It’s Economical?

Many believe in choices and in markets. But markets work effectively only when there’s a reasonable relationship between cost and price. The current $2.5 BILLION plan for the Durham-Orange Light Rail Train assumes 50% Federal funding, 10% state and 40% local. The 40% local funding is comprised of a 0.5% sales tax, $10 annual vehicle registration fee and 5% tax surcharge on car rentals, to be supplemented with massive debt and debt repayments for half a century until 2062.

However, the NC General Assembly capped the state’s maximum contribution not to exceed $190 million (or 7.7%). Including debt payments (2062 and beyond), the total cost of the DOLRT project is estimated to be $3.4 BILLION. These estimates do not include the recent changes including the downtown Durham tunnel.


And then you add the annual 80% taxpayer subsidy for ongoing operating and maintenance costs (“farebox recovery” is the actual fare paid by the rider and planned to be 20%, leaving the remaining 80% to be paid by the taxpayer).

These lavish tax subsidies distort the market, are socially inequitable, and externalizes costs to others. Light rail projects require inordinately high capital costs, exorbitantly high operating subsidies at taxpayer expense and lack environmental benefits when compared to other alternatives including automobile or bus transit. The challenge is to find alternatives and technologies that could compete effectively with the flexibility of automobiles.

“A driverless system will be able to run frequently even very late at night, early in the morning, whenever you want to travel.  Light rail, bound by labor costs, will always be pressured to cut frequency outside the peak period…” — Human Transit: “Frequency and Freedom on Driverless Rapid Transit”

Our current emphasis on monopoly public transit systems wedded to buses and trains, fails to prepare us and our community for the demands of the future. Light rail will entail perpetual federal subsidies, state subsidies, long-term bonded indebtedness against future revenues, plus ongoing operating and maintenance costs.

A reviews of 30 LRT projects around the nation have conclusively demonstrated that all of them operate at a loss requiring average tax payer subsidies of 70%. The fare revenue does not offset the annual operating and maintenance costs.


For example, it is well established in various studies that “U.S. rail transit systems do not cover costs. Ridership is too low and/or costs are too high. The weighted average annual operating deficits in our sample were $21 million for the eight commuter rail systems, $329 for the six heavy rail systems and $48 million for the 20 light rail systems [including Charlotte]… On average, commuter rail costs society $42 per round-trip while heavy rail and light rail cost society $17 and $20 per boarding, respectively.”

In fact, this same analysis shows that Charlotte riders only pay a mere 4.1% of the actual cost (with the taxpayer graciously paying for the remaining 95%) SOURCE: A NOTE ON RAIL TRANSIT COST-BENEFIT ANALYSIS: DO NON-USER BENEFITS MAKE A DIFFERENCE?

Although LRT operates at lower frequencies and therefore requires fewer drivers, maintenance costs for BRT are typically lower than LRT, partly due to the high cost of maintaining and depreciating the catenary on LRT systems. (Furthermore, in the US the lower frequencies of LRT are a problem because they do not entice people to make the switch to mass transit.)

BRT, however, has a distinct operational advantage over LRT: A BRT vehicle can operate in mixed traffic on normal streets and then enter dedicated BRT infrastructure without forcing passengers to transfer to another vehicle. LRT, by contrast, can only operate where there are rail tracks, and passengers coming from locations not served by the tracks must transfer to and from buses, or to space-consuming park-and-rides, in order to use the system. A transfer can pose significant delays and inconvenience to passengers and is sometimes enough to turn people away from mass transit. — ITDP study, More Development For Your Transit Dollar