High-Speed Rail in California: An Expensive Train To A Slower Trip

 

By Norman R. King, Executive Director

San Bernardino Associated Governments/County Transportation Commission

(The following are the opinions of the author and do not necessarily represent the views of San Bernardino Associated Governments (SANBAG). The SANBAG Board has no position on the California High-Speed Rail proposal this time.)

 

What could possibly be more appealing? -- a fast train from Los Angeles to San Francisco, fewer cars on the highway, a cheaper trip than air.

I am not a trained economist or transportation analyst. However, I can read. And after reading the feasibility documents backing up the proposed California High Speed Rail (HSR) system, I am convinced it does not seem likely that the proposed system can deliver anything close to this. Instead, HSR holds the promise of increasing taxes on all Californians in order to entice air and auto passengers, who now pay their own way, to chose a heavily subsidized, more costly, and in most cases slower mode of intercity travel which will do nothing to improve highway mobility for the rest of us.

The HSR staff indicates that additional proposals which may improve the project’s performance prospects are being reviewed. If so, such changes must respond to and overcome the following concerns which are based solely on data provided in the existing HSR feasibility documents.

The proposed system envisions a Very High Speed Rail (VHSR) or Maglev system running from San Diego through Los Angeles to San Francisco and Sacramento. The total capital costs would be between $20-30 billion depending on the technology chosen. The HSR Authority has the independent discretion to seek majority support of a sales tax increase to construct the system on the November 2000 ballot, though the Authority has indicated it will allow the Legislature to make this decision.

The major conclusion of the feasibility study is that in order to make HSR feasible, most of the capital cost of construction would have to be subsidized by a tax increase so that HSR rail fares would be reduced to 70% of the average intercity air fare -- an approximate $17 reduction from the $58 one way trip from Los Angeles to San Francisco.

The major assumption of the feasibility studies is that airport capacity cannot expand in California’s primary metropolitan areas; and therefore, in the future air travel in California will inevitably be subject to massive delays.

The conclusion is costly; the assumption appears dubious. Here is why:

1. High-Speed Rail would provide passengers with a slower intercity trip (portal to portal) for virtually all passengers diverted from air, and many if not most, diverted from auto. Using time estimates provided by the feasibility study (including access/egress time estimates which favor HSR over air), the HSR total trip compared to air, from arrival at the station or terminal from Los Angeles to San Francisco, will be 1 hour and 18 minutes longer by Very High Speed Rail (VHSR) and 32 minutes longer by Maglev. The total time (to when the passenger exits the San Francisco terminal or station) would be 1 hour 46 minutes for air;3 hours and 4 minutes for the VHSR and 2 hours and 18 minutes for Maglev.

The HSR feasibility studies conclude that the benefit/cost ratio for the basic system without extensions is 1.0 or less (The extensions include the routes to San Diego and to Sacramento). The feasibility studies allocate benefit to air travelers because of less airport delay. On the other hand, it does not appear that the HSR passenger delay costs, because of a slower trip noted above, have been allocated as a negative benefit. If this were done it is quite possible that the benefit/cost ratio for the system with extensions would be less than 1:0; meaning the project would not even be projected to reach the minimum threshold of economic feasibility. A recalculation of the benefit/cost ratio should be performed.

2. High-Speed Rail will provide insignificant highway congestion relief. It is not supportable to portray HSR as providing congestion relief on highways based on the data provided. The feasibility study projects at most (Maglev) a 6% auto diversion from intercity trips. Intercity auto trips are an infinitesimal portion of total trips. Thus congestion relief from a minor 6% auto diversion from intercity trips would be minuscule as it affects urban highway congestion. Claims that HSR brings benefits to users of state highways by reducing congestion are simply not based on any analysis and are not accurate. A thorough congestion analysis should be produced.

3. HSR will provide the greatest benefit to air passengers, which include air passengers diverted to HSR and those using air after HSR is built. Though the information is not directly provided, by interpolation it appears that well over 50% of the benefit will go to air passengers or former air passengers.

This is important for two reasons. Presently air passengers pay their own way; HSR would replace these private expenditures with a heavy public subsidy. Secondly, though lacking in the feasibility studies, an analysis of the social equity effects of HSR would certainly show that financing the system with a state sales tax would be an income transfer from the less affluent and middle income taxpayer to more affluent citizens. It is not a question of whether or not less affluent taxpayers will subsidize the more affluent. The only uncertainty is by how much. A social equity analysis should be performed.

The argument reduces to this: Let’s not continue to have air passengers pay for needed expansion of their facilities. Instead, let’s increase taxes for everyone so that the public, rather than the user, can pay for the expansion of rail which about one-half of intercity air passengers (and a small fraction of intercity auto drivers) will presumably use.

4. The HSR proposal hinges on the assertion that California’s air system will not expand in the near future. The feasibility study and staff response provide virtually no analysis of airport capacity. There is no mention of airport alternatives such as the San Bernardino International Airport, March, the Southern California International Airport (Victorville), El Toro or Palmdale.

Once built HSR would serve only one out of ten intercity trips in the entire corridor. VHSR technology would capture about 11% of total intercity trips in the corridor. Air would still provide almost as many trips (9.5%). Private automobiles would provide most of the remaining 80%.

Only 8% of LAX’s air traffic serves the HSR corridor. Something more than one-half of HSR corridor air traffic is projected to be diverted to HSR. It would appear that HSR would affect no more than 4 or 5% of total projected air traffic. We are asked to believe that the remaining plus/minus 95% of air traffic will experience insufferable delays and that the air industry will not respond to the demand by increasing capacity. A more detailed analysis about the expansion of air capacity should be performed.

5. The public subsidy to HSR (plus/minus $2 billion for at least 30 years) will be an amount equal to twice the amount ($1 billion annually) now spent through the State Transportation Improvement Program (STIP) for highway and transit construction. The feasibility studies optimistically forecast that passenger fares will pay for operation and maintenance costs plus a bit for bond reduction. However, operation and maintenance costs are a minor component of the overall costs. The bulk of the costs are the capital costs to be paid primarily by taxpayers. For every $1 paid by HSR passengers as a fare, it appears the public will pay at least $4-5 in increased sales taxes to support the system. HSR will produce a very expensive cost per passenger mile compared to air or auto. The feasibility studies do not portray HSR’s cost per passenger mile. Such calculation would be most revealing compared to other modes.

6. HSR investments would be better spent on more productive transportation related improvements. The feasibility studies claim a positive cost/benefit ratio and other benefits. The important question is: Compared to what? There is no analysis of opportunity cost or alternative transportation investments which would certainly yield benefit/cost ratios and benefits far exceeding HSR. Such alternatives should be evaluated.

In summary, the intuitively obvious benefits of HSR – reduced highway congestion and a faster trip -- do not appear possible with the present proposal. On the contrary, most of the trips would take more time and highway congestion is unaffected. The system will require a heavy public subsidy -- an amount equal to a 15 per gallon fuel tax increase. (The state gas tax is presently 18.) HSR’s cost per passenger mile far exceeds other modes.

Unless a revised proposal comes forward which responds to these concerns, there are most certainly better ways to spend $20-30 billion on California’s transportation future.