argument, of course, but should point out that your use of the process is not in the interest nor in the spirit of which it was created. The converse for your argument is then: Why don't we eliminate City Council and do all of the City's business through ballot initiatives?
    You are entitled to your opinion on the fair use of the charter amendment process, but again I bring up California as a digressive mess.

    As far as Amtrak, you keep acting as though subsidy is the crux of the problem. I would argue that our system of transit is inferior to that of Europe and that is the reason for the subsidy, but it is not the problem. Rail systems are more efficient than cars and interstates and we are now in a negative power situation, rather than a positive one.
    Half of the food you eat is probably from subsidized farming, but subsidy is not the problem, it is a symptom of a process that is truly not free for competition?

    Merely using Amtrak as a straw man is not sufficient. You should instead argue why petroleum is a better energy source for transit than coal, perhaps. For instance, the Automobile Industry did not necessarily allow for free market competition in the 50s and 60s, did they? How has that impacted our transit in this country going into the 21st century?

  15. Anonymous -

    The real straw argument is comparing the Eurpean rail transit system to the of the United States.

    Rail transit in the US will never work like it does in Europe because of distance and convenience.

    European urban centers are relatively close together. If you have a business trip between Paris and Amsterdam you coud take a train and be there in about 4 hours. In The US if you have a business trip between Cincinnati and Cleveland who in their right mind would take a train when it is a marginally longer transit time, and is marginally more expensive than automobile travel?

    Add to that the idea of convenience. The plan as it now sits would have merely 2 trains runiing one round-trip per day. Who the hell would schedule their business around a sparse train schedule and possibly risk having to spend the night out of town because of a missed train when they can hop in the comfort of their own car and come and go as they please?

    It also works the other way on distance too. Who in their right mind would take a 4 day train trip for business from New York to Denver when they could get there by air in just a few hours?

    Also, as to your assertion that "this isn't Amtrak". Per
    the Cleveland Plain Dealer, "The state would pay Amtrak to operate the passenger service between Cleveland, Columbus and Cincinnati on rail owned by Norfolk Southern and CSX. The service would connect to other Amtrak routes through Cleveland and Cincinnati."

    If it looks like Amtrak, and sounds like Amtrak, it's AMTRAK.

  16. Bris Chortz:

    But let's be honest. You say we can't do what Europe does, but we were on our way in the 40s. The auto industry killed rail transit with government help and now we are over a barrel (pun intended).

    When you compare the subsidy of Amtrak at 900 million/year to the oil industry subsidies of 20-35 billion a year, I mean, come on. The free market you are touting doesn't exist. The oil industry is making hand over fist and raking in our tax money as icing.

    Take into account total spending by the Federal government on Air and Highway(1971-2001): 1.89 trillion
    compared to Amtrak(1971-2001): 30 billion. That is a 63:1 ratio (Amtrak accounts for less than 1% USDOT)

    Jack oil prices up to actual cost like Europe experiences and you have a lot more people taking rail to meetings, vacations, work, etc. More lines, more riders, less cost, more self sufficient.

    When it costs $7-10 liter ($20/gallon), your priorities shift dramatically. You either pay the piper now or later.

    Rail is way cheaper and more efficient than auto and air will ever be. If we don't do it now, the cost just goes up every year we put we off.


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