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Now it is not only enough for delusional light-rail supporters to “ask” taxpayers to loan them tons and tons of money to finance white manatee (elephants are too small) projects.

TriMet now says it intends to make up the difference by borrowing against future federal grants, though it is questionable whether this meets FTA funding guidelines. At best, it means the transportation projects that would normally be funded by those future grants will not be possible.

In other words, usually transit authorities and municipalities raise bond revenues in one of two ways: general obligation or user fee (OK, so I forget the fancy term). In the GO case the taxing ability of the agency stands behind the bonds – in other words, all taxpayers are on the hook for paying these off, so long as the agency can actually raise the taxes. In the second case, the funds to pay the bonds come from the revenues raised from the project itself – such as train fares, bridge tolls, etc. Except in this case and in nearly all other light-rail cases, the fares charged will be nowhere near the amount needed to pay the bonds. And the cities and states are so darn bankrupt that no one will lend to them even on a GO basis (other creditors presumably are ahead of them in line when it all goes belly up). So what are we doing now? We are pledging future federal government slush monies to pay these things off.

You can’t make that up. And do I need to remind readers where that federal slush money is coming from, especially when we are projecting trillion dollar deficits until my kids are in college? When does the U.S. pledge “United Nations slush fund money” for its Treasury debt? By the way, does it strike anyone as odd that according to the piece that it is “questionable” that such a move is possible under FTA funding guidelines?

One Response to “This Week’s Sign of the Economic Apocalypse”

  1. Harry says:

    Light rail is generally a stupid dream of the city planner class, who want most of their subjects to ride bicycles, and the rest of us to ride public transportation from their East-German apartment to their job in the city.

    The government killed the New Haven Railroad in the fifties, and the LIRR in the sixties, but Amtrack has been a progressive success story.

    This is the reason why I am not warm to light rail projects, especially in Los Angeles.

    I do support a light rail project that begins in Brighton and goes to both Oak Hill and the U of R, and to the sunny beach on Lale Ontario. Speedmaster gets a lifetime pass.

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