St. Louis Taxpayers Paid a Lot To Run a Money-Losing Streetcar. It Could Cost Them Even More To Shut It Down.

Officials in St. Louis are faced with a dilemma that only the federal government can produce: They must decide whether to invest money to revive the long-troubled and currently abandoned trolley system or to lose more money to shut it down permanently.

Reporters in media reported that Tishaura Jones, the Federal Transit Administration (FTA), sent a February letter to St. Louis mayor Tishaura. The letter stated that local officials would have until February to develop a plan to restore the Loop Trolley’s 2.2-mile service or to return $37million of federal funding.

This is just the latest in a long and sad story about the St. Louis streetcar.

The trolley started operational life in 2018—six years behind schedule and about $10 million over budget. Neighboring businesses—which were supposed to be the primary beneficiaries of the new streetcar—complained that the inconvenience of the trolley’s construction was instead costing them customers.

It opened, but ticket sales were only 10 percent of the expected revenue. This almost instantly put the line in financial trouble. A Friday night was one of the creative efforts that helped boost ridership. You can laugh at these tracksThe service, during which comedians did 40-minute sets on the 2-mile route, generated as much laughter as it brought in new customers.

After county officials rejected the request of the operator for $700,000. to maintain the streetcar’s operation through 2020, the city decided to close the roadcar in December 2019. The Loop Trolley website states that it has been shut down in order to prevent COVID-19 spreading.

These are all reasons to not revive the Loop Trolley. However, the FTA ultimatum leaves St. Louis officials somewhat in peril.

Officials will need additional funds to revive the streetcar. To revive the streetcar, officials will need to pay $37 million back in capital expenses that the federal government incurred. The worst part is that the St. Louis area would lose its ability to obtain federal grants for future projects if federal funds are returned.

This is why St. Louis’ streetcar supporters continue to use this risk as a reason for keeping it alive.

In December 2019, Lyda Krewson, then-Mayor Lyda Krewson stated that “We have gone too far with the Loop Trolley and invested too much in it to simply walk away.” This statement was made after the trolley’s first closure. What critics don’t realize is that we all run the risk of losing federal funding and defaulting on federal grants.

Even streetcar critics who have been around for a while are finding the logic convincing.

“While Mayor Jones did not support construction of the Loop Trolley, she committed to solving this problem to safeguard our region’s transit dollars as well as our ability receive federal funding moving forward,” Nick Dunne (a Jones spokesperson) said via email. Center Square.

Baruch Feigenbaum (senior managing director, transportation policy, Reason Foundation), says that taxpayers also are being placed in an unwinnable situation. Reason).

“I love the idea that it must be continued to operate if you receive federal funding. What’s the harm in an entity applying for federal funds? [and then]”Shutting it down.” says Feigenbaum. “There should be consequences. Otherwise, taxpayers are going to get even worse.”

He said that the fear of losing federal funds to future transit projects motivates local and state governments, to milk taxpayers, to preserve zombie transportation systems, which few people use.

Feigenbaum believes federal transit officials should adopt objective criteria, around ridership and financial sustainability, when awarding grants to localities in order to prevent future St. Louis Loop Trolley situations.

Urban Circulator, which was responsible for the majority of federal funding for St. Louis’ streetcar system, reviewed grant applications on the basis of difficult to quantify criteria, such as “stakeholder cooperation”, environmental sustainability and livability.

The circulator program also funded streetcar projects in Cincinnati, Ohio, and Charlotte, North Carolina, that—while not as disastrous as the Loop Trolley—suffer from low ridership and are almost entirely dependent on taxpayer funding to cover operating expenses.

The St. Louis Streetcar is a mess and suggests that less federal funding should be used for transit. It would be difficult for local and state policymakers to choose the right projects if they were forced to more heavily rely on voters and taxpayers. These same taxpayers and voters will be more inclined to pay close attention to their state and local governments.

If they didn’t put future federal grants in danger, politicians would be less likely to abandon clearly failing projects.

In November 2021, President Joe Biden signed the $1.2 trillion Infrastructure Investment and Jobs Act. This law moves federal transport policy in the other direction. New spending of $550billion, with $39billion in transit funding, is provided by the law.

It leaves you with a lot of money which could be used to fund the St. Louis Loop Trolley.