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Pragmatic Funding Decisions Mark the Final Round of Rail Grants

Posted by Ken Orski on Thursday, May 12th, 2011
Innovation NewsBriefs Vol. 22, No. 15 Pragmatic funding decisions have marked the third and final round of awards in the Administration’s $10 billion High-Speed Rail Program. The awards, announced on May 9, confirmed what critics, including this column, have long maintained: the White House high-speed rail initiative, stripped of its high-blown rhetoric, is in fact a program of modest incremental improvements to existing Amtrak passenger rail services. As such, the initiative represents a small but useful step in restoring more reliable intercity passenger rail service— but it hardly deserves the hype and exaggerated claims that have been used  to characterize it. Rather, it is a “victory for incrementalism,” in the words of Scott Thomasson, policy director of the Progressive Policy Institute. The latest round of awards has redistributed the final $2 billion that had been returned to the U.S. Transportation Department when Governor Rick Scott rejected the offer to fund a rail line between Tampa and Orlando last February. The funds have been awarded to 22 recipients, with the largest single winner being Amtrak’s Northeast Corridor. A total of $795 million will enable Amtrak trains to increase their top speeds to 160 mph on a 24-mile stretch of track between New York and Philadelphia and alleviate a major bottleneck in Queens that causes delays for trains coming in and out of Manhattan. Other major grants were awarded to Illinois, Michigan and the Midwest region for track upgrades that will allow improved reliability of Amtrak service on the Chicago-St. Louis and Kalamazoo-Dearborn lines, and for the purchase of new passenger rail cars and locomotives. A $300 million grant will enable the California High Speed Rail Authority to extend its Central Valley rail segment by an additional 20 miles. The remaining dollars went for minor enhancements in passenger rail service in eight other states. Despite the commendable new focus on the Northeast Corridor, long advocated by House Transportation and Infrastructure Committee Chairman John Mica (R-FL) as the country’s most legitimate target for rail investment, the Transportation Department’s announcement drew the latter’s renewed criticism. “Once again the Administration has scattered funding to numerous slower-speed rail projects,” Mica said in a press release. Railroad Subcommittee Chairman Bill Shuster (R-PA) echoed the criticism. “I continue to question the realism of the President’s overall high-speed rail policy,” said Shuster.. “We need to focus government funds on the lines that make the most sense…Until then, true high-speed rail will remain on the drawing board.” Amtrak spokesman, Steve Kulm admitted that the final round of projects would not significantly reduce trip times, but asserted that they were necessary to lay a foundation for future service improvements. Progressive advocacy groups, predictably, praised the US DOT announcement as putting thousands of Americans to work and reducing dependency on foreign oil. Secretary LaHood brimmed with optimism: “America is abuzz today with the news that the high-speed train is just around the bend… I am thrilled,” the Secretary wrote in his blog, announcing the latest round of awards. Now that all of the money in the Administration’s passenger rail program has been fully committed, it is time to form some initial judgment as to its impact and influence. In our view, several observations are warranted: First, the Administration’s initiative took a major step in expanding the federal role in surface transportation by embracing intercity passenger rail as a major new candidate for federal capital assistance. Henceforth, highways and transit may have to compete with passenger rail for available federal surface transportation funds. Second, by injecting $10 billion into the upgrading of existing intercity rail facilities, the Administration’s rail program will hopefully bring about incremental improvements in the average speed and reliability of Amtrak intercity passenger services in several key corridors. The money has not been totally wasted, as asserted by some critics, but the value and cost effectiveness of the $10 billion investment remains to be demonstrated. Growing Amtrak ridership would be a positive indication of success. Third, the compelling need to reduce the budget deficit and rein in discretionary spending has dimmed the prospects for further congressional funding of intercity passenger rail. Fiscal 2011 funds for high-speed rail have been rescinded and funding for next year remains in doubt. The ambitious $53 billion high-speed rail plan proposed by the White House earlier this year has been given a quiet burial. Deprived of further federal aid, the momentum gained in the past two years will likely be lost. Fourth, given Gov. Scott’s decision to cancel the Tampa-to-Orlando line and given the uncertain future of the troubled California’s high-speed rail project (read the highly critical report by California’s Legislative Analyst’s Office, released on May 10, http://lao.ca.gov/reports/2011/trns/ high_speed_rail/ high_speed_rail_051011.aspx), the Administration can hardly claim to have launched an era of high-speed rail. The pledge to connect 80 percent of the nation to high speed rail in the next 25 years, repeated by Secretary Ray LaHood in a mantra-like fashion, is particularly misleading and has raised false expectations in the rail industry and among transportation reformers. A more tempered and realistic conclusion would be that the prospect for true high-speed rail in this country, with bullet trains running on their own dedicated tracks, still remains highly uncertain. Lastly, what we have said in an earlier Brief bears repeating. The President’s initiative came at a most inopportune time, while the nation is recovering from a serious recession and desperately trying to reduce the federal budget deficit. However, the recession will eventually end, the economy will start growing again, and the deficit will hopefully come under control. At that more distant moment in time, perhaps toward the end of this decade, the nation might be able to resume its tradition of “bold endeavors” — ambitious programs of public infrastructure renewal. That might be an appropriate time to revive the idea of high-speed rail, at least in the context of the densely populated Northeast Corridor where road and air traffic congestion will soon be reaching levels that threaten its continued growth and productivity. For now,  prudence, good sense and the nation’s well-being require that the federal government  and its surface transportation program live within their means.

C. Kenneth Orski is a public policy consultant and former principal of the Urban Mobility Corporation. He has worked professionally in the field of transportation for over 30 years, in both the public and private sector. He is editor and publisher of Innovation NewsBriefs, now in its 22nd year of publication.

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