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Wednesday, June 19,2013

Ground control

Why a vote to block a federal grant for Michigan Flyer would be shortsighted

by Andy Balaskovitz
Eric Finkler/City Pulse
Ody Norkin served three years in the Israel Defense Forces from 1972 to 1975 during the 19-day Yom Kippur War. He enlisted at the age of 19 and was a tank commander during most of his tenure, spending most of his time in the Sinai Peninsula. Thousands of soldiers died in that war as Egypt and Syria attacked Israel-occupied territories during Ramadan, the Muslim holy month. Norkin said it was the “closest we had come to losing the nation.”

It is a dark period in Middle East history, Norkin said, and one he chooses not to discuss much these days.

Now as vice president of the passenger bus company Michigan Flyer, Norkin finds himself in another battle. He is up against the Capital Region International Airport, local business leaders, the Lansing State Journal and elected officials who claim his company, by using a federal grant, would threaten the economic development of the entire Lansing region.

Norkin’s years in the Israeli army may have girded him for a tough fight, but what he learned during his 20 years working for the state Department of Management and Budget as a travel administrator is proving perhaps more useful. During his time at the state, a mentor taught Norkin the definition of a “political decision.”

“I wasn’t familiar with that term. I thought, ‘Was it something that you voted on?’ He said, ‘No, that’s just a white glove, a sugar-coated term for corrupt decisions. You don’t call them corrupt or bad, you call them political decisions,’” Norkin explained, “when decisions are made based on who you know or your passions, rather than the merits of the case.”

When you look at this argument between the airport and Michigan Flyer over a one-time $595,680 federal grant, it’s hard to see how airport supporters are siding with the merits of the case. 

The airport’s position is in part a philosophical one: Some say taxpayer dollars shouldn’t support private businesses that compete with the airport, which is funded by Ingham County taxpayers. But it’s also a largely hypothetical argument: There is fear that if Michigan Flyer is awarded a one-time grant that would effectively increase its trips between East Lansing and Detroit Metro from eight to 12, that will likely mean more Lansing-area people will fly out of Detroit Metro Airport (Lansing’s biggest competitor) rather than Lansing. That, in turn, could lead to a major airline like Delta pulling its Lansing service all together. 

“It could happen,” said Robert Selig, president and CEO of the Capital Region Airport Authority and executive director of the airport. Michigan Flyer threatens the ability of the airport to expand, some argue. Or, more sardonically they say, a vote for Michigan Flyer means you don’t support the airport.

On the other hand, Michigan Flyer argues with facts — or at least a broader worldview that takes into consideration the less well off, the less mobile and the environment. 

Eventually, the dispute may go down as just another example of parochialism — when one region’s gain is another’s loss and the idea to do something for the state as a whole is never allowed in the discussion.


Switching sides, with long-term vision

All of this comes to a head next week when the Tri-County Regional Planning Commission is expected to reconsider whether to add this project to its Transportation Improvement Plan, which the federal government is requiring before Michigan Flyer can use the money. On May 15, the commission’s Transportation Review Committee voted 5-5 on whether to recommend the project to the full committee. It was a non-binding resolution meant to be a recommendation. Turns out it was prescient: The full committee voted 9-9 two weeks later. Ingham County Commissioner Brian McGrain was absent from the May 29 meeting.  McGrain supports reconsidering the issue but hasn’t said how he will vote. 

The last time a Michigan Flyer grant was on the table, in 2011, McGrain voted against it. That was a $1.56 million grant to expand service from East Lansing to Detroit Metro by way of I-96 and U.S. 23 with stops in Howell, Brighton and Ann Arbor. If he switches this time, he will follow the lead of fellow Commissioner Shirley Rodgers.

As a planning commission member, Rodgers switched this year from a no vote in committee to a yes vote. What gives?

“I had to look at the project in itself and how it related to our regional transportation plan and how it also related to our wise-growth plan,” Rodgers said last week, adding that both plans had “a lot” of public input and covered a variety of forms of transportation. “Our transportation plan in particular talks about reducing emissions, multi-modal transportation options for the public. Because it met the express options we say we want … I had to look at it from that perspective: Does it meet what we say we want as part of a regional transportation plan? And whether I like it or not, it did.”

In 2011 and again this year, the Michigan Department of Transportation is the grant sponsor, meaning the federal government distributes the money to the state, which then uses it for the Michigan Flyer project. Rodgers initially felt that MDOT put the commission “between a rock and a hard place” because it hadn’t approached the commission about amending the 2011 grant application from Michigan Flyer to expand service along Interstate 96 to Detroit Metro. But she came back to the commission’s Regional 2035 Transportation Plan — which was adopted in 2005 and is updated every four years — whose main goals are to reduce traffic congestion and air pollution from vehicles.

“If I support all of that plan, and I do, then I didn’t see how I could continue voting no on this. It absolutely met the criteria we had in the plan,” Rodgers said. “Consistency is important to me. If you have rules and regulations, you ought to be the first one to follow them.”


A threat to economic development?

Selig, of the airport, said that should Michigan Flyer receive the grant, it would send a message to the Deltas of the world that Lansing isn’t interested in attracting more airlines.

“Sending and maintaining a message of high-level community support for air service is absolutely essential for every modern community in the United States,” he said Monday. “For the MDOT bus people, who admittedly are not plugged into the air service development side of things, we’re trying to convey to them that there is a real negative impact of promoting shuttle bus service to Detroit Metro.”

Selig said the airport loses $40 in revenue for every passenger that is diverted to Detroit Metro, “or any other airport for that matter.” However, “There’s no public information out there that’s been published that says how much business is actually being diverted,” Selig said. But in 2011, the airport alleged Michigan Flyer costs the local economy $150 million, which the Flyer disputed. “Prove it,” Indian Trails Vice President Chad Cushman wrote in a May 18 column in the Journal.

And ridership has increased at Lansing’s airport. Selig said regular scheduled air service on Delta and United — “the bread and butter of air service” — has declined over the past five years since the Delta Airlines/Northwest Airlines merger. But the airport’s been able to make up for that with flights through Sun Country, Apple Vacations and Allegiant Air. He said the airport will continue to lose travelers on Delta and United if the grant comes through.

“This region cannot afford to lose Delta or United Airline Services,” he said. The airport’s goal is expanding those airlines. “We can’t afford to weaken our hand in those negotiations by implying as a region we support shuttle bus service to another airport.”

But he’s never broached the subject with Delta. When asked if he’s had this particular discussion with Delta representatives about whether Michigan Flyer’s expansion would affect Delta’s decision to expand or leave here, he said: “No, we have not had that kind of discussion. We probably wouldn’t be foolish enough to ask that type of question. It puts bad ideas in the mind of an airline. They’re probably well aware of that now, with all of this media coverage.”

When asked if he thinks this grant could be enough to send Delta packing, he said: “It could happen. I don’t think we want to mess around and put Delta Airlines to the test.”

Mayor Virg Bernero, also an airport supporter, doesn’t understand why anyone would support public tax dollars for the private company. 

“I don’t get why we would be doing that,” he said. “If you wanted to (fund) a train, that might be different, supporting public infrastructure in a real way. But to promote a bus line that is essentially taking someone to another airport, I don’t support it, I don’t get it. If the private sector wants to do it, I’m all for competition. But why you would subsidize a competing interest, I don’t understand.”

About $4.5 million of the airport’s revenue comes from a millage levied on Ingham County taxpayers — not those in Eaton or Clinton counties. However, Clinton County does not receive property tax revenue from the airport. That tax revenue is used to pay down debt, airport development and capital improvements at the airport.

Lansing City Council President Carol Wood, who chairs the planning commission, is against the grant largely because of the threat of losing, or not gaining, airline business. She finds the argument about using public money for this “laughable,” particularly coming from the business community, which has supported tax abatements for private developers. 

“For me, it’s the idea of pulling passengers out of Lansing,” Wood said, adding that more shuttle services out of Lansing to Detroit “depletes the market.”

But Norkin says the Flyer isn’t competing with those airline passengers who’d fly from Lansing: It’s competing with the 1,000 people annually who drove from Lansing to Detroit Metro to catch a flight. Norkin said the Flyer has been able to cut that by 20 percent to 800 people. With this grant, Norkin hopes to reduce that by another 10 percent.


Long-term thinking

The state Department of Transportation says this grant is in line with the state’s long-range transportation plan that emphasizes more travel options, and it recognizes the Flyer as an important route for Michigan State University and University of Michigan students and staff. Michigan Flyer also increases “intercity” travel options as part of the state’s “comprehensive intercity network.” 

“There is a long history of MDOT using state and federal funds to support intercity bus services,” Sharon Edgar, MDOT administrator of passenger transportation, wrote to the Tri-County Regional Planning Commission in late April. In her letter, Edgar maintains that having more options increases the area’s competitiveness, filling in voids or handling an influx in passengers that the airport couldn’t support.

The Federal Highway Administration awarded MDOT the grant — which will specifically use it for Michigan Flyer’s plans — through its Transportation, Community and System Preservation Program that explores “the relationships between transportation, community, and system preservation plans and practices and identify private sector-based initiatives to improve such relationships,” according to its website. Under the Safe, Accountable, Flexible, Efficient Transportation Equity Act, projects must meet five criteria: improve the efficiency of the U.S. transportation system; reduce transportation’s impact on the environment; reduce the need for “costly future” public infrastructure investments; provide efficient access to jobs, services and centers of trade”; and “examine community development patterns and identify strategies to encourage private sector development that achieves” the previous four criteria. 

The money comes from the federal Highway Trust Fund, which is funded by an 18.3-cent federal tax per gallon of gasoline and 24.4 cents per gallon of diesel. 

Michigan Flyer plans to contribute $148,920 in first-year operating costs for the increased routes, as well as invest $550,000 for a new motor coach. It would mean near hourly service seven days a week, from early mornings till late evenings.

Roughly 50,000 people a year use the Flyer between East Lansing and Detroit Metro, according to the company’s statistics, compared to the passenger volume at the airport, which was near 400,000 in 2012.

Michigan Flyer officials say the company doesn’t compete with the airport, but with the automobile driver. Which brings to light the environmental benefits of reducing the number of automobile passengers, which Michigan Flyer says are its biggest competitor.

Indian Trails and Michigan Flyer buses exceed air pollution standards set by the U.S. Environmental Protection Agency, resulting in 85 percent fewer carbon dioxide emissions per passenger mile for each person who rides instead of drives alone, according to the company. Each bus, the company reports, has the capacity to remove 50 cars from the roads, reducing air pollution, traffic congestion and oil dependence.

However, the U.S. Department of Energy says that airlines still have a higher average per-passenger fuel economy than transit buses. Airlines are more efficient now that ticketing software can more easily fill planes. On the other hand, “Transit buses are not very efficient at their current ridership rates, where, on average, a given bus is less than 25 percent full,” according to DOE data. The average passenger miles per gallon of gas is 44.56 for airlines and 29.6 miles for transit buses, data from April shows.

Tim Fischer, policy director with the Michigan Environmental Council, said the transportation sector accounts for about one-third of greenhouse gas emissions, which is the leading contributor to climate change.

“The way to reduce greenhouse gas emissions, from the transportation sector, is to reduce the amount of miles driven in personal vehicles,” he said. The MEC supports the Michigan Flyer grant. “The ability for that to be realistic is to increase the amount of transit options we have available and make those services efficient, convenient and safe.”

Moreover, short flights from Lansing to Detroit, which happens several times a day, “from an energy consumption standpoint simply doesn’t make any sense whatsoever. Planes burn most of their fuel on takeoff and landing, so these short trips are really big fuel wasters. That’s where we see the environmental component,” Fischer said.

And then there’s the cost of flying out of Lansing compared to Detroit, which in some cases is a several-hundred-dollar difference depending on how far in advance you book and where you’re going. It’ll always be cheaper to fly direct to Washington, but what about for other passengers whose decision to explore outside the region might be hindered by such costs?

In April 2011, author, statistician and East Lansing native Nate Silver wrote for The New York Times that Lansing’s airport’s fares are about $117 overpriced. In the context of smaller airports like Lansing, fares “tend to be overpriced, as they are usually dominated by one or two legacy carriers who will charge you a premium to fly you to their nearest hub.” In order to be viable, Lansing passengers may have to accept this fact.

“Lansing is within a reasonable driving distance of Wayne County Airport outside Detroit, so relatively few people will choose to fly from Lansing unless its fares are competitive with Detroit’s,” Silver wrote. “The airlines, rightly or wrongly, may take that trend to signify a lack of demand, and may cut service, with further price increases on the remaining flights. Before long, the only passengers who regularly fly out of an airport like Lansing are those who are extremely insensitive to price, creating a semi-stable equilibrium of limited but very expensive service.”


Parochialism as legacy

What then does this debate say about our region when it comes to long-range transportation planning? What does it say about the political climate when decision-makers wage battles based on hypothetical outcomes rather than the facts or merits of a project? What does it say when regionalism stops at the Ingham/Livingston counties border and we treat Detroit as if it were China in a Pete Hoekstra political campaign?

Bob Trezise, president and CEO of the Lansing Economic Area Partnership, is adamant that neither he nor LEAP has a position on whether Michigan Flyer should get the grant. He thinks the region might be better served with a “better and more comprehensive transportation policy” so as to avoid these conflicts in the future.

When asked if the airport’s point of view is parochial, Trezise said: “I don’t know.” He’d like to “get our own house in order first” when it comes to regionalism before considering the state as a whole.

Bernero said he’s “for investment in Lansing as mayor. I have to be biased toward Lansing and the Lansing region, not the Detroit region. I’m for them, I love them, but I have to promote Lansing and the Lansing region.”

Selig said “this is not a fun process to go through, but we have no choice. We as an airport authority are obligated to operate the region’s airport. We, like it or not, have to respond to these types of erosions of service, especially when it’s a policy driven thing from the state or federal government.”

As for the message it sends to the airlines, Norkin flips the question to the airport: “What they’re saying is that air travel is vital, ground transportation is not, especially for non-choice riders.” He called out the Journal for “outright hypocrisy” by backing the airport. This is a one-time grant — why doesn’t it call out Amtrak or Greyhound for “perpetual line item subsidies” from the government, he wonders?

While he’s neutral on the grant, Trezise has a position on the broader debate, taking sides with no one, it appears.

“I will tell you that I find the debate discouraging because it strikes me as a very small-town type of debate,” he said. “I’m trying to get people to believe that we’re a big region, and I don’t think big metro areas have these kinds of small debates.”

The amount of lobbying — “from Michigan State University to the Chamber to City Council is ridiculous. We’ve got to be not better, but bigger than this. I’m eager for it to all go away.”

(Staff writer Sam Inglot contributed reporting to this story.)

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