Is it ever a good idea to turn down federal funds for local projects? In my opinion, the answer is no, especially if the refusal is based on ideological reasons. There are some councilmembers on the Ann Arbor city council who believe that it is their job to save the federal government money. This Tea Party ideology is hurting the residents of Ann Arbor and we may miss the boat (or should I say train) on a major new initiative because of their shortsightedness.
President Obama and Republican transportation secretary Ray LaHood have been pushing a major new transportation initiative for the past few years; this initiative is high-speed rail and the expansion of passenger rail. LaHood has compared this initiative with the start of the interstate highway system and says that the transportation challenges that are driving increased demand for rail are not going away.1 The federal government has invested millions of dollars in rail over the past few years throughout the country. This is not on a whim, but it is an actual progressive and culture changing initiative; an initiative that benefits the country by making transportation efficient and environmentally cleaner, but admittedly is expensive. So then why are Republicans and Teapublicans against any type of rail project? Is it really about the money only?
I found this article on AlterNet “Why Do Conservatives Hate High-Speed Rail? 5 Reasons Right-Wingers Are Sabotaging Public Transportation Projects” that had an interesting explanation. Here is an excerpt:
High-speed rail is one of the rare areas where business, labor, and environmental activists are often in agreement. Republican transportation secretary Ray LaHood is a fan, as are, of course, President Obama and Vice-President Biden.
But Tea Party-supported governors like Scott Walker in Wisconsin, John Kasich in Ohio and Rick Scott in Florida have made headlines by refusing billions in federal stimulus dollars aimed at creating new high-speed train lines between major cities.
The trains would be electric-powered, providing comparable travel times to regional plane flights but cheaper, running on cleaner energy, and without the same security concerns. Real estate developers and other business types saw new rail lines as an opportunity to invest in new places, and the rail projects would create both construction jobs and permanent jobs operating and maintaining the new trains.
So what’s the problem? Why do conservatives hate high-speed rail so much? They claim it’s all about money, but handing back billions in federal dollars while claiming to be broke doesn’t seem to make much fiscal sense.
What they list as the reasons for sabotaging rail are the following:
- They don’t want President Obama to get the credit.
- It would strengthen the unions that support other programs that conservatives hate.
- Collectivism/ Socialism. In the words of George Will, “the real reason for progressives’ passion for trains is their goal of diminishing Americans’ individualism in order to make them more amenable to collectivism.
- Urban vs. rural. People of color vs. white people. Public investment of any kind has been branded by the conservative movement as a way for the government to take away money from hardworking, independent (white) people and give handouts to freeloaders, usually seen as nonwhite people.
- High-speed rail will change our lifestyle.
This article really gets to the heart of the matter. It is not all about the money, but about ideology for many Teapublicans who are against rail. They don’t like rail, period. Whether it is for the issues listed above or another personal issue, they use the cost of rail as a way to discredit the entire initiative. Every new initiative in this country has had a high cost. When government implements something as widespread as a national high-speed rail plan, there will be a cost, a high cost, but a necessary and justifiable cost. The argument that rail is too expensive is not a valid argument if the benefits for society are there.
A main role of government at all levels (federal, state, local) is to provide services and needs to society. They provide things on a large scale without the consideration for a monetary return on every dollar. The return on governmental expenditures is in the worth or betterment that the service or need brings to society. You cannot equate this to dollars because many of the benefits are intangible. What is the monetary value of clean air, less congested roads or time commuting? Although some economists sometimes try to label these intangibles with dollar figures, it cannot really be done accurately. How can one possibly put a dollar figure on time? Using your hourly wage at work is not accurate because everyone should have the same worth outside their job. No one person has a higher dollar value for their time over another person. The anti-train councilmembers complain about the high cost for these projects because they don’t believe that these intangible items are in the best interest of society or that government should pay for anything that does not have a direct financial benefit for the government.
The State of Michigan Film credit is the perfect example of how shortsighted our own Michigan Republicans/Teapublicans can be when valuing the intangible benefits of a program.3 Governor Snyder only cared about the bottom line and the amount of tax revenue coming into the State coffers in exchange for the film tax credit. He did not recognize all the jobs and economic development that the film credit brought into our state; other revenue items would have included any uptick in revenue for the economic benefits. We had infrastructure created for the film industry, many new local jobs created for the film industry as well as an increase in local economic development in certain areas due to the increase in hotels, car rentals and restaurant patronage. None of it mattered. Snyder only saw a line item that said that the State gave a credit to the film industry with no direct revenue return on the investment. He saw the tax credits as a direct loss of revenue and ignored all the other gains that I mentioned above. However, the return was recognized in other areas of government indirectly, specifically the overall economy, and not in a direct dollar figure reported as revenue. Snyder is a businessman and not a politician. IMO, he does not understand the value of the intangible benefits by government investment, when as a Governor he should. We were growing a new industry for our state. A new industry that would be here for the long haul and continuously brings in more revenue over time.
A main aspect of government is providing the infrastructure for transportation, whether that is roads, rail, or airports. Transportation needs to be interconnected. The government is not supposed to make a profit on these ventures, but should implement them for the good of all society, not for the good of stockholders or the good of the government itself. The high cost in dollars or lack of return on the dollar is not a justifiable reason to be against anything that is needed and is in the future best interest of society. You cannot have a direct cost benefit ratio for every government program because that is not the role of government. Not all government programs are supposed to earn a profit or break even for that matter. The service they provide has a cost and we the citizens pitch in collectively to pay for that cost. Government is there to serve us, collectively, not to “sell” services to us. We already paid for these collective services by paying and pooling our taxes.
Since this rail initiative began, the Republican/Teapublican Governors from Wisconsin, Ohio and Florida have refused rail money for their states. 4,5,6 They cite the high cost of the projects and that they would require huge subsidies to operate. They also think that there will be no will or desire to ride a train. The governors think that the projects are boondoggles and will require a state subsidy to operate. I say, so what, to the state subsidy. There will be many intangible benefits that will justify the subsidies. Their ideology blinds them to the benefits of all future innovations in rail.
Although, the Teapublican Governors thought they were being prudent by sending back the federal funds, they were being careless, shortsighted, and irresponsible. LaHood has since redistributed the funds to other states who more than willing to take the federal tax dollars to upgrade their infrastructure. There were no “savings” of tax expenditures; they were just redistributed. What is a loss for Florida, Wisconsin and Ohio was a gain for many other states. 4,5,6
The State of Michigan has been on board with rail for the past few years. The Michigan Department of Transportation (MDOT) has a dedicated website to explain its vision about rail:
Where is rail transportation headed in Michigan? What role does rail freight play in our state’s economy? When and how will high-speed rail become a viable option for passenger travel in our Great Lakes State?
These and other questions are addressed in the Michigan State Rail Plan. MDOT developed the comprehensive plan to set forth state policy involving freight and passenger rail transportation, including commuter rail operations. It presents priorities and strategies to enhance or preserve rail service that benefits the public, and serves as the basis for future federal and state rail investments in Michigan.
The Michigan State Rail Plan plan meets the requirements established by the Federal Passenger Rail Investment and Improvement Act of 2008, which positions the state to receive additional federal funding for rail projects. MDOT has been preparing for rail and is excited about rail. Freight rail was the predominate type of rail in our state, but now the state is moving towards investing in accelerated passenger rail and even in commuter rail. MDOT has purchased the Norfolk Southern Rail line and is in the process of rehabbing the line.7 It also received millions of dollars for seven new and faster locomotives for the Blue Water and Wolverine lines; these trains will be able to travel at speeds up to 110 mph in portions of the track running between Dearborn and Porter, Ind.8 In addition, MDOT has purchased 23 bi-level, stainless-steel commuter rail cars to be used on the newly established commuter rail lines between Ann Arbor and Detroit and the Wally Line-Howell to Ann Arbor.9
Many cities in Michigan recognized the value of rail early in the State’s process and set forth with plans to help their communities prepare for commuter rail and passenger rail. Ann Arbor appears to be behind the curve and is on the verge of missing out on federal subsidies that would help us connect to rail in the most efficient and least expensive manner.
So why is Ann Arbor behind the curve? We are supposed to be this progressive, forward-thinking city, yet we are behind other municipalities in the state in preparation for this inevitable new initiative.
On Monday October 14, 2013 the Ann Arbor City Council held a regional transportation briefing at their work session. The presentations were very informative and highlighted all the progress and work that the state has done thus far in regards to rail. There were [presentations form Amtrak, MDOT Office of Rail and SEMCOG. I am attaching videos of those presentations for you to watch. They range from 6-12 minutes each.
(There was also a presentation by the AAATA and the RTA, but I won’t be going into that in this piece.)
First up was Charles Monte Verde, Government relation’s officer for Amtrak. He gave a PowerPoint presentation that spoke about the many train stations that have been constructed over the past few years. There was a very interesting slide that showed the progress of all the station projects. Ann Arbor lags behind Battle Creek, Troy-Birmingham, Dearborn, East Lansing, Grand Rapids and Jackson in the construction of a new train station or transit center.
Watch the Amtrak presentation here:
Next was Carmen Palumbo, Director for Transportation Programs for Semcog who spoke about the potential commuter rail lines.
And finally we heard from Tim Hoeffner, Director of Rail at MDOT. He spoke to all the progress in rail that has been made over the years. He thinks that the local stations should be the gateway to the community.
These presentations showed that the rail initiative is legitimate, plausible and ongoing in the State of Michigan. So why is there so much push back form some Ann Arbor City Council Members?
Councilmembers Lumm, Anglin, Kailasapathy and potential councilmember Eaton10 are adamantly against building a new train station for Ann Arbor. Lumm and Anglin have actually voted against accepting a $2.8 million federal high-speed rail grant for a train station upgrade study in June 2012. At this meeting, Kailasapathy who was not a sitting councilmember yet, along with Jack Eaton did speak at the public hearing and voiced their strong opposition to rail. All of their statements in regards to rail sounded an awful lot like the Teapublican Governors who have turned down federal funds for rail in Florida, Ohio and Wisconsin. Anglin thought that it would be a big boondoggle, Kailasapathy called it a phantom transit plan.11 None of them can see the intangible benefits of rail or public transit for that matter. They obviously are ignoring all the efforts by MDOT and SENCOG to get rail up and running
Then in October 2012, Lumm and Anglin again voted to turn down the local match for the $2.8 million federal high speed rail grant.12 Lumm says that the basic need (for rail) has not been established; she doesn’t know what the hurry is? The hurry, Councilmember Lumm, is that if Ann Arbor is already behind in preparing for the increased ridership for rail. Take another look at the Amtrak station slide I posted above. The other major cities along the train corridor are already preparing for the new rail initiative; Ann Arbor is not. We already need to play catch up. If we wait until rail is fully established there may not be any federal subsidies remaining and Ann Arbor could have to fund a new transit center without any federal funds.
The problem with that is that we missed our chance for a federal grant with no requirement for a local match. Many of the other stations got federal funding with no match because they were prepared, had a shovel ready plan and applied when there was the rare opportunity for a grant with no local match. Ann Arbor was not prepared, because Lumm (even before she sat on council), her fellow Teapublicans and their supporters have obstructed the process every step of the way. They vote and campaign against anything that has to do with a new rail transportation initiative.
They claim they are against rail because they are simply being fiscally conservative, which is not accurate. They are being FISCALLY RESTRICTIVE. They are not trying to be careful with money, they are refusing to spend money. Republicans have traditionally called themselves fiscally conservative where they only allow spending on specific items that fall under the conservative agenda. They cherry pick out their favorite programs and refuse to fund others. Many Republicans do find rail to be a viable and worthy program. Meanwhile, a Teapublican refuses to spend any money at all on anything that is not a current, basic, governmental service. They can not see past the present moment.
So reality is that Ann Arbor will have to put up some sort of local match when we build our new transit center. Having to pay a local match should not kill our project because as you saw in the presentations rail is coming and we need to prepare for it. The residents of the city now need to show the Teapublican Caucus on council that their actions by refusing funding for an inevitable project will actually cost us more in the long run. We should not throw out federal funding just because we have to now contribute a local match. However, Lumm votes against supplying matching funds as well as accepting the federal grants.
Think of the local match this way. Compare it to your matching retirement plan, if you have one. If you pay 5% into your retirement plan, your employer will often give you matching funds, say 10%. (e.g. is the UMICH retirement plan). That 10% is free money that you would not receive unless you put in the original 5%. Do you consider your 5% a waste of money because you think you deserve the 10% outright? That is what Lumm is insinuating; that we don’t invest in rail because of the local match. Using Lumm’s and the other Teapublicans logic about matching funds, she would prefer to retire without anything, no 5% or 10% in her retirement account and live on social security (equiv to no train station), or she would prefer to wait until she had only a few years to retirement and try and save up 15% or more using her own salary to make up for the lost matching funds. (Equiv. to paying for the train station without any federal dollars). It is lose-lose.
Some of the Teapublicans on council are not only against taking federal funds for rail, but also apparently against taking federal funds for anything. In June 2013, Lumm, Kailasapthy and Councilmember Peterson, voted against a $1.3 million Federal grant (with no local match) for educational demonstration wind turbine project at Pioneer High School.
Kailasapathy said, “I know it’s federal dollars coming in, but it’s not free dollars — it’s taxpayer money. And it’s our duty to be good stewards of that money.”
Really? This is an educational project for kids to learn from the technology. So what if the windmill is not located in the most ideal and efficient place? So what if the return on electricity does not match the investment cost of the windmill? The return on investment is the education benefit to the community and the students. I just don’t understand why everything has to have a return on dollars for it to be a legitimate governmental expense.
Now I understand that council needs to discuss issues about noise, placement, whether these wind turbine even belongs on school property, etc. These are all items that can and should be discussed. What I object to is the rhetoric about how we are wasting taxpayer dollars on this. That we should turn down the grant because the intangible benefits of the project are not justifiable to the Teapublican ideology.
Maybe the real problem is that the Lumm, Kailasapathy and Peterson think that wind turbines only rotate to the left and they don’t like that. They should simply walk around the wind turbine to the other side and see that the windmills also turn to the right! This project can benefit everyone, regardless of party.
Personally, I like rail and have always enjoyed riding the train, much more than flying. Those who live on the east coast take rail for granted. It is so convenient and available that it is a part of everyday life out there. I can’t understand why some in Ann Arbor can’t see the benefits of rail travel. We have some strong anti-rail councilmembers who currently sit on city council who do not represent the majority of the resident’s views. They argue about the location of the train station and its cost ignoring the reality that is going on outside of the bubble of Ann Arbor.
Inter-mixed in the funding issue is the debate regarding the placement of a new train station. I am going to review that controversy in-depth in my next post. I wanted to separate the two issues because I believe that the bigger principle here is the fact that we have Teapublicans who do not believe that federal money should be accepted or used for innovative projects that will greatly benefit the residents of Ann Arbor.
Lumm, Anglin, Kailasapathy and Eaton are deliberately clouding the issues and arguing about the potential placement and costs of a new station even before a study has been done to see where it possibly could go or how much each option could cost. That is why they are refusing to take federal funds for the study. This is just a diversion because they really don’t want to invest anything into an upgraded station no matter what the cost or where it is.
I don’t believe that is ever prudent to turn down Federal funds for rail, wind turbines or for anything that can give us a tangible or intangible benefit. It is just the opposite…foolish and wasteful. The Teapublican Caucus14 on our city council may cause the city residents to not only forgo participating in new transit initiatives that the most of the country will be experiencing, but also may cause the city to miss out on the intangible benefits such as cleaner air, less congested roads and saved commuter time. They are thinking rather selfishly and not understanding what is the real purpose of government.
Lumm, Anglin, Kailasapathy, and Eaton are in denial about Rail and should wake up and see the reality of what is happening now. They debate rail and a new train station location as if it is some far fetched concept like flying cars or living on the moon. Reality is that modern day rail is progressing and Ann Arbor can either get on board or be left behind.
Throughout time, many others have failed to see the benefits of new concepts or ideas. Back in the day, some believed that talking movies would never last, people would get tired of staring at a box all night (TV), and Rock and toll was the devil’s music. I found this website, Null Hypothesis that “has found a long and distinguished list of inventions that were poo pooed by esteemed individuals, only for the product to become a raging success”. It has some great quotes from the past that show how shortsighted some people can be. Here is second site that lists more. Here are some rail related quotes from the site:
Rail travel at high speed is not possible because passengers, unable to breathe, would die of asphyxia.
– Dr. Dionysus Lardner (1793-1859)
Professor of Natural Philosophy and Astronomy
It is an idle dream to imagine that automobiles will take the place of railways in the long distance movement of passengers.
-American Railroad Congress, 1913
What can be more palpably absurd than the prospect held out of locomotives travelling twice as fast as stagecoaches?
– The Quarterly Review, England (March 1825)
Some base their opinions only on what they know at the present time and can’t think out of the box and recognize potential for success. Lumm, Anglin, Kailasapathy, Eaton and also Peterson should try thinking out of the box sometime.
1 Keith Laing, LaHood squares off with critics of high-speed rail. The Hill Dec 06, 2011
2 Sarah Jaffe, “Why Do Conservatives Hate High-Speed Rail? 5 Reasons Right-Wingers Are Sabotaging Public Transportation Projects” Internet, July 22. 2010
3 Mitch Albom, Fight the smackdown of film biz’s success. Feb 20, 2011
4 Timothy Williams, Florida’s Governor Rejects High-Speed Rail Line, Fearing Cost to Taxpayers. Feb 16, 201
5Michael Cooper, More U.S. Rail Funds for 13 States as 2 Reject Aid. Dec 9, 2011
6 Ami Cholia, Around 24 states seek high-speed rail funds Florida refused. April 7, 2011
7 Ryan Stanton, Ann Arbor to benefit as Michigan moves to purchase and rehab Norfolk Southern rail line. Sept 27, 2011
8 Sebastian Fryer, Multimillion-dollar federal grant to fund new high-speed trains in Michigan. Ann Arbor News, Aug 4 2011.
9 Ryan Stanton, Commuter rail cars between Ann Arbor and Detroit slated for test runs starting Monday. Nov 9, 2012
10 Jack Eaton is running unopposed on the November 5, 2013 ballot for city council. He will most likely be elected.
11 Ryan Stanton, Ann Arbor accepts $2.8M federal grant for new train station but location not yet decided. June 5, 2012
12 Ryan Stanton, Ann Arbor agrees to spend $550K for next phase of work on new Amtrak train station. October 26, 2012
13 Ryan Stanton, $1.4M wind project at Pioneer High School advances to next stage in 8-3 vote. June 18, 2013
14 The Ann Arbor City Council Teapublican Caucus is made up the following councilmembers: Mike Anglin, Stephen Kunselman, Sumi Kailasapathy, Jane Lumm, and Sally Peterson. (Based on his campaign platform and rhetoric, I assume Jack Eaton will be welcomed into this group once he takes office in November.)