Houston's Light Rail Funding Woes

Houston may prove no different than Denver and Charlotte in its light rail expansion plans based on bonds backed by a 1% sales tax. While that may be the conventional basis for capital funding, this article suggests that the formula may no longer succeed, especially if operations must be reduced when the lines are built.

"The Metro Solutions plan aims to add 30 miles of light rail to the existing 7.5-mile corridor at a cost of $2.6 billion (as well as additional transportation projects), may simply be too ambitious a project for a metropolis concerned about fiscal restraint in a period of budgetary black holes.

Just a few years ago Houston had grand plans for an extensive new light rail system that would crisscross the nation's fourth-largest city from end to end. With new sales taxes, the local transit authority would be able to afford the construction of five lines by the early 2010s.

The decision to backload virtually all spending on the project through bonds will cause problems if the economy ten years from now doesn't perform exactly as predictions assume today."

Thanks to Marilyn Skolnick