North Carolina State Transportation Secretary Gene Conti defended the recent Southeast High-Speed Rail Corridor proposal by claiming that North Carolina has a “good chance of winning some of the $8 billion in federal economic stimulus funding allocated to fast trains.” Conti continued, “North Carolina would be one of the most profitable venues for high-speed rail, [and] people are starting to see that [our] corridor would generate the most revenue.”1
First off, if such a high-speed rail project would indeed be “profitable,” why are government subsidies needed?
President Obama revealed the High-Speed Rail Strategic Plan in April 2009 proposing an $8 billion down payment, provided in the American Recovery and Investment Act (ARRA), to then be followed by $1 billion in additional grants annually over the next 5 years.2
July 10 was the due date for pre-applications from states to the FRA for inclusion in the high speed project corridor routes. If North Carolina, as Conti suggests, enters into this bidding war a state-drafted proposal is required outlining the state’s fiscal and institutional capacity to carry out and manage the project.
The ramifications of a North Carolina high speed train on our over-stretched budget should be considered before North Carolina jumps on this spending train.
According to new report released by the John Locke Foundation and authored by Randal O’Toole, senior fellow at the Cato Institute,3 “The average North Carolinian will take a round trip on a high-speed train only once every 27 years.” The report continues, “Because of a premium fare structure and downtown orientation, the main patrons of high-speed trains will be the wealthy downtown workers, such as bankers, lawyers and government officials.” 4
To upgrade the nearly 400 miles of North Carolina tracks in the Federal Railroad Administration’s plan taxpayers will pay more than $1.3 billion, O’Toole said. That’s nearly $150 for every North Carolina resident. Money some think the state is ready to spend.
On April 16, President Obama cited clogged highways and overburdened airports as stifling our nation’s economic growth.5 It would appear that North Carolina’s transportation secretary feels the same way.
However, according to O’Toole’s report, “The average American will ride these trains less than 60 miles per year, or about 1/70th as much as the average American travels on interstate freeways.” It seems people are not easily persuaded to leave the convenience of their Fords behind for the inflexible routes and schedules of high-speed trains.
North Carolina’s fascination with trains is neither new nor forgotten. The North Carolina Railroad Company owns and manages the current 317 mile rail corridor that transports 70 freight trains and eight passenger trains daily from Morehead City to Charlotte.6 In 1998, North Carolina agreed to buy out the remaining private shares of NCRR stock, making the pre-civil war railroad a privately run company, fully owned by the state.
Beginning in the mid-90s, officials in the Raleigh-Durham Triangle area, and in Charlotte, began pushing for light rail projects. In 2004, federal planners rejected the Triangle’s $810 million light rail proposal because the projected population density and ridership numbers did not merit such large spending.7
Private business incentives are second to North Carolina’s fantasy of railroad transportation even a decade later as NCPP is still owned by the state. Now, the introduction of a high speed rail will increase taxes to subsidize the commute of downtown bankers on an already state-owned train. While Secretary Conti wants North Carolina to be included in federal stimulus money, constructing high speed trains is not the proper route to take.
7 The Civitas Institute Public Policy Series, Breaking the Gridlock. Pg 27.