In the “could-it-possibly-be-any-worse” department, this Rad Sadlee/Chronicle article reports on the just-released external audit of Houston’s Metropolitan Transit Authority. It’s not a pretty picture:

Comparing Metro’s numbers for fiscal years 2001 and 2004, the audit shows a 29 percent rise in operating costs, to $304 million, and a 36 percent increase per passenger boarding. On the income side, Metro’s annual report shows fare revenue has hovered around $46 million a year since 1995.
The report says ridership slipped 5 percent in the three years, from 100 million yearly boardings to 95 million, despite a one-year bump in 2004 when 5 million boardings on the new MetroRail line offset the loss of 3 million on buses. Most of the loss was on local and express routes, with Park & Ride numbers holding steady.

This less-than-inspiring performance is after Metro plunked down $325 million to construct the underutilized 7.5 mile Red Rail Line from downtown to Reliant Park and Metro’s announcement from a little over a month ago that the agency plans to spend another $104 million on the Red Line — less than three years after completion of the project — to double the number of trains and fix problems caused by construction errors. Then, as if to jolt into perspective the economic absurdity of all of this, Metro and public officials recently announced a modified public transit plan in which Metro puts up $676 million (in addition to the $325 million already spent on the Red Line) in return for an additional $1 billion in federal matching funds. Given how poorly Metro has invested public money to date makes the details of how Metro intends to spend that additional money almost an afterthought, but Anne Linehan over at blogHouston.net and Tory Gattis at Houston Strategies have done a good job of analyzing that issue. By the way, blogHouston.net’s compendium of Metro posts that Ms. Linehan and Kevin Whited have prepared is the flat-out best resource on the web to track what Metro is doing.

In a post on the city’s similarly dubious investment in downtown hotels, I observed that after awhile — by throwing $15 million here and there on bad investments — you eventually start talking about some real money. However, even though the amount of poorly-invested funds in the scam of Metro’s rail system is absolutely huge, the issue of whether such funds should continue to be invested in such a plan does not even seem to register on the local political radar screen.
Unfortunately, the relatively small groups that benefit from these urban boondoggles have a vested interest in keeping that threshold issue from being re-examined. The economic benefit of light rail is highly concentrated in only a few interest groups — particularly political representatives of minority communities — who tout the political accomplishment of shiny toy rail lines while ignoring their constituents need for more effective mass transit, environmental groups striving for political influence, construction-related firms that feed at the trough of Metro’s poor investment decisions, and private real estate developers who enrich themselves through the increase in their property values along the rail line. None of these reasons for mass transit appeal to the vast majority of the electorate, so this amalgamation of interest groups continues to disguise their true interests behind amorphus claims that the uneconomic rail lines reduce traffic congestion (they do not), curb air pollution (they do not), or improve the quality of life (at least debatable). The literature on all this is public and volumnious — check out demographia.com, cascadepolicy.org, and americandreamcoalition.org.
How do these interest groups get away with this? The costs of such systems are widely dispersed among the local population of an area such as Houston, so the many who stand to lose will lose only a little while the few who stand to gain will gain a lot. As a result, these small interest groups recognize that it is usually not worth the relatively small cost per taxpayer for most citizens to spend any substantial amount of time or money lobbying or simply taking the time to vote against an uneconomic rail system. Nevertheless, given Metro’s poor financial performance — combined with new proposals for allowing this poorly-managed agency to invest over $1.5 billion before it has even put it’s house in order — it’s high time that Houston’s civic leaders show some statesmanship by addressing the real demands of folks who need to use mass transit and recognizing that we are talking about some real money here.
Metro’s rail system is a bad virus that has infected Houston, and the cost of treating this civic virus is growing larger each month. Without periodic and independent re-examination of Metro’s light rail plan, the increasing costs of this plan risk turning this currently manageable problem into a major civic fiscal crisis that could negatively affect the Houston area’s growth and prosperity. Real leadership involves recognizing that risk and addressing it, not indulging it.