An In-Depth Look at Kerry's High-Speed Rail Bill

We haven’t gotten the chance in the last few weeks to consider what is the United States’ most credible path towards developing a high-speed rail system: the bill (PDF) that Senator John Kerry introduced in November. The proposal, which has yet to be discussed in committee is officially called “A bill to encourage and support the development of high-speed passenger rail transportation in the United States, and for other purposes,” though its title has been shortened to the “High-Speed Rail for America Act of 2008″ (S. 3700).

With 15 co-sponsors, mostly from the Northeast, Kerry’s bill is one of the first major American attempts to sponsor a large investment in rail improvement since the Northeast Corridor Improvement Project, which cost a total of $4 billion and which electrified the line between New Haven and Boston. Kerry’s proposal is actually far larger in scope, however, as it envisions a nationwide network of high-speed rail lines that would eventually criss-cross the continent, sponsored by the federal government. In fact, the bill seems to almost mark fun of the interstate highway system’s “military” origins, including this choice passage that we won’t comment on:

The Secretary of Transportation… shall consult with the Secretary of Homeland Security and the Secretary of Defense to understand how high-speed rail can benefit the Nation’s infrastructure in times of emergency and prioritize which corridors will prove most beneficial if other modes of transportation are compromised.

If passed, the bill would create an “Office of High-Speed Passenger Rail” (we’ll call it OHSR here) which would operate within the Federal Railroad Administration. This would dramatically alter the priorities of the FRA, whose principal focus in recent years has been on improving the freight rail system in the United States. One wonders if FRA’s “safety” precautions, which require passenger rail trains in the United States to be far heavier than similar vehicles in the rest of the world, will be slowly phased out as the FRA’s mission is repositioned towards high-speed rail. Such a change, which would mean great monetary savings for rail operators around the nation in equipment purchases, might be necessary if a true HSR program is to be implemented.

The OHSR would be funded at a rate of $15 million a year, guaranteed for five years, and its principal purpose would be to guarantee tax-free and tax-credit bonds to governments (and even potentially private organizations) that wish to invest in high-speed rail. Working with the Secretary of Transportation the OHSR would choose which projects should qualify for the funds and then assist those entities in the development of their rail programs. This is the fundamental point: OHSR would not be the implementing agency, buiding the high-speed rail system. Rather, OHSR would simply distribute funds to other unnamed organizations (presumably mostly state governments, though Amtrak, which owns most of the Northeast Corridor, could also apply for funding). This means that Kerry’s bill, unlike the interstate highway system, does not establish a set group of priority corridors to finance. Rather, the bill necessitates that state and private actors work together to make HSR projects happen.

This is problematic, but the money the bill authorizes makes up for it to some extent.

In a five-year period, the bill would authorize the following:

  • $8 billion in tax-exempt bonds to qualified high-speed rail programs
  • $10 billion in tax-credit bonds to “super high-speed” rail programs (we’ll get to this in a minute)
  • $5.4 billion in tax-credit bonds to other high-speed rail prgrams

This would mean that the bill would produce a total of around $5 billion a year to be spent on high-speed rail infrastructure improvement. Most of that money would go to California in the initial years, which will need a lot of federal help to make its HSR program a reality. If California needs roughly $20 billion from the federal government before 2018, when the first stage between San Francisco and Los Angeles is completed, this bill – if renewed in 2014 – would provide enough funding. A lot of money would also go directly to the planning of new routes in the Southeast, Midwest, Texas, and Florida. These routes, as they have yet to be fully designed, would not yet need construction money, so this bill’s authorizations look sufficient for the time being. In a few years, however, this bill may need to be augmented with additional funding.

The bill defines two types of investment – “high-speed rail” – which is anything running above 110-mph, and “super high-speed rail,” which would run at speeds of at least 150-mph. “Super” HSR would require passenger service on a dedicated track, no at-grade crossings with roadways, and completed federal environmental impact statements. By spending more money for super HSR the bill implies that states would do well for themselves if they prioritized investment in fast corridors, not just upgrades of traditional track which would allow 110-mph service.

Money would be provided for the purchase of rail equipment, construction of tracks, acquiring of right-of-way, improvement of trade crossings, and communications improvements. It is unclear whether station improvements could be factored into an HSR program funded by this bill, but one assumes…

Overall, this is a better bill than what we originally envisioned – its proposed funding of $5 billion a year to HSR is far higher than what the federal government currently spends yearly on Amtrak (~$2.5 billion) or the Federal Transit Administration’s New Start grant program (~$1.6 billion). And it would be able to pay for the Californian system even as it sponsors the development of initial stages of HSR in other sections of the country.

The most important question, however, doesn’t relate to the amount of funding. Rather, we question whether the decentralized mode of planning represented by this bill makes sense. HSR is by definition an intercity service, and that would usually mean crossing state lines in the United States. If the planning is done on the state level, however, how can we ensure a cohesiveness to the system? How can we ensure similar levels of quality and network coverage? Unless the OHSR plays a significant role in planning, and in pushing state authorities in the national, united direction it wants, this will become an increasingly large problem as the rail system develops.

5 Comments | Leave a Reply »
  • Great post! I’ll have some more thoughts of my own at the CA High Speed Rail blog later today.

    This does confirm my own belief that the Kerry bill doesn’t provide enough money to meet the full HSR needs of the nation, but it is an excellent start. A key question is reauthorization in 2014. We may be in a very different place politically and economically, which could make reauthorization difficult. At the same time if we have a bunch of projects already funded and under way, it becomes harder for a future Congress and White House to strip funding. Doesn’t mean there won’t be efforts to do so…

    I agree with you about the centralization issue. Does it suit our national needs to have basically multiple HSR systems around the nation, with different standards and different technologies? Kerry’s bill seems to understate things here as well.

  • It seems as if a focus is on the fact that the bill does not contain what we already have … a framework for designating HSR corridors and grids and establishing state or multi-state commissions to oversee development of a corridor or grid.

    It seems to focus on what is missing from what we already have, which is funding.

    The Midwest Hub has its commission, participating from most states in the envisioned system … but nowhere near enough money to finalize the alignment, do the economic and environmental impact statements, and get a project in shape ready to be given the go ahead. Ditto a range of single-state systems, which have more or less formal structure inside their state DoT and more or less of their system with official DoT HSR corridor designation … the Ohio Hub, the Empire Corridor, the Keystone Corridor. However, the funding is some minor bottleneck removal or upgrade in support of existing Amtrak services (eg, the Philadelphia to Harrisburg section of the Keystone Corridor).

    Indeed, given the existing scattered plans and preliminary studies and State Legislature working parties and commissions, a single OHSR providing these range of state and multi-state projects and commissions with assistance is likely to be our best hope to have a coherent set of standard, with a common loading gage and electrical standard for true HSR and a common loading gage and electrical standard for Rapid Rail quote-HSR-unquote systems.

    Regarding “By spending more money for super HSR the bill implies that states would do well for themselves if they prioritized investment in fast corridors, not just upgrades of traditional track which would allow 110-mph service.” … it recognizes the fact that true HSR costs more. If Ohio was given a choice between funding 25% of a $2b Rapid Rail system and funding 25% of a $10b true HSR system, there’s no doubt that it would opt for the Rapid Rail system.

    Dedicating money to true HSR ensures that one or more true HSR projects are funded … dedicating money to quote-HSR-unquote Rapid Rail ensures that some of the HSR money can reach a majority of the states in a form that they can derive some benefit from.

  • I think it’s good that Kerry recognizes the importance of FRA regulations, particularly those pertaining to passive safety and mixed traffic, in reviving passenger rail in the US. Allocating hundreds of billions of taxpayer money at all levels over several decades will only make sense if

    (a) FRA regulations are modified to make a range of freight and passenger rail services feasible in terms of operating cost, in addition to keeping heavy freight competitive.

    (b) the focus is on improving service quality (speed, punctuality, frequency) in metropolitan statistical areas, where it makes economic sense, rather than nationwide, which is merely politically expedient.

    (c) true HSR corridors (186mph+) can be utilized not just for passenger service between major population centers but also for onward direct service to secondary destinations on tracks that may or may not be shared with selected types of rail freight to maximize utilization rates for the expensive infrastructure.

  • Re: “(b) the focus is on improving service quality (speed, punctuality, frequency) in metropolitan statistical areas, where it makes economic sense, rather than nationwide, which is merely politically expedient.”

    This list ignores the nation’s ongoing current account blow-out and the substantial risk exposure that comes from dependency on imported oil. It is impossible to take serious advantage of the primary energy savings benefit of Rapid Rail, in shifting diesel road freight to electric rail freight, without a national system. And it is difficult to justify making an investment in the hundreds of billions of dollars without gaining the ability to move goods and people between different regions of the country without reliance on oil-based transport.

    And I believe that the phrase “makes economic sense” should read, “makes commercial sense”. In many smaller population centers that receive rail services because it is “politically expedient, the reason it is politically expedient is because the rail services are more important to the economies of those centers. Denying them the benefits in terms of speed and punctuality and frequency of service that they could receive very economically as a side-effect of the electrification of freight rail and establishment of a national Rapid Freight grid would be both unsound as economic development policy and politically inexpedient.

  • BBBunting

    I recently offered a book,
    eloquentbooks.com/ThePowerPlayToEndTheCar.html that takes high speed rail to its modern equivalent. A system that could entirely replace commuter traffic by car, or even most plane trips. It also uses DC power (much more efficient for the purpose than AC) and doesn’t need timetables. BBBunting, author.

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