Tuesday, July 14, 2009

USDOT Announces HSR "Pre-Applications"

NOTE: We've moved! Visit us at the California High Speed Rail Blog.

by Robert Cruickshank

California has some competition - 39 competitors, if you're counting by state. Secretary of Transportation Ray LaHood made that statement at a press conference in Las Vegas yesterday:

On Monday Transportation Secretary Ray LaHood announced that 40 states had submitted 270 high-speed rail pre-applications seeking to qualify for stimulus money.


A total of $93 billion has been preliminarily requested. The Transport Politic offers a great overview of the state applications. California represents $22.3 billion of that total:

Caltrans met the Friday deadline to submit preliminary applications for $22.3 billion in passenger and high-speed rail projects in three main corridors: San Francisco-San Jose (which includes improvements to San Francisco's Transbay Terminal), Los Angeles-Anaheim and the Central Valley.

Many of these applications were for "regional" multi-state projects, such as the New England and the Midwest.

Nevada also submitted a multi-billion request, entirely for the maglev project:

Neil Cummings, president of the American Magline Group, the private consortium of firms that would develop the maglev line, said the commission proposed building the first, 40-mile segment between Las Vegas and Primm. The cost would be $1.6 billion.

The group also submitted a second application to the Transportation Department for planning money to continue developing the line to Anaheim.

DesertXpress, for its part, didn't put in an application for HSR stimulus funds, but intends to make use of the planned national infrastructure bank program to finance up to 70% of the estimated $5 billion cost, according to the Las Vegas Sun.

I confess I would be surprised if maglev got much money out of this. Ray LaHood has previously said that California and Florida are in the lead for HSR funds, and although that doesn't guarantee a thing, we've always anticipated CA could get as much as $3-$4 billion of the HSR stimulus funds.

As far as I can tell that should remain the case. The Midwestern application has its issues, including what Ray LaHood has described as a lack of leadership. New England's application is interesting but as they already have the Acela, one might expect USDOT to spread the money around a bit.

We'll find out later this fall what the USDOT's final decision is.

PS: Apologies for the spotty posting of late. I came down with the flu while in LA last weekend, and I'm only just now coming out of the worst of it.

59 comments:

Fred Martin said...

California will be lucky to get $2 billion of the $8 billion, and that's assuming its advantages in having the passage of Prop. 1A. Other states are certainly going to fight for the funds, and with $2 billion, California is still getting twice what its share of US population would justify.

The Midwest has the "leadership" where it matters, namely President Barack Obama and Secretary of Transportation Ray LaHood. You had better believe that the Midwest is best positioned to bring home the bacon!

New England has the advantage of all those US senators in a compact area, and it can make the inter-state appeal for federal funds.

California's proposal is burdened by the fact that its request only serves a single state.

Anonymous said...

speaking of funding:

http://vtawatch.blogspot.com/2009/07/rod-diridon-stirring-false-hsr-funding.html

I heard Chuck Reed on KGO saying the same thing - if they continue to use misinformation - this project will never get finished.

We need new people leading this project!

Rafael said...

$22.3 billion is rather more than the $12-$16 billion that CHSRA had earlier said it was looking for from the feds. Perhaps the name of the political game here is to ask for the moon in the full knowledge you'll be lucky to get a pet rock.

I'd quite like to see an itemization of what's been requested on California's behalf and what prompted the increase in the size of the request. Federal funding is not free, in fact California is a net contributor to the federal budget.

Rafael said...

@ anon @ 7:18 -

ranting about lack of integrity among elected/appointed leaders while commenting as anonymouse is WEAK.

Owen E said...

I think the Southeast project might be off most peoples' radar but it's probably in the running for $1 billion or so of the stimulus.

Spokker said...

We all know $8 billion for HSR across the country is peanuts. They've said that this is only a down payment. I see this as the first round of many.

Rob Dawg said...

Watch the dark horse New Haven to Springfield project.

Rafael said...

@ Fred Martin -

since the $8 billion will be divvied up by USDOT rather than via congressional earmarks, the fact that there are only two California senators vs. many more for the Midwest and Northeast is no longer as relevant.

California is widely acknowledged to be further along in the process than anyone else, certainly any other state with ambitions for express HSR. Florida could catch up quickly if it revives the Tampa-Orlando(-Miami) effort it mothballed in 2004, but only if that state's voters put their money where their mouth is.

Texas (T-bone) and Illinois (Chicago-St. Louis) may also seek express HSR, but they're still at the very beginning of their respective planning processes.

Many other projects, like maglev from Anaheim to Las Vegas, Atlanta-Chattanooga-Nashville maglev or Cheyenne-Denver-Albuquerque-El Paso emerging HSR may not get any funding at all, at least not anytime soon. There's no point spreading $9.5 billion so thin you end up getting very little accomplished anywhere.

Note that emerging HSR in particular is relatively cheap to construct but very likely to require state-level subsidies for operations and maintenance. The Acela Express in the NEC is the exception that proves the rule, but it serves the most densely populated corridor in the country. Pretty much everywhere else, 110-125mph just won't fast enough to attract enough ridership for >100% fare box return.

USDOT would therefore be wise to consider applicants' willingness and ability to exploit the federal investment for at least a couple of decades. There's nothing worse than upgrading a corridor only to have passenger service wither on the vine again as soon as subsidies are needed.

Emerging HSR is a public service, not a for-profit business opportunity. Delivering a new or upgraded public service requires additional tax revenue.

The biggest problem here is, of course, politics: Congress will fund debt service on expensive capital projects but stick states with the bill for operating subsidies/ongoing maintenance. As a result, state-level politicians all over the country have a huge incentive to pursue express HSR projects even if they are overkill relative to the objective transportation requirements.

Nameless in CA said...

"Note that emerging HSR in particular is relatively cheap to construct but very likely to require state-level subsidies for operations and maintenance"

This would be illegal in California according to prop 1A. (or that is, if they want to use any of that bond funding.)

Maybe they're anglig for the WHOLE CHSR amount from the feds, because they know they'll never be able to touch the Prop 1A bonds. AFter all, they get 22 billion, build a sorry half (or less) then have no money to finish because CA refused to fund it - go back to feds with hat in hand for the rest.

Spokker said...

"This would be illegal in California according to prop 1A."

Which is fine since California is not building emerging HSR.

Rafael said...

@ Nameless in CA -

actually, $950 million of the prop 1A(2008) bonds is reserved for HSR feeder services like Amtrak California, BART, Metrolink and Caltrain.

While none of these established railroads have indicated they intend to use their share of that money for upgrades to higher speeds, the language of AB3034 does in fact not prevent them from doing so.

CHSRA itself can petition the state legislature to actually appropriate funds for the express HSR starter line it is planning once there are non-state funds that at least match the state's share (plus other requirements).

In other words, CHSRA has to get someone - the federal government, counties, cities and/or private investors - to pony up at least $9 billion over the course of the next decade. Those matching funds do not have to come all at once, as appropriation will be on a segment-by-segment basis.

Of course, even if CHSRA met all of the requirements laid down in AB3034, lawmakers could still refuse to appropriate prop 1A(2008) bonds for sale, e.g. if they felt they state's general fund was still too weak to support the additional debt service at that time.

In practice, I doubt that would happen, but substantial delays are more than likely. Thanks to the idiotic 2/3 rule, the state legislature has been late in passing a balanced budget for 23 years in a row.

Fred Martin said...

Rafael,

You misunderstand (or misrepresent) the relationship between capital subsidies and operating subsidies. When it comes to "express HSR", the capital costs vastly exceed the operating costs. With "110-125 mph HSR", the required operating subsidies may be higher (on the order of millions), but the capital subsidies are far less than express HSR (on the order of billions). It's not even clear that express HSR" will make an operating profit, especially if key links like Bay Area-Sacramento are missed. It is far from clear how increased speed alone attracts more ridership, especially when you consider that long-distance travel markets are small compared to travel markets within regions. Investments to increase train speed do have a diminishing rate of capital return, and the 110-125 mph projects are likely close to the optimal rate of return on capital investment. BART always likes to tout their relatively high farebox recovery ratio to suggest that they are somehow efficient, but BART's capital costs are immense. When capital subsidies are properly considered, BART is a very inefficient transit provider. Blowing billions on capital subsidies to make the farebox recovery ratio look good is both misleading and foolish.

Congressional power balances will most certainly have a great deal of influence on how the stimulus funding is distributed. All sorts of horse-trading and deal-brokering goes on behind the scenes. The Midwest is clearly in the best position to get the most funding, and as I said, California will be lucky to get its proportionally large share of $2 billion.

Clem said...

BART always likes to tout their relatively high farebox recovery ratio

A percentage in the mid-forties is relatively high?

(Also note in passing, with Neanderthal equipment, Caltrain manages about the same farebox recovery ratio!)

Alon Levy said...

Fred, all HSR lines make operating profits, and virtually all non-Japanese rail lines that aren't HSR require operating subsidies. If HSR can make a profit between Kagoshima and Yatsushiro, it can make a profit between Los Angeles and San Francisco.

neroden@gmail said...

If LaHood has any sense, they will steer a huge chunk to Virginia and North Carolina, who really have their act together. The DC-Righmond-Raleigh-High Point-Charlotte line is as close to ready to go as anything. In particular, the state-level funding for operations is already in place (legislated, anyway).

In the Midwest, Wisconsin seems better organized than anyone else, and I wouldn't be surprised if they picked up some of the money. People are still arguing about all the other MWHSR lines, but Milwaukee-Madison is pretty much consensus, it has the biggest bang for the buck (Madison currently has *no* rail service) and the added operating costs are very low (couple of extra trainsets for an extension of an existing run).

"Perhaps the name of the political game here is to ask for the moon in the full knowledge you'll be lucky to get a pet rock."

Yes. NC and VA pretty much asked for full funding for everything they have lined up in any of their state rail plans. Odds are they'll get less than that.

Rafael said...

@ Fred Martin -

debt on public works bonds is paid for out of taxes, just as operating subsidies are. For a private corporation, there is value in distinguishing between depreciating capital assets and recurring operating expenses because it has a balance sheet to maintain. Assets support profit generation and can be traded on the open market.

An emerging HSR infrastructure isn't an asset in this sense because its purpose is to support a public service that almost certainly won't ever turn a profit. Perhaps there are bits and pieces that a buyer could put to some other profitable use, but the system as a whole has no value because no private company would buy it. The reason it's still a good idea for a government is that well-planned population mobility increases macroeconomic activity and hence, the tax base.

Your analogy between the private (microeconomic) and public sector is therefore flawed.

I'm perfectly aware the annual debt service on an express HSR network is higher than the debt service + subsidies required for an emerging HSR service. However, debt is eventually repaid. Subsidies are potentially forever.

All I was pointing out is that any state applying for an emerging HSR grant should understand that it will be expected to operate the new transportation service for decades even if doing so requires a tax hike to cover subsidies.

If all they want is money for additional construction jobs in a deep recession, they should seek funding for other types of infrastructure, e.g. drinking water and sewage. Not sexy but even more fundamental than population mobility.

---

Btw, the reason BART requires much higher capital outlays than e.g. Caltrain is that third rail electrification absolutely requires full grade separation for safety reasons. There are many fringe benefits - and also downsides - to full grade separation, but the reason is fundamentally a technological one.

That is why just about everywhere else, third rail is only used for subways or legacy networks that are already (almost) fully grade separated. Overhead catenaries have their drawbacks, but they do permit grade crossings to be retained. FRA rules actually permit that for speed limits up to 125mph, though it's not advisable - especially if service is frequent.

TomW said...

Clame said: "BART always likes to tout their relatively high farebox recovery ratio
A percentage in the mid-forties is relatively high?"
Actually, it's 53% according to wikipedia, which realatively high. Further, only 32% of their income comes from taxes (the rest presumably comes from advertising etc.).

Fred Martin said...

Unfortunately, BART is considered to have a relatively high farebox recovery ratio, but it is still pathetic considering that BART only has to provide the more lucrative, "cherry-picking" trunk-line service. BART also offers no real discounts or pricing incentives, primarily so they can make their farebox recovery ratio appear good. Not exactly serving the public... how much do airport employees have to oay to take BART work now?? It's $8 round-trip for Millbrae-SFO and $14.80 (!) for San Bruno-SFO. Who says bad decisions don't have consequences to the public?

This is why it is important that CHSRA makes good decisions, but you can't expect sound planning from Kopp and Diridon.

Only the Hong Kong transit system makes a system-wide operating surplus, although the AirBART bus service makes a healthy operating profit. Of course, BART and MTC want to replace that profitable bus with a wasteful $500+ million Oakland Airport Connector that is actually functionally inferior to the buses given the awkward access-egress to the terminals. BART and MTC never miss an opportunity to destroy a good thing.

"Express HSR" will never come close to recovering its capital investment -- and the public at least expects a decent recovery ratio -- so talking about a trivial operating profit is deceptive in trying to describe "Express HSR" as paying for itself. With its denial of Bay Area-Sacramento service and its circuitous and grade-separated frenzy through the Central Valley, CHSRA will struggle to make a operating profit and its capital-recovery ratio should be astoundingly low. Then again, this even assumes CHSRA doesn't run out of money and public trust well before system completion, which seems more likely. If you are going to bring up wild speculation on all the jobs and economic activity that "Express HSR" will create, you also have to consider the opportunity cost of spending all this public money on alternatives (education, job training, ITS, green technologies, green building, etc), even on the more cost-conscious "emerging HSR". Furthermore, if CHSRA expects to generate all this economic activity and increases in land values, why aren't they attempting to directly capture this revenue through such mechanisms as station-area TIFs, special hotel taxes, rental car taxes, and other forms of value capture.

Rafael, how do you think both public debt and public subsidies are paid for? Um, taxes, maybe? What's your distinction between public debt and subsidies?? It's all a burden on the public purse.

Another advantage "emerging HSR" has over "express HSR" is the ability to be completed and brought on-line far more quickly. Who cares about trivial operating losses if the capital savings are immense AND revenue service can begin at least 2-3 (perhaps even 10?) years more quickly than "express HSR"?

looking on said...

From Alon Levy:

"Fred, all HSR lines make operating profits, and virtually all non-Japanese rail lines that aren't HSR require operating subsidies. If HSR can make a profit between Kagoshima and Yatsushiro, it can make a profit between Los Angeles and San Francisco.

July 15, 2009 2:02 AM"

Wrong wrong wrong --- Anyone who has really investigated these claims understands for they are subsidized by the governments.

Quit spouting such garbage.

Martin said...

CHSRA really is in a win-win situation. Lets say they get the $4billion they want.. Big win. If they don't, and the USDOT gives the money out to many projects nationwide, perhaps bigger win. We will now have many more congress members with a vested interest in HSR. This would make it easier for future HSR spending bills to pass.

This is what the defense industry has learned. Spread the jobs base as wide as possible, and votes get "locked-in".

mike said...

It is far from clear how increased speed alone attracts more ridership

Really? It's not clear? I would think it would be clear from two simple facts:

(a) Speed is inversely related to travel time.
(b) People value time.

public at least expects a decent recovery ratio

Do they? I don't think we've ever expected - and we've certainly never gotten - a decent recovery on virtually all of the roads we've built or the air traffic control system. To the contrary, those require billions of dollars of ongoing operating subsidies. You may not believe in government funding for transportation infrastructure, but it's pretty clear that the "public" does.

Wrong wrong wrong --- Anyone who has really investigated these claims understands for they are subsidized by the governments.

You're confusing operating and capital subsidies.

jim said...

One has to took beyond the basic numbers - "how much did it cost to build-how much does it cost to operate- how much is the profit-how much did the taxpayers pay" and calculate the more intangible revenues and benefits and costs saving that will occur elsewhere as a result of having the system in place. Every hsr station will generate revenue in various forms, retail, services etc, the rent that is paid, the sales tax revenue those business create for the local area, the jobs created by that stimulus and the income tax generated by those jobs, the nearby development that will occur, the construction jobs created by that development and the income tax those jobs create and the resulting housing, retail and related services that come with that development and the permanent jobs that creates and increased sales tax revenue and income tax revenue that results. repeat that in every hsr station location - and you have the exact type of stimulus to the california economy that is desired and that is why the local chambers of commerce and local politicians and the people of california, are behind the project. They are actually able to see the bigger picture. its not just about getting a group of self identified vips from sf to la quickly, its about much much more. Its also why we are running the trains through the hearts of the cities and town via well established infrastructures and business districts - those districts that are ripe for revitilization and stimulation.
The opportunity for endless numbers of business and people to makes profits in an unlimited number of ways from this project is huge, from the hot dog vendor on the adjacent corner to the new holiday inn or w hotel, Just think about how much revenue hotels generate for a city, two or three hotels built in merced - the gateway to yosemite - built adjacent to the hsr station in merced would be an economic godsend for a town like that. hundreds of jobs, and gobs of tax revenue. There probably isn't a formula to figure out the real full benefit of this project to the state but it will be huge. big picture, people, big picture. And those who would block or delay this project are not worthy of living in california. They are traitors to the bear republic. There are just too many ordinary working californians who will benefit in too many ways to steal this away from them.

BruceMcF said...

Rafeal: "Note that emerging HSR in particular is relatively cheap to construct but very likely to require state-level subsidies for operations and maintenance."

This depends, of course, on the distribution of metro areas. For much of the US east of the Mississipi, metro areas of substantial size are close enough together for 110mph systems to generate operating surpluses. Certainly the Triple-C corridor and Chicago to St. Louis, and likely Chicago/Cleveland/Pittsburgh and Chicago/Columbus/Pittsburgh as well.

One speed benefit that you omitted is the construction time ... in a number of cases, an Emerging HSR corridor can be opened within three or four years of being fully funded.

Peter said...

Wrong wrong wrong --- Anyone who has really investigated these claims understands for they are subsidized by the governments.

I'm curious. Citation please? You certainly can't be talking about the the French SNCF. They "get more than 80% of the profit by operating HSR", which generated so much money they "constructed three railway lines in the recent 10 years, and [they] financed the construction [them]selves."

Fred Martin said...

(a) Speed is inversely related to travel time.
(b) People value time.


Oh, so the cost of increasing this speed should have no bearing on this time value??? Remember that cost is directly related to this time value, and people will only pay so much for increased speed. If it costs many billions more to increase train speeds beyond 125mph (due to the many, many grade separations at $50-100 million EACH as well as fundamental track reorganizations) when compared to an "emerging HSR" system that can get to 110-125mph with mere electrification, improved crossing controls, and positive train control. "Emerging HSR" is a comparative bargain to the capital cost blowouts of "Express HSR". Furthermore, the "emerging HSR" system can be brought into revenue service much more quickly and with less NIMBY upheaval, so CHSRA can start earning some money instead of wasting it.

The exemption is that "Express HSR" at full speeds could be implemented quite cheaply along the I-5 corridor in the Central Valley, because the grade separations and NIMBY opposition are negligible. The current CHSRA isn't about building an effective system, so of course, they neglected this option as well as Altamont Pass.

Our road and air systems are subsidized, but the subsidies come from the actual system users. Local roads are financed by property taxes, but most residents want local road access. Highways are financed by state and gas taxes, which are paid for by automobile users. Highways have the Highway Trust Fund based on fuel taxes, and air systems have the Airports and Airways Trust Fund. Both trust funds are financed by internal system user subsidies. Airports and air traffic control are financed by a combination of landing fees, aircraft fuel taxes, ticket taxes, air freight taxes, and parking revenue. HSR isn't developing its own internal system user subsidies; it's seeking general tax funds and funds from other transportation modes. Hell, HSR is even hoping to get $50 billion in federal funds from the fuel tax on automobile users. I don't mind fuel taxes funding transportation alternatives, but the investments have to be well-spent. So who is subsidizing whom???

Get beyond the rhetoric, Mike, and do a little reading and research.

jim said...

@fred"people will only pay so much for increased speed. If it costs many billions more to increase train speeds beyond 125mph (due to the many, many grade separations at $50-100 million EACH as well as fundamental track reorganizations) when compared to an "emerging HSR" system that can get to 110-125mph with mere electrification, improved crossing controls, and positive train control. "Emerging HSR" is a comparative bargain to the capital cost blowouts of "Express HSR"

--yes but californians already said they will pay for this higher speed. remember?

jim said...

as for funding and taxes, everything is subjective based on the political reality of the day. The country agrees at this point in time that a fundamental shift in how transportation of goods and people is managed is needed and using tax revenue to encourage that shoft in whatever way is deemed effective, is what will happen. roads, airlines etc, being funded by gas taxes and user fees are irrelevant. There is going to be a shift in how things are done and typically, the tax structure is used to assist with such shifts in behavior. Just like tax structure is used to encourage homeownership and reproduction to the longer term detriment of single people and renters who pay higher taxes for less in return. There is no such thing as fairness in the tax code. Why would you expect it now?

DBX said...

I personally think almost all these requests ought to be funded. And as such, this should be viewed as a blueprint for the next transportation reauthorization. Even the ones that probably should not go forward yet are probably good candidates for the authorization after next.

I still think, however, that the federal government needs to apply some fairly rigorous cost-benefit standards to rail transportation, simply because there is enormous variation in the competence of transit and state transportation agencies around the country. We range from the zone of multiple expensive fiascoes at BART what with the misguided obsession with replacing rather than improving AirBART and the San Jose tunnel boondoggle and the Millbrae-SFO connection debacle -- all the way to Chicago's near-100-percent farebox recovery on the Metra BNSF line while providing per-mile ticket prices that simply blow away driving in cost terms.

Clearly setting priorities will help ensure in all modes of transportation that precious money won't be wasted. Warped priorities serve the public poorly and make government look bad, whether we're talking about BART's obsession with expensively displacing other modes of public transportation rather than cooperating with them, or the Iowa DOT's obsession with four-laning highways that carry barely 5,000 vehicles a day while letting their busiest routes become dangerously congested.

mike said...

Oh, so the cost of increasing this speed should have no bearing on this time value?

What in the world do construction costs have to do with the question of whether increased speeds attract more ridership? Again, to quote exactly what you said:

It is far from clear how increased speed alone attracts more ridership

Increased speed alone attracts more ridership by reducing travel time. That is the answer to your question.

Whether the additional ridership is worth the extra investment is a separate question. Specifically, it is not the one that is posed above!

Our road and air systems are subsidized, but the subsidies come from the actual system users. Local roads are financed by property taxes, but most residents want local road access.

Under that definition, I am certain that the vast California households will be "actual HSR system users." If someone in your household has ever travelled between Northern California and Southern California, then you will almost certainly be an actual HSR system user.

mike said...

Incidentally, Fred, I suspect that your entire line of argument could be distilled into some combination of "I don't like CA HSR because I think it will cost too much" and "I don't like CA HSR because I think it won't attract ridership."

It might be more effective to actually just say that in a succinct manner, rather than writing these incredibly complex posts that result in strange statements like "increased speed does not attract ridership" or heroic efforts to defend subsidies for one specific form of transport infrastructure while claiming other forms should be unsubsidized.

Fred Martin said...

What I originally wrote:
It's not even clear that "express HSR" will make an operating profit, especially if key links like Bay Area-Sacramento are missed. It is far from clear how increased speed alone attracts more ridership, especially when you consider that long-distance travel markets are small compared to travel markets within regions. Investments to increase train speed do have a diminishing rate of capital return, and the 110-125 mph projects are likely close to the optimal rate of return on capital investment.

Increased speeds alone don't attract ridership, especially if the route sucks. A hypersonic train between Bakersfield and Fresno is still going to have limited ridership. The current Caltrain carries more daily passengers that the entire daily Bay Area/SoCal air market. The rail connection between San Francisco to San Jose will have more riders than the connection between San Jose and LA, no matter the speed. Just increasing the speed doesn't produce better ridership numbers. The route has to go where people want to travel in the first place. Speed helps, but the demand has to be there first.

The auto and air system users actually PAY the subsidies. The subsidies are actually collected to directly fund the systems. Hypothetically claiming that most Californias will be using HSR is different from them actually paying actual user fees. CHSRA just hopes their $55 fare (!) for SF-LA is going to do the trick. That fare estimate was a complete fabrication to make the ridership model work with respect to competing air fares.

jim said...

@ fred concerning the 55 fare. You are either being disingenuous with that statement or you really don't understand how fares will work.

jim said...

This system as designed is going to be a success from day one. I guarantee it.

mike said...

A hypersonic train between Bakersfield and Fresno is still going to have limited ridership.

But it will have more ridership than one that travels at 40 mph. QED.

The auto and air system users actually PAY the subsidies.

You are confusing user fees and subsidies. The HSR fare is clearly a user fee. If I use the system more, I pay more fees. The gas tax is sort of a user fee, though not really since involves a lot of cross-subsidization between different roads. Property taxes are definitely not roadway user fees - they do not vary at all with how much you use the road. Yet you admit that a large portion of our roads are funded from property taxes.

TomW said...

looking on said... Wrong wrong wrong
[citation needed], methinks.

jim said...

There's no reason the railroad can't attach "facility" taxes and sales taxes and "homeland securty" fees to the cost of a ticket to pay for infrastructure just lik ethe airlines do. Currently rail does not do this because its built into the cost of the public transit subsidized ticket, but the hsr operator and the state and federal govt could certainly instate such fees to pay off the bonds while the ticket price goes to cover the operations.

By the way, anyone who thinks that roads and airports are funded entirely by user fees and don't cost the feds, states and local governments any general funds monies are failing to look at the cost of impact mitigation that surrounding communites pay for - aside from the concrete and asphalt and terminal construction. In this country everyone is paying for everything no matter how you slice it.

We've got no money for toys! said...

Hey California dreamers, still going at it, uh! Still playing with your choo choo train like little kids.
You've got a billion or two. Where are you going to find the other 40+? Another bond? What bond? James Bond?
Why don't you stop shooting crap on this blog, and start reading the newspaper. You might discover that the State of California has got no money for nothing, let alone your toy train. I'm afraid you'll have to stretch that billion or two (plus that from the stupid bond passed in November) to build your little choo choo train. How about building a one track line between SF and SJ, or from LA to SD, and leave it at that! You'll have your little toy you can play with your little friends, and you'll finally stop this nonsense of spending all these billions that California doesn't have.

Andre Peretti said...

@peter
It's true that the French HSR makes enough profit to subsidize the other lines and still pay a dividend to its main shareholder, the French state. The construction of the first line, in the 70s, was financed by bonds floated on the international financial market, mostly Wall Street. By the way, the fact they were oversubscribed shows that American bankers believed in the project more than the French politicians in power at the time who did all they could to sabotageit.
But can this success serve as an example for the CHSR? I don't think so. Although it belongs to the state, the SNCF is a commercial company. The way the TGV is run has a lot in common with RyanAir, the low-cost airline. Same opaque fare structure where no two passengers ever pay the same price for the same seat depending on where, when or how they paid for it. It is run like any other big private company and manages to stay clear of any political influence. This business mentality also has its downsides. For example, it is not trying too hard to develop its rail freight operations because it also owns profitable trucking businesses.
CHRA is just the contrary. It is not a company, it is a group of politicians with a project vulnerable to the unpredictable actions of other politicians. Bankers don't finance political projects.

Rafael said...

@ we've got no money for toys -

ahm, California has +/-37 million inhabitants, about 10% of the nation's total. It is a net contributor to the federal government, to the tune of $0.78 recovered for every dollar shipped to Washington.

The Pentagon budget has ballooned to a ludicrous $520 billion and that much of that is spent on weapons systems. Are you saying the F-22 stealth fighter, littoral combat ships, future combat systems etc. amount to anything other than toys for the generals/congressional pork? The enemy isn't the Soviet Union anymore, he's now a bearded madman with a few AK-47s, RPGs, IEDs and a totally broken moral compass!

Collectively, Californians would actually have more than enough to pay for both infrastructure and public services. They're just still choosing to waste it on essentially useless new military hardware and foreign misadventures.

dave said...

@ We've got no money for toys!

One of the childish, stupidest things I've read in a few days! I suggest you take a f*cken hike if you don't like it around here! We will tolerate the opposition and their perspective here, but we will not tolerate stupidity and bullying from some small minded people who are not forced to read this blog!!

Beat it, A$$hole!!

luis d. said...

Hey, The Japanese are "Watching Us" by the looks of this Video of one of the Shinkansen's new E5 Model. Although I don't know what they are saying. I'm sure they are planning on targeting our system.

Watch the video to the near end!

We've got no money for toys! said...

Hey Dave! Ki$$ My A$$!
My opposition is more than legittimate! You can call me all you want, the fact is that Californians have no money and will not be willing to pay extra taxes for your toys, since they aren't even ready to pay extra taxes for more important things like schools and police. And I can guarantee you that if the Prop. 1A had asked: "Do you want to pay $45 billion in extra taxes to build a train?" the response would have been NO! But since the question asked about issuing a bond, which right now doesn't seem to cost anything, then they said yes! Eventually they'll figure out that if they want the train they'll have to pay for it, THROUGH MORE TAXES. And then you'll see how many Californians will be ready to pay!

BruceMcF said...

Andre Peretti said...
"But can this success serve as an example for the CHSR? I don't think so.

Although it belongs to the state, the SNCF is a commercial company. The way the TGV is run has a lot in common with RyanAir, the low-cost airline. Same opaque fare structure where no two passengers ever pay the same price for the same seat depending on where, when or how they paid for it. It is run like any other big private company and manages to stay clear of any political influence.
"

Sorry to rain on your tirade, but you were aware that while the CHSRA is building the infrastructure, the plan is to franchise the operation of the service? The above reads as if you were laboring under the misconception that the CHSRA would be operating the service.

We've got no money for toys! said...

@Rafael: you can keep saying all your liberal pacifist complaints about waste at the Pentagon, and " how goodie goodie the world would be if instead of wasting money on weapons we don't need we built trains to play with in peace!" and blah blah blah!
Even assuming that all defense money is wasted, don't you think that Californians (or Americans for that matter) would rather spend that $528 billion that you would save by eliminating the Pentagon in health insurance, since so many people can't afford it? Or in Schools, since our kids suck compared to their international peers? Or in more police, since crime in America is higher than any other industrialized country? Or in any other possible way you can think of that people would consider more important than your toy train?
What makes you think that if tomorrow the entire Pentagon budget were made available for other uses Americans would actually utilize that money to build trains? Do you honestly think that the most urgent need that America has is a high speed train? There are millions out of work, millions without health insurance, millions losing their homes to foreclosure and the absolutely most important thing that you would spend the Pentagon budget on is a God damn train?
And do you honestly think that the US of A will forego its military predominance in the world because some California liberal like you wants a new train to play with? What planet do you guys live in? Americans are not like Europeans who love to be taxed. As soon as people know that they actually have to shell out more taxes for this train you'll see how quickly the project is trashed. At most they'll build you 50 miles just to make you happy!

dave said...

@ We've got no money for toys!

Since when do you speak for everyone in California? This project is one that MUST continue behind the scenes whether we can afford it at the moment or not! It's not a choice of Yes or No, but of NOW or Later?

Our state will be saved by this type of investment later. We'll "pick the fruit's of our labor" and sacrafice down the road.

Rather then waiting for California to crash and burn if we do nothing, let's do something NOW! Transportation Infrastructure is way too important for us to give in to a bunch of "babies" who are blind to something good and want to run the other way like cowards!

We've got no money for toys! said...

@ Dave: And since when do you speak for all Californians?
Why don't you ask them what they think? Why don't you start telling them the truth? California is in the state it is because those stupid propositions promise and promise but they don't require funding. They just say: "do you want this goodie?" YES/NO. And what do you think people would say? No I don't want goodies? But if would be totally different if the proposition asked? "Do you want to pay this extra X dollars in taxes for the next Y years so that we can build this Z goodie?"
Unfortunately the propositions don't do that. They promise the goodie, but they don't tell us how much it's going to cost, and people so think it's free. Like all other unfunded mandates that Californians have voted over the years and that are now causing this budget crisis. Do you think the train is a good investment for California taxpayers? Fine!! Tell them so, and ask them to pay those taxes upfront so that it can be built. Then see if they'll still say yes. Or if they'll say: No way! I want Universal health insurance first! or I want better schools first! or better and cheaper universities! It's too easy to do like you do! Promising something as if it cost nothing to build. YOu're doing the equivalent of buying a car with a credit card without down payment.

Dan S. said...

A message for We've got no money for toys!

Hey, quit trying to take over Fred Martin's blog! I like it just fine the way it is! :-D

luis d.


Thanks for the great link to that Japanese video clip! They are definitely keeping tabs on us, which is great!

Actually on topic,


doesn't La Hood keep saying that the State of Disneyland and the State of DisneyWorld are the top-runners for this money? I think that's why we expect CA to get a lion's share.

Andrew said...

Very eager to see that...

Thanks for sharing...


___________________
Andrew
Entertainment at one stop

mike said...

Guys, don't feed the troll. That's like one of the first rules of Internet etiquette.

Spokker said...

I don't see a troll. All I see is a person with a different viewpoint.

jim said...

@ "toys" I agree with dave, beat it. If you don't like cali then take a hike. We don't need squares like you here and you are killing our buzz dude.

jim said...

@ toys - you have a very low opinion of californians. Guess the masses are not as smart and enlightened as you are. Perhaps we can direct you to a state that can do a better job of satisfying your intellectual and political needs. I'd be happy to assist you in making your choice and arranging your travel.

jim said...

@Dan "doesn't La Hood keep saying that the State of Disneyland and the State of DisneyWorld are the top-runners for this money? I think that's why we expect CA to get a lion's share"

in this case, sounds like it would be the mouse's share.

jim said...

in other news - french students built a solar powered blimp that will go into service over the channel. This made me think.. what if we could make solar powered mini-blimps. the carry 1,2 or 4 people, and fit in a garage with a helium supply. instead of driving, everyone would just hop in there mini blimp, no infrastructure needed - Im just trying to picture the morning commute over the LA basin. and the good part is the if the helium balloons bump into each other the just bounce off each other. The fights for a parking(landing) space would be hysterical.

but for real - who of you wouldn't totally want a personal blimp to get around in? we all want one. admit it.

Rafael said...

@ jim -

why bother with a blimp (= glorified balloon) when you can ride in a Zeppelin aka true airship with an internal frame?

$495 is pretty steep for a single ride, though.

jim said...

yes ive seen their website and they fly around here all the time - they do have a lower price with a standby ticket but still, they are out of their minds charging that much. the blimp idea I have is for a personal sized mini blimp that can fit in a suburban garage. fill it with helium and the solar panels power the propeller and off you go to the grocery store.

John Thacker said...

Property taxes are definitely not roadway user fees - they do not vary at all with how much you use the road. Yet you admit that a large portion of our roads are funded from property taxes.

True, but not federal funds. Federal funds for roads are all user fees. (Well, they were until 2008 and in the stimulus bill, since the Congress keeps appropriating more money to roads but refuses to raise the gas tax.) The best reference is here. Note that some gas tax funds gets diverted to mass transit; if you added that back in, about 70% of all costs of roads are paid for by gas taxes and (to a much lesser extent) tolls.

However, we're talking about federal money here. States and local governments have always been free to spend their money on intracity rail, just as they choose to use property taxes (and I wish they wouldn't) for roads.

Talking about operating profits for HSR internationally is difficult. In Japan, the regular rail lines make more of a profit. (It's difficult to transfer between shinkansen and regular lines in some places because of the different gauges and new stations built.) In other countries, the feeder lines lose money but add business to the main lines, generally HSR. It's unclear if they add more business than they cost overall, but the feeder lines bear the cost while giving most of the benefits to HSR. Since the most heavily traveled routes

You're confusing operating and capital subsidies.

However, the complicated accounting of the European companies means that separating operating and capital subsidies is not as simple as looking at the operating companies' profits. See the Amtrak OIG report on subsidies to European passenger rail companies. The report claims that most European HSR operating companies don't pay for infrastructure maintenance, which is instead paid by separate infrastructure companies. However, track maintenance is properly speaking an operating cost.

The Amtrak OIG report said that while SNCF claimed a profit of $4.10 per train-mile, there was $31.88 in government subsidies per train-mile.

John Thacker said...

You certainly can't be talking about the the French SNCF. They "get more than 80% of the profit by operating HSR", which generated so much money they "constructed three railway lines in the recent 10 years, and [they] financed the construction [them]selves."

They get operational subsidies according to the Amtrak Office of the Inspector General report. The Amtrak OIG report said that while SNCF claimed a profit of $4.10 per train-mile, there was $31.88 in government subsidies per train-mile.

SNCF only makes a "profit" post-subsidy.

Alon Levy said...

Does this include just the intercity network, or also local commuter lines managed by SNCF and paid for by local subsidies?