Rail subsidy makes sense

The Tampa Tribune ^ | Sunday, July 11, 2010 | editorial

[Willie Green]

While transit advocates are discussing where to put rail and how soon, a broader debate continues about the wisdom of spending any tax money on any form of rail.

Critics say that if passenger rail were practical, private investors would happily build it and reap the profits.

They're half right. If profits were to be had, many people would be trying to capitalize. But that's no justification to refuse to subsidize better mobility on corridors where road expansion is impossible or would cost much more than a rail line.

The great expense of right of way, the slow return on investment and the complexity of operating across multiple jurisdictions are among many reasons investors won't risk money on passenger trains. But trains aren't the only thing taxpayers subsidize. Yacht owners didn't build the Intracoastal Waterway. Ship owners didn't build the Port of Tampa. Airlines and airplane owners didn't build Tampa International Airport.

Those who fret about rail subsidies should remember that from the early 1940s until the early 1960s, before rail service was nationalized, a federal tax on railroad tickets went into the general fund. Some of the revenue was used to build highways and airports.

The total collected, adjusted for inflation, would today be in the tens of billions of dollars, enough to build high-speed rail in selected corridors.

Despite what some politicians promise, it is unrealistic to expect civic improvement to continue no matter how little is invested in it.

The free market is focused on the next quarter and next year, and especially so in hard economic times. It's government's job to focus on the next decade and wisely invest in infrastructure that will be around to serve our grandchildren.

[mountainlion]

Nice dream. I dream of having pot holes fixed but I have to pay for a train in Denver.

[bill1952]

Sure - the economy is booming, all entitlements are flush with cash, and RRs are a great source of revenue!

>Rail subsidy makes sense

To a deranged loon.

[dennisw]

 

The great expense of right of way, the slow return on investment and the complexity of operating across multiple jurisdictions are among many reasons investors won't risk money on passenger trains. But trains aren't the only thing taxpayers subsidize. Yacht owners didn't build the Intracoastal Waterway. Ship owners didn't build the Port of Tampa. Airlines and airplane owners didn't build Tampa International Airport.

Guess who built Penn Station in NYC? The Pennsylvania Railroad did. Anyways ports and airports are in one location so nothing wrong with a government building them. But during the history of the United States rail lines have always been built by private corporations. Not by governments. Who laid the the first transcontinental railways? Private companies did that on it turning a profit.

[poindexter]

These people and their damned choo-choo trains.

[arthurus]

If such routes actually are profitable then they do not need subsidy. Those routes alone would be served by private companies. Subsidy makes some political sense in the foreshortened vision of politicians but makes no economic sense.

[Adder]

Some of the revenue was used to build highways and airports.

Indeed it was and the result was more freedom of movement and greater access to transportation. The explosion of the automobile was not a tool of the corporates to enslave people with debt or whatever socialist nonsense they come up with.
It was a means of liberation.

Now they want to cram us all back on trains.

Its a step backwards.

[Willie Green]

Who laid the the first transcontinental railways? Private companies did that on it turning a profit.

The First Transcontinental Railroad was subsidized by Congress through The Pacific Railway Act of 1862 and 1864
Through these acts, Congress gave away vast tracts of taxpayer owned land (including mineral rights) to the railroads, who in turn sold land back to the settlers at a profit. Congress also further subsidized construction with government loans.

[decimon]

Subsidies are never so simple. NYC used to have an express ‘Train To The Plane’ for an extra fee. It was good. It was a money maker. Except that it wasn’t a money maker for the operator, the MTA.

Was but wasn’t? Wasn’t because the more money made by the MTA meant less money from federal subsidy.

And so it goes.

[ketsu]

If such routes actually are profitable then they do not need subsidy. Those routes alone would be served by private companies. Subsidy makes some political sense in the foreshortened vision of politicians but makes no economic sense.

The only reason trucking is anywhere near competitive with rail travel is the 32+ billion the gubbmint spends maintaining the highway system each year.

Highways versus trains are an interesting comparison. You can't monopolize the highway(the gubbmint owns it) so small business can move goods more easily. It also aids in the mobility of people; it's hard to move your family across the country in a train.

There are many arguments for car travel, but they are social and military, not economic.

[Willie Green]

Those routes alone would be served by private companies.

Myopic Wall Street parasites are incapable of making long term investments.
That's why we had to bail them out.

[Bull Man]

No one here in FL (elites and press excepted) really wants this crap. We all know it will end up costing us lots more in taxes and fees. We already pay for a bus system no one uses and that is a drop in the bucket for what this monster Utopian dream will cost. New toilet...same s**t.

[mvpel]

Who laid the the first transcontinental railways? Private companies did that on it turning a profit.

You disregard the corruption-riddled practice of government land grants to these private companies, working hand-in-glove with politicians and bringing the art of corrupt dealing to a whole new national level. Consider, for example, the scandal wrought by the sham corporation Crédit Mobilier of America and the subsequent Congressional bribery and coverup.

The Railroad Act of 1862 provided a 400-foot right-of-way plus ten square miles of land for every mile of rail built plus 30-year bonds of up to $48,000 per mile. Then in 1864, it became twenty square miles plus full mineral rights. What, thus, was the incentive? To build as many miles of shoddy railroad as cheaply as possible. And guess what happened? To this day a 3-hour car trip takes 8 hours by train.

[dennisw]

I stand corrected on the first intercontinental railroad

[cartoonistx]

High speed rail and local commuter trains are the wet dream of Fascists and Euro-weenies! They dream of a world where the government controls your arrival and departure, your route and your destiny. These are the people who hate Big Oil but love Big Brother!

The Nazis loved to force folks onto trains too!

[2 Kool 2 Be 4-Gotten]

There probably is no “one size fits all” solution to the rail issue. It all depends on a huge number of variables - length of proposed route, size of potential market, quality of right of ways and existing track, etc. etc.

The Bos-Wash corridor is probably the poster child for where traffic by rail makes sense. Chicago to LA, not so much. Everywhere else, somewhere in between.

Here in NC, Raleigh to Charlotte is commercially viable - Raleigh to Wilmington has been proposed but seems to me to make very little sense.

I think one mistake that gets made in these discussions is to lump all of rail travel into one all-or-none bucket, when in fact, each potential route should be analyzed on its own merits.

[stylin_geek]

So, are you claiming the government doesn’t collect near enough in fuel taxes to pay for roads?

Are you seriously making that argument?

[mvpel]

If you want a more modern example than the 1862 and 1864 Railroad Act, just look at the current California High Speed Rail Authority:

http://sf.streetsblog.org/2010/04/30/ca-audit-criticizes-high-speed-rail-authority-of-mismanagement/

[achilles2000]

Willie can’t help himself. He loves his choo-choos.

[ketsu]

So, are you claiming the government doesn’t collect near enough in fuel taxes to pay for roads?

Are you seriously making that argument?

Yup. 33 billion of general tax revenue + 79 billion or so fuel tax. So per capita $330 per american or so(Yes I know that taxes really don't work this way).