Budget & Tax

High-Speed Spending

June 30, 2009

Randal O'Toole

How would you like to pay $1,000 so that someone--probably not you--can ride high-speed trains less than 60 miles a year? That's the question the Federal Railroad Administration (FRA) effectively asked last month when it invited states to submit proposals for spending $8 billion of stimulus money that Congress allocated to high-speed rail.

Soon after Congress approved this $8 billion, President Obama and the FRA grandly announced their "vision" for high-speed rail in America. Except in California and possibly Florida, they aren't talking about bullet trains. Instead, in Oklahoma and 30 other states, they are merely proposing to upgrade existing freight lines to run trains at top speeds of 110 miles per hour-which means average speeds of 55-75 mph.

What the FRA did not say is how much this plan would cost, who would pay for it, who would be likely to ride the trains, and whether the benefits would justify the costs. However, based on projections made by California, Florida, New York, and other states, we can estimate the answers to these questions.

California wants very fast (top speed of 220 miles per hour, average speed of 145 mph) trains from Sacramento to San Diego, which will require all-new construction. The total cost is estimated to be at least $52 billion-and the state expects federal taxpayers to pay for half of it.

The FRA's plan for Florida calls for 125-mph trains (average speed of 85 mph) between Tampa and Miami via Orlando. The estimated cost is $11 billion, but the state of Florida itself is unenthusiastic about the project.

Upgrading the 7,500 route miles in 31 other states to 110-mph standards will cost nearly $27 billion, for a total cost of close to $90 billion. Since about 90 million file and pay federal income taxes each year, that's about $1,000 per taxpayer.

That's only the beginning. Cost overruns are practically certain; based on similar rail projects, they are likely to add 40 percent to the total.

Taxpayers will also have to cover operating losses: Amtrak currently loses $28 per passenger in its 90-mph corridor from Los Angeles to San Diego, and $84 per passenger in its 110-mph corridor from Chicago to Detroit. Amtrak expects the states to cover most of these losses.

The FRA plan also has huge gaps, such as Dallas to Houston, Jacksonville to Orlando, and the entire Rocky Mountains. Once states start building high-speed rail, expect local politicians to demand these gaps be filled at your expense. And don't be surprised when the government asks for billions more in 30 years to rebuild what will then be a worn-out system.

What would we get for all this money? Proponents of high-speed rail predict that, if the FRA's system is completely built, it will carry Americans 20.6 billion passenger miles a year in 2025. That sounds like a lot, but, given predicted population growth, it is just 58 miles per person.

For comparison, the average American travels 4,000 miles per year on the Interstate Highway System. Unlike high-speed trains, which would be paid for entirely out of general tax dollars, interstate highways were 100 percent paid for out of user fees such as taxes on gasoline, tires, and trucks.

Oklahoma's portion of the FRA plan-a line from Tulsa to Oklahoma City continuing south towards Dallas-will cost at least $840 million, or $230 for every Oklahoma resident. At a $28 loss per passenger, Oklahoma will have to spend about $24 million more each year covering the trains' operating losses-and that's an optimistic number. For that, the average Oklahoman will take a round-trip on the train only once every 24 years.

Most of the rest of your $1,000 will go to California's bullet train. Even this train will do little to relieve congestion or save energy; mainly it will just fatten the wallets of rail contractors.

Who will ride these trains? We can get an idea by comparing fares between New York and Washington, D.C.

As of this writing, $99 will get you from Washington to New York in two hours and 50 minutes on Amtrak's high-speed (135 mph) train, while $49 pays for a moderate-speed (110 mph) train ride that takes three hours and 15 minutes.

Meanwhile, a ride on a relatively unsubsidized and energy-efficient bus with leather seats and free Wi-Fi costs $20 for a four-hour-and-fifteen-minute trip. Airfares start at $119 for a one-hour flight.

Who would pay five times the price to save less than 90 minutes? Those wealthy enough to value their time that highly would pay the extra $20 to take the plane. The train's only advantage is for people going from downtown to downtown.

Who works downtown? Bankers, lawyers, government officials, and other high-income people who hardly need your taxes to subsidize their transportation. Not only would you pay $1,000 for someone else to ride the train, that someone probably earns more than you.

When announcing his support for high-speed rail, President Obama promised the trains would provide "clean, energy-efficient transportation." Many people take it for granted that trains use less energy and produce less pollution and greenhouse gas emissions than other forms of travel. In fact, however, this isn't true.

Amtrak says its trains consume less energy per passenger mile than cars. But its calculations use the average energy-efficiency of all auto driving. In fact, most driving is done in cities, where both miles per gallon and the number of people in an average car are lower than in the intercity travel that competes with Amtrak's trains.

In intercity travel, the average car carries 50 percent more people than in the cities. That makes cars almost 15 percent more energy-efficient than Amtrak, while light trucks (pickups, SUVs, and full-sized vans) are about nine percent less energy-efficient than trains.

A 2001 Department of Energy report concluded that, on average, automobiles in intercity travel "are as energy-efficient as rail intercity trips." Since then, cars have gotten even more energy efficient. The report added that boosting Amtrak trains to 110 mph would reduce their energy efficiency, making even SUVs environmentally superior to trains.

Because diesel locomotives would power nearly all of the trains in the FRA's plan, greenhouse gas emissions are proportional to energy consumption. So the trains would also pump more greenhouse gases per passenger mile into the atmosphere than autos.

One reason Florida lost interest in high-speed trains is that the environmental analysis for its plan found that "the environmentally preferred alternative is the No Build Alternative." The main proponents for high-speed rail left in Florida are the companies that expect to profit from the tax dollars spent building and operating it.

An expensive rail system used mainly by a wealthy elite is not change we can believe in. Oklahoma should use its share of the $8 billion in rail stimulus funds for safety improvements such as grade crossings, not for new trains that will obligate taxpayers to pay millions or even billions of dollars in additional subsidies.

Randal O'Toole (rot@cato.org) is a senior fellow with the Cato Institute and author of "High-Speed Rail: The Wrong Road for America," available from cato.org.