RTD Makes the Rubber Meet the Road

As an infrequent rider on RTD buses, I recently experienced sticker shock when I boarded a bus from DIA to Boulder and was asked to pay $12 for a one-way ticket. Back in the day, the fares were $4.

My first thought was, “Well, I will show them for raising the fares. Next time I will drive.” So I quickly did the math to confirm my beliefs.

Total round-trip mileage from Boulder to DIA is roughly 90 miles. Assuming $.50 a mile for vehicle operating costs, the expense for me to drive would be about $45, not to mention parking fees and the hassle of dealing with traffic. It was clear that the round trip fee of $24 was the most cost effective way to travel, at least for one person.

After I sat down I noticed signage on the bus that encouraged visitors to go to its website for a free lesson in mass transit economics. When I got home, I visited and learned that fares account for about 30% of total revenues. Approximately 69% is derived from sales tax revenues and one percent comes from on-vehicle advertising and other sources. The economic lesson concluded with a statement that an $18 million deficit is projected for the 2011 budget.

To address this situation, RTD solicited feedback from its customer base over recent months. They asked about possible and preferred solutions that could be considered as part of a fiscal plan to address the projected shortfall. A short list of considerations include wage and hiring freezes, staff furloughs, service reduction and fare increases.

Many of the basic daily services that we take for granted during good economic times are facing challenges at least as severe as those faced by RTD. We can expect to face those challenges for awhile. Stay tuned to see how RTD makes the rubber meet the road.


©Copyright 2011 by CBER.

Increased DIA Traffic Bodes Well for Economy

Amidst all of the bad economic news, there is a ray of hope from the transportation sector. Year-to-date passenger traffic at DIA, through July 2010, is stronger than last year. About 30.2 million passengers have passed through airport gates this year, or about 779,710 more than in 2009. This represents a healthy increase of 2.6%. This is a good sign because it means more people from around the world are traveling for business and personal reasons.

Typically, the DIA’s peak load occurs in July. The total number of passengers for July 2010 was 5,060,508. Despite the year-to-date increase, the monthly total for July is slightly off the pace of 5,109,342 for 2009.

The 2010 YTD passenger total is slightly below the same period for 2008. If this level of activity continues, approximately 51 million passengers will travel through DIA in 2010.

©Copyright 2011 by CBER.

Net Job Losses Occur Beyond the Official “End” of Recession

On September 20, 2010, the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER) issued a press release that said, “The committee determined that a trough in business activity occurred in the U.S. economy in June 2009. The trough marks the end of the recession that began in December 2007 and the beginning of an expansion. The recession lasted 18 months, which makes it the longest of any recession since World War II. Previously the longest postwar recessions were those of 1973-75 and 1981-82, both of which lasted 16 months.”

Did you breathe a sigh of relief when you first heard that news?

Because the criteria for determining a recession includes a variety of factors, it is possible for a downturn to continue to take a toll beyond the trough. That was certainly the case with Colorado employment in the past two recessions.

Seasonally adjusted employment data for the 2007 recession show that Colorado experienced net job losses of 113,800 workers, from peak to trough. Between July 2009 and August 2010, job losses have occurred in 10 of 13 months. Post-trough job losses have totaled 41,800 workers to-date and may go higher.

By comparison, the 2001 recession lasted from March to November. During that period, net job losses were 42,500 employees. Post-trough declines occurred in 15 of 20 months and totaled 60,600 workers.

In summary, there was a drop of over 100,000 jobs associated with the 2001 recession; to-date over 155,000 employees have been shed as a result of the 2007 recession. That is a significant decrease for a state that employs 2.2 million workers.

Looking forward, we can only hope that the expansion cited by the NBER is strong enough to include employment growth for Colorado in 2011.

©Copyright 2011 by CBER.

KC Fed Cites Growth in 10th District High-Tech

The Denver Business Journal recently reported that the Kansas City Federal Reserve Beige Book stated that during late July and August, consumer spending in the 10th District “increased slightly from the previous period, and high-tech and transportation firms reported moderate growth.”

Colorado’s Office of Labor Market Information  (LMI) group has produced a definition of Advanced Technology (AT) and a data series based on this definition. That definition suggests that AT includes much of the Manufacturing; Information; and Professional, Scientific, and Technical Services sectors (PST).

Based on their definition of AT, the cluster does not appear to be performing as well in Colorado as their counterparts in other parts of the 10th district.

©Copyright 2011 by CBER.