Tuesday, July 20, 2004
Fun and Games with Depreciation
When BART was built, it planned to depreciate its track, stations, and other equipment over 80 years. Now it is just 34 years old, but it is asking voters to approve a $900 million bond measure to rebuild much of its track and stations.
This article describes this and many other ways that transit agencies mishandle depreciation. The problem is most acute for rail transit. For the most part, the agencies simply ignore depreciation as a cost. Then, when it comes time to rebuild the lines -- generally after 30 to 35 years -- they ask for capital grants from the feds or more taxes from the taxpayers.
This article describes this and many other ways that transit agencies mishandle depreciation. The problem is most acute for rail transit. For the most part, the agencies simply ignore depreciation as a cost. Then, when it comes time to rebuild the lines -- generally after 30 to 35 years -- they ask for capital grants from the feds or more taxes from the taxpayers.
Comments:
The bond issue is NOT for rebuilding BART facilities due to wear and tear. Rather, the $900 million would go towards upgrading BART infrastructure to meet earthquake standards that were not in force when BART was originally built.
As usual, O'Toole gets key information wrong.
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As usual, O'Toole gets key information wrong.
