Competition for Rail Grants Heats Up as Illinois and Florida Articulate Proposals

Illinois Governor wants legislature to appropriate $400 million for effort; Florida simply demands money from Washington.

We all knew we’d have a fight on our hands after the Congress approved $8 billion in funds for high-speed rail back in February, and now the contest is entering prime time. California remains the nation’s biggest potential winner; its $30 billion project from San Francisco to Los Angeles already has $10 billion in funds approved by voters last November and the line itself is practically construction-ready. Illinois — wanting a line between Chicago and St. Louis — and Florida — envisioning fast connections between Orlando and Tampa — are particularly interested in not being left out. But their efforts aren’t identical and they prove that it’s high time the federal government define not only what makes a rail line qualified for funds, but also what percentage of total project costs should be covered by local sources.

Illinois Governor Pat Quinn (D) has asked his state’s lawmakers to include $400 million for high-speed rail in a $30 billion public works package currently being considered in Springfield. Previously, State Representative Elaine Nekritz (D) attempted to include $1 billion for the effort in the bill, but her effort was rebuffed by leadership. A 110 mph line between Chicago and St. Louis would cost $2.7 billion to build; it’s unclear where Mr. Quinn expects the rest of the money to come from, considering that he has previously suggested that he only expects to receive $500 million of the Recovery dollars. Midwest states as a whole announced last month their intentions to apply for $3.5 billion of the funds to build fast lines spreading out from Chicago to Madison, St. Louis, and Detroit.

Florida’s leadership, on the other hand, seems to expect that the feds will simply fork over $2 billion for a line between Orlando International Airport and Tampa. Funding for that project was approved by voters in 2000, only to be rejected three years later following a campaign against it by former governor Jeb Bush (R). Current governor Charlie Christ (R) seems more in favor of rail projects in general, but has done nothing at all to find state government funds for the system. After (unhelpful) comments by DOT Secretary Ray LaHood, Florida’s High-Speed Rail Authority mistakenly thinks that its project is the furthest along of any in the nation.

I’ll ignore for the moment the fact that Florida’s proposal is poorly designed; it won’t even serve downtown Orlando, precluding many of the potentially positive land use impacts of rail investment there.

The real question is whether Florida should get a huge funding boost if other states are willing to leverage local money in a way that it is not? Wouldn’t it be unfair if Florida got just as many federal dollars as Illinois or California, states that have been proactive in choosing to invest their own funds in their respective projects? If Florida got away with its costs being covered entirely by the federal government, why wouldn’t other states ask for the same treatment? What would be the incentive of investing local funds in such infrastructure projects?

It’s clear that Washington needs to be more explicit in defining its decision-making process for allocating rail funding; a line between San Francisco and Los Angeles, for instance, by definition deserves more federal money than one between Boise and Missoula, because the former would be used by far more people per route mile or construction dollar than the latter. But no policy currently on the books at DOT ensures that the former line would be picked for funding first. An outcome-based examination, leading directly to decisions about monetary outlays, needs to be codified and enforced.

Once projects have been cleared as appropriately cost-efficient for federal funding, Washington also doesn’t have an explicit policy about how much of costs to cover. The New Starts process used to judge and fund new transit lines results in seemingly random decisions about federal shares of construction costs: Washington will pay for 34% of the ARC Tunnel in New York, but 50% of the second phase of Sacramento’s South Corridor LRT. Why? No one knows, and that’s a problem because if states are applying for rail funds, they shouldn’t have to commit more than they need to simply because they’re afraid that DOT will hesitate if it’s asked to pay too much. Florida shouldn’t have 100% of its rail line’s price covered by Mr. LaHood if Illinois is going to pay for half of its line’s cost, so Washington should pay a standardized construction cost share for qualified projects.

I suggest that the federal government stick to a four-step process to fund and construct rail projects, modeled on the New Start and highway funding models:

1. States or regions study a project for consideration, using local funds;
2. That project is analyzed based on its projected ridership, cost per mile, environmental impacts, land development impacts, etc; it is scored by the DOT, and must meet a required minimum to receive federal funds (similar to how New Starts projects are considered today);
3. The federal government commits to 80% of the funding, with the other 20% of the money allocated by affected regions, states, or municipalities (highways are funded at an 80% federal share today);
4. The project is built.

Once a rigorous system to judge the projects (#2) is established, this would provide states the kind of predictable, reliable process necessary to make building rail in the United States feasible. Earmarks by powerful congressional leaders to their preferred projects should not be allowed, because it would dilute the federal government’s ability to pay for the most deserving projects.

If Illinois and Florida’s respective lines met DOT’s criteria, the respective state governments would simply have to commit to 20% of the overall funding, and then they would be guaranteed 80% back from Washington. A failure to appropriate at the state level like Florida now would simply not be an option.

Of course, the other option is a national rail infrastructure operation under direct control of the U.S. DOT, but that’s going nowhere fast considering conservative America’s steadfast unwillingness to allow the federal government to invest directly in communities…