High Speed Rail-Public Funding

As a new, and relatively exotic form of transportation to the United States, high-speed rail technology is not part of the transportation planning or funding regimes of the public or private sectors of the US. Unlike the well-established auto, railroad, trucking and public transportation industries, high speed-rail is essentially a foreign phenomenon, which must be imported and integrated into the long-established structures of the US transportation industry and the intricate government planning, regulatory and funding structures that shape public transportation. Under current funding regimes, directed taxes, bonds and grants, all of which are derived from a combination of federal, state and local tax revenues, constitute the exclusive source of funding for high-speed rail initiatives and development. As governments at all levels experience fiscal deficits and uncertain future revenues, public transportation systems will be subjected to similar reductions in funding and subsidy.

The present status of American high-speed rail is essentially that of an importer of state of the art transportation systems, for adaptation of European and Asian transportation technology to the US economy and transportation networks. Introduction of high-speed rail systems and technology to American travelers must, at the same time, successfully enter the established public transportation planning, funding and operational regimes of federal and regional transportation authorities. Until high-speed rail becomes a government-sponsored, government-funded extension of national transportation policy, as it is in Europe and China, builders of high-speed rail systems will not be able to raise or secure the vast amount of funding required to build and operate hundreds of miles of high-speed rail networks capable of linking cities, urban areas and regions of the United States.

Importing of high-speed rail equipment and system technology to create a new generation of rail service will amount to the first major American transportation improvement and modernization that has not developed out of a fundamentally American transportation industry. After leading the world’s aircraft, automotive and trucking industries for decades, and the railroad industry for over a century, all but the aircraft industry have retreated from their positions of leadership; internationally, as well as, domestically. However, the absence of a high-speed rail industrial foundation and history in the US may complicate the introduction and integration of this essentially foreign technology into the main stream of American transportation planning, design, funding and operation.

Potential difficulties or dysfunction experienced in building, funding and implementing imported high-speed rail systems may prove all the more ironic, in light of the availability of proven monorail manufacturing capabilities, which offer significantly more efficient, cost effective, safe and environmentally sound technology, operation and service. Currently operating up to 80 miles per hour in numerous cities and regions of the world, international monorail designers and manufacturers are developing 100-150 mile per hour versions of monorails presently in service. The potentials presented to US high-speed rail development are compelling, and should be considered in early stages of planning and evaluation of alternative systems and technology. However, the most fundamental decision between high-speed train and monorail technologies should focus on the source of systems components, and the domestic industrial base that can be developed to support the building and long-term viability of high-speed transportation systems and networks. The European Union, according to an October 2010 statement by an EU transportation official, is planning a $250 billion network of high-speed trains that is expected to replace virtually all European inter-city and short haul airline service. This level of comprehensive financial commitment would be required of the US government to underwrite and ensure implementation of the new mode of transportation that high-speed rail represents in America. High-speed rail systems that are not developed and funded under such a comprehensive plan and program are likely to suffer from the disadvantages inherent in pioneering of such advanced and expensive initiatives. Furthermore, the US federal government has made no commitment, or indicated any policy that would support or precipitate the diminishing of inter-city or regional airline services; which have experienced significant reductions in percentages of passenger use of short-haul flights, coupled with a 72% increase in the average length of those flights over the past 20 years.

Reliance on bonded indebtedness of the State of California as the single source of public funding for the California High-Speed Rail Project is likely to result in little or no additional funding beyond its initial stages. The project should not break ground or begin any construction, nor acquire any significant right of way, until funding adequate to complete the entire project is secured. The rail authority should, therefore, establish high-speed rail in the main stream of US planning and public transportation service, in order to secure government sources of funding adequate to complete the San Francisco Bay Area to Southern California rail system. Financing plans that project a combination of revenues from bonds, government grants, taxes, operating income and private investment are subject to shortfalls in any, or all revenue sources. Without the comprehensive underwriting and planning of federal government and national transportation agencies, multi-billion dollar projects of this magnitude appear to be well beyond the financial and logistical capacities of local or state transportation authorities.

Highly leveraged transportation development initiatives like the California High-Speed Rail Project, dependent upon voter approval of massive borrowing or tax increases, have succeeded by virtue of high profile political and special interest campaigns that provide very little detail to voters regarding the purpose, scope, financial feasibility or long-term impacts of the proposed initiatives. While the initial $10 billion approved for the California High-Speed Rail Initiative funded little more than a “start-up” or preliminary stage of high-speed rail development to commence, the full extent and cost of the proposal were barely addressed in the initiative campaign. In a similarly vague and misleading campaign, the Los Angeles County Metropolitan Transit Authority was joined by organized labor, the City of Los Angeles and a coalition of high profile special interests in a campaign that succeeded in convincing a majority of voters in a low turnout county election to assess themselves an additional ½ cent sales tax to supplement the 35-year, $300 billion development and operational plans of the MTA. The projected $30-40 billion revenue from the tax has already been “earmarked” and directed into plans to start a dozen transportation projects and initiatives under an accelerated time schedule, while the full extent and costs of the projects have yet to be assessed.

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