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Friday, July 26th, 2013

Exploding the Myth of the Fiscally Conservative Republican Governor

Republican governors like to strut around like they are the adults in the room, making the painful cuts and decisions needed to balance budgets and propel economies. This lets them portray their policies as somehow rooted in some different and better philosophy of government than their Democratic opponents. But peek under the covers, and you’ll see that all too often these Republicans are just as much big spenders as their Democratic brethren. The only difference is the list of boondoggles they want to waste money on.

Exhibit A is Ohio Governor John Kasich. One of his first acts in office was to strip Cincinnati of $52 million in federal fund allocations for the downtown streetcar project. Not content with a mere administrative decision to defund, a Republican legislator actually introduced a budget amendment to legally prohibit any state allocations for the streetcar. The state’s transport policy committed had previously ranked the streetcar the top project in the state. After Kasich took over, he cancelled it completely from the state’s perspective.

Was this because he wanted to run a tighter fiscal ship? Or put money toward higher cost/benefit projects? No. Look at how he’s actually governed and it’s clear he wanted to cancel projects like the streetcar so he could spend it on his own personal boondoggles.

Kasich recently put forth a $3 billion transportation plan. Of the 41 tier one projects, which one is the most expensive, the most strategic investment the state is making?

Kasich’s biggest investment is a $440 million bypass around Portsmouth, a town of 20,000 people. That’s almost $22,000 for every man, woman, and child in town. (Even expand the look to the entire county and there are only 80,000 people). Ask the people of Portsmouth whether they would rather have this road or a check for $22,000 each, and I know where my money is. To put in perspective how crazy this is, remember those $300 stimulus “rebates” from a while back? Even at today’s ridiculously low interest rates, 30 year treasuries are yielding about 3.5%. Invest the $22K per person in treasuries and you could pay them a $750 “stimulus” every year in perpetuity.

Kasich is hardly alone in this category. Indiana Gov. Mitch Daniels’ most expensive project was a highway in another state that costs over $100,000 per foot and includes a tunnel that passes only under trees local residents didn’t want to cut down. Daniels also enjoys a high reputation in Republican circles for fiscal rectitude. Though not a governor, it was Republican Rep. Don Young and Sen. Ted Stevens who championed the original “Bridge to Nowhere”, a $400 million span to an island of 50 people. Kentucky Rep. Hal Stevens, dubbed the “Prince of Pork” by the Lexington Herald-Leader, has single handed kept plans for an I-66 interstate through rural Kentucky that nobody else seems to want alive.

Back to the case at hand, Kasich just goes to show yet again there’s no highway boondoggle big enough that even the most ostensibly fiscally conservative governor is willing to cancel it.

It may well be that this is part of a longer, more strategic route. But with the vast transportation needs in Ohio, it’s tough to imagine this one small town project deserves the most money. And while I’m not the biggest fan of urban streetcars myself (not evil, but not my top priority by any means), at least downtown Cincinnati legitimately has millions of people visiting it every years.

It’s hard to take Kasich seriously as a conservative if this is the type of project he wants to champion. Unlike some urbanists, I like roads. I’m not ashamed to say that we need to build more of them, even some expensive ones. But we ought to at least build ones that make sense, in places where people actually live in numbers commensurate with the money spent, and where there’s a real cost/benefit to be had.

In the meantime, by no means does someone like Kasich deserve to be put in the conservative bucket. Just because someone wants to waste money on a boondoggle you actually like doesn’t make him any less a boongdoggler.

72 Comments
Topics: Public Policy, Transportation
Cities: Cincinnati

72 Responses to “Exploding the Myth of the Fiscally Conservative Republican Governor”

  1. John Morris says:

    You also can’t reach close to all the jobs through a BRT system given the region’s current layout. Get real, no plan can help everyone.

    Did you actually look at the proposal which seems to involve a BRT system covering almost 100 miles? Is it remotely realistic to expect often low paid workers to commute 10-30 miles each way to work- assuming they are lucky enough to not have to transfer? Have you ever experienced that?

    What about getting to the doctor, or the grocery store? More miles?

    I’m not saying that BRT can’t play a constructive role some times- but it is far from being a good choice here. Another money bleeding system in this region will only remove resources from the routes that could actually change housing and job patterns.

    You do know, the Woodward plan is supported by actual real estate developers and large employers invested in Detroit? Perhaps they know more than you about what might work.

  2. jbcmh81 says:

    John, Bexley has significantly higher tax rates than Columbus, and maintains some exclusivity by pricing out many people. I don’t think that comparison is legitimate. Columbus could not do the same and be successful. And it goes without saying that there are huge structural and size differences.

    Bexley does not have transit.

    Construction being built in anticipation of a transit line would be TOD. What lines are planned in Columbus to spur the same development? You don’t seem to be getting the point here.

  3. John Morris says:

    Right, Bexley has more urbanist development than much of Columbus and doesn’t even have transit.

    All you offer is excuses.

  4. John Morris says:

    @jbcmh81

    The American Dirt post shows areas not far from Columbus’s downtown without sidewalks. Is that really Kasich’s fault?

  5. John Morris says:

    One only wishes Bexley could annex surrounding areas, since it seems to have a much better clue than Columbus.

  6. DBR96A says:

    If it’s been mentioned already, I didn’t see it, but the bypass around Portsmouth, OH is just one small part of a bigger effort to extend I-74 from Cincinnati to Wilmington, NC. There’s probably some federal pressure to get it done too, considering the feverish pace at which I-69 is being extended from Indianapolis to Brownsville, TX.

  7. John Morris says:

    Meanwhile toll revenues on roads like The West Virginia Turnpike have dropped dramatically.

    http://www.examiner.com/article/west-virginia-turnpike-revenues-taking-a-hit-at-the-toll-booth

    The “You didn’t Build That”, environmentalist president seems to be an avid supporter of road construction.

    The latest story from 2013 seems to expect more revenue declines.

  8. John Morris says:

    He said “you didn’t build that” in Roanoke, Virginia where large chunks of the black community were torn down for road widening projects and a crony capitalist deal to build a Coca Cola Bottling plant.

  9. John Morris says:

    He actually started the speech, by acknowledging that Roanoke was built around railroads, which are by far the most logical transport mode in that region.

  10. Matthew Hall says:

    By “you” Obama meant private business owners, not government.

  11. John Morris says:

    Right, so in this case he went to a town where government road building and urban renewal had done vast damage to to the community and said “you didn’t build that”.

    He was ignorant or deceptive enough to not say all the damage government has done- particularly in the South.

  12. John Morris says:

    One can read about the damage urban renewal did to Roanoke in the book, Root Shock.

    Why didn’t he mention that?

  13. Bia Ma Fei Ma says:

    @Aaron

    I find your analysis of the Portsmouth bypass insufficient and unfair. Your analysis is limited to the comparing cost of the project to the population of Portamouth. Since the good people of Portsmouth are not the exclusive users of the road, your analysis is undeniably incomplete. Anybody who drives around (instead of through) Portsmouth will benefit from the road. It is necessary to evaluate the surplus derived from these non-Portsmouth drivers in order to determine the utility of the road. Quite frankly, I was embarrassed for you when I read your laughable analysis.

  14. But Bia Ma Fei Ma, just about every highway is going through somewhere to somewhere else, so those “good people of Portsmouth” are also paying their share for the bypasses around other cities as well. What you’re trying to say is “it’s the whole network” that matters, but even that’s completely broke! Everywhere is on the way to somewhere else, and in the effort to bypass everything, there’s no destinations left worth going to. Is it *really* that beneficial to bypass Portsmouth? Or to put it another way, are the supposed benefits, which the state DOT will insist are easily quantifiable despite them being exactly the opposite, really worth the cost of real cash money?

  15. @Bia Ma Fei Ma,

    What benefits are these? You are positing benefits that may not add up to much. By the way, I looked at part of the application for funding to the state as it was linked on Columbus Underground. It seemed to be about “build it and they will come” greenfield economic development, not benefits to through traffic.

  16. Bia Ma Fei Ma says:

    @ Aaron

    How do you know that these uncalculated benefits are small? Once again, you jump to a conclusion without adequate evidence to support what you hope is true. Anyone who uses the bypass to travel around Portsmouth rather than through it will benefit from shorter travel times and fuel savings. One can compute a monetary value for the saved time for travelers and semis. The feasibility study I saw claimed that the road would save approximatley 1.5 million man hours in travel time per year.

    @ Jeffery

    I am glad you recognize that there are networking benefits to road construction. Therefore, you must agree with me that Aaron did not compare the total benefit of the road to its costs and that his analysis is flawed. How do you know what the network benefit is if you assume it is negligible? However, I am glad that you raise the questions that Aaron should have and answered but instead ignored.

  17. @Bia Ma Fei Ma, I couldn’t find the FEIS online, but US 23 only has 12,000 total vehicles daily north of the city and US 52 only about 8,500 east of it. According to the Record of Decision, even in the design year the traffic won’t be bad, with only a small segment at LOS C and 9 intersections at LOS D or worse.

    If there’s really that much value in facilitating through traffic movements, there’s a very simple way to show it: build the bypass as a toll road. Motorists should happily spend some of their immense savings on a toll if the savings are real.

    In any case, there’s no way this possibly warrants the most money in the entire state of Ohio.

  18. Bia Ma Fei Ma, what evidence do you have to support what YOU hope is true? ODOT is expecting the bypass to save 16 minutes in travel time versus the current route http://www.dot.state.oh.us/Divisions/InnovativeDelivery/PortsmouthGenProcurement/PortsmouthFactSheet.pdf If your 1.5 million man hours figure is right, then that translates to 15,411 vehicles per day. So do you know how much taxes saving 15,411 vehicles 16 minutes of travel time nets the government so they can pay for this highway? Nothing!

    Even if people were getting paid for that time they saved, which they aren’t, that would assume this bypass is yielding travelers $19.5 million in benefits per year. That’s based on Ohio’s per capita income of $25,618 per year, which divided out is about $13 per hour. So even if the government captured every last cent of that supposed benefit through a 100% “Portsmouth Bypass Time Savings Tax,” it would still take 22.5 years to repay the construction of this bypass. The pavement isn’t going to last that long for one thing, on top of all the extra costs of plowing, policing, filling cracks and repainting lines, mowing grass, inspecting and painting bridges, and running lights.

    You can say that this new highway will open up more territory to economic development (ODOT’s PDF even states as much), but look at the landscape it’s planning to go through. It’s all rugged forested foothills with scattered tiny farms and rural sprawl. What little development will materialize is just going to be a few gas stations and fast food joints. It may help residential property values along the currently busy route through the center of Portsmouth and New Boston, but it will also hurt existing businesses that rely on that through traffic.

    So what’s left? The government is going to spend a minimum of $440 million of real cash money on this bypass. How will they recoup that investment AND make ongoing money for maintenance and operation, plus the major rehabilitation that it’s going to need in 40 or 50 years? Rainbows and unicorn farts apparently, because I can’t find an actual cost/benefit analysis prepared by ODOT for this project. The final irony is that providing shorter routes and reducing congestion means users burn less gas. Great! Another benefit! But oh wait, that means less gas taxes. Well this just keeps getting worse and worse. But you know, we can’t NOT do this project, because a 1965 study said so!

  19. Bia Ma Fei Ma says:

    @Aaron

    The bypass will save each of those motorists 15 minutes every time they use the bypass. Let’s look at the composition of the traffic and see how many people are in each vehicle. Let’s see how many of those vehicles are semis or other vehicles used in industrial production. Next, let’s consider increase in traffic over the lifespan of the project. All of these variables determine the the benefit society will derive from the bypass. You should have made an earnest effort to determine the surplus generated by the road before you jumped to the conclusion that the bypass is a boondoggle.

    There are countless publicly funded roads that produce a net benefit for society. The mere fact that these roads were not funded as toll roads does not mean that they were not worth the cost of construction.

    Now, I would like to address your last observation that Ohio is not undertaking a project more expensive than the bypass. The lack of more expensive projects could be viewed as evidence of fiscal restraint. First, you argued that the bypass was a ridiculous waste, now you have reduced your criticism of the bypass to a mere mis-priority. This new position is a long way from your original claim that this project is a glaring example of Republican fiscal lunacy.

  20. Bia Ma Fei Ma says:

    @ Jeffery

    Where to begin?

    1) Your math falsely assumes that there will be only one person in every car that uses the bypass.

    2) You need to look at the value of saved machine time. Semis and other industrial vehicles that use the bypass will save valuable time.

    3) Per capita income is the wrong number to use to value time saved by the bypass. Per capita income takes the state’s total income and divides it by the total population. This means that children (who do not drive cars) will lower the per capita income. Every car should have a driver 16 years or older. I bet you most of those drivers would pay more than $13 to avoid sitting in traffic for an hour.

    4.)What about fuel savings?

    5.)How are you addressing discounting for the future? Is an hour saved today as valuable as an hour saved a year from now? (Discounting actually helps your argument.)

    The only positive claim I have made is that the road will generate some benefits to some members of society (this is undeniably true). The whole point of my preceding posts has been criticize the gaping flaws in Aaron’s analysis.

  21. On average there’s only 1.3 people per car, so that doesn’t change the numbers much. Besides, trying to throw out children suggests that their time is worthless. But how much travel is actually for business? Most of it is going to be commuting, shopping, and leisure travel. Even for truckers, their job is to get from point A to point B. If they’re paid hourly, then the shorter route hurts them. Otherwise, they save some on gas, but again that means less gas taxes coming into the state and the feds to pay for this highway.

    What’s absurd about this is just how little of the “benefits” of this project are actually capturable through taxes. Go ahead and use household income, or heck, just assume everyone makes $30 an hour. It doesn’t change anything. The benefits are all abstracted anyway.

    All this project does is take the 17.5 mile drive between Sciotodale and Lucasville and cuts it down to 16 miles. Without the bypass, Google Maps says the current route takes 24 minutes with no traffic. So except during congested times, the bypass saves just 8 minutes and 1.5 miles. Big whoop.

  22. Bia Ma Fei Ma says:

    @ Jeffrey

    Now you claim that usership will be 30% greater than your first guess, but then you treat those extra users as trivial. When did I try to through out children? My point was that value of time for the average driver exceeds the per capita hourly income. Many people will pay more than $13 to avoid spending an hour sitting in traffic. Furthermore, the shorter route does not hurt truck drivers; the drivers will be able to do the trip faster. This means that the drivers will be more efficient and earn higher wages (simple micro dude).

    The government provides countless services which generate benefits that are not directly taxable. However, this reality does not mean that the government should not provide services like national defense.

    The periods of congestion are precisely when a lot of people use the roads. Furthermore, there are a lot of stop lights along the current route. Does the Google Maps time take into account the traffic lights?

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