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SMART
SMART Marketing -- Spending Your Money to Convince You of the Wonders of SMART Rail
Since its inception, the Sonoma-Marin Area Rapid Transit (SMART) agency has a history of making bold claims about its value proposition while hiding its costs from those paying for it – that is, local taxpayers. And the reason is simple: it’s a “suburban” rail system. As such, it costs a lot of money and takes too few passengers to justify the enormous investment of local tax dollars.
Alas, local politicians serving on the Board don’t want to tell voters this well-known truth. Instead, they device a “marketing plan” paid for with your Measure Q tax dollars.
What Does the Most Recent Marketing Plan Claim?
On Wednesday (October 15th), the SMART board discussed the marketing plan proposed by staff. Here’s the “Branding and Positioning Value Proposition Statement” that was placed before the Board.
SMART’s Branding and Positioning Value Proposition Statement
SMART is an essential North Bay transportation service, connecting communities while aligning with the region's values, emphasizing sustainable transportation, increased mobility, and access to opportunity. SMART provides an environmentally sustainable transportation alternative to driving, actively reducing carbon emissions and promoting a greener future. SMART’s unwavering commitment to riders' needs ensures a continuously enhanced transit experience, and our dedication to accessibility ensures our services are available to everyone.
SMART offers many benefits to North Bay communities, encompassing economic growth, convenience, accessibility, and enhanced well-being. Commuter rail service supports local businesses and boosts economic development, increasing property values, job opportunities, and overall community advancement. Moreover, reducing traffic congestion not only eases road accessibility but also leads to shorter commutes and reduced stress for everyone.
As our population ages, SMART's accessible transportation options cater to individuals with mobility challenges, ensuring everyone can travel conveniently. SMART's commitment to quality of life is evident in its efforts to reduce stress, provide cleaner air, and promote better health, including a multi-use bicycle and pedestrian pathway for sustainable commutes and recreational activities.
Finally, by investing in public transit, SMART champions sustainable transportation, reducing carbon emissions and paving the way for a greener, more environmentally responsible future. These key messages form the foundation of a public outreach campaign to educate the public about the benefits of commuter and passenger rail train services. Messaging should be adapted to suit the specific features and advantages of the rail service being promoted to target audiences.
Let's consider some of the claims in the statement.
Traffic Congestion Reduction?
Can the agency make any claims about traffic that are not false? Prior campaign TV ads always showed traffic congestion on Hwy 101. And SMART proponents constantly assert this. But is it true? Has SMART reduced traffic? Does anyone other than the most ardent rail supporters believe SMART has reduced traffic congestion anywhere in the two counties?
I doubt anyone traveling through downtown San Rafael believes it, because they experience train-caused traffic congestion at the at-grade crossings in downtown, every day. These delays are so great they can push cars onto Hwy 101 during the peak hours. The agency never comes clean on this issue. SMART’s prior GM (Mansourian) claimed SMART had no responsibility for the delays despite the common experience of drivers traveling across the at-grade crossings in downtown San Rafael.
The data on ridership, when carefully analyzed, demonstrates the train carries far too few passengers during the peak commuting hours at known congestion locations on Highway 101.
SMART describes how one can calculate ridership from data provided by SMART staff, who now, finally, cooperates with public data requests.
As shown in the table below, there are five trains heading southbound during the peak morning hours (numbers 5,7,9,11, and 13). Remember, in order to reduce congestion requires removing vehicles at a specific time. Ignoring delays, the trains operate on published schedules as indicated. One day in May train #9 had 111 passengers. On a typical weekday morning there may be about 2,000 vehicles per hour per lane passing a single point.
One could do the same kind of calculation for the PM peak northbound trains compared to the traffic stuck on Hwy 101 north of Atherton Ave. And it would show similar results.
Maybe you think the few riders traveling on the train still makes a difference. Perhaps, you assume that a single person on the train is one less car on the freeway and that has to make a difference. But just look at any of the video cams along Hwy 101 around 8 AM on a weekday. That alone should tell you that whatever impact SMART has on reducing congestion, it simply isn’t sufficient to even be measurable.
The data are public. The high-priced consultants hired by SMART know how to use Excel. They could make the same computations I just made. But will they? Will the marketing of “SMART’s benefits” bother to note any of SMART’s failures or costs?
Economic Benefits and Costs
SMART's marketing spin is filled with claims that the train
“supports local businesses and boosts economic development, increasing property values, job opportunities, and overall community advancement” and that “reducing traffic congestion not only eases road accessibility but also leads to shorter commutes and reduced stress for everyone.”
Transportation improvements, hopefully, provide for some greater mobility for the public. But we need to keep in mind that trains aren’t the only way to produce public mobility benefits. Despite what you may hear, roads and buses also produce benefits, and very significant ones.
The challenge for public transportation agencies is operating costs. What is the cost of providing their mobility benefits and how do they compare with other, less costly ways of providing the similar benefits? And this is the SMART’s fatal flaw. While it produces limited benefits to the very few who find the train convenient and affordable (most commuters live and work quite far from SMART stations), it does so at an enormous cost per passenger.
And someone has to pay for that. But those someones are not the passengers. There are too few of them and the price of tickets is very far below the costs of providing the service. No, it is you and me, the taxpayers.
Of course, SMART promoters don’t want to mention this or how much has been spent by the agency since it was formed in 2004. Nor do they want to talk about just how much of the current trip cost isn’t paid for by those taking the trip.
The table below was derived from the Annual Comprehensive Finance Reports. As indicated, through the end of FY 2022 (FY 2023 is not available yet), SMART has spent over a billion dollars on planning, engineering, construction, rail operations, staffing, and interest on the bonds they issued in 2011. The figures also include depreciation, which the external auditor includes in the report, something SMART never includes in its costs.
If that isn’t enough to concern you, consider how much of the operations aren’t paid for by passengers and how that compares to other transit operators in the Bay Area. This is shown in the charts, below, which reports taxpayer subsidy per boarding.
SMART Expenditures from the Annual Comprehensive Reports by Fiscal Year
Click on images to enlarge
What does the data reported by the Federal Transit Administration tell us?
- SMART is the most expensive provider of transit trips in the San Francisco Bay Area and has been in FY 2019, FY 2021, and FY 2022 as measured by taxpayer subsidy per boarding.
- In FY 2021, SMART spent almost $200 per boarding. With the return of riders to pre-pandemic levels, that cost has declined, but only to $75 per boarding, which is twice the subsidy that existed in FY 2019, when voters handily rejected Measure I.
- Trains are expensive. Three of the top four most expensive agencies provide rail services. Meanwhile, bus agencies providing transit services do so at much lower cost.
And what is was one of the most important things that voters indicated they cared about in March 2020 when they rejected Measure I, a 30 year tax extension measure? How much it is costing taxpayers to subsidize each SMART rider.
This information was not be provided in the staff's Marketing Plan.
Social Equity
SMART’s claims of providing an " equitable" service are highly questionable. The system is funded by sales tax, which is the most regressive type of tax used by local governments.
"Regressive” means that less affluent households pay a higher percentage of their income in sales taxes than more affluent households do. The reasons for this are simple. First, because the tax percentage is the same no matter whether you're rich or poor. And, as affluence increases, consumers spend a higher percentage of their income on non-taxable services. The affluent also save a much larger percentage of their incomes.
At the same time, most of the sales taxes that consumers pay is “hidden.” They see sales taxes on receipts when they buy taxable items at the store but they don’t see the sales tax that can be buried in the pretax price. There are 46 states charging sales taxes on goods purchased from those states. These costs are buried into the costs of doing business and incorporated in the pretax prices, even on tax exempt items, like services and food. That’s right, even a banana purchased at Safeway has a sales tax cost Safeway pays buried in how the banana is priced. And then there are California state sales taxes included in the price of some items, for example, for a gallon of gasoline.
SMART’s prior general manager was notorious for misunderstanding how much local taxpayers are paying for SMART, thinking local businesses were picking up the tab. But the best estimate is virtually all sales tax revenues received by SMART are coming from personal consumption in the two counties. Yes, some tax revenues are from non-residents, just as Marin and Sonoma residents pay sales taxes when they purchase something from another location but it's not a significant amount.
Every local government that uses sales taxes to fund their services seems to play the game that “someone else is paying for some of it.”
Sales taxes are unfair and inequitable but they are built into our economy. And this is something regularly ignored by SMART promoters. And it’s not just who is paying for the train service. It is who is taking the trip.
Surveys conducted by SMART, years ago, indicated to no one’s surprise that the income of SMART riders is higher than average. Not many less affluent people take the train, because it is far cheaper to drive or take a bus.
It’s called a 'Robinhood in reverse public policy.’ To pay for the costs of operating the train, less affluent households are paying sales taxes to subsidize more affluent SMART riders.
Environmental Benefits
SMART liberally throws around terms like “environmentally sustainable transportation” – whatever that means -- and “actively reducing carbon emissions" and “a greener, more environmentally responsible future.” Yet, in its 6 years of operations (rail service began in August 2017) SMART has yet to produce any credible analyses, studies, or data to substantiate these claims, preferring to rely only on theoretical claims and the misleading beliefs of the environmental community that rail ALWAYS produces such benefits.
As the usual, the real answer is “it depends.” For instance, the key claim is that the train reduces greenhouse gas emissions (GGEs). Surely removing cars from the freeway accomplishes this, doesn’t it? If only the calculations of a diesel-powered passenger rail system were so easy.
No one can deny that the SMART train adds to GGEs to the atmosphere. So, any reasonable analysis calculation has to consider how many cars are removed from the freeway, what kinds of engines power those cars, and the extent how many vehicles are stuck in downtown San Rafael waiting at train crossing, emiting GGEs. One must also account for the fact that most SMART passengers are by people who drive to the SMART station and park in their free parking lots.
Finally, a complete analysis must also account for the fact that not all passengers on SMART trains would be driving on the road. For example, some of those passengers might take buses or rideshare. Bikers who use the train are more likely to be doing it for recreational purposes and so cannot be assumed to be displaced drivers. Still others might hitch their bikes to a bus rather than take the train.
Proof of how the agency has a history of ignoring these complexities in their calculations, one only need read the claims in the brochures circulated to voters before the last Measure I election in March 2020. SMART uses simple arithmetic, outdated GGE emission assumptions, and ignores the realities of how SMART trains operate. SMART markets the idea that trains reduce GGEs because it’s politically correct and a widely held belief, but because it’s not backed up by any evidence.
So, What’s the Marketing Plan Really About?
SMART's marketing shibboleths are believed by 'passenger rail true believers' and promoted by local politicians, who despite overwhelming evidence to the contrary sold voters a pig in a poke in 2008. The simple truth is that rail is expensive. It’s expensive to start-up. And it’s expensive to operate. Only if it can achieve huge ridership should it warrant public investment.
And therein lies the rub for SMART. As a suburban passenger rail system with a widely dispersed population, it has no hope of carrying enough passengers to spread the high costs over boardings in order to be financially viable without needing endless, massive public tax subsidies.
And that’s why the subsidy per rider, $75 per boarding, is so high and that’s why it will continue to be high. And that’s why no amount of marketing, misleading advertising, paid for with your tax dollars, is going to convince enough voters to continue to support throwing good money after bad, when the time comes to vote on the next tax extension measure.
Mike Arnold is a PhD economist, currently lecturing at the Fromm Institute (USF) and in the Osher Life Long Learning Institute (OLLI) at Dominican University and Sonoma State University.