City Sales Taxes Appear to be Stabilizing
The news on the City's finances lately has been pretty gloomy. The projected operating deficit for the year ending June 30, 2010 has swelled to the $142-160 million range. Mayor Parker just announced a budget that will draw down on reserves to their legal minimum next year in order to offset a deficit initially projected at almost $200 million.

However, in all of the doom and gloom there is one ray of good news. The City's sales tax collections, which had been in a free fall, appear to have stabilized. Sales taxes bottomed out in January with an 18% decline from the previous year ($34MM vs. 41.6MM). But ever since then the collections have been steadily improving. In the most recent report from the State Comptroller (May reflecting March sales) the City posted its first increase for the year, up 3.8% from the same month last year. This will still leave the City down by about 9% for the year, but the final number should come in fairly close to current projections, meaning that this year's deficit will

probably not be much worse than the current projection.

However, no one should be blowing the all clear signal. The City will still likely see pressure on its property tax collections as lower property values work their way through the appraisal process. The Mayor's proposed budget projects a 5% decline in property tax collections next year. With pension and retiree health benefits increasing at a 12% annual rate, it would take extremely robust revenue growth just to keep up with those mushrooming costs. Even though the City enjoyed record revenue growth from 2002-2007, we still ran substanial deficits. Add to that the fact that the City's infrastrutre is growing precariously old and you have financial straits that will likely be with us for many years.

Would You Like a Transit Lesson with that Shoe Shine?
Recently as I was leaving a rodeo committee meeting at Reliant, I stopped at a shoe shine stand to have my boots shined. During the shine I struck up a conversation with the young man operating the stand. It was late and he told me was about to head home, which was near Westheimer and Highway 6. I asked him how long it would take him to get home.

"Oh, about two to three hours," he replied.

"How can that be?"

"Oh, I ride the bus."

He then went on to share that one of reasons it took so long was that Metro had cut back the number of buses running, making it harder to make the two connections necessary to navigate the 14-mile trip home. He also told me that since the bus fares had been increased the roundtrip would cost him $5.00. He had calculated that the higher bus fare would pay for his gas if he drove to work. So he was saving up his money to buy a car. In doing so he could get to work earlier and stay longer and thus increase his income. Or he was considering using the extra time to take some classes at HCC so that he could get a better job.

There were three things that struck me about this conversation. First, in debates about public transportation policy we frequently hear about issues such traffic congestion, development patterns and air quality. What we rarely hear discussed is the very important role that transit plays in providing economic opportunity. Transit provides low income workers who cannot afford to own an automobile the ability to get to a job and begin building a financial base. This is a tremendously important contribution, not only to the workers who need the transportation, but also the employers that employ these workers and thus to our local economy generally.

Second, one of the favorite pastimes of the new urban pundits is to deride Americans' "love affair" with the automobile. They depict the attraction of the automobile as some sort of deranged erotica, the last vestiges of mankind's desire to dominant nature as opposing living harmoniously with her. This is complete nonsense. The allure of the automobile is very simply freedom; the freedom to go where you want when you want. This young man's desire to own a car was a perfectly rational economic decision from his perspective. He wanted a car to free up his time to improve his own economic circumstances.

Third, our transit policy in Houston has utterly failed the transit dependent like this young man. For it to take 2-3 hours to make a 14-mile trip is a disgrace. And his story is hardly unique. The Houston Chronicle has run a series of stories documenting similar travails. The poor service is a direct result of Metro decision to downscale its bus service. It is rarely discussed today, but the 2003 referendum which authorized the light rail, also mandated that Metro would increase bus service by approximately 50%. Instead, today we have fewer buses and fewer bus riders than we did in 2003.

The truth is that transit policy in Houston is made by people that do not have to rely on public transportation to get to their jobs. It is made by businessmen, lawyers, developers, academia, the media and other wealthy elite whose grandiose vision for the city trumps the real life hardships of trying to hold a job without access to an automobile. We can only wonder what our transit system would look like if the folks that actually had to use it everyday to get to work had a voice in making our policy.