High-speed rail subsidies are a bad investment
February 15, 2011, by Kyle Wingfield
I mentioned high-speed rail in my post last week about the Charlottephobia infecting some people in metro Atlanta. Anyone who wants to know whether metro Atlanta, and Georgia, should fret over “losing” the high-speed rail race absolutely must read this column by the Washington Post’s Robert Samuelson (links in the quoted sections are original throughout):
Vice President Biden, an avowed friend of good government, is giving it a bad name. With great fanfare, he went to Philadelphia last week to announce that the Obama administration proposes spending $53 billion over six years to construct a “national high-speed rail system.” Translation: The administration would pay states $53 billion to build rail networks that would then lose money — lots — thereby aggravating the budget squeezes of the states or federal government, depending on which covered the deficits.
There’s something wildly irresponsible about the national government undermining states’ already poor long-term budget prospects by plying them with grants that provide short-term jobs. Worse, the rail proposal casts doubt on the administration’s commitment to reducing huge budget deficits. … How can it subdue deficits if it keeps proposing big spending programs?
High-speed rail would definitely be big. Transportation Secretary Ray LaHood has estimated the administration’s ultimate goal — bringing high-speed rail to 80 percent of the population — could cost $500 billion over 25 years. For this stupendous sum, there would be scant public benefits. Precisely the opposite. Rail subsidies would threaten funding for more pressing public needs: schools, police, defense.
Samuelson then recounts the long, sad history of Amtrak, including higher fares relative to other modes of transportation and an inability, because its passenger load is so small as to be irrelevant (one-tenth of 1 percent of all passenger miles in the country, according to Samuelson), to reduce traffic congestion or improve the environment. And all of this comes at an exorbitant level of subsidy — $35 billion for Amtrak since 1970, the vast majority of which likely benefits upper-income travelers on the East Coast — compared to other types of transportation:
In 2004, the Transportation Department evaluated federal transportation subsidies from 1990 to 2002. It found passenger rail service had the highest subsidy ($186.35 per thousand passenger-miles) followed by mass transit ($118.26 per thousand miles). By contrast, drivers received no net subsidy; their fuel taxes more than covered federal spending. Subsidies for airline passengers were about $5 per thousand miles traveled. (All figures are in inflation-adjusted year 2000 dollars.)
High-speed rail would transform Amtrak’s small drain into a much larger drain. Once built, high-speed-rail systems would face a dilemma. To recoup initial capital costs — construction and train purchases — ticket prices would have to be set so high that few people would choose rail. But lower prices, even with favorable passenger loads, might not cover costs. Government would be stuck with huge subsidies. Even without recovering capital costs, high-speed-rail systems would probably run in the red. Most mass-transit systems, despite high ridership, routinely have deficits.
But for me, the kicker is this observation:
The reasons passenger rail service doesn’t work in America are well-known: Interstate highways shorten many trip times; suburbanization has fragmented destination points; air travel is quicker and more flexible for long distances (if fewer people fly from Denver to Los Angeles and more go to Houston, flight schedules simply adjust). [emphasis added]
This isn’t just about the difficulty of prying Americans out of their cars and off airplanes; it’s about the wisdom of doing so. In no other facet of American life are people demanding less flexibility and adaptability. Why would that be different for transportation?
Rail only begins to make sense for traveling over long distances. And, for the vast majority of 21st-century America, it doesn’t make any sense to spend billions of dollars we don’t have to build an inflexible, hugely subsidized, slower, publicly operated transportation option (rail) to compete with a highly flexible, less subsidized, faster, privately run transportation option already in widespread use (air travel).
– By Kyle Wingfield
blogs.ajc.com |
