Transit’s cost-effectiveness index fell short


The U.S. Department of Transportation announced last week that it would pull back from its cost-effectiveness index when picking major transit projects.

So how smart is that?  

Well, pretty smart, as it turns out.  The move makes sense, even for those of us at Growth & Justice, where we emphasize cost-effectiveness and smart investments.

U.S. DOT in 2005 made the cost-effectiveness index (CEI) the linch pin for decisions on the Small Starts and New Starts transit programs. Those programs provide federal funding for such initiatives as the planned Central Corridor light rail line that will link St. Paul and Minneapolis. 

With the CEI, a narrowly defined set of benefits had to exceed project costs by a given threshold in order for transit plans to move forward.

Trouble is the CEI focused primarily on faster travel on long trips by commuters — a legitimate consideration, but not the only one. This over-emphasis on commuter trips often came at the expense of quality transit service for low-income city residents.

Case in point: The Central Corridor line. The planned light rail service was slated to reduce the transit service now available along the region’s busiest transit run, down University Ave. in St. Paul through several ethnically diverse and lower-income communities. 

Metro Transit argued that adding stops to better serve the residents of those areas would increase construction costs and reduce the speed of the trip for for commuters in ways that would put the Central Corridor line over the mark for the all-important CEI. Correct.

But U.S. DOT’s Federal Transit Administration states as policy that the the most fundamental reason for offering transit service is to provide affordable mobility, a critical issue for low- and moderate-income people who depend more on public transit and constitute its core ridership.

Federal statute lays out six statutory criteria for major transit projects, just one of which is the cost-effectiveness index. The Bush Administration’s decision to elevate the CEI to the overwhelming focus led to decisions that undermined other key goals for transit.

The Federal Transit Administration will soon initiate a rule measuring a broader range of benefits from New Starts and Small Starts, including economic development opportunities and environmental gains.

With this new approach, the CEI will continue to be evaluated, but as one of the six criteria. And this new approach may allow for sensible changes to Central Corridor plans, including additional stops in what otherwise will be under-served, transit-dependent neighborhoods.