A Fiscally Conservative Approach is the Right One for Florida High-Speed Rail

» If the government invests billions in this fast train project, it is not unreasonable to expect the line to cover its operating costs.

The first phase of Florida’s high-speed rail plan is by no means perfect: It is too short to produce major time savings over car trips and it fails to serve a number of downtowns along its route. Nevertheless, its construction is now fully funded and when completed in 2015 as planned it will be America’s first new fast train line. From the perspective of the Obama Administration, the project’s limited scale is a major benefit, as its relatively small budget makes it more realizable in the short term and thus more likely to serve as a model for the development of a nationwide network of similar projects.

Getting the project’s financing and construction done right, then, is of essential concern to anyone interested in establishing a well-functioning intercity rail system in the United States. Making that happen will require a serious effort to keep costs in line. A new report from the Reason Foundation notes some useful ways to do so that are worth consideration.

New Florida Governor Rick Scott, a Republican who was elected in November 2010, has not yet indicated a serious commitment to the 84-mile project that would connect Downtown Tampa with Orlando Airport. Despite the U.S. government’s decision to grant the project almost $2.4 billion of the project’s $2.7 billion budget, some Florida politicians have recently signaled that they would decline the funds if given the chance, just as have the states of Ohio and Wisconsin. The governor has suggested that he will wait until the release of updated cost and ridership reports due in February or March to make a decision; Mr. Scott says he does not want to commit any more of the state’s taxpayer dollars to what he considers a superfluous scheme.

In order to receive the federal funds, the state agreed to pay at least $280 million for the construction of the project, which would be covered by the Florida Rail Enterprise, a publicly-funded authority.

The Reason Foundation, a libertarian think-tank, released a report this week by Wendell Cox that argues that the Florida rail project’s cost and ridership estimates are likely to be way off track and that the state’s assumption that the project will be operationally profitable is not necessarily correct. The line is expected to attract 2.4 million riders annually. The Reason Foundation, and Mr. Cox himself, have established themselves as against public transport and intercity rail projects everywhere in the nation.

The report, as Robert Cruickshank chronicles extensively, has its problems. It compares projected ridership on Florida’s line to that on the Acela Express, stating that it is unrealistic for the Sunshine State’s project to attract 2/3rds of the riders of the Northeast’s premier rail line. Of course, the study neglects to mention that other rail services in the Northeast, including Amtrak Regional and many commuter rail lines, attract many times that ridership. It compares Florida’s cost estimates to those California’s high-speed project, arguing that the Tampa-Orlando corridor will cost more than estimated, without noting that Florida’s right-of-way is already entirely reserved, unlike that of the Golden State. It suggests that the project will not be operationally profitable, despite the fact that nearly every high-speed rail project completed anywhere in the world has achieved as much. (In October 2010 YTD, for instance, the Acela Express made a profit of $17.7 million on total revenues of $45.7 million.)

That said, many of the report’s conclusions — that the state either abandon the project or develop a strict and comprehensive system by which to guarantee cost controls — are reasonable and should be implemented if Florida is to move forward.

Fundamentally, Mr. Cox argues that the state should enter into an agreement with a private builder and operator that would ensure that Florida taxpayers are not stuck with construction cost overruns or operations losses. If high-speed rail projects around the world have been operationally profitable, so should the Tampa-Orlando line, and private corporations should be able to accept the risk in buying train cars and beginning services, especially since the project’s construction costs are entirely covered by the federal and state governments.

The rail authority previously announced that it expects to award a build-operate contract to a private consortium later this year. Many foreign and domestic firms have already expressed their interest in the program.

The study notes five conditions: One, the winning private bidder should assume all risks for construction cost overruns; Two, the state should have to provide no operating subsidies; Three, any changes in the project’s design that would increase costs should have to approved directly by the governor; Four, the government should provide no guarantees on debt taken on by the private companies (which should be minimal considering that the government is paying for construction); and Five, the project should be built in stages to guarantee cost controls.

Apart from the fifth condition, which seems largely unnecessary if the other four are implemented, these conclusions amount to reasonable advice to the new governor. If Florida is set on contracting out operations to a private operator (and it has been for a long time), it should take steps to ensure that risks on construction and operations are absorbed by that entity rather than by taxpayers. Similar agreements have become standard abroad.

If Mr. Scott commits to these rules, he should have no fear about devoting (largely federal) government dollars to the project — giving up on the project before at least attempting to construct it under these guidelines would be a mistake. Considering the positive response by companies far and wide to the project thus far, getting a bidder to agree to these conditions should not present much of a difficulty.

Image above: Proposed Orange County Convention Center Station, from Florida High-Speed Rail

200 Comments | Leave a Reply »
  • BrianTH

    Excellent post. Demonstrating and popularizing the public-construction/private-operation model for future HSR in the United States seems like a great idea all around.

    • G Ratener

      Public-construction/private-operation seems like a subsidy to the private sector as only the operation part of HSR is profitable.

      • Gordy

        Exactly. It’s a huge form of corporate welfare. It’s as if someone were starting a new airline, and expected the government to pay all the costs of buying the planes and other equipment, building airport terminals, etc., so that the airline itself only had to cover the costs of fuel, labor, etc. for operating the planes.

        • Just to clarify, the private company would have to a) Buy the rolling stock; b) Take in all risks for construction cost overruns; c) Take in all risks for operating losses. I have never been a supporter of private operations of high-speed rail, but agreeing to these rules in Florida would ensure that the state could set the price for construction, and then have no responsibility for increases.

          • Max Wyss

            Question: would the state get anything from the profits?

            • Also, who’s paying to keep the infrastructure in a state of good repair? And who owns the infrastructure? And how long does the contract last?

              • Max Wyss

                In the civilized world, there would be an infrastructure manager, usually with government status. The infrastrucutre manager is the owner of the infrastructure, and responsible to keep it in operational shape.

                The operators buy access to the infrastructure, normally managed by an independent agency (in order to ensure discrimination-free access. The operators own (or lease) the rolling stock and are responsible for their technical fitness.

                The access fees are supposed to pay for maintenance etc. of the infrastructure.

                At a first glance, the proposed model may work only because there is a big interest in the potential operators to put foot in the US. In a “normal” economic environment, no potential operator, sane in their mind, would accept such conditions.

                However, as we don’t know the details, it may be completely different…

            • Tom West

              Max Wyss: “Question: would the state get anything from the profits?”
              Tax revenue from a profitable company.

              • Max Wyss

                Shouldn’t then the state do as much as possible to ensure that the company would be profitable?

              • Alas, the state corporate tax rate isn’t enough to make the money back. But the feds could get a fair amount of their share back this way.

              • Adirondacker12800

                Pause for a moment. Unless the private operator is doing something that increases revenue greatly the only way to “make the money back” is to have a tax rate of 100% on profits. I don’t think there are many altruistic companies out there willing to take a deal like that.
                PPPs are usually a way to socialize the costs and privatize the profits.

            • It depends on how the deal is structured.

              If the bid is in terms of meeting basic conditions and then bidding the revenue share to the state, by definition the operator that wins the bid would be the one providing the mandated level of service at the highest gross revenue share to the state.

  • John

    As an HSR supporter, I was pretty upset that this worthless line was chosen for full federal support. People in Disney World don’t even take the monorail around: they drive. People from Central Florida know: nobody would ever use this train. The only reason they’d even consider building it is that the feds are footing the whole bill. They can promise viability all they want, but that doesn’t make it happen.

    Especially considering that a refusal will result in a reallocation to other more deserving projects I would be pleased as punch if they passed up the money. I was much more broken up over the Wisconsin line.

    Why don’t they use the money to build ARC, a project that thousands of people would use every day? Or Dallas -> Houston HSR? Or Seattle->Portland? Or NYC->Montreal? Or Chicago->New York? Or Chicago->Minneapolis (I guess bypassing Wisconsin)? Or just making sure the California project actually gets built?

    • Adirondacker12800

      People in Disney World don’t even take the monorail around: they drive.

      Cars are prohibited inside the parks. That’s what all those parking lots are for. Since there are no cars inside the park that makes it very difficult to drive anywhere.

      • Spokker

        Disney World is the entire resort, which has its own road network. The parks are Magic Kingdom, Epcot, etc.

        The monorail at Disney World has essentially been abandoned in terms of expansions. Yes, most people get around by coach or car.

        • JJJ

          People get around with the fleet of FREE shuttle buses. No car needed. That means arriving by rail is the perfect solution.

          • Spokker

            Many do, but there are still massive parking lots for each individual park. Walt Disney World is not the transit utopia that Walt Disney himself envisioned.

            By the way, those buses often fail to handle the load at park closing, causing many unhappy guests at sundown.

        • Adirondacker12800

          They drive down Main Street USA to get to the ice cream parlor?

    • Jason

      So wrong. When people come to visit disney world, they can take a free chartered bus from the airport to their disney hotel, ten travel everywhere on disney property on Disney bus, or Monorail, or Boat, without ever renting a car. The same is true for close by hotels that have busses running back and forth all day between the parks and their hotel. If this is built Disney will have a HSR sation on their property, this will give the significant amount of people visiting Disney who don’t have much need for a car a choice between going around disney for a third or fourth day or having as another option jumping on this rail line and going to visit Tampa and maybe going to the beach or seeing Busch Gardens.

  • Max Wyss

    There are reasonable thoughts in that report.

    However, the conditions may be discutable.

    > One, the winning private bidder should
    > assume all risks for construction cost
    > overruns;

    That does make sense as long as the cost overruns are not caused by “government”, meaning that, for example, a big sound barrier has to be built because “government” asks for it, “government” also has to pay for it.

    > Two, the state should have to provide no
    > operating subsidies;

    Makes kind of sense. However, the state should be allowed to order services, for which it will, of course, pay (a concept which is more or less common all over the world).

    > Three, any changes in the project’s design
    > that would increase costs should have to
    > approved directly by the governor;

    This is very dangerous. Too much power for an individual who (by definition, being a politician) lacks the knowldedge and understanding of civil engineering and infrastructure projects (unless he is a civil engineer by profession).

    > Four, the government should provide no
    > guarantees on debt taken on by the private
    > companies (which should be minimal
    > considering that the government is paying
    > for construction);

    Make sense.

    > Five, the project should be built in stages
    > to guarantee cost controls

    Stages? what stages. This is one single stage. Well… one could consider Orlando Airport to Disney World to be a stage, which could be repurposed as a regional line if “the governor” decides to scrap the rest…

  • Kevin

    If we want to guarantee the Tampa-Orlando line is successful, the Orlando-Miami line needs to get built ASAP. Without the Miami end of the system, this system won’t make it. Southern Florida has over half the state’s population, and travel from Miami to Central Florida is very strong, a HSR line between these two cities is gold.

  • Nikko P

    With Florida HSR to become the first true HSR line constructed in the country, I am very concerned about the precedent that this project may set.

    First and foremost, I am concerned that with such a short segment and inaccessible route that ridership will be so low that it will reflect poorly on other HSR projects around the country.

    Second, I am concerned that the decision to put the Lakeland and Orlando stations far removed from the city centers may give the impression to politicians and project planners that this is acceptable.

  • JJJ

    If Florida is stupid enough to send the money away, once again California will gladly take it.

    Last election brought California a democratic governor that has supported rail for 30 years, democrats in all major state positions, and a democratic house and senate. Unlike these other states, California will not say no to the money.

    New england really needs to hurry up and get their studies done so they can also enjoy some of the money being passed around like a hot potato.

    • David Keddie

      Yes, but California is fiscally insolvent and the governor is proposing deep cuts across the board. It’s hard to see how the tens of billions funding gap for HSR will be made up given such constraints and federal cutbacks.

      • MrTemecula

        Insolvent means unable to pay. California’s deficit, while significant, is not unmanageable to the point where California is unable to pay. California has a $1.8 trillion economy. There’s plenty of money here.

        The plan was roughly a third of the cost would come from California and the voters have already authorized $10 billion in bonds. The other 2/3 would come from the Feds and private groups. California love affair for freeways and highways has come to an end, and as long Republicans still believe in federalism, I don’t see why some of the infrastructure funding can’t be used for the rail. As long as the Chinese/Japanese/Germans/Spanish/Italians remain interested, there’s a very good chance California will have something by 2020.

        • David Keddie

          To be precise California is facing a structural deficit in excess of $20 billion, has the lowest debt rating of any state being below investment grade, $500 billion dollars in unfunded pension liabilities, $77 billion in outstanding general obligation bonds and has resorted to issuing IOUs when the legislature finds itself unable to reach agreement on a budget. There is at present no private funding secured for HSR and the House now has a Republican majority that is hostile to funding for transit.

          Perhaps you are correct and private funding and large scale federal support will materialize, not to mention the state will come up with what remains of its share and be able to sell the bonds that have been authorized. But I do think the fiscal situation is horrendous and not one to allow outlays of tens of billions on HSR. Transit advocates need to start mobilizing for more fiscally responsible government if infrastructure spending is to have a place in the budget pie.

        • Gordy

          The idea that California has “plenty of money” for its HSR line is laughable. The state is facing the worst fiscal crisis in its history. The projected construction cost is now $43 billion, so the $10 billion bond authorization isn’t even one-quarter of the cost, let alone one-third. There is absolutely no evidence that the federal government and private sources will supply their shares of the cost, either. The feds have provided only a few billion, and with the GOP in control of the House the prospects of further funding from the feds, let alone a third of the total funding, are practically zero. Furthermore, the current $43 billion projection is almost certainly way too low. The study of rail project costs by Flyvbjerg et al that Cox references in his report on the Florida project found that the average cost overun for passenger rail projects is 45%. So we can reasonably expect the final price tag for the California HSR project to be more like $60+ billion. Where is all that money going to come from? So I think the project will almost certainly be cancelled at some point for lack of money. The only real question is how many billions they will manage to waste on administrative functions and the train-to-nowhere “starter” segment before the ax finally falls.

          • Gordy,
            You a really are an HSR-hater who loves to manufacture the low-propability, worse scenario. You’ve lost all credibility in this forum.

            • Gordy

              Do please explain why you think there is only a “low probability” that the enormous amount of funding required for the California HSR project will fail to materialize? Where is all this money going to come from?

              • Peter

                From the foreign investors who are VERY interested in lending CA the money they need to complete the system? China, Japan, and South Korea have already expressed their willingness to fund large portions of the system.

                The CHSRA hasn’t even asked European companies yet, although SNCF has already stated they want to operate the system.

              • Gordy

                You’ve got to be kidding. Show me these foreign investors who have said they are willing to fund the remaining costs of the project.

              • Looks like there’s a limit of one link per comment, so how about you take five minutes out of your life to try googling about Chinese and Japanese loans for CAHSR?

  • jason

    It’s impossible for the Tampa-Orlando line to be profitable due to its location and length. Dear Governor, there is no need for more research on this, you can kill the project and fire those who are doing the research now to save on budget.

    • Ocean Railroader

      I was in Port Canivaral Florida last week at the Cruise ship Terminal and noicted that a lot of people on the cruise ships don’t have cars when they try to go to the attractions which a large amount of them are along the Florida high speed rail line. They could make this project make sense and help save it by extending the extra few miles to the cruise ship tereminal and Coco Beach.

  • Mason Hicks

    While completely acknowledging the shortcomings of the proposed Central Florida HSR line, I support it whole-heartily; if for no other reason than in the hope that it will help spur the development of a matching link to South Florida. I am excited about the potential in California and about the planning for the realignment of the NEC as well. However, this country is sufficiently large that extensive HSR networks could be up and operating fully in both California and the NEC, and 80% of the country would still remain oblivious to their existence or their practical benefits. The more HSR systems that come on line in the following decades and the more dispersed they are in their placement, the more likely it will be that someday these systems will be laced into a truly continental HSR network. And, I believe that that is our goal
    Great post, Yonah…

  • G Ratener

    Forget about cost overruns, what about the predicted cost of construction alone?Construction is expensive and non profitable to whoever is in charge of it, while operation is usually quite profitable. Having the public pay entirely for construction, while letting the private sector operate the line amounts to giving the private sector a subsidy while leaving the public with the expenses.

    Do you know that the private sector would be interested in Florida high speed rail if it had to cover both construction and operation costs for the system?

    • Yes, as we do with passenger road operators and passenger air operators. Given that we provide those capital subsidies to rival modes, not providing similar subsidies to HSR when its a lower capital cost means of providing the same transport capacity is irrational.

  • G Ratener

    Even the completed line will be deeply flawed. One often touted advantages of HSR over air travel is that it can take people from city center to city center to city center albeit at lower speeds, as opposed to air travel which takes people to and from airports often a ways out of the destination/starting city. The closest stations to downtown Orlando will be OCCC and OIA both about 20 minutes from downtown by car eliminating the proximity advantage. A line built this way also has no potential for TOD (at least for Orlando) as the line will be purely suburban in that area.

    • Adirondacker12800

      a few blocks outside of what passes for downtown in Orlando, it’s suburban…. You need a downtown to bring a train to downtown…

      • G Ratener

        HSR is often built with the expectation that it will strengthen downtowns adjacent to stops. There is no law that says that Orlando’s downtown must remain small and isolated. There simply has not been any real investment in densifying the downtown area by building high quality transit, creating a pedestrian/bicycle friendly environment friendly environment, or taking any one of hundreds of other steps to strengthen downtown. Orlando doesn’t have to just be sprawl, the downtown can be strengthened with a simple shift in investment priorities.

        • Further, HSR is intercity transport, not local transport, so a direct platform transfer between the HSR and the Sunrail would bring multiple stations in Orlando, extending both into downtown Orlando and into suburban areas that could benefit from a transit-oriented suburban station village.

      • Jason

        There is a Light rail line planned for central FL http://www.sunrail.com/

  • Chris

    Wendell Cox has never, as far as I know, supported any train project anywhere. If opponents of HSR want to change or eliminate HSR projects, they need a spokesman who has a more even-handed reputation.

    • David Keddie

      Wendell Cox would support any rail project that was entirely self-financed, such the freight railroad network or the HSR lines between Tokyo-Osaka and Paris-Lyon. He feels the same about automobile travel, that it should be subsidy free.

      • Chris

        Perhaps he would, but I’m not aware that he ever has. I find his views “out there” and so ideological that I take them with a grain of salt.

        I’m a staunch Republican and have served in government before (in the transit field) but don’t care for types like that; there is a need for a point of view that stands up for accountability and efficiency in transit, but an ideologue unfortunately doesn’t effectively serve that purpose.

        • Chris

          To add; Cox has spoken out very strongly against Amtrak in the Northeast, and the Acela project. If there’s anything in the US that’s comparable to the Paris-Lyon TGV, it’s the Acela and the Northeast Corridor, but he won’t even support that.

          • Gordy

            The Acela and the Northeast Corridor are not self-financing. Acela may make an operating profit, but I’ve never seen an analysis indicating that it makes a profit (or even breaks even) against total costs. And I don’t think the rest of the Northeast Corridor services even cover their operating costs.

            • The Regional operationally breaks even.

              • Gordy

                Breaks even on what? Operating costs or total costs? And give us a link to the numbers substantiating your claim.

              • I said “operationally.”

                It’s in Amtrak’s annual report, in the section on route performance. Google it; I’m not your intern.

              • Adirondacker12800

                Interns can have interns?

              • Gordy

                I’m not your intern either. It’s not my job to look for evidence supporting your claims. That’s your job. You claimed that that “the Regional operationally breaks even.” Show us the numbers substantiating that claim.

              • Adirondacker12800

                I’ve seen it in Amtrak’s annual report. The Chicago-St.Louis service breaks even occasionally too. The new service in Virginia is well over projections and the subsidy is very very small and they expect that to break even. Feel free to Google it.

              • Gordy

                I just looked at the Amtrak Annual Report 2009. The report contains no financial date on the Northeast Regional, just systemwide financial data. Again, show us the numbers substantiating your claim.

              • Adirondacker12800

                Not our problem you can’t find things. For instance the NEC made 7.8 cents per seat mile in a recent reporting period. Which reminds me, what’s the utilization rate of a six passenger automobile hauling around a driver and no passengers….

              • Financial Data for the lazily inclined. Acela, Northeast Regional, Washington-Lynchburg, Washington-Newport News, Pere Marquette, and the Carolinian all operationally broke even (although, comparing ticket revenue to total revenue, in the case of the latter two, that might be a reflection of state subsidies causing the break-even for Amtrak).

              • Gordy

                Financial Data for the lazily inclined.

                For the reading impaired, the document you linked to is a monthly report, not an annual one. Alon Levy and Adirondacker said that it’s shown in the annual report. So where is it?

                Acela, Northeast Regional, Washington-Lynchburg, Washington-Newport News, Pere Marquette, and the Carolinian all operationally broke even

                Where does the monthly report you cited show that?

              • For the reading impaired, the document you linked to is a monthly report, not an annual one. Alon Levy and Adirondacker said that it’s shown in the annual report. So where is it?

                If you had bothered to actually read down to the second content page of the document (page 4 of the PDF, A-1.2) you would see that it also includes information “for the year ending September 2010″. I congratulate you on honing that laziness to an art form.

                Where does the monthly report you cited show that?

                PDF page 60, document page C-1. Bounce up to 24/A-3.5 to see only ridership and ticket revenue.

              • Gordy

                Paulus Magnus

                I congratulate you on honing that laziness to an art form

                You’re not addressing the question. Alon Levy and Adirondacker claim that the annual report shows “The Regional operationally breaks even.” The report you cited is a monthly report, not an annual report. Where is this annual report that shows this?

                PDF page 60, document page C-1.

                Page C-1 does not show that the Northeast Regional “operationally breaks even.” It shows an operational loss of $48.8 million.

              • Again, I repeat: It has both monthly data for the month of September and annual data stretching from September 2009 to September 2010. Of course, since you went and tried to quote from page 60 which is an annual sum, you should know that already.

                Page C-1 does not show that the Northeast Regional “operationally breaks even.” It shows an operational loss of $48.8 million.

                The loss is only after accounting for “other post-employment benefits”, which are unrelated to the actual operational cost of running the Northeast Regional trains.

              • Gordy

                Again, I repeat: It has both monthly data

                Again, I repeat, your link is to a monthly report, not an annual report. Where is the annual report mentioned by Alon Levy and Adirondack? Do you have it or don’t you?

                The loss is only after accounting for “other post-employment benefits”, which are unrelated to the actual operational cost of running the Northeast Regional trains

                Nonsense. Post-employment benefits, such as pension and health benefits for retirees, are part of the labor costs for drivers, conductors, mechanics, etc. Those are operational costs, not capital costs.

              • Again, I repeat, your link is to a monthly report, not an annual report. Where is the annual report mentioned by Alon Levy and Adirondack? Do you have it or don’t you?

                Again, I repeat, if you would bother reading the bloody thing, it includes the annual data. As I mentioned previously, you quoted from a section that is only annual data.

                Nonsense. Post-employment benefits, such as pension and health benefits for retirees, are part of the labor costs for drivers, conductors, mechanics, etc. Those are operational costs, not capital costs.

                However, they are only relevant to individual lines if they are forecasts of or money put away for future spending on such benefits currently guaranteed. Legacy costs are irrelevant to the question of whether the line is currently covering its running costs. Additionally, since that category doubled in just one year (against its 09 total, which you can check on the next page), it’s doubtful that that is a reflection of legacy pensions and other retiree benefits and rather that there was a one-time increase in the “other costs” included alongside OPEBs.

              • Gordy

                Again, I repeat, if you would bother reading the bloody thing, it includes the annual data.

                You keep ignoring what I say. Alon Levy and Adirondacker claim that the Amtrak annual report shows “the Regional operationally breaks even.” The report you cited is a monthly report, not an annual report. Where is this annual report that shows this?

                However, they are only relevant to individual lines if they are forecasts of or money put away for future spending on such benefits currently guaranteed.

                No, they are relevant to the claim at issue because they are part of the operational costs of the Northeast Regional. The employment costs for drivers, conductors, sales agents, etc. are operational costs, not capital costs. As the monthly report you cited clearly shows, the Northeast Regional didn’t even break even on operational costs. It lost $48.8 million. And it lost even more against total costs.

                Additionally, since that category doubled in just one year (against its 09 total, which you can check on the next page), it’s doubtful that that is a reflection of legacy pensions and other retiree benefits and rather that there was a one-time increase in the “other costs” included alongside OPEBs.

                Wrong again. The figures for September 2009 YTD also show an operational loss for the Northeast Regional. The loss against operational costs was $34.9 million. The claim that the Northeast Regional breaks even operationally is contradicted by your own citation.

              • Its Appendix C of the September Monthly Reports. Each month contains monthly and Fiscal Year to Date figures, so for Annual Figures, obviously you look at the Appendix C of the end of the Fiscal Year or, as already noted, September.

                Knowledge of the meaning of Fiscal Year and ability to use a Table of Contents required, so it is rather advanced stuff.

              • Gordy

                A monthly report is not the annual report. And the figures in Appendix C of the monthly report show that, contrary to Alon’s assertion, the Northeast Regional did not break even operationally. It lost money.

              • A monthly report is not the annual report” That’s mere juvenile quibbling. The annual Fiscal YTD figures are given in the monthly reports, and since September is the end of the Fiscal Year, the monthly report on September gives the annual line performance report.

                The reason that its in the monthly report rather than in the annual report is that Amtrak is required by Congress to report on that information monthly, so if you have a beef with Amtrak giving their annual line performance figures in their monthly report, take it up with your Congressman.

                Whether Other Post Employment Benefits should or should not be included in the operating cost of an Amtrak Line is something for you to argue out with Adirondacker. However, not even you can dispute that the Acela runs an operating surplus.

              • Adirondacker12800

                I try not to think about payroll and personnel issues, especially ones to do with railroads because there are all sorts of special rules when it comes to railroads. Anyway I decided that my decision to not argue with Mixner was a good one.

            • Chris

              “The Acela and the Northeast Corridor are not self-financing.”

              I agree, but they are still worth having, as they carry a large part of the area’s travel market and serve an important role. Wendell Cox has still opposed them.

              It seems to me as if some anti-HSR reports just start with the desired conclusion of “this project isn’t worthwhile” and make up junk to back up the point.

              • Adirondacker12800

                Very roughly the NEC carries enough intercity passengers to use up a lane on I-95. ( Assuming 1.5 passengers in each automobile ) Interstate grade lane miles cost 25 million dollars a piece. So again in nice round numbers that are easy to figure out in your head, 400 miles between Boston and DC or 800 miles roundtrip at 25 million a mile comes out to a cool 20 billion. Chances are very good that another lane through the Bronx, Philadelphia or even New Brunswick would be impossible or at the very least more than 25 million a mile. Travel between the cities on the NEC is going to go up over the years, the cheapest way to add capacity is rail.

              • Gordy

                I agree, but they are still worth having

                I don’t think so. But since you agree that they’re not self-financing, it’s not very surprising that Cox opposes them. Just because you think they serve an important role that justifies maintaining them even though they lose money doesn’t mean anyone else has to agree with you.

              • Adirondacker12800

                Just because you think they serve an important role that justifies maintaining them even though they lose money doesn’t mean anyone else has to agree with you.

                There are no roads that make money except maybe the Delaware Turnpike which has astonishingly high tolls. Why should we build roads, they consistently lose money. And maintaining them often costs more than initially building them did.

              • Gordy

                There are no roads that make money except maybe the Delaware Turnpike

                How do you know?

              • Adirondacker12800

                Which roads make money? The toll roads in Southern California were a miserable failure. Toll roads in the Northeast and Midwest publish annual reports. They barely break even long term and their annual reports don’t account for all the hidden and not so hidden subsidies they receive like borrowing at favorable government rates. Texas DOT has published studies that show their best performing roads only make 16 percent of their cost back from user fees, mostly gas taxes. Then there’s millions of miles of road that don’t have funding provided by user fees. Local roads. Which ones make money?

              • Texas DOT has published studies that show their best performing roads only make 16 percent of their cost back from user fees, mostly gas taxes.

                The best make just less than 50%. The bad ones make 16%.

              • Gordy

                Texas DOT has published studies that show their best performing roads only make 16 percent of their cost back from user fees, mostly gas taxes.

                Your claim was “There are no roads that make money except maybe the Delaware Turnpike.” Even if it were proved that every road in Texas loses money, that would not substantiate your claim. Yet again, you appear to be simply making up facts out of thin air.

              • Texas is the only state that actually checked its roads for cost versus revenues generated per segment. This includes well-patronized urban highways, even ones that are off-limits to trucks and should thus have lower maintenance requirements.

                The part about the Delaware Turnpike is a Northeastern complaint about how Delaware jacks up tolls because nearly everyone who uses the Turnpike is out-of-state.

              • There is, in other words, no evidence to suggest that any of the free access Interstate Highways pay their own way and substantial evidence that none of them do.

              • Adirondacker12800

                Another way to look at it is toll roads. I haven’t done it since the last toll increase on the NYS Thruway – calculate tolls. The median for toll roads in the Northeast is 5 cents a mile. Or a buck a gallon at 20 miles per gallon. Toll roads have overhead that non toll roads don’t have. Toll roads are better maintained and policed than non toll roads. Not 80 cents a gallon worth. Other than favorable tax treatment toll roads get no support from the Federal government.

  • G Ratener

    What is a subsidy? Most Fixed Guideway/all transportation besides cars and planes critics don’t count gas and vehicle taxes that pay for highways as subsidies, these are labeled as “user fees” even though the relationship between gas/vehicle usage and highway usage is far from linear. Many seldom use highways but pay for their upkeep and construction anyways, while frequent highway users sometimes pay less than their fair share (depends on mileage, and where the driving takes place).
    On the other hand, taxes imposed on those who would surely benefit economically from transit and HSR (not just riders) are still considered subsidies when they are used to fund such transit. Transportation critics seem to have a very selective definition of what a subsidy is.

  • Gordy

    Gas taxes, vehicle registration taxes, tire taxes, etc., are road user fees because they are paid for using roads. You don’t buy gas for your vehicle or register it unless you’re going to drive it. Yes, the mechanism is imperfect, but we cannot realistically turn every road into a toll road.

    As for transit, people who don’t use it personally may still derive some benefit from it, but that benefit is negligible in comparison to the benefit received by the people who actually use it. Yet transit users pay only about 30% of the costs of transit (even less when you include negative externalities), while automobile users pay almost the entire costs of using autos.

    • G Ratener

      I understand why they are called user fees, I just think the concept is flawed. I am not saying we should turn every road into a toll road, I am just saying they (anti-transit organizations/people) are applying a double standard to what is and what is not a subsidy. Only a fraction of the roads in the United States are federal highways, so the idea that purchasing gas or buying a vehicle is synonymous with using a federal roadways because of federal user taxes is false. Different states and counties have various ways of funding their respective roadways, as do cities. This makes the statement that two US citizens who use their cars will pay roughly the same amount per mile in taxes additionally flawed (not to mention mileage disparities between different cars affecting gas tax rates).

      Your second claim that automobile users pay almost the entire cost of using autos is false, even when counting “user fees”, unless by “almost” you mean 65% (nowadays the percentage is likely higher as “user fees” are not keeping up with inflation). The rest is paid for either through actual subsidies (property, sales taxes, etc…), or through borrowing.

      I encourage you to read this to learn more: http://subsidyscope.org/transportation/highways/funding/

      When transit is built, the number of people who will benefit from it, is almost always many times that of the number who will actually ride the system regularly.
      Examples of benefits for non users include: the freeing up of road ways in the vicinity, increases in property values, higher business revenues in regions accessible to transit, and higher economic productivity (due to quicker transit).

      It is for these reasons that I believe the usage of the word subsidy is inconsistent.

    • They are only user fees to the extent that the users of the roads funded by the gas taxes pay the fees. To the extent that users of other roads are cross-subsidizing the users of the gas-tax-funded roads, they are a cross-subsidy.

      And, indeed, since we presently underfund our road network physical depreciation, allowing cars to use roads that are allowed to physically deteriorate because there is not sufficient funds collected to maintain them in a state of good repair is also an unfunded real cost of driving.

      Rather than funded highways shifting from reliance on cross subsidy to self-funding as population has shifted out of subsidizing urban and inner suburban areas to subsidized outer suburban and rural areas, we have rather chosen to simply allow the road network to decay over the long term.

  • Gordy

    Only a fraction of the roads in the United States are federal highways, so the idea that purchasing gas or buying a vehicle is synonymous with using a federal roadways because of federal user taxes is false.

    Nobody said that buying gas or a vehicle is synoymous with using federal roadways. Gas taxes and other road-user fees are used to fund roads in general, not just “federal roadways.”

    Your second claim that automobile users pay almost the entire cost of using autos is false

    No it is not false. Total subsidies to auto users are on the order of 4 cents per passenger-mile. That is just a small fraction of the total costs of using an automobile. See the link below for more information. Nothing in the subsidyscope report you cite claims otherwise (you appear to be confusing subsidies of road costs with subsidies of total costs).

    http://www.its.ucdavis.edu/publications/2000/UCD-ITS-RP-00-08.pdf

  • Cameron Slick

    So all taxpayers in the country, through the Recovery Act, are paying for 87% of the capital costs for the Orlando-Tampa High Speed Rail Line, and the State Florida or a private consortium will get to keep 100% of the profits?

  • G Ratener

    The report you cite, 1) is more than 10 years old, 2) focuses largely on externalities and hidden costs, 3) the report doesn’t even claim to know precisely what is and isn’t a subsidy, 4) where do you get the “4 cents per passenger-mile” number?

    I have not yet read the report in much detail, but I doubt I have missed anything that crucial.

    If you reply, would you mind elaborating on what you mean by road costs/total costs?

  • Gordy

    G Ratener,

    The report provides estimates of total subsidies (direct subsidies plus negative externalities) for two types of automobile and three types of transit. Those estimates are summarized in the table labeled “External costs and subsidies for different passenger-transport modes” on Page 12. As the table shows, the best estimate of total subsidies per mile for a gasoline auto with a single passenger is 6.9 cents. At the average occupancy of 1.6 passengers, that is about 4.3 cents per passenger mile. The subsidy for transit buses is almost ten times higher — 40 cents per passenger-mile. And the subsidies for rail transit range from 17 to 109 cents per passenger-mile. As Delucchi says: “the total subsidy to transit greatly exceeds the total subsidy to auto use, per passenger mile, in both absolute terms and relative to the prices users currently pay.”

    would you mind elaborating on what you mean by road costs/total costs?

    I don’t understand why this isn’t clear to you. “Road costs” are the costs of roads. “Total costs” are road costs plus all the other costs of using an automobile. The most obvious ones are the costs of purchasing the automobile and fuel. Other costs included vehicle registration fees, insurance, maintenance and repairs. Road costs are only a fraction of total costs. The government pays some of the road costs, but all the other costs are paid entirely by drivers themselves. This is why government subsidies to auto users are only a small fraction of total costs. In contrast, the government pays around 70% of the total costs of mass transit. Transit users pay only about 30%. Even less when you include the costs of negative externalities (air pollution, noise, etc).

    • Adirondacker12800

      The total subsidy to each passenger-owner is zero for transit riders because none of them own the transit. It’s vastly higher for passenger-owners of private automobiles.

      • Rick

        Yeah, that’s something never addressed. Good point, Adirondacker.

      • Gordy

        The total subsidy to each passenger-owner is zero for transit riders because none of them own the transit. It’s vastly higher for passenger-owners of private automobiles.

        The issue is subsidies for the USE of transit, not subsidies to transit owners. Why should transit users receive vastly higher subsidies than automobile users?

        • Adirondacker12800

          Why should anyone care what the subsidy per mile is? Most people take whole trips not fractions of trips that can be doled out by the mile.

          • Gordy

            Why should anyone care what the subsidy per mile is?

            Because the costs, and hence the benefits, of trips increase with their distance.

            • I’m sure you’re aware of diminishing marginal utility. Benefits generally increase with costs, but nowhere near linearly. So while every mile driven is costing the taxpayer (and driver) the same amount, every extra mile has less and less benefit.

              • Gordy

                So while every mile driven is costing the taxpayer (and driver) the same amount, every extra mile has less and less benefit.

                Every extra mile produces at least as much extra benefit as it consumes in extra cost. Otherwise, people wouldn’t pay that extra cost. Again, it’s hard to see what your point is.

              • Every extra mile produces at least as much extra benefit as it consumes in extra cost. Otherwise, people wouldn’t pay that extra cost.

                Well, that’s going to be news to the field of behavioral economics.

              • Gordy

                No it isn’t. “Behavioral economics” does not hold that people are willing to pay the extra costs of traveling 30 miles if they can get the same benefit from traveling only 1 mile.

              • I’m willing to pay $2.50 for a bottle of Perrier, but it’s not anywhere near five times the utility of a $0.50 can of Coke.

                Utility doesn’t scale linearly with price paid, and neither does it scale linearly with miles driven. There’s no reason to think it doesn’t increase at all, but that doesn’t mean that the third dollar/mile confers the same utility as the first.

              • Gordy

                Nobody said utility does “scale linearly.” If you think the utility of transit use does not scale linearly, why do you favor a policy of a fixed subsidy per trip, instead of a variable subsidy that decreases with the number of trips?

              • Nobody said utility does “scale linearly.”

                You did, right here:

                If someone is willing to pay 8 times more for one trip than another, then the former trip is indeed 8 times more valuable to him than the latter one.

              • Gordy

                The statement you quote doesn’t have anything to do with the scaling of utility. It’s about the relationship between costs and benefits.

              • “Every extra mile produces at least as much extra benefit as it consumes in extra cost. Otherwise, people wouldn’t pay that extra cost. Again, it’s hard to see what your point is.”

                This assumes that the beneficiaries pay the full cost, which is a false assumption.

              • Gordy

                No it doesn’t assume that. Whatever the additional cost of the extra mile to the user, the additional benefit must be at least as big. Otherwise, he wouldn’t pay that additional cost. It’s basic economics.

              • “Whatever the additional cost of the extra mile to the user, the additional benefit [not stated, but required: to the user] must be at least as big. Otherwise, he wouldn’t pay that additional cost. It’s basic economics.”

                Which only establishes anything about the marginal economic benefit and the marginal economic cost if there are no costs or benefits to anyone else. That is basic economics.

                And there are third party benefits and costs in the issue at hand. Indeed, if there were not third party benefits in transport, you would not be able to justify any subsidies to road transport, let alone the massive subsidies in place.

              • Gordy

                Which only establishes anything about the marginal economic benefit and the marginal economic cost if there are no costs or benefits to anyone else. That is basic economics.

                No, it establishes that the marginal benefit to the user is greater than the marginal cost to the user, regardless of any costs and benefits to anyone else. Since the trip is taken by the user, and not by anyone else, this isn’t terribly surprising. The point is that people would not be willing to pay the higher costs of longer trips if they did not get a benefit in return. Hence, longer trips are more valuable than shorter trips.

              • Your “hence” does not follow. The value of the trip to the traveler is the net benefit, exclusive of the cost. That is what being the marginal user means ~ being at the point where there is no net benefit of the trip, and you are indifferent between traveling and not traveling. The net benefit of the travel is in the infra-marginal trips.

                And let us not forget that you are either through incapacity, ignorance or deliberate effort to deceive are arguing that:

                Whatever the additional cost of the extra mile to the user, the additional benefit must be at least as big.

                This is a quite sophomoric error in economic reasoning: it shows that you know that you should be using the word “marginal” but that you do not understand what the word actually means.

                This is assuming that the benefit of all trips taken under the lower cost is equal to the marginal cost, but it is only the benefit of the marginal trips taken under the lower cost that are equal to marginal cost. In reality, when there is a variety of trips of different types for different purposes taken, many trips will offer benefits greater than the benefit offered by the marginal trip.

                Indeed, if all trips taken under the lower cost provide a benefit equal to the marginal benefit, any increase in cost would result in quantity of trips demanded dropping to zero. So for any local transport market in which the price elasticity of demand is less than perfectly elastic, we know that there are infra-marginal trips that provide benefits in excess of the benefit provided by the marginal trip.

                SO the extra mile does not have to provide any extra benefit: it may just be the result of a different system of spatial organization that forces longer distance trips to accomplish the same ends. The willingness to bear the higher cost then implies that only those trips with gross benefit in excess of the now higher cost are still taken.

                But in that case, the net benefit to the user is reduced, due to the higher cost.

            • The proposition that you are defending, let us remember, is the proposition that the longer the trip is, the more benefit it provides, because it costs more.

              Yet the basic economics that you are trying to use to defend this proposition does not say that a longer trip thereby provides increased consumer surplus. It rather says a wider range of short trips, both high and low benefit, will be worth the lower cost of a short trip, while only a narrower range of relatively high benefit trips will be worth the higher cost of longer trips.

              It would be, for example, well worth my while to get on my bike and pedal to a local business college to teach contemporary economics multiple times a week. It would be worth my while to get on a jet to fly to Denver for the annual ASSA meetings. But it would not be worth my while to get on a jet to Denver to teach a weekly class in contemporary economics. And if the annual meetings are in Chicago next year and I am able to catch the train rather than flying, I would as a result have a higher consumer surplus next year than this year.

              • Gordy

                The proposition that you are defending, let us remember, is the proposition that the longer the trip is, the more benefit it provides, because it costs more.

                No, not because it costs more. Because the user is willing to pay the higher cost. The mere fact that it costs more does not mean it provides more benefit.

                Yet the basic economics that you are trying to use to defend this proposition does not say that a longer trip thereby provides increased consumer surplus.

                I didn’t say it provides increased consumer surplus. I said it provides increased benefit. If you would read what I actually write, and stop attributing to me statements I did not write, maybe you wouldn’t be so confused.

              • No, not because it costs more. Because the user is willing to pay the higher cost.

                I said it provides increased benefit.

                If you are talking net benefit to all of the users, that is the consumer surplus.

                It is very simple economics that, first, the cost to the user is the floor on the benefit to the user, not equal to the benefit to any user other than the marginal user. It is also very simple economics that the costs that the user is not charged in return for consuming the benefit does not enter into that decision, so its only the increase in the fraction of the cost actually charged to the user in return for using the benefit that is equal to the direct or first-party benefit to the marginal user.

                For example, a car registration fee only enters into the decision whether to maintain ownership of a car in a given year: since it is not charged on a per mile basis, it does not enter into the decision on miles traveled per year in that vehicle.

                I find it entertaining that someone who evidently is either incapable of understanding the difference between direct benefit to the marginal user and economic benefit across all users or is attempting to mislead readers by confusing them on that question is charging me with being confused.

  • G Ratener

    No, “total costs” is quite ambiguous. Does it include the purchase of the automobile? Does it include the heavy subsidies often given to auto manufacturers (including foreign)? Does it include oil subsidies (mostly tax exemptions)?…

    I don’t expect anyone to know what the true subsidies or costs are for either transit or cars, as subsidies/costs are so widespread world-wide that knowing the true cost of anything is impossible. If someone purchases a subsidized good, and takes advantage of it, the subsidy gets passed on to the purchaser.

    The report you site besides being out of date, is too limited in scope to determine what the actual cost/subsidies of driving are, same goes for transit.

    True, the 65% value applies not just to roads but specifically to federal highways, however this is a high estimate, hidden subsidies would likely make the percentage far lower. Other measures of cost are too speculative and incomparable to be of that much use.

    • Gordy

      No, “total costs” is quite ambiguous. Does it include the purchase of the automobile?

      Yes, of course it does. I already told you it does. Someone has to pay the costs of purchasing the automobile. The government doesn’t pay those costs. Drivers pay them.

      Does it include the heavy subsidies often given to auto manufacturers (including foreign)? Does it include oil subsidies (mostly tax exemptions)?…

      What heavy subsidies often given to auto manufacturers? What oil subsidies?

      I don’t expect anyone to know what the true subsidies or costs are for either transit or cars, as subsidies/costs are so widespread world-wide that knowing the true cost of anything is impossible.

      Sorry, this is just more nonsense. Governments know how much they spend on transit, and they know how much they collect from transit users in fares. The difference is the amount of direct subsidy provided to transit users. Governments also know how much they spend on roads and how much they collect from drivers in road-user fees. The difference is the amount of direct subsidy provided to drivers. Externality costs are estimated from empirical data on air pollution, noise, congestion, etc. Those estimates may not be exact, but they are dwarfed by the costs of direct subsidies to transit users to purchase buses and trains, construct railtrack and stations, purchase fuel and power, pay the wages of drivers and mechanics, and so on. If you seriously believe that subsidies to automobile users are even remotely close to subsidies to transit users, either as a share of total costs or in cents per passenger-mile, then show us your analysis. That idea flies in the face of all the evidence from government and academic research.

      • Adirondacker12800

        Governments also know how much they spend on roads and how much they collect from drivers in road-user fees.

        Most lane miles get no revenue from road user fees, Most lane miles are local roads that are funded with property, sales and in some cases income taxes.

      • Gordy

        Never said that governments don’t keep track of their finances. The claim was simply that subsidy measurement is tricky, very imprecise business.

        • Adirondacker12800

          Yet with great authority you will claim that automobiles are subsidized at 1 cent a passenger mile. Unless you are claiming it’s 2 cents a passenger mile. Except when you are claiming it 3.8 because the average passenger count is 1.4.

        • Gordy

          I did not write the above comment (9 January 2011 at 14:38). Someone is stealing my name.

          • For all I know, it could be true, from a narrow perspective. I’m told that Mix-ryg-dy-lonS switches between multiple email addresses and IPs. Could be a composite personality that just glitched.

            Or it could be really true. I have no idea.

      • “Governments know how much they spend on transit, and they know how much they collect from transit users in fares. The difference is the amount of direct subsidy provided to transit users.”

        This would only be true if there are no other beneficiaries. However, there are always beneficiaries of passenger transport in addition to the passengers themselves, which is why we subsidize transport across the board in the first place.

        Obviously the greatest benefit to motorists of the provision of alternatives to driving is in the most heavily congested locales.

        • Gordy

          This would only be true if there are no other beneficiaries. However, there are always beneficiaries of passenger transport in addition to the passengers themselves, which is why we subsidize transport across the board in the first place.

          Unless you can show that transit has uncounted positive externalities larger than those of driving, it doesn’t make any difference to the accounting. In fact, the biggest positive externality of motorized passenger transportation is the reduction in travel times, which has huge social and economic benefits. And cars save much more time than transit.

          Obviously the greatest benefit to motorists of the provision of alternatives to driving is in the most heavily congested locales.

          Delucchi includes congestion as a negative externality subsidy to cars and buses. You can’t count these costs twice.

          • Adirondacker12800

            Cars save much more time unless you are stuck in slow moving traffic. Then, even slow trains are faster than driving.

            • Gordy

              Drivers are not usually stuck in traffic. On average, driving is much faster than using transit. That’s one reason why people are willing to pay its higher costs.

              • Adirondacker12800

                All-news radio station’s advertising, all over the country, feature the time they have traffic reports because it’s something no one needs….

              • Gordy

                That’s right, Adirondacker. I didn’t actually write “usually.” I wrote “never.”

                You write a lot of short comebacks that make no sense because you have misread the comment you’re responding to. I usually just ignore them, because it’s just not worth correcting you. Just so you know.

              • Don

                “on average” driving is faster than transit. Well, of course! But, so what? The “average” is meaningless. Transit in the US is a niche product, that in many places keeps peak hour highway traffic at least semi-fluid. Even in transit-challenged Atlanta, MARTA is carrying several lanes worth of traffic on routes parallel to the interstates. It is all that keeps the traffic levels from the tipping point between flowing and jammed. I would say this is worth quite a bit to the commuters in their cars.

              • Gordy

                “on average” driving is faster than transit. Well, of course! But, so what?

                So, driving saves time. People value time. That’s one reason why they’re willing to pay the much higher costs of driving.

                The “average” is meaningless. Transit in the US is a niche product, that in many places keeps peak hour highway traffic at least semi-fluid.

                In some places, transit does that, yes. How does that mean the average is “meaningless?”

          • Delucchi counts current congestion, not the congestion level if transit disappeared.

            • Gordy

              Of course. And your point is…..?

              • Credit the congestion reduction to transit and the accounts change dramatically. In the New York area, it covers nearly all of the loss of the transit systems, including depreciation.

              • Gordy

                Delucchi already includes the cost of road congestion in his estimates as an external cost of autos and buses. You can’t count it twice.

              • We all understand that congestion costs are not a linear function of traffic per route mile per hour, so it would be grossly flawed analysis to attempt to do the comparison that Alon describes in terms of the present marginal net congestion cost per car and use that as a net cost of motor vehicles per passenger mile ~ the comparison that Alon describes must be done in terms of the TOTAL cost of replacing current public transit trips with semi-private car transit.

            • Gordy

              If transit subsidies were eliminated, there might be a small increase in the public cost of automobile use from increased congestion. There would most certainly be a huge public benefit from the savings of no longer paying the subsidies.

              • Adirondacker12800

                Congestion is not linear. A road near capacity that moves freely can be turned into a nightmare of congestion with a small addition of vehicles.

              • Gordy

                Yes, congestion is not linear. So what? Do you have an actual argument to make about subsidies and congestion, or is this just another random thought?

              • Adirondacker12800

                In certain situations, ones that are common in many places, a small increase in traffic results in much more congestion. So a “small increase in the public cost of automobile use from increased congestion.” many not be as small as you might imagine – when congestion goes from mildly annoying to “walking is faster” due to a small increase in traffic.

              • Gordy

                If all transit disappeared, and every single passenger-mile of current travel by transit was transferred to road travel, the total amount of road travel would increase by about 1%. But eliminating transit subsidies would almost certainly not cause all transit to disappear. Some transit would survive. The transit most likely to survive would be transit in areas and at times where road congestion is a serious problem, because that is where transit is at its most competitive with driving. So the increase in road traffic would likely be even less than 1%, and most of that increase would occur on uncongested roads. Hence, any increase in road congestion caused by the elimination of transit subsidies would likely be small.

              • “So the increase in road traffic would likely be even less than 1%, and most of that increase would occur on uncongested roads”.

                This is an unsubstantiated claim. Alon’s claim was regarding transit in New York City. Prove that a majority of new road trips taken if all transit in New York City was eliminated would occur on uncongested roads.

              • Gordy

                This is an unsubstantiated claim.

                It’s hard to substantiate hypotheticals. I just explained the argument for it. If you think the argument is wrong, tell us what you think is wrong with it.

              • All you have to do is to show how to add new car trips in New York City where 99% of the trips take place on uncongested roads.

                Congestion on New York City roads, after all, is not a hypothetical, and it is straightforward that adding car traffic will certainly no decrease congestion, so you need at a minimum to find presently uncongested New York City roads to take up the new traffic. Once you have identified those uncongested roads, you merely need to show that adding the new traffic will not congest them in turn.

              • Gordy

                I have no idea what “show how to add new car trips in New York City” is supposed to mean.

              • Simply indicate which roads in NYC are going to provide the transport service presently provided by transit, and provide traffic studies that show that they have ample capacity to handle the additional traffic.

  • Ramond Chiaramonte

    Just a comment on Disney. A huge portion on the of people moving around Disney do so on transit. My family has been there many times and we always use the monorails and buses to get around as well as our car, but we could easily get around if the car where not available. Disney would not be able to function without their transit system any more than New York or Chicago could. I find it inconcievable that many of the millions of people who visit Disney every year, many being from countries where transit use is a normal part of life, would not use the high speed rail, if for no other reason than just to ride the fist high speed rail system in the US. Let’s be the kind of Americans that have dreams and visions of an exciting and bright future again like we did in the 1950′s and 1960′s.

  • Gratener

    Whoops, sorry about that.

    Gordy, to find out about gas, auto company subsidies, and other indirect auto subsidies just do a google search on each, ours yielded more than 2,000,000 results.

    Comparing transit to auto travel is like comparing apples and oranges. Public transit subsidies can often be direct, while auto subsidies must almost by definition be indirect…., they are public. When would the gov literally mail a check to individual drivers specifically for the purpose of refunding travel expenses? When calculated this way, transit subsidies will almost always come out higher than auto travel subsidies, due to only the counting of direct subsidies.

    Nonetheless, we would like to see current data regarding auto subsidies and not just the 10y old report.

    We don’t need to show data since we are not trying to make a point, we are just attempting to point out the faults in your reasoning.

    We see both direct and indirect subsidies as equally important pertaining to the definition of the word subsidy, the only difference is that indirect subsidies are harder to determine.

    You can always get the results you want if you tweak the definition of subsidy enough.

    • Gordy

      Gordy, to find out about gas, auto company subsidies, and other indirect auto subsidies just do a google search on each, ours yielded more than 2,000,000 results.

      Gratener, it’s not my job to search for evidence to support your claims. That’s your job. You claimed that “heavy subsidies” are “often given to auto manufacturers” and also referred to “oil subsidies.” It’s up to you to produce evidence that these subsidies actually exist. And if you’re suggesting that they make a significant difference to the estimates of total subsidies provided by Delucchi, it’s up to you to produce data and calculations supporting that suggestion. You haven’t done any of this.

      Comparing transit to auto travel is like comparing apples and oranges. Public transit subsidies can often be direct, while auto subsidies must almost by definition be indirect…., they are public. When would the gov literally mail a check to individual drivers specifically for the purpose of refunding travel expenses? When calculated this way, transit subsidies will almost always come out higher than auto travel subsidies, due to only the counting of direct subsidies.

      No, auto subsidies are both direct (government spending on roads not covered by road-user fees) and indirect (negative externalities of auto use, such as air pollution and noise). The point is that both of these kinds of subsidy are utterly trivial in comparison to the enormous direct subsidies the government provides to transit for the purchase of transit vehicles, purchase of fuel and electric power, wages of drivers and mechanics, and so on. We’re not talking about a minor difference here. The subsidy provided to transit users is simply vastly larger both as a proportion of total costs and in cents per passenger-mile. If you seriously think there is any government or academic research that contradicts this basic finding, then please produce it.

      • How do you even know what the cost of air pollution is? Have you read the hundreds of studies on the issue? Have you done a meta-study? Where was it published?

        • Gordy

          How do you even know what the cost of air pollution is?

          Air pollution costs are estimated from empirical data of the effects of air pollution on health, the environment, etc. If these estimates are too low, they are too low for both autos and transit. Transit buses and some rail transit emit air pollution through the combustion of diesel fuel. Electric transit emits air pollution through the combustion of coal, natural gas or oil used to generate the electricity.

          • Adirondacker12800

            Google “Safe Harbor Dam”. Electricity can come from non carbon producing sources.

            • Gordy

              Electricity can come from non carbon producing sources.

              Yes, but only a small fraction of it does. The largest source of electricity in the U.S. is coal. Coal is the dirtiest fossil fuel. And non-carbon producing sources have external costs of their own. Again, if you seriously think you can produce an analysis showing that total subsidies to auto users, including air pollution costs and the costs of any other negative externalities, are even close to total subsidies to transit users, then do so.

              • Adirondacker12800

                That’s easy to find, the budgets of the FTA show how much subsidy ( and profit in a few cases ) mass transit lines receive. Road budgets dwarf it.

                … you forgot to add “per passenger mile” to request.

              • Adirondacker12800

                and it took few minutes to find the statistics from the Department of Energy. Nationwide the single biggest source of electricity is natural gas. Natural gas as a source surpassed coal in 2003. In nice round numbers only 30 percent of our electricity comes from coal. 40 percent from natural gas and 5 percent from petroleum. The rest comes from nuclear, hydro and other renewable sources.

              • Gordy

                and it took few minutes to find the statistics from the Department of Energy. Nationwide the single biggest source of electricity is natural gas.

                You’re wrong yet again, Adirondacker. As the EIA link below clearly shows, the single biggest source of electricity is coal. Coal provides about twice as much electricity as natural gas. Why do keep making factual assertions that you obviously do not know to be true?

                http://www.eia.doe.gov/cneaf/electricity/epm/table1_1.html

              • The incremental GHG emission of electric rail ranges from a modest improvement if its provided via coal, to a massive improvement if its provided via carbon neutral power sources. Natural Gas has, of course, long since passed coal as a source of new power to the grid, and Wind could easily push coal to third place as a source of incremental electric capacity.

                And, of course, whether to provide this incremental capacity with coal, natural gas, wind, or other is not an externally determined thing: its a policy decision.

              • “”Electricity can come from non carbon producing sources.”

                Yes, but only a small fraction of it does.”

                Note that this is an outright lie, since 30% can not be considered “a small fraction” by any reasonable standard, and since we only require additional transmission capacity to increase Wind to 20% of production by 2020, it is straightforward that carbon-neutral and carbon-free power “can” by pushed up past 50%.

                Indeed, a policy decision, such as the decision in California to source the entire incremental power requirement of the CA-HSR from new investment in carbon-free and carbon-neutral power, can help drive this transition.

          • Okay, you’ve just proven you have literally no clue about public health issues – not even the kind of clue you’d get from reading Wikipedia. State of the Air lists around a hundred footnotes, most peer-reviewed and the rest from sources like the EPA or WHO, and some of the studies I found in half an hour of Googling (also peer-reviewed or governmental) aren’t even on that list. And a bunch of those are actually meta-studies with references to tens of other studies not cited in the original list. Don’t trivialize entire fields with trite assumptions of a single canonical estimate, picked out of a hat by a person who’s not a public health expert.

            For what it’s worth, out of the about 15 studies I’ve read, a couple talk about motor vehicle pollution; zero talk about transit pollution. I know there exist studies that talk about bus depots but nothing about transit in general. It’s as if the community of public health experts doesn’t think non-auto transportation is a problem.

            • Gordy

              If you seriously think you have evidence that Delucchi’s estimates of air pollution costs for either autos or transit are significantly wrong, then produce it.

              Given that air pollution cost estimates for both autos and transit are utterly trivial in relation to the enormous direct subsidies provided to transit, it is not remotely plausible that your point here is anything more than an irrelevant quibble.

              • Given that air pollution cost estimates for both autos and transit are utterly trivial in relation to the enormous direct subsidies provided to transit…

                What’s the cost of an asthma attack?

              • The evidence: there are tens of studies giving different figures. A different Delucchi study (link, PDF p. 59) cites a range of costs of more than an order of magnitude. (And the newer studies I’ve seen, at least the ones that give dollar amounts, tend toward the higher end or beyond, for reasons I could but won’t speculate on since nobody in this thread is a public health expert). To pull a number out of a hat and decide it’s The Estimate and one must have special reasons to disagree with it is to be either ignorant or dismissive of the field.

            • Gordy

              The evidence: there are tens of studies giving different figures. A different Delucchi study (link, PDF p. 59) cites a range of costs of more than an order of magnitude.

              The summary in Delucchi’s Access article also cites a range of air pollution costs of more than an order of magnitude. Again, air pollution is an externality of both transit and autos. If the true costs of air pollution are much higher than the estimates, then they are much higher for both autos and transit, and are utterly irrelevant to the conclusion that transit is subsidized at a vastly higher rate than autos.

              • The air pollution costs are much higher for autos, according to Delucchi, so higher estimates will screw drivers with higher fees than transit users.

                (The other studies I’ve seen disagree so much on what each emission source does that even the ratio of car-to-transit emissions isn’t fixed – though, motor vehicle pollution is a common subject of study whereas transit pollution isn’t.)

              • Gordy

                The air pollution costs are much higher for autos, according to Delucchi, so higher estimates will screw drivers with higher fees than transit users.

                No, Delucchi’s best estimates of air pollution costs are 1.25 cents per passenger-mile for gasoline autos and 1.83 cents per passenger-mile for transit buses. So higher estimates would “screw” bus users, not auto users. But the air pollution cost estimates for all modes are trivial in comparison to the enormous costs in direct subsidies to all modes of transit, especially light rail, so once again, you are quibbling over an irrelevance.

              • And, people taking shorter trips would pay less.

              • Gordy

                No, I didn’t “forget rail.” As just told you, the air pollution cost estimates for all modes are trivial in comparison to the enormous costs in direct subsidies to all modes of transit, especially light rail.

      • Adirondacker12800

        If you seriously think there is any government or academic research that contradicts this basic finding, then please produce it.

        Where are your sources for the varying per mile rates you have claimed. Essays without bibliographies won’t do.

        • Gordy

          It’s not an “essay.” It’s an article from Access, the magazine of the University of California Transportation Center. The article summarizes transportation cost estimates taken from the primary research literature. The article’s author, Mark Delucchi, is himself a leading researcher on this topic. You can find a list of his papers here:

          http://www.its.ucdavis.edu/people/faculty/delucchi/index.php

          • Adirondacker12800

            And the report you love to point at only accounts for Federal highways. Federal highways are a small percentage of the roads in the US.

            • Gordy

              No, it doesn’t only account for federal highways. Road-user revenues are used to fund roads in general, not just “federal highways.”

              • Except when it’s illegal to spend them on local urban streets.

              • But not to fund all roads, nor to fund the maintenance of the roads that are funded at a level sufficient to compensate for the damage inflicted by their use.

              • Gordy

                But not to fund all roads, nor to fund the maintenance of the roads that are funded at a level sufficient to compensate for the damage inflicted by their use.

                We went over this silly point the last time you made it. The maintenance backlog for transit, which the FTA estimates at $78 billion, is enormously greater per passenger-mile of transportation benefit than the maintenance backlog for roads. So if you really want to include deferred maintenance in the subsidy calculation, transit use is even more heavily subsidized in comparison to automobile use than if you exclude it.

              • I apologize, I hadn’t realized that you were under the impression that your previous response was an effective one.

                First, I note that you shift ~$18b from the road system ledger to the rail ledger by looking at the “Transit” SGR backlog, which is $59.2b rail, $18.4b other, primarily road based, transit.

                Second, I understand why you insist on measuring passenger benefit by passenger-mile delivered rather than measuring it in terms of passenger benefit, since that is biased against the passenger benefit provided by tips that require fewer miles through more densely settled areas and in favor of the passenger benefit provided by trips that require more miles through subsidized suburban sprawl, but I don’t understand whether you have conned yourself first before attempting to con others.

                Third, I also note that either through ignorance or deliberate deceit you remove any time dimension from the two figures that you are comparing. The rate of physical depreciation of the road network and associated transport system is more rapid than the rate of physical depreciation for a rail network and associated transport system, so that one the one hand, the lifetime of the transport benefit of returning a rail network to a SGR is greater than the lifetime of the transport benefit of returning a road network to a SGR, and indeed the period of time that it has taken us to build our larger road maintenance backlog is much shorter than the period of time that we have been depreciating our passenger rail systems, many of which have been operated as depreciating assets for in excess of half a century.

                However, in being forced to attack with such an evidently weak line of argument, can I presume that you are conceding that there is a substantial cross-subsidy from urban motorists, paying “user fees” for driving on streets that are either underfunded or, in many states, no funded at all from those fees, so that only line of attack that you see is the underfunding of the State of Good Repair of the road system?

              • Gordy

                First, I note that you shift ~$18b from the road system ledger to the rail ledger by looking at the “Transit” SGR backlog, which is $59.2b rail, $18.4b other, primarily road based, transit.

                No, I’m not “shifting” anything. I’m quoting the Federal Transit Administration, which reports that the maintenance backlog for transit is $78 billion. None of this is for roads. The categories of transit asset listed in the report are railtrack, stations, vehicles and maintenance facilities.

              • Gordy

                Second, I understand why you insist on measuring passenger benefit by passenger-mile delivered rather than measuring it in terms of passenger benefit, since that is biased against the passenger benefit provided by tips that require fewer miles through more densely settled areas and in favor of the passenger benefit provided by trips that require more miles through subsidized suburban sprawl, but I don’t understand whether you have conned yourself first before attempting to con others.

                I have no idea what you mean by “passenger benefit” if not passenger-miles of transportation. What DO you mean by “passenger benefit?” How are you measuring it?

                Third, I also note that either through ignorance or deliberate deceit you remove any time dimension from the two figures that you are comparing. The rate of physical depreciation of the road network and associated transport system is more rapid than the rate of physical depreciation for a rail network and associated transport system, so that one the one hand, the lifetime of the transport benefit of returning a rail network to a SGR is greater than the lifetime of the transport benefit of returning a road network to a SGR, and indeed the period of time that it has taken us to build our larger road maintenance backlog is much shorter than the period of time that we have been depreciating our passenger rail systems, many of which have been operated as depreciating assets for in excess of half a century.
                This is all irrelevant. What matters is the COST, not the rate of depreciation. Both the initial amount of money needed to achieve a state of good repair, and the increase in ongoing costs needed to maintain that state of good repair, are much higher for transit than for roads. This means that to achieve and maintain a state of good repair for both roads and transit, transit subsidies would need to be increased much more than road subsidies.

              • Gordy

                However, in being forced to attack with such an evidently weak line of argument, can I presume that you are conceding that there is a substantial cross-subsidy from urban motorists, paying “user fees” for driving on streets that are either underfunded or, in many states, no funded at all from those fees,

                This again. You keep repeating that same irrelevant points that I have already addressed. Yes, there is a lot of “cross-subsidy” of roads. Some roads are subsidized much more than others. There is also a lot of “cross-subsidy” of transit. Some transit services are subsidized much more than others. But I’m not comparing subsidies between different roads or between different transit services. I’m comparing subsidies between different MODES, between transit in total and roads in total.

              • Adirondacker12800

                The subsidies to transit, in total, are dwarfed they the subsidies to roads, in total.

              • Gordy

                The subsidies to transit, in total, are dwarfed [by?] the subsidies to roads, in total.

                How do you know? And so what if they are?

              • “How do we know”? Because the subsidy to roadwork alone is greater than the total subsidy to transit, and that omits the balance of the subsidies to the road transport system.

              • Gordy

                Repeating the assertion, or making a different assertion, does not explain how you know it to be true. Show me the numbers.

              • Adirondacker12800

                Bruce, he keeps forgetting to add “per passenger mile”. If he thinks transit subsidies are higher, as a straight dollar amount, than road subsides, I wanna drink what he’s been smoking.

              • Gordy

                No, I didn’t forget to add anything. You claimed: “The subsidies to transit, in total, are dwarfed they the subsidies to roads, in total.”

                I’m asking how you know that to be true. Or is it yet another one of your made-up facts?

              • Adirondacker12800

                The FHWA budget for fiscal year 2009 was, in nice round numbers, 57 billion dollars. 27 billion of it was stimulus money. The FTA’s budget for FY 2009 was 19 billion, I can’t find how much of that was stimulus money. 30 minus 19 means at least 11 billion more was spent on roads. It’s all on the US DOT’s website.

              • Gordy

                For the second time, your claim was “the subsidies to transit, in total, are dwarfed they the subsidies to roads, in total.” To substantiate that claim, you need to show that subsidies to roads were much greater (“dwarfed”) subsidies to transit. The numbers you state above don’t do that. In fact, they don’t identify spending on roads or spending on transit at all. In order to support your claim, you have to provide the relevant numbers, not a different set of numbers that are only sorta kinda related to some of the relevant ones.

              • Adirondacker12800

                I give up Mixner.

              • Here’s your opening Gordy: since you assert that the claim is false, prove it.

              • Oh, and Gordy, when making your case that subsidy to the road transport system is lower than subsidy to rail or other transport systems, be sure to address the points raised by US PIRG: that most states exempt gasoline from state sales tax, so much (and in some cases more than all) of the gas tax is effectively a diversion from the general fund to road spending, that on top of that diversion $600b has been spent on roads in addition to total gas taxes and other so-called “user fees”, and that recovery at present is about 50%, excluding the cost of mandated “free” parking, policing, carbon costs and other externalities which can only drive recovery lower, as all so-called “user fees” only cover a portion of a portion of the public costs of the system, and much of those so-called “user fees” are de facto diversions of what would otherwise be sale tax revenue.

      • The subsidy provided to drivers is simply vastly larger both as in absolute terms and in dollars per trip. If you seriously think there is any government or academic research that contradicts this basic finding, then please produce it.

        • Gordy

          The subsidy provided to drivers is simply vastly larger both as in absolute terms and in dollars per trip.

          How do you know? And so what? The subsidy provided to transit users also increases with trip length, both in absolute terms and in dollars per trip. If you think all trips should be subsidized the same amount regardless of length, why do you support this?

          • In terms of the absolute subsidy, we know from the broad figures on the state of road transport from the Federal Highway Administration.

            As far as the amount of additional costs imposed by drivers that is simply not covered by any funding source, whether direct subsidy, cross subsidy or user fee, that would be from the report by US PIRG.

      • Gratener

        Before proving anything to you, we would like to see a recent report(s) on total subsidies to both auto and transit. The report you cite is too old to be taken so seriously.

        • Discounting the subsidy because the most recent studies that have attempted a complete accounting are dated implies that there is evidence to support a belief that subsidies have been declining over time.

          But the reality is that even the Federal Highway Fund has been increasingly supplemented by general fund spending over the past decade, so there is every reason to believe that the subsidy required has been increasing over time, which implies that older studies are off in the direction of underestimating the subsidy.

  • Ocean Railroader

    I went down to this area on a Criuse ship and found out some things that could save this high speed rail project from the start. Right now it is going to be a big fall unless they extend to the Port Canivaral curise ship teriminal in that the biggest proberms we had was that when our ship stopped in port there was no way to take public transport without using a car or a 90$ Taxi Ride to Disiney World or to NASA. What they should do is try at all costs to extend the line to the cruise ships that way people can take the high speed rail line to reach the cruise ships which can hold 5000 to 2000 people in a sitting. Not to mention most people don’t have a car when they get off the ship.

  • Florida Boondoggle

    The route in Florida is wrong.

    This train should have run from West Palm – Ft. Lauderdale – Miami. This is where the population is, this is where the congestion is.

    Kill it Governor Scott.

    • You talk about spending an indefinite amount of money to acquire an alignment that does not exist, and which therefore will take a decade or more to get completed, and at the same time object to the use of an alignment that the state already owns, which can see service in four or five years, where the service will cover its operating costs (unlike airports and roadworks).

      It seems that your name is based on what you are proposing rather than what you are opposing.

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