Reason Foundation

Recent Research and Commentary

Surface Transportation Innovations #100

Preserving the Highway Trust Fund, cooking the books on high-speed rail, progress on bus rapid transit, much ado about road pricing equity, MTC's response on benefit-cost analysis

February 9, 2012

Robert Poole

In this issue:

• Preserving the Highway Trust Fund
• Cooking the books on high-speed rail
• Progress on bus rapid transit
• Much ado about road pricing equity
• MTC’s response on  benefit-cost analysis
• Upcoming Conferences
• News Notes
• Quotable Quotes

Preserving the Highway Trust Fund and Paying for Transit Projects

February 9, 2012, 3:49pm

Robert Poole

In recent weeks my Reason Foundation colleagues and I have been strongly critical of the House proposal to supplement the Highway Trust Fund (HTF) with revenues to be derived from expanded oil and gas production. Indeed, we participated in a joint news conference with the Competitive Enterprise Institute, Natural Resources Defense Council, and Taxpayers for Common Sense in defending the principle that the federal program should continue to be based on the users-pay/users-benefit principle. Closing a large HTF funding gap with non user-tax revenues, even if there were enough money to do so (which there isn’t) would destroy the HTF’s protected status as exempt from across-the-board federal spending cutbacks. That’s because the Budget Control Act grants that protected status only to trust funds that obtain at least 90% of their funds from user taxes.

But last week, the House Ways & Means Committee came up with a way to save the Trust Fund.

Atlanta Streetcar Costs Increase by $22 Million

February 3, 2012, 2:38pm

Baruch Feigenbaum

The U.S. DOT recently disclosed that the Atlanta Streetcar project has risen to almost $100 million dollars. The 1.3 mile project is designed to increase Economic Activity. Currently, it is decreasing the budget of other city departments.

French Style Light-Rail Will not Work in the U.S.

February 1, 2012, 11:51am

Baruch Feigenbaum

While many U.S. politicians chase the streetcar named Desire, French presenters explained while French style light-rail will not work in the U.S. While French streetcars lose money and do not quickly transport people from point A to point B, France has the better density and culture for these systems. French streetcars average 15 miles per hour while U.S. streetcars average between 5 and 10 miles per hour. Thus while French streetcars are somewhat effective, U.S. streetcars are a total bust.

Jerry Brown Continues to Push High-Speed Rail Boondoggle while California Drowns in Debt

January 27, 2012, 2:59pm

Adam Summers

Considering that cost estimates have soared from between $40 billion and $45 billion a couple of years ago to between $98.5 billion and $117.6 billion now, and ridership estimates have plummeted from 117 million passengers per year by 2030 to between 23 million and 34 million per year by 2035, while the state is running a $9.2 billion budget deficit, a $10 billion unemployment fund deficit, and an unfunded pension liability in the range of $400 billion to $500 billion, pushing forward with the high-speed rail project is unconscionable and incredibly irresponsible. Yet Governor Jerry Brown is trying to move ahead with the project at the same time he is pushing a $35 billion tax increase.

Tampa to Orlando High-Speed Rail Could Cost $3 Billion More Than Expected

Comparisons to California and other rail projects suggest rail system will cost Florida taxpayers much more than $280 million

January 6, 2011

If the proposed Tampa to Orlando high-speed rail line goes over budget or fails to meet ridership expectations Florida taxpayers could get stuck with a bill of up to $3 billion, according to a new Reason Foundation report.

Long-standing research shows costs are underestimated on nine out of every 10 large passenger rail transportation projects, with cost overruns averaging 45 percent higher than anticipated. If the Tampa-Orlando rail line were to go over budget by 45 percent Florida taxpayers would be on the hook for $1.2 billion more than the $280 million currently forecast.

The Reason Foundation warns that Florida may be miscalculating the costs of high-speed rail by even more than that. Consider that the expected cost of building the first segment of California’s high-speed rail line is 111 percent higher than Florida’s - $67.8 million per mile compared to $32.1 million per mile in Florida. The costs of the Tampa to Orlando system would be $3 billion more than advertised using California’s estimated cost per mile.

The Reason study also flags concerns about ridership numbers. The Florida project is predicted to carry 2.4 million riders annually, which is two-thirds the ridership on the existing Amtrak Acela Express service. The Acela trains serve several big metropolitan areas, including New York, Washington, DC, Boston, Philadelphia, and Baltimore. The population of those cities is approximately eight times the population of the Tampa and Orlando metropolitan areas.

The California High-Speed Rail Proposal: A Due Diligence Report

Policy Study 370

September 1, 2008

Joseph Vranich, Wendell Cox, Adrian Moore

With the high costs of building in California and the history of cost overruns on rail projects, the final price tag for the complete high-speed rail system will actually be $65 to $81 billion, according to the Reason Foundation report.

And while the Rail Authority forecasts between 65 and 96 million intercity riders by 2030, the due diligence report finds these projections are dramatically inflated. After compiling numerous ridership studies previously conducted for California rail systems, the study demonstrates the state can expect 23 million to 31 million riders a year in 2030.

Any failure to meet the Rail Authority's lofty ridership projections would force ticket-price increases, further cutting ridership, or require taxpayer subsidies to cover the financial shortfall, adding to future budget deficits. The due diligence report finds "the San Francisco-Los Angeles line alone by 2030 would suffer annual financial losses of up to $4.17 billion."

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