June 2012

Debate over intercity rail leaves policy at a crossroads

by Cliff Henke

Both the critics of intercity passenger and freight rail policies that have emerged in recent years, as well as supporters of these programs, are partly right and partly wrong. How these conflicts will be resolved — and whether both sides own up to their shortcomings — will determine the future of these programs.

The controversy surrounding the future of the California High-Speed Rail Program is perhaps the most famous case in point. Among the critics, the California state legislature’s equivalent to the federal Congressional Budget Office, the Legislative Analyst’s Office (LAO), recommended that the program not be funded, despite the revised business that lowered the estimated costs from $98 billion to $68.4 billion. The LAO and other critics also cite the uncertainty of future funding. On this score the critics are right — to a point.

Critics ignore U.S. history
The more extreme of the opponents use the LAO’s and others’ calculations to decry investment in intercity rail, in general, arguing that it is wasteful and an inefficient use of taxpayer funds. Nevermind the data showing the jobs created, or that Amtrak’s ridership is at its highest in decades, not just in the Northeast Corridor but also in California and the Pacific Northwest as well. Nor do their arguments recognize that both freight and passenger intercity rail services began with some early public sector commitments, ranging from direct subsidies to free land to loan guarantees. Nor do the critics acknowledge that these systems are facing severe roadblocks that will constrain U.S. competitiveness if delays go unaddressed. By contrast, even conservative governments throughout the world are ramping up their rail infrastructure spending.

Supporters also point out that the nation would have to make less effective and even more expensive investments in airports and highways to cope with the expected increase in intercity travel demand, especially within the “super regions” that dominate economic growth now and in the future.

This is not only true of California, but also in the Northeast Corridor, as well as major corridors in Florida and the Midwest. The final refuge of conservatives is to argue that, if there is a need, it should be borne by the private sector. They point to the recent announcements by private consortia of plans to build lines in Florida and between California and Nevada with private money — again overlooking the assumptions regarding expected public sector contributions on both lines.  

Lack of consensus
Regardless of the long-standing support by some on both sides of the political spectrum, current and future intercity rail funding has been plagued with a chronic lack of sufficient consensus on either the nature or even need of a program. The current difference between House and Senate transportation bills are a case in point. Until those differences get hammered out, not just this year, but also long-term, it will be more of the same.

Cliff Henke, a contributing editor to METRO, is senior analyst at PB. His views herein are solely his own.


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