From Boondoggle to Bailout: Governor Hogan's Wrong Turn on the Purple Line | Citizens Against Government Waste

From Boondoggle to Bailout: Governor Hogan's Wrong Turn on the Purple Line

The WasteWatcher

The March 2015 edition of WasteWatcher included an article about local transit projects, “Transportation Boondoggles:  Streetcars and Other Things Lacking Desire.”  One of the culprits was the proposed Purple Line, a bait-and-switch,* multi-billion dollar, 16-mile light-rail line connecting New Carrollton and Bethesda, two Maryland suburbs of Washington, D.C.

*(The Purple Line, which envisions a $900 million federal commitment, is a bit of a misnomer, because it has virtually no connection to the D.C. area’s Metrorail system, known by its variously colored lines: Red, Blue, Yellow, Orange, Green, and Silver).

The March article was written before a frustrating feat of misdirection in June, 2015: Gov. Larry Hogan, the freshman Republican chief executive of the (otherwise very blue) Free State, gave the green light to the Purple Line, despite having campaigned on the need to end such wasteful projects, which invariably end up in the red, as this one almost certainly will.

The 2014 race for governor pitted Democratic Lt. Gov. Anthony Brown, the heir apparent to term-limited Gov. Martin O’Malley, against Hogan, a respected and successful, but largely unknown, businessman.  Brown entered the contest as a heavy favorite.  When Hogan decided to accept public financing, ensuring that he would be heavily outspent by Maryland’s vast, and well-heeled, Democratic machine, a Brown victory seemed virtually assured.

However, after Gov. O’Malley’s massive spending and multiple tax increases, even Democratic voters had become alarmed at the state’s fiscal recklessness.  In response, Hogan campaigned as a staunch fiscal conservative and opposed the costly Purple Line, which was strongly supported by O’Malley and Brown.

The stark contrast between the candidates’ positions on the project was highlighted during the 2014 campaign.  In its endorsement of Lt. Gov. Brown over Mr. Hogan, the Washington Post, a vigorous cheerleader for the Purple Line, specifically cited Brown’s support of the project and Hogan’s opposition.  The Post then ridiculed Hogan’s other positions as “incoherent,” “slapdash,” and “pandering,” predictably dismissing his candidacy in favor of the “more serious and substantial” Brown.

On Election Day, Maryland voters rebuffed the Post and rejected O’Malley, Brown, and the Purple Line, electing Hogan by 51.0 percent to 47.2 percent.  The Purple Line’s fate appeared sealed by the incoming governor and the voters who elected him.

Until he flip-flopped.

On June 26, 2015, Post readers awoke to an article announcing that Hogan had changed his mind.   As a caption to a photo of Hogan in the print edition of the paper succinctly stated, “Maryland Gov. Larry Hogan, who strongly opposed the Purple Line in last year's campaign, now supports it.”

In an editorial appearing that same day, the Post sung the praises of a man whom, just months before, it had ridiculed as a pandering lightweight:  “It took political guts for Mr. Hogan, a Republican who collected most of his votes from rural and exurban voters, to embrace an urban transit project that will overwhelmingly benefit Democratic suburbanites who didn't vote for him.”  The Post also hailed the policy acumen of someone who, when he disagreed with the newspaper, had been dismissed as hopelessly dim; now that he reversed course to adopt the Post’s position, Hogan was gifted with exceptional insight.  “The governor, who was a Purple Line skeptic during his campaign last year, deserves credit for recognizing that, on the merits, the project should go forward.”

The Post continued to laud Hogan’s reversal in an article two days later that ran beneath a photograph of Hogan gazing admiringly at Pete Rahn, his Secretary of Transportation and the picture’s central figure.  Remarkably, Rahn, with his Svengali-like influence over the governor, boasted openly to the Post that he “early on” decided the Democratic establishment and the Post were right, and his boss and Maryland voters were wrong.  Thereafter, Rahn “pressed” Hogan to reverse course on the Purple Line, including on a trip the two took to Asia where Rahn “would pester him.”  As he continued his efforts, Rahn said, Governor Hogan’s position “evolved.”

The article stated that Hogan’s reversal showed that he could be “pragmatic and flexible, even at the risk of disappointing his conservative political base.”  The article also said that Hogan’s decision “shows he drives a hard bargain,” though it did not note a single concession given by any party other than Hogan.

Prior to the much-ballyhooed decision, the Post had generously offered advice to the governor whom they had trashed as a candidate:  “Gov. Larry Hogan’s imminent choice about the Purple Line will play a large role in defining whether his first year in office steers his Maryland Republican Party toward the middle or gives Democrats a cudgel to beat him as an anti-spending ideologue.”  The Post declined to note that Democrats had wielded that very cudgel during the election to no effect, with voters deciding that, after years of reckless spending under one-party Democratic rule, an anti-spending Republican was just what the state needed.

Perhaps Gov. Hogan’s Purple Line capitulation is the political equivalent of “Stockholm Syndrome,” whereby even Republicans long captive to overwhelming Democratic majorities in one-party states acquiesce to bad liberal ideas, browbeaten to believe that such apostasy is the only path to political survival.  Gov. Hogan’s decision is also a likely harbinger of his being a one-term wonder:  not only is he  abandoning his fiscally conservative base, as well as some anti-Purple Line Democrats who supported his principled opposition to this wasteful boondoggle, he is also pandering to those who supported his opponent last year (and will almost certainly do so again in 2018).  Gov. Hogan’s turnaround on the Purple Line was surely intended to curry favor with Maryland’s left-leaning electorate, despite having won handily with a fiscally conservative message.  If his about-face was so motivated, he should remember the following admonition:  “When a Republican runs like a Democrat and a Democrat runs like a Democrat, then the Democrat will win every time.”

If Gov. Hogan proceeds with the Purple Line, he’ll do so after Sen. Barbara Mikulski (D-Md.), the powerful Senate Appropriations Committee chairwoman in the 113th Congress, secured $100 million in fiscal year (FY) 2014 funding.  Despite having relinquished the gavel to Sen. Thad Cochran (R-Miss.) when the Republicans assumed control of the Senate in the 114th Congress, Maryland’s senior senator has secured another $100 million toward the project as part of the Congress’s grab-bag omnibus appropriations bill that was approved by the Senate on December 18, 2015.  Of course, if Congress continues this absurd transfer of taxpayer dollars to the wealthiest state in the nation, the retiring Sen. Mikulski’s “farewell gift” to her constituents represents a mere down payment toward the projected $900 million federal commitment.

There are more critical facts about this “colossal waste of money,” as described by Wall Street Journal columnist Mary Anastasia O’Grady.  The Purple Line’s projected cost more than doubled from initial estimates to $2.448 billion (as of 2014), over seven times the cost to taxpayers of the “Bridge to Nowhere.”  The Purple Line’s cost per passenger would be an estimated $63,431.  Maryland’s Purple Line ridership estimates would require heavier utilization, based on passengers per mile served by the system, than 31 of 32 light rail systems in the U.S., and 2.5 times national median utilization.  The Federal Transit Administration (FTA) estimated far fewer riders and criticized the state’s financial projections as “more optimistic than historical experience.”  Yet Maryland has not lowered its ridership claims, even after it stated train frequency will be cut by 20 percent.

But it gets worse.  To placate Purple Line critics, Maryland announced (after the inclusion of the federal funding, which presumed significant state contributions as part of the state-federal cost-share relationship) that the state unilaterally would reduce its funding for the project by more than 77 percent from the levels set forth in the 2014 FTA project description.  Maryland’s bait-and-switch would cause a far greater share of the Purple Line’s cost to be borne by the federal government.  In 2014, the FTA estimated that, for every $1.00 Maryland would spend, the federal government would spend 61 cents.  Now, for each $1.00 Maryland plans to spend, the federal government would pay $5.37.  Taxpayers from outside of Maryland would be forced to lavish their scarce federal transportation dollars on a system located entirely within the nation’s highest-income state and dedicated largely to serving Bethesda, the nation’s highest-income town.

Moreover, Bethesda outpaces its closest competitors by a large margin: 17 percent higher than second place Greenwich, Connecticut; and more than 18 percent higher than third place Palo Alto, California.  Bethesda’s median household income of $197,622 is more than three-and-a-half times the national median of $53,657.

The Purple Line also fails as transportation policy because its route was determined by political considerations, not transportation needs.  The political impetus behind the Purple Line always has been, almost exclusively, from Montgomery County, the proposed site of the project’s western terminus in Bethesda.  The funding for Purple Line advocacy efforts has come overwhelmingly from developers who have long salivated over the opportunity to build further in and around the town.  Although the community is already served by three Metro stations, the Purple Line would encourage even more development.  By contrast, Bethesda residents overwhelmingly oppose the Purple Line, largely because it would be built on, and effectively destroy much of, the Capital Crescent Trail, a cherished linear park and hiking and biking trail that runs through D.C.’s Maryland suburbs.

The federal largesse secured by Sen. Mikulski would fund a project that is not only extravagant, but unnecessary.  Superior alternatives for travel via public transit already exist or are planned for the entire area to be served by the Purple Line.  In particular, Metro already has proposed a “Metrobus Priority Corridor Network” that will serve almost precisely the same route as the Purple Line; yet, unlike the Purple Line, it will be tied into the larger Metro system.  Clean-fuel buses also would be a far less expensive, more environmentally responsible, and more adaptable means of transporting persons around the inner Washington suburbs.  In fact, buses are a viable option for prospective Purple Line riders:  A 2013 environmental impact statement commissioned by the state concluded that the great majority of projected Purple Line riders would use buses, not cars, if the project was not built.

The Purple Line’s most fundamental flaw as transportation policy is that, despite its misleading name and Hogan’s claim that it “will integrate seamlessly with...Metro,” the Purple Line would not be part of the existing Washington Metro system.  Because the Purple Line would serve only a handful of stops, Purple Line riders seeking to travel by public transit to all but a very few destinations in the Washington area would be required to transfer to the Metrorail or Metrobus system to do so, a time-consuming and burdensome process that also would require the payment of an additional fare.  That fact alone calls into question the Purple Line’s projected ridership numbers and the financial viability of the project.

In his remarks at a June 25 press conference explaining his reversal, Gov. Hogan struggled to justify the Purple Line, doing little to comfort those worried about its excessive cost and limited benefits.  Like many politicians in similar circumstances, his reflexive rationale related to jobs, although he offered no data to support any employment claims.  In fact, prior to the decision, even Purple Line advocates had backed away from their job creation projections.

In the press conference, Hogan himself acknowledged, “I’m skeptical about some of the projections.  I mean, some people just come up with wild expectations about how many jobs it’s going to create.”  Nonetheless, at the very same press conference, Hogan asserted that the Purple Line would create 23,000 construction jobs, nearly quadruple the 6,300 Purple Line construction jobs estimated just a year earlier by the O’Malley administration, which was not known for understating the benefits of the project.

Gov. Hogan did not address another key concern for Maryland residents about the Purple Line:  What happens if, as the FTA warned, Purple Line revenue projections prove too “optimistic” and funds are not sufficient to pay off the project’s massive debt and operating expenses?  Even the O’Malley administration had acknowledged that deeply unpopular measures would need to be taken if that happened, stating “fare revenue from other Maryland transit systems would make up the difference.”  Gov. Hogan remained silent on this aspect.  Instead, the Hogan administration has continued to assert that the O’Malley ridership estimates remain accurate, notwithstanding the sharp reduction in the planned frequency of Purple Line trains since those estimates were first released.

Maryland Republicans in the state legislature, none of whom represent the Washington suburbs, understand full well what Hogan’s Purple Line decision would mean to their constituents.  Maryland House Minority Whip Kathy Szeliga (R-Baltimore County) posed the question, “Why should citizens in Harford County pay $100 million a year to maintain the Purple Line when you know someone from Bel Air is never going to ride it?”  Exactly.

Maryland taxpayers may be stuck with the costs of the Purple Line if the project goes forward, but that should not happen to taxpayers from outside the state.  Maryland Comptroller Peter Franchot announced that the state had record tax revenues for FY 2015.  Tax collections were up by 5.1 percent, and individual income tax revenues were up 7.1 percent.  Yet Maryland still seeks to shift costs for the wasteful Purple Line to the federal government.  As a result, federal taxpayers would be on the hook for nearly a billion dollars of debt-financed spending to benefit the country’s wealthiest state, which is running a surplus and is awash in record tax revenues.

While funding for the Purple Line was not stricken from the FY 2016 omnibus appropriations bill, the proper amount of money that federal taxpayers should contribute to the Purple Line is precisely zero.  In addition to its chronic cost woes, the Purple Line makes no sense as transportation policy.  Even if it did, it should be paid for by the extremely wealthy local jurisdictions that would reap its benefits (if any) and neither be supported nor bailed out by taxpayers from across the country.

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