Portland’s (And Kansas City’s) Streetcar Collapse

A television station in Portland, Ore., reported that the city’s ever-expanding streetcar system is losing money.

Streetcar service and routes are expanding, and this week Portland Mayor Charlie Hales floated the idea of expanding streetcar lines east of Martin Luther King Boulevard. But last year the Portland Streetcar collected less than half the fare revenue they expected. That meant the Portland Bureau of Transportation ended up helping finance streetcar operations to the tune of $200,000. In fact, over the last five years, PBOT has increased its yearly streetcar spending by more than $2 million.

“The city of Portland has kicked in sufficient money to maintain our operating level,” said Portland Streetcar Executive Director Rick Gustafson.

You read that right, city officials want to expand streetcar service despite the fact that fare revenue is less than half of what they budgeted. As a result, the city has to fund the effort out of its general revenue.

But Eric Fruits, an urban economics professor at Portland State University, calls the streetcar “a money pit.”

“I think what we need to do now is figure out a way to reduce that deficit as much as possible so that we’re not taking money out of the general fund,” Fruits told KOIN 6 News.

The board is considering raising the streetcar fare from $1 to $2.50, but others fear that such an increase will further dampen revenue. Incredibly, the story goes on to say that streetcar proponents are  “convinced the changes, while expensive, are worth it no matter who pays for it in the long run.”

Does anyone doubt that this will be the case in Kansas City? The Kansas City streetcar is currently slated to be free to ride, just as Portland’s was. But when the bill gets too large, Kansas City will start charging a fee, just like Portland did in 2011. The result in Kansas City, as it was in Portland, will be fewer riders, even though in Portland the routes were expanded. The city will be on the hook for the cost and — as has been the case all over the country — the transit authorities will start taking money from successful and cheap bus transportation.

Just as in Portland, count on Kansas City’s streetcar supporters to remain steadfast, no matter who pays for it in the long run. Talk about being taken for a ride.