CAHSRA to apply for $1.2 billion in rejected Florida funds

Via the Merced Sun-Star:

High-speed rail may come to Merced sooner than expected, as the California High Speed Rail Authority will announce today it's asking for $1.2 billion in funding that was rejected by Florida.

If the request is approved, it would mean the first phase of track will run from Merced to Bakersfield. Also, instead of building a station just in downtown Fresno, stations will be built in Merced and Bakersfield. The authority is also looking at building a station in Tulare County.

"This is very good news for Merced," said Mayor Bill Spriggs on Sunday afternoon. "The City Council has always supported high-speed rail. We were disappointed when the Corcoran-to-Borden route was announced."

"If we get a portion of Florida's money, we'll able to complete the entire backbone of the project," Jeff Barker, deputy director of the rail authority, told the Sun-Star Friday.

In December, after receiving federal money from canceled high-speed rail projects in Wisconsin and Ohio, the authority announced it was building the first leg from Shafter to Borden. That was quickly dubbed "the train to nowhere" by some critics and disappointed advocates.

The application deadline is April 4 for the $2.43 billion that Florida Republican Gov. Rick Scott turned down. Barker said the state will provide a 30 percent match from state Proposition 1A funds that will bring the total to more than $1.7 billion.

"We already have $5.5 billion to start construction from Borden to Shafter," he said.

Assemblywoman Cathleen Galgiani, D-Livingston, who wrote Proposition 1A, which voters approved in November 2008, said "It's not a question of whether were going to get the money, but how much."

The staff will make its recommendation to the authority's board Wednesday.

"With the extra money we think we can do one of two things," Barker said: Extend the track to south of Bakersfield to at least Te-hachapi or build the track 39 miles beyond the triangle at Chowchilla toward Los Banos and San Jose.Laying the "keel" of the high-speed rail in the Valley, Galgiani said, "gets us closer to getting private money on the table. It signals to the private investment community that we are serious."

FL DOT: High speed rail would have been even more profitable than expected

High-speed rail is profitable, study says

TALLAHASSEE -- Three weeks after Gov. Rick Scott put the brakes on high-speed rail, the Florida Department of Transportation on Wednesday released a study showing the line connecting Tampa to Orlando would have had a $10.2 million operating surplus in 2015, its first year of operation.

The study showed the line would have had a $28.6 million surplus in its 10th year.

The numbers are more optimistic than a 2009 study, which concluded the line would have not seen an operating surplus until 2021.

The $1.3 million study, conducted by the forecasting firms Wilbur Smith Associates and Steer Davies Gleave, shows the line would have had 3.3 million riders in its first year. The previous analysis predicted the line would have had 2.4 million riders in 2015.

Scott, who last month cited concerns about operating losses due to low ridership when he decided to kill construction of the project by rejecting $2.4 billion in federal money, dismissed the ridership study results.

“I had been briefed on their ridership study and I looked at other ridership studies and I’m still very comfortable with the decision I made that I don’t want the taxpayers of the state on the hook for the cost overruns of building it, the operating costs or giving the money back if it’s shut down,” he said.

He said he made the decision based on a verbal review of the ridership study, as well as documents provided by the libertarian Reason Foundation and the Heritage Foundation, a conservative think tank.

Scott said he feared the 84-mile line would be a burden to Florida taxpayers, even though private vendors had indicated they would be willing to cover any operating losses or construction cost overruns, and federal officials said Florida would not have to repay the $2.4 billion if the project failed.

A spokeswoman for Scott said he doesn’t trust the studies.

“The governor has said all along he believes ridership projections for this and other rail projects are overestimated,” said spokeswoman Amy Graham. “Numerous studies support this conclusion.”

Wilbur Smith Associates, one of the companies that conducted the study, is a transportation and infrastructure consulting firm founded in 1952. It has 56 offices in eight countries, according to the company’s website.

Steer Davies Gleave has 16 offices worldwide, including locations in Boston and Denver according to its website.

The sunny numbers came way too late for rail proponents, who criticized Scott for turning down the money before all the information was available.

“Now we see more evidence that shows just how profitable high-speed rail would have been,” said U.S. Rep. Kathy Castor, D-Tampa. “Private firms had been clamoring to bid on Florida’s high-speed rail initiative. Now, unfortunately, because of the governor’s rigid ideology, these private companies will look to other states. The jobs and economic benefits will follow.”

Sen. Thad Altman, R-Melbourne, who unsuccessfully fought Scott’s decision in the state Supreme Court, said he doubts an earlier release of the ridership study would have made a difference to the governor.

“His conclusion was political, not based on economics, good business or even protecting the taxpayers,” Altman said. “As time passes and more information comes out, you can see the injustice that was done to the state of Florida.”

In the wake of the study, Democratic U.S. Sen. Bill Nelson is clinging to the idea that the line could be built.

“I still have a sliver of hope that common sense and the facts will prevail,” he said.

Others, though, want to just let the matter go.

“Frankly, it’s Day 2 of session,” said House Speaker Dean Cannon, R-Winter Park. “That issue, unless the governor changes his mind or does something differently, is behind us. So we’ve got to move forward.”

A poll conducted by the Tampa Chamber of Commerce shows that 59 percent of Hillsborough County registered voters support a high-speed rail line connecting Tampa to Orlando. The survey questioned 400 voters likely to participate in the November 2012 election between March 2 and 6 and has a margin of error of plus or minus 4.9 percent.

U.S. Department of Transportation Secretary Ray LaHood is expected to announce by the end of the week which states will receive Florida’s money. According to an attorney for the governor, the state had already spent about $110 million on the project when Scott announced that he did not want to go forward with it.

Again, we can see that Rick Scott's decision to cancel the project was entirely political in nature rather than being founded in actual concern over cost overruns and state subsidies.

Florida High Speed Rail Funding Withdrawn

It looks like high speed rail in Florida is dead for the time being

About $2.4 billion in federal funds for a high-speed rail project in Florida will go elsewhere after the state's Republican governor rejected the deal out of hand, U.S. Transportation Secretary Ray LaHood said on Friday.

LaHood said the Obama administration was pulling the plug on the financing after speaking with Rick Scott, Florida's Tea Party-backed governor, Friday morning in a last-ditch attempt to win his approval.

The money, which many Floridians hoped would bring thousands of jobs to a state burdened with record-high unemployment, would now be spent in other parts of the country, LaHood said.

"I know that states across America are enthusiastic about receiving additional support to help bring America's high-speed rail network to life and deliver all its economic benefits to their citizens," LaHood said in a statement.

Under LaHood's offer, Washington would have paid for all but $300 million of the $2.7 billion high-speed line. The project was originally approved in late 2009 by former Governor Charlie Crist and by state lawmakers, who set aside funds to finance the state's share.

Scott rejected LaHood's offer at least three times, saying the state could not afford it and, if the line were built, taxpayers would be responsible for operating losses. The Tampa-Orlando line would be the first phase of a longer line to Miami at a cost of billions more.

"Put simply, the proposed high-speed rail line is far too uncertain and offers far too little long-term benefit for me to consider moving forward and ultimately putting taxpayers at risk during an already challenging fiscal climate," Scott had written in a Feb. 16 letter to LaHood.

All hope is not lost however. Given the bipartisan backlash against the rejection of the rail funds, it is almost certain that it will be a major issue during the next election and will probably serve as an important element of his downfall. While the program will now be delayed by a few years, there is nothing inherently preventing it from being funded again in the near future, and in the meantime, the money will most likely turn into valuable upgrades on the Northeast Corridor and in extending the California high speed rail system.

Korea's high speed rail kills several airports

High Speed Rail Has Basically Killed A Dozen Airports In South Korea

Eleven of the 14 airports managed by the Korean Airports Corporation lost money in 2009 and 2008. Several are ghost airports with no regular flights. Still more developments were suspended and never completed.

KAC is now trying to sell these loss-making airports, according to JoongAng Daily, putting Cheongju Airport on the market after it lost $5.1 million in 2009.

How did South Korea end up with all of these useless airports?

First, local governments keep building giant infrastructure projects, including empty airports and empty office buildings.

Second, airports can't compete with the new high-speed rail network, which travels from one end of the country to the other in less than three hours.

This story should terrify airlines (and automakers) everywhere. And you wonder why high-speed rail gets blocked in America.

Because of the long distance nature of many of the flights, it's rather unlikely that you would see the same effect upon American or even simply Californian airports, but this does show that high speed rail will dominate the short distance regional market. In turn, this will free us from the need to add capacity or build additional airports at tremendous expense and cut down on pollution, through which we prevent hundreds of millions of dollars in health care costs.

If Bill Nye is for it, it must be good

Ok, this one is pretty much just tongue in cheek, but even Bill Nye is for high speed rail.

The National Review attack on high speed rail

Wendell Cox, a noted opponent of high speed rail programs, has a new article in the National Review criticizing President Obama's call for more high speed rail funding in the state of the union address, calling it "hard to imagine a more unnecessary program". As is generally the case with such critics, the criticisms leveled are generally flawed or even completely misrepresent reality. Let's begin, shall we?

For example, people who travel between Los Angeles and San Francisco — along the route planned for one of the nation’s first high-speed-rail projects — already have choices. They can fly, drive, take the bus, or travel by train. True, some would prefer to tax their fellow citizens so that they can have another choice, high-speed rail. But indulging this desire would be as legitimate as funding government grocery stores for people who prefer not to shop at their local grocery chains.

Merely two paragraphs into the article and already Cox is waving the flag of the the dreaded "specter of communism" by suggesting that high speed rail is somehow comparable to government grocery stores. But in so doing, he has shown himself to be either completely ignorant of the facts surrounding the financing of the California high speed rail project or to simply be lying about them in service of personal political and financial gain. Neither of those alternatives speak well of him.

Is there a tax involved with the California high speed rail project? The answer is no.Proposition 1A, the Safe, Reliable High-Speed Passenger Train Bond

Act, established no tax for the construction of the high speed rail system. Rather, it authorized the sale of nine billion dollars in bonds to be used for the construction. While these are general obligation bonds and face the possibility of being repaid through the general fund, the reality is that the California high speed rail system is expected to post a sufficiently high profit that will be able to pay off the bonds from its own revenue, without a single tax dollar from Californians. Don't believe me or the high speed rail authority? How about SNCF, the operator of France's quite profitable high speed TGV lines?

There is a somewhat better case to be made with the Federal grants to the high speed rail authority, of which 3.5 billion dollars has been granted so far. The best that can be said of these is that they are prior existent tax dollars, coming from the general fund, to which California is a major net contributor, representing a normal use of discretionary funding rather than a specific tax for the construction of the project. There is, however, no need for the government to simply grant the money. Future federal monetary aid could easily be in the form of a loan with the interest rate set to inflation, slightly above inflation, or at a fixed percentage slightly higher than that of treasury bonds, giving the federal government a direct profit on the venture rather than the current indirect profit venture from corporate taxes on the operator (should it be operated by a private company) and income taxes from the higher wages and economic activity engendered and enabled by the rail system.

While we are at the issue of taxation, however, what precisely is the problem with levying taxes to pay for the high speed rail system? It was the promise of taxes with Federally backed bonds and the wholesale granting of land that paid for the first transcontinental railroad (and two of the three others) so that people could have a choice other than months by horse, walking, or ship. It was also taxes, most egregiously, coming in part from the railroads themselves, that paid for the highways and airports that gave new, highly subsidized, choices that made passenger rail too unprofitable to justify new private capital investment and operation. What, then, is the problem with a tax that finances this choice?

But most importantly, what the high speed rail costs is in many ways less important than what it doesn't cost. By building high speed rail and thus diverting short range intrastate air traffic to rail, the congested airspace and airport terminals are able to free up space for more long range airplanes, their proper role. This delays or entirely eliminates the necessity of spending tens or hundreds of billions of dollars to upgrade current airports and build new ones in order to handle the expected demand, much of which would come, not from user fees, but from taxes on local citizens. The same goes for the expansion of highways, especially in the Central Valley, which currently does not have much choice of transit means to Los Angeles or San Francisco, but also in both Southern and Northern California. Not a peep is made of a 3.3-4.5 billion dollar project that would expand the I-5 over a mere thirty miles, yet to expand commuter and high speed rail projects which provide a valuable alternative and reduce the need for future expansions, and do so at a lower cost and higher passenger capacity than high expansions which result in simply more highway congestion, is somehow equated to be with communism.

Among intercity transport modes, only Amtrak is materially subsidized. User fees pay virtually all the costs of airlines and airports, which (together with connecting ground transportation) link any two points in the nation within a day. The intercity highway system goes everywhere, and nearly all of it was built with user fees paid by drivers, truckers, and bus companies.

Well, one of these facts is true. Amtrak is indeed subsidized, thanks to legislative mandates requiring service on unprofitable routes and immense government subsidies to build the airports and highways which it competes with. While gasoline and vehicle taxes are valuable contributors to highway construction and maintenance, they are far from "nearly all of it." In 2008, user fees in the form of tolls and fuel and motor vehicle taxes accounted for only 51.72% of highway spending with the rest made up from income, sales, and property taxes and the promise of future taxes in the form of bond proceeds. Indeed, much of the user fees is actually a bit of an accounting trick, since fuel taxes are paid on all fuels, regardless of whether or not one travels on a highway. The local roads which therefore subsidize the highways are paid for through property and sales taxes, which are most assuredly not user fees. Expansion of highways in order to deal, ineffectually, with congestion is also generally not provided for by user fees, as can be see in the earlier cited example of highway expansion in San Diego County. In that case, it is a county-wide increase in sales tax which goes to pay for it. Similar examples exist throughout the country.

How great is this cross-subsidy, you ask? Currently, 15.44 cents per gallon is levied upon gasoline in order to pay for the federal share of highways, equating to 0.68 cents per vehicle-mile at an average 2008 fuel economy, or 0.71 cents at 1997 economies, the last time it was adjusted. That is less than a tenth of the toll for state run tollways such as the Pennsylvania and New Jersey Turnpikes, which themselves are only a half or even a third of the tolls for privately run toll roads.

High-speed rail is a budget buster. Japan, with the world’s leading system, illustrates the financial devastation that high-speed rail can produce. For 25 years, Japan borrowed to build a system serving the ideal rail corridor, nestled along a single coast with a population of more than 75 million people. Ridership was artificially increased by high gasoline prices and one of the highest highway tolls in the world. Yet this modest system, only twice as long as proposed California system, played a major role in driving up a gargantuan rail debt that was transferred to Japanese taxpayers. The rail debt added more than 10 percent to the national debt. This is akin to adding $1.4 trillion to the U.S. national debt.

Japan is not an example of high speed rail being a budget buster, it is an example of why relying on independent financing while subject to political mandates can be a budget buster. Japan's rail debt was largely thanks to the Diet mandating the construction of many lines, commuter and high speed, for political reasons while also engaging in some rather corrupt practices in order to make a personal profit out of the deal, and at the same time an costly upgrade of the major Tokyo commuter lines was necessary. These are problems which require open books and independent oversight, but which can plague any problem, not merely rail.

If Mr. Cox wishes to make the comparison to adding 1.4 trillion dollars to the US national debt, a cost dwarfed by the Iraq War incidentally, then let us feel comfortable in pointing out that that would require the construction of nearly 25,000 to 50,000 miles of high speed rail. With94,000 miles of rail owned by the Class I railroads in America today, it is extraordinarily doubtful to believe that such a large amount of rail construction would be required in order to meet the 80% of Americans access goal that President Obama outlined.

Virtually everywhere high-speed rail has been constructed, financial liability has fallen to the taxpayers. In Taiwan and the United Kingdom, taxpayers assumed billions of dollars in private debts for much more modest high-speed-rail systems than Japan’s.

Meanwhile in France, Spain, and Germany, the systems run at a profit and the taxpayers are not on hold for such debts despite much larger systems than in Taiwan and the United Kingdom. These state-backed systems provide an interesting contrast to those of Taiwan and the United Kingdom which were private corporations with largely private funding, up to 80%, at high interest rates. It was these high percentages of loans and high interest rates which were to kill them. Once THSR was taken over by the Republic of China, and its loans redone at the lower interest rates which the government can receive, it began to post an operational profit.

All of this could have been avoided. Through the years, high-speed-rail cost overruns have been well documented. Most recently, research by Bent Flyvbjerg of Oxford University, Nils Bruzelius of Stockholm University, and Werner Rothengatter of the University of Karlsruhe (a former president of the influential World Conference on Transportation Research) found that passenger-rail cost overruns above 40 percent were common and that overruns above 80 percent were not uncommon. Overruns can go even higher: On Korea’s high-speed-rail project, they were between 200 and 300 percent, the president of the country’s rail system said.

Yet how much of this is due to problems with the high speed rail projects themselves? If a project is delayed, even if through no fault of the constructing authority itself, inflation will naturally push the cost higher than previously projected. If the scope of the project is expanded, that too will push the cost higher than the original projection, but is to be entirely expected. Recently prices for construction materials have been pushed higher thanks to the development of China and other nations, leading to major cost overruns that could not have been reasonably foreseen. If these are not isolated and accounted for in the study, it is entirely worthless to cite.

High-speed-rail cost escalation has reached these shores. Even before the first shovel has been turned, California’s high-speed-rail costs have risen at least 50 percent, inflation adjusted. The cost estimates for the first approved section of the Los Angeles–to–San Francisco line, a “train to nowhere” from Corcoran to Borden, indicate escalation beyond $45 billion.

If Wendell Cox can show some actual evidence that there has been a more than twenty billion dollar increase in the expected construction cost, in year of expenditure dollars, I would be most interested in hearing of it. So too, I suspect, would the California High Speed Rail Authority.

Of course, since he has deemed fit to follow it up with the silly "train to nowhere" meme, it is more than likely that there is no such evidence. Criticizing the construction of a short portion of the overall line simply because it is not the overall line does not make any sense. As the line now extends to Bakersfield, it is equally an absurd comment without any rationale behind it. Indeed, to refer solely to the initial Corcoran to Borden section and ignore that it is funded through to Bakersfield is to, simply put, engage in a blatant lie. One might also note that the Interstates themselves similarly began in "nowhere."

In Florida, boosters tell taxpayers that their liability for the Tampa to Orlando high-speed-rail line would be only $280 million, and that, somehow, a private bidder will shower additional billions upon them to pay any cost overruns.

Since the private companies have offered guarantees to cover the cost of any cost overruns, this is merely an exercise in fear-mongering by Cox.

Even the rosy reports produced by boosters show that high-speed rail would remove only a small percentage of cars from the roads. The hope of reducing air congestion is just as elusive because travel origins and destinations are so dispersed in the United States and because the number of people forsaking air travel for high-speed rail will be small.

It is quite possible that, were high speed rail to drop from heavens today, there would not be an appreciable number of people switching from automobiles. Today, however, is not 2020 when the LA-SF line is scheduled to open, or 2030, when the ridership projections are set. By 2020, California's population is expected to increase by more than six million, a fifteen percent increase. By 2030, we are expected to hold fifty million residents. Southern California is already infamous for its heavy road congestion and no amount of freeway expansion will be able to alleviate the crush of so many additional commuters, nor, if memory serves, is it currently programmed or funded. I do not believe it unreasonable to suggest that, faced with ever increasing congestion delays and steadily rising gasoline prices, many will switch over from increasingly slow driving to traveling along the same route at 125 miles per hour in comfort and able to work productively on their way to or from their destination. Thousands already make that switch every day; it is incredibly hard to imagine that with more frequent service, average speeds more than doubling, and rising time and monetary costs to driving that a substantial number of people would not make that switch.

As for the assertion that "the number of people forsaking air travel for high-speed rail will be small" this is completely in ignorance of the actual facts. The Acela, despite averaging only 65 miles per hour between the two cities, holds 55% of the air-rail market between Boston and New York. To assert that a rail service with three times the average speed and none of the absurd TSA theater will not entice customers away from air is to blatantly ignore the reality of what even slow rail is capable of.

Voters gave the new Republican House of Representatives a mandate to cut spending. Zeroing high-speed rail out of the federal budget may be the litmus test. If Congress fails to stop this costly and unnecessary program, it would call into question the commitment to spending reduction.

The Republican House may indeed have a mandate to cut spending. But let's cut it from highway and airport expansion and invest in smart growth instead. High speed rail and commuter rail are capable of handling America's future transportation growth and cutting our dependence of foreign oil at a far lower cost than any road and air dominated plan can ever aspire to.

Texan group pushes flawed report encouraging sprawl

No surprise there

The Texas Transportation Institute today released the final version of their report on congestion, which ranks the DC area tied for first with Chicago in hours wasted in traffic. Unfortunately, the report's methodology completely misleads as to the seriousness of traffic, and TTI is pushing the wrong policy solutions.

The TTI report narrowly looks at only one factor: how fast traffic moves. Consider two hypothetical cities. In Denseopolis, people live within 2 miles of work on average, but the roads are fairly clogged and drivers can only go about 20 miles per hour. However, it only takes an average of 6 minutes to get to work, which isn't bad.

On the other hand, in Sprawlville, people live about 30 miles from work on average, but there are lots and lots of fast-moving freeways, so people can drive 60 mph. That means it takes 30 minutes to get to work.

Which city is more congested? By TTI's methods, it's Denseopolis. But it's the people of Sprawlville who spend more time commuting, and thus have less time to be with their families and for recreation.

Sadly, despite CEOs for Cities pointing out these methodological problems last year, TTI went ahead and finalized its report without fixing them (PDFs). TTI ranks Portland as worse than Nashville, with a Travel Time Index (TTI) of 1.23 1.15 for Nashville and 1.15 1.23 for Portland. However, because of greater sprawl, Nashville commuters spend an average of 268 hours per year commuting, while the average Portland commuter spends 193 hours per year.

What does this mean for public policy and the Washington region? TTI's data is often used to justify spending money on new freeway capacity, since congestion sounds bad. TTI even promotes this approach. Tim Lomax, a co-author of the report, told the Post's Ashley Halsey III, "You can do little things like stagger work hours, fix traffic-light timing and clear wrecks faster, but in the end, there's a need for more capacity."

"That we are congested is not news, but TTI's report does tremendous damage, because they fail to recognize the primary cause of our congestion and imply that we could simply widen roads to build our way out of the problem," said Stewart Schwartz, Executive Director of the Coalition for Smarter Growth.

More at the link