Politics & Policy

High-Speed Rail Is a Fast Train to Fiscal Ruin, in California and Elsewhere

California’s proposed high-speed rail train (Concept image via California High-Speed Rail Authority)
Massive cost overruns, construction delays of years, and growing public disapproval do not dissuade train supporters.

It’s been seven years since President Obama vowed to bring the U.S. the kind of high-speed train travel that China, Japan, and Europe have. His original stimulus bill envisioned several high-speed trains, but after the 2010 elections, the new GOP governors of Florida, Ohio, and Wisconsin all said no to the federal money. They cited unreliable ridership estimates and future cost overruns that would be dumped on their states.

Only California, where no liberal boondoggle is ever too wasteful to reject, has charged ahead with its plan to build a train between the Bay Area and Los Angeles. Voters in 2008 narrowly approved initial bonds to finance the project, but that was when it was projected to cost $33 billion and travel 220 miles per hour. Now it has lost the support of key figures such as Lieutenant Governor Gavin Newsom, a likely successor to Governor Jerry Brown in 2018, and Quentin Kopp, former head of the California High-Speed Rail Authority. Kopp says the current plan is a betrayal of what was approved by voters. He says it has morphed into a “slow-speed” project that is likely to cost upwards of $80 billion, or 40 times the federal government’s annual subsidy for all of Amtrak.

It is essentially a train from nowhere to nowhere, ridden by almost no one.

But train supporters refuse to give up. Last year, they broke ground on an initial 119-mile segment of the train’s route in the state’s sparsely settled Central Valley. The main reason they forged ahead with the ground-breaking was to avoid having to return Obama stimulus money, which the state had pledged to do if nothing was built. The first segment of track will run from Madera to Bakersfield, a stretch that fewer than 3 percent of the line’s potential ridership can use. It is essentially a train from nowhere to nowhere, ridden by almost no one.

Just last week, the Obama administration quietly approved a four-year “adjustment” in the initial segment’s construction schedule, admitting that it won’t be finished until 2022 at the earliest, rather than 2018 as originally planned.

But California’s embarrassment hasn’t stopped the Obama White House from continuing to push high-speed rail elsewhere. Last November, Vice President Joe Biden visited Dallas to tout a proposed high-speed-rail project between that city and Houston as a dramatic advance in transportation. “Folks, you don’t even know it yet, but you’re going to lead this country into an entirely new era of transportation,” Biden told an audience of local officials.

#share#Aware of the ridicule surrounding the California train, the private investors behind the Texas project promise it will be different. Texas Central Partners has pledged to use private funds to completely finance, build, and operate the $10 billion line, which they say will deliver an express ride of less than 90 minutes between Texas’s two largest cities. It plans to use the same rail technology that Japanese Shinkansen trains use to speed riders between Tokyo and Osaka. And it will use eminent-domain laws to seize property for construction, it says, only if it can’t strike deals with property owners.

But color opponents of the train as skeptical. Glenn Sodd, a noted eminent-domain attorney in Texas, points out that Texas Central has admitted it might use eminent domain “in locations not ultimately identified” as the final route of the train. “Never before have I seen the audacity of this type of premature condemnation proceeding,” he said in a new filing this month with the State Transportation Board.

RELATED: It Takes a True Detective to Understand California’s High-Speed Rail Plans

As for paying for the project, the train is popular with local officials in Dallas and Houston who use dubious numbers to support their claim that it will have enormous development benefits. But nine of the eleven counties the train is planned to run through oppose it. Ben Leman, the leading official of Grimes County, has filed a petition demanding more details about the project. “They [Texas Central] haven’t proven financial feasability or their financial capability,” he said.

Concern about where the money for the train will come from abounds. Former Dallas mayor Ron Kirk, who also served in the Obama administration, is now a senior adviser on the train project. He said the project will “aggressively pursue” federal loans to finance the project if such money is available. If that money is secured, opponents believe that the Japanese owners of the Shinkansen technology will pony up more money and then squeeze state taxpayers for the remainder. “They want a beachhead for their product in America and will stop at nothing to get it,” says Kyle Workman, president of Texans against High Speed Rail.

RELATED: Amtrak Is a Train Wreck Engineered by Politicians

“There never has been a privately funded high-speed rail line in the U.S. because it doesn’t make any economic, transportation, environmental, or even safety sense,” says Randal O’Toole, a transportation analyst with the Cato Institute. “Rail transportation may make sense moving freight with 100 cars from point A to B, but not moving one or two or ten cars of people from one place to another.”

O’Toole himself is a big fan of trains, but he says the economics can’t justify massive subsidies for passenger rail. In an interview he told me:

In general, the disadvantage high-speed rail has over air travel is the huge amount of infrastructure that must be built and maintained. By comparison, most of the infrastructure for air travel is cheap: It is the air. Back when the California HSR project was estimated to cost $9.8 billion, economists at the University of California at Berkeley calculated that it would still cost more to move people with it than by air. Of course, the current estimated cost is over $80 billion.

Everyone is intrigued by new technology, and certainly we should do all we can to encourage the capital formation that breeds innovation. But building high-speed rail may be all about fighting the last war, given that the first Shinkansen was launched more than 50 years ago in Japan and is clearly not a technology of the future. Elon Musk, the entrepreneur behind Tesla Cars, is aiming to develop “Hyperloop” technology that will whoosh passengers through vacuum tubes at 700 miles per hour.

Let such forward-looking research projects proceed, funded in part by small amounts of federal research seed money. But when it comes to high-speed rail, government involvement is likely to buy a ticket destined only to terminate in a station called Despair or Waste. Average taxpayers, most of whom will see no benefit from high-speed rail, shouldn’t have to pay billions for political elites’ toy-train hobby.


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