Where will high-speed rail funds come from?

Last week, President Obama and Vice President Biden announced $8 billion in awards for 13 high-speed rail projects that will impact 31 states around the nation, as well as a reassurance for the continued pledge of more funds in the future.

While many have hailed this as a step in the right direction, which will enable us to finally compete with massive and effective high-speed rail systems in countries such as Japan and Spain, just as many are skeptical that the investment will not be enough to aid financially struggling states.

Even in states like California, where in 2008 voters passed a $9.95 billion referendum to fund a high-speed rail system, it is not clear where the rest of the funds for the project will come from.

With all that said, do you think that states will be able to foot their part of the bill? Also, since national high-speed rail system is the current’s administration’s goal, is it asking too much to expect the feds to step in and fill the financial gap?

Alex Roman
Managing Editor

posted @ Friday, February 05, 2010 2:21 PM

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Comments on this entry:

# re: Where will high-speed rail funds come from?

Left by Bill Eager at 2/5/2010 2:55 PM
I hope the public will find our what a colossal waste of money these high-speed rail programs will be. We are not Japan or Spain.

# General Revenue Funds

Left by Dan Johnson-Weinberger at 2/5/2010 2:57 PM
The increasing investment in high speed rail ($2.5B in FY2010 with hopefully more in FY2011) should come from general revenues. The benefits of high speed rail to regional economies as well as our national security through less consumption of oil mitigate against requiring any sort of user-fee or dedicated fund to finance the construction of high speed rail. Thus an ever-increasing amount of general revenues should be invested in the construction of high speed rail networks.

# re: Where will high-speed rail funds come from?

Left by Jason G. at 2/5/2010 2:58 PM
Never forget where the Feds get "their" money. Are higher taxes the answer? In Japan and Spain, does their HSR system pay for itself or is it subsidized up the wazoo? Sorry if I sound skeptical, but this just seems like a pie in the sky mistake that our children and grandchildren will have to foot the bill for. I'd love to be proven wrong.

# re: Where will high-speed rail funds come from?

Left by John Killian at 2/5/2010 3:03 PM
Where will they come from? Where should they come from is a better question. I have always concluded that they must be part Federal, State, and Private funding. Many years ago I was in Washington D.C. and observed magnetic levitation type vehicles work with almost impossible speeds,smooth rides,no pollution, and moderate cost. What about that type of rail transportation?

# Many HSR routes generate operating subsidies

Left by Dan Johnson-Weinberger at 2/5/2010 3:17 PM
SNCF in France, as an example, generates an operating surplus. We need to put money into construction of the infrastructure (a good investment), but the need for continued operating funds is very small (depending on the success of each route).

# re: Where will high-speed rail funds come from?

Left by Roberto in Florida at 2/5/2010 3:48 PM
The FACTS are:
1. High speed trains can only break even in densely populated corridors where the service provides a useful daily alternative.
2. Ridership estimates are always GROSSLY OVERSTATED.
3. Building costs are always GROSSLY UNDERESTIMATED.
4, New Job estimates never even come close to estimates.
5. Operating costs ALWAYS end up being a MULTIPLE of the estimates.

The cheapest thing Florida could do is to give our billions of federal $$ to some other state and watch them go bust.

# re: Where will high-speed rail funds come from?

Left by Howard Bingham at 2/5/2010 3:55 PM
Higher-Speed-Rail would be a better idea, it would utilize existing rail corridors with signalling improvements, grade separation, double tracking in areas where main lines are single track with passing sidings to permit passenger trains to safely pass slower moving freights.

This could better utilize resources in permitting infratructure improvements that would benefit both host railroad freight operations and passenger consists.

# re: Where will high-speed rail funds come from?

Left by Alex Roman at 2/10/2010 2:15 PM
Hello all,
From time to time we get people who spam ads, share opinions that are offensive or try to push their own agendas.
We apologize and stress that our Blog section is for intelligent and open discussion on the issues that face our industries today.
Thank you,
Alex Roman

# re: Where will high-speed rail funds come from?

Left by Jan van Eck at 2/12/2010 6:51 AM
What proponents of "high-speed-rail" seem to overlook is that we have inherent disadvantages to such networks in the US. First, we have large animals in the West and North (elk,moose, bison) that will cause serious damage in impact - there are no bison in Japan or in Spain. A high-speed train implies, at some point, a high-speed train wreck, and at speeds of 150 mph such wrecks are non-survivable events. Second, that implies that the entire ROW would have to be securely fenced, and patrolled, on both sides of the rail lines - an astronomical cost. Third, that implies that all crossings of dirt roads through the far West would have to be grade-separated, at enormous expense. Fourth, it implies that entirely new rail lines and beds have to be constructed for thousands of miles - at astronomical cost. All this to compete with a transcontinental air ticket that you can buy for less than $150.

And therein lies the problem: with our vast distances (not like Japan or France), air travel will always be cheaper. Sure, the airlines do not make any money either, but then again, they have private stockholders and the bankruptcy courts to work with. National rail ends up costing the treasury.

We would be better off to forget about "high-speed-rail" fantasies and concentrate on "higher-speed rail" infrastructure, coupled with Pullman-type sleeper cars. Then, at say 95 mph, you can do the run from New York to Chicago on an overnight in comfort. Much cheaper, and in my view eminently more sensible..

# re: Where will high-speed rail funds come from?

Left by John Killian at 2/16/2010 3:51 PM
How will the resent high speed rail accident in Belgum effect the vision of the movers and shakers in Congress and Wall Street? Early plane crashes did not slow our advancment toward the airline systems we have in the world today. I hope the naysayers will not pevail.

# re: Where will high-speed rail funds come from?

Left by John Sambdman at 2/16/2010 5:27 PM
The wrong question is being asked. What we should be asking is whether or not it is appropriate for government to be involved at all. Adding more government subsidies to build something that is otherwise not a viable economic endeavor, is an exercise in futility and wasteful of limited resources. As I have said before, the transportation sector suffers from a tremendous market distortion caused by subsidies to every sector of transportation. This causes resources to be spent in areas where it otherwise would not be. This favors one economic activity over another with harm being done to the economic activity being pushed out of the market by the government subsidies.
It may be that rail would be viable, had it not been for the many billions of dollars of public money spent on roads. This distortion caused government to then subsidize the rail system. Meanwhile the airlines are suffering - so let's bail them out too. As you can see this endless chain of subsidy and bailouts serves to further distort an already greatly distorted market and results in tremendous waste of our limited resources and dollars.

It is also absurd to think that we compete against Japan, Spain and Germany in terms of HSR. Or to give that as a reason why we must emphasize building HSR here, as if we must save face as a nation or some other nonsense.
There is no competition between the US and those other countries regarding HSR as no American can choose to ride the HSR system in Japan, or Germany or Spain as we are here and not over there. It isn't available in the US market, thus there is no competition. I mean no one can choose to ride a Japanese HSR between New York and Chicago because the Japanese HSR is in Japan!

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