Another valuable analysis from Sightline Institute researcher Clark Williams-Derry (further to his piece on declining traffic and tolls here):
Last Friday’s excellent Vancouver Sun story put a much needed spotlight on on the Golden Ears Bridge—where traffic is running so far behind projections that Translink now forecasts that the agency will lose between $35 and $45 million per year on the bridge, for at least the next several years.
But the story is really just the tip of iceberg in a much larger story about Greater Vancouver’s transportation finance woes. Not only are bridge tolling revenues falling behind projections, but gas tax revenues are too. Take a look at the black line in the chart below, representing the 1-year average gasoline sales volumes in Metro Vancouver:
… it became clear that gasoline sales had started to decline. And that realization apparently sent shockwaves through Translink’s entire budget.
In the agency’s 2012 budget forecast Translink was forecasting substantial growth in annual fuel tax revenue through 2021. But their 2013 plan recognized that gas taxes were at best flatlining —a realization that forced the agency to strip more than half a billion dollars from their budget through 2021. And the forecasts are getting progressively worse: the 2013 forecast was bad enough, but the 2014 draft forecast … trims even more money from Translink’s long-term budget.
The chart below illustrates the problem. If you’re not a transportation finance nerd, the gap between the red line (the fuel tax forecast from the 2012 “Moving Forward” Plan) and the blue line (the forecast from the 2014 draft plan) may not look dramatic. But to transportation planners who had been counting on the revenues represented by the red line, the lower revenue forecasts in the blue line must have come as quite a shock:
Several different forces are contributing to falling gas consumption in the lower mainland. Declining driving per capita certainly plays a role. Gains in fuel efficiency probably do as well. But there’s also evidence that a strong Canadian is encouraging some drivers to cross over into Washington to buy gas. …
Regardless of the reasons for the decline in Greater Vancouver’s gasoline sales, there’s no question about the fiscal impacts: Translink just isn’t getting as much gasoline tax revenue as it thought it would a few years back. Meanwhile, toll revenue from the Golden Ears Bridge is falling badly behind forecasts.
But the agency’s megaproject debt isn’t going away. And when gasoline and toll revenues don’t show up, but debt service obligations keep coming, everything else gets squeezed
. Transit in particular has been on the chopping block
over the last two years. So far the agency has managed to avoid major service cuts, in part by tapping into its reserve funds. …
The irony is palpable. Much of the agency’s budget problem stems from its relationship with cars. The lower mainland has built new, expensive facilities to move vehicles, but the drivers (and the revenue they generate) haven’t shown up. Yet the budget squeeze falls particularly hard on transit riders—people who aren’t using cars at all! ‘
If I were conspiracy-minded, I’d say that Translink’s shrinking transit ambitions are part of a plot to keep people in private vehicles—where they’ll pay more tolls and gas tax. But since I’m not conspiracy-minded, I’ll say it looks like just another in a long and depressing series of examples of how bad traffic forecasts can lead transportation spending astray.
This is an abridged version. All the details here. More on Sightline (and your chance to contribute to its work) here.
Further to the mention of TransLink’s Base Plan:
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Over the coming weeks, TransLink will be asking for public comments on the draft 2014 Base Plan and Outlook. The Plan outlines the strategic initiatives, transportation programs and services that TransLink will deliver using existing revenue sources. A copy of the 2014 Base Plan Summary is attached.
We invite you to visit the webpage to learn more about the Plan and provide your comments through the Base Plan survey.