Indiana’s printing presses and the wheels on the bus

Did you know that Indiana state government once had about half a dozen printing departments? Within itself. All with their own staff and presses and supplies. Did I mention there were several of these? Sometimes one would be busy while others were sitting around doing nothing. That went away during the Daniels administration.

I was thinking about that anecdote this weekend as I placed some trash bags in the garage. Because as I was putting those bags into the trash cart, I thought, “I wonder how much the City pays for this? And why do we contract with Republic Services for so much of the city?”

This is how my brain works.

So I went digging around and I can’t say I can tell. Indianapolis’ budget [PDF] is usually around $35 million a year for solid waste collection (that doesn’t include disposal). I’m in one of the districts that gets served by Indianapolis DPW for trash collection, and we pay an extra $6 a month for recycling pickup via Republic Services. I’ve never had a problem with either.

Republic actually provides collection for much of the city. While I can’t figure out how much is paid where, it does lead to the obvious question: should a city ever collects its own trash? Some cursory Googling would suggest it’s rarely cost-efficient, as municipal workers tend to get paid more. And if you squint, you can make the suggestion that the extra pay makes them behave a little safer.

Like Mitch Daniels and Indiana’s monkeying with the print works, the rationale there was, “If we can open the yellow pages and find at least three companies doing the same thing, we should just hire one of them to do that thing.” It saves money and no one much noticed or cared when they went away. Trash collection seems all the same. No ever complains that their trash guy – city or private – is a problem.

Which brings me to the center of this government nougat: why don’t cities ever consider privatizing their bus systems?

There are plenty of private busing companies. Lots of school districts find it useful to hire a contractor for their school buses and drivers, so why not city buses? If schools do it and people are okay with that, and they’re no more or less safe than a publicly-owned bus, why wouldn’t we?

Indianapolis is set to vote in November on the Marion County Transit Plan, which includes a .025 percent increase on income taxes to pay for expanded bus service (FYI: we pay .093 for trash collection). This doesn’t include the Red Line, which is already paid for by federal money. This plan expands the “typical” service on more city streets, longer hours, and higher frequency (the magic sauce of a successful system).

IndyGo being Indianapolis’ bus provider would receive that money and put it to work. IndyGo exists in a weird place alongside narrow company. They’re a municipal corporation, meaning they can receive public money, but largely operate on their own with their own oversight, governance, boards, and leadership. The Indianapolis Airport Authority and the Indianapolis-Marion County Public Library are the other two.

The airport does well with this. But they also have things to sell. Gate fees and usage fees for airlines and other companies keeps them flush. The library is much less so, but they can rent out space and presumably sell some tickets for events. And, luckily, you buy a book once and it’s pretty much okay forever.

IndyGo, however, is not in this fortunate position. Fare boxes can collect ticket revenue, but a bus’ fare box collects about enough money to pay for its gas. The bus itself, the driver, maintenance, and other infrastructure is reliant on public money.

I don’t think anyone with a rational bit of sense can look at IndyGo in its current state and say, “They’re inefficient with money.” If anything, they’re inefficient because they lack enough money to buy reasonably. Like when they buy a used bus from another city, usually Columbus, Ohio, and we run them until they’re powered by everyone’s feet sticking out the bottom. Like your dad who always bought $1,000 cars twice a year because it was “cheaper”.

But when folks walk out and say, “Hey, let’s levy a .025 income tax to pay for such-n-such”, this gets to be a really hard sell for a lot of reasonable people. There are places in Marion County that will pay for this and not see service. Probably ever. No one’s going to drive 4 miles just to take a bus for another 5. And no amount of squinting is ever going to make this valuable to them.

There are people, like me, who won’t see much difference because their current route’s frequency isn’t going up or down in the new plan, and I’m unlikely to ride a bus at 11 pm.

There are also rational people who will say, “Yeah, but for how long?” We pay .025 this year, and the next, but what about in 5? 10? Those costs have to go up sometime. What happens then must either be an increase or a reduction in services. This is true of trash service and lots of things, but it doesn’t seem to come up much. Plus, people are naturally inclined to assume whatever someone says about any public expenditure is likely not true. It’s almost impossible to accurately estimate anything at the scale of an entire city,anyway, but years of stories of really bad government spending has taken its toll.

I’m generally in the corner of privatized services because no one likes a monopoly, and government shouldn’t be allowed to run a monopoly on anything except military and police/justice matters.

And I know lots of great folks working at IndyGo. Like I said, no one can question their ability to make something out of nothing. But what would a private service look like? How come there isn’t a private company that takes on a large city’s bus service? We did it for the Commuter Express busses that served Carmel and Fishers, which was later doomed by low service frequency. Is it because it’s like education, where it inherently has to lose money, but we get a bunch of other things in return that makes that okay?

And if we did privatize it and regulate it like a utility, would that allow for more service through different hours, efficiency, savings, routes, or all of the above? I can imagine the biggest problem may be in loss of significant federal funding sources, which is a problem entirely in and of itself.

Indianapolis likes to lay claim to a bunch of successful public-private partnerships. We do this for school buses, trash collection, water, and electricity. Transportation seems like a reasonable place to look, too.

I ask these questions because I genuinely just don’t know. If anyone can point me to some guidance, please do.

2 Comments

  1. The number one problem is that drivers of private, single-occupancy vehicles don’t pay the full cost of driving. Currently, user fees pay for about 50% of road costs, so there is some heavy subsidizing of roads which very few people complain about.
    https://twitter.com/jen_keesmaat/status/731992251275055104

    For most Indy Go routes, if you can afford your own car, it is faster and more convenient to just drive. Many people say that one benefit of the Red Line is that it will reduce congestion, which sounds nice, but economics says that any decrease in congestion will be filled by other people. That is why the Red Line taking a lane away from College is actually a good thing because it imposes a cost on those still driving making the Red Line more economical.

    The bottom line is that unless we purposely increase the cost of driving, more mass transit won’t make a noticeable difference and mass transit certainly wouldn’t be financially viable if privatized.

    Maybe someday it will, but it will be a long, long time because of our poor land use over the last 60 years.

  2. In the Netherlands public transit contracts are open to a bidding process in which existing semi-publicly financed and owned operators, similar to IndyGo, must compete with private companies over public transit contracts. The cheapest bidder gets the contracts for operating that part of the public transit system. The result of this is that private companies usually operate lines connecting major urban centers and serving rural areas, while the major cities usually remain serviced by operators similar to IndyGo. I, however, question the benefits of this system. It mainly serves to decrease available money for maintenance while simultaneously depressing workers wages. At the same time our public transit costs continuously increase.

    In the Netherlands, however, comparatively high taxes on gas and vehicles ensure that public transit virtually always is cheaper than driving, particularly when parking costs are taken into account. The cost of gas does become cheaper than public transit when traveling with more than one person. Public transit use is also stimulated by free country wide travel passes given to all higher education students.

    I’m aware there are stark differences between the public transit situation and budget between the Netherlands and Indy. Also, the network in the Netherlands connects with the other extensive public transit networks of Europe, most similar to the U.S. travel networks in the New York and New England area and the West Coast. But perhaps there are some ideas here that could be applied to Indy?

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