GAO's Report on HSR Recommends Significant Federal Role

Government Accountability Office sees federal involvement in planning and financing as necessary for high-speed rail construction

The U.S. Government Accountability Office (GAO), Washington’s in-house accounting firm, studied high-speed rail in its most recent report (“High Speed Passenger Rail: Future Development Will Depend on Addressing Financial and Other Challenges and Establishing a Clear Federal Role,” PDF) and came to some significant conclusions about how best to proceed in implementing fast train links in the United States. GAO’s report also indicated strong government support for investment in high-speed rail in corridors of distances between 100 and 500 miles, which the study indicated were best-suited for such connections.

Perhaps most interesting about the report was its in-depth comparisons with France, Spain, and Japan, the three countries that have developed the strongest high-speed networks. The GAO’s conclusions should play a major role in determining the future of U.S. ground transportation policy, because they provide a strong framework for establishing potential routes, funding them on a national scale, and operating them efficiently.

The report’s most important piece of advice is its advocacy for a national plan:

“GAO recommends that the Secretary of Transportation develop a strategic vision of how high speed passenger rail systems fit into the national transportation system, and develop guidance and tools to improve the reliability and accuracy of ridership, cost, and other forecasts for these systems…

“Since the 1960s, Congress has authorized various programs dealing with high speed ground transportation, including high speed rail, but no federal vision or national plan for determining the role of high speed rail in the U.S. transportation system exists. FRA officials told us that they do not have a high speed ground transportation policy, and, as one FRA official told us, policies related to high speed rail have varied from one administration to another. FRA officials also told us that creating interest in promoting high speed rail at the national level has been difficult to sustain…

“The development of a vision for high speed rail in the United States may need to be coordinated with reexamination of other federal surface transportation programs. As we reported, in March 2008, one reason that existing federal transportation programs are not effective in addressing key challenges, such as increasing highway and airport congestion and freight transportation demand, is because federal roles and goals are not clear. In addition, we reported that many programs lack links to needs or performance, the programs lack the best analytical tools and approaches, and there is modal stovepiping at DOT.”

I have been pushing for some time now for the DOT to come forward with a national rail project that articulates the best corridors for development by using an empirical system – considering potential ridership, environmental impacts, and congestion relief – to establish priorities. Without such a strategic plan, we will continue to see the same type of hodge-podge, ineffective development that has marked the American rail system for the past fifty years. The FRA’s complete lack of leadership on the issue is a disappointing reflection of that lack of interest. GAO’s endorsement of national planning especially in light of the recent passage of $8 billion for rail in the stimulus package will likely encourage the DOT to describe its priorities and efforts for the future.

GAO’s push to incorporate high-speed rail into the broader ground transportation program is elemental for the future of rail in the U.S. That’s because – as GAO’s study indicates – fast trains need to be put into comparison with highways and airports when considering the manner in which Americans will get around in the future. Without such direct, cross-modal comparisons, there is little chance for establishing whether rail, road, or air connections are priorities; without the comparison, we get the status quo, where funding allocations are close to random and where few question which transportation mode fits best where.

And indeed, the report sought to establish some principles for the future of the nation’s surface transportation program, emphasizing the following:

• “Create well-defined goals based on identified areas of national interest.”
• “Incorporate performance and accountability for results into funding decision.”
• “Employ the best analytical tools and approaches to emphasize return on investment.”
• “Ensure fiscal sustainability.”

The GAO sees the federal government as playing the important role of planner in the high-speed system, citing comparisons with other nations, “French officials told us it is easier to sustain public support for a high speed rail project once it has the commitment of the central government.” But more important is the GAO’s conclusion that federal funding is essential for the construction of such lines; the report repeatedly argues that without a strong commitment from Washington, there is little hope for the future of fast rail in the United States. Citing the foreign examples, the report points out that while high-speed programs are capable of recouping operating costs through fare revenue, covering construction costs will not occur in the short-term, if ever. That said, the report does say that the Paris-Lyon line, France’s first high-speed project completed in 1981, has paid back its initial capital costs completely.

In Japan, where the rail sector is privatized, the national government invests directly in new high-speed lines because of the lack of sufficient private-sector support to ensure the construction of such lines. France and Spain have large national programs relying on national and local funding allocations to build rail projects. The U.S. cannot rely on future private investment to complete fast rail, and must develop a national funding strategy to make high-speed rail a reality: “Without substantial public sector commitment, private sector participation is difficult to secure.”

The report’s guidance on federal funding suggests that high-speed rail needs a more stable base of funding than was provided by the $8 billion in the stimulus bill or the $1 billion yearly established in President Obama’s proposed first budget. The fundamental problem is that these funds are provided from the general fund, rather than from dedicated transportation money; “High speed rail projects must compete with other nontransportation demands on federal funds as opposed to being compared with other alternative transportation investments in a corridor.” A national framework for how the ground transportation system works overall, the report argues, is necessary so that the appropriate transportation funds can be dedicated toward fast rail.

This indicates, then, that the U.S. must develop a strong rail funding strategy that relies on dedicated, secure revenues – perhaps coming from the DOT’s existing funding sources – to ensure the completion of the system’s most important corridors. The lack of such an existing commitment is a reasonable explanation for the lack of rail investments in the U.S. That said, the problem could be addressed in the upcoming transportation bill, CLEAN-TEA. This should be a priority.

Overall, GAO’s report articulates strong support for the principles behind high-speed rail and indicates, through cross-national comparisons, that such a system would work in the United States. The auditing body’s appraisal is good news for rail supporters and suggests that if anything, there will not be anti-rail ideology coming from within the governmental apparatus.

GAO’s warnings and advice about the importance of national planning and funding should be followed closely by the White House and DOT. We must develop a national framework for rail programs, and we must develop a financing system that won’t be altered significantly during every political changeover. Only a long-term, carefully considered program will allow for the development of the high-speed network all of us want.