Rail Runner Runs Away with Taxpayers’ Money

Commuter rail on existing tracks sounds seductively attractive at first glance. You don’t have to buy right of way or build new rail lines; you merely have to make a few upgrades and buy some used commuter cars and locomotives and–voila!–you have a hip new rail transit line to attract Millennials to your urban area.

If politicians ever did more than take a first glance at these projects, they would realize that it never works out that way in practice. Costs are a lot higher than expected, and even if you only run a handful of commuter trains a day going a maximum of 40 miles per hour, the feds have added to your costs by requiring you to install the same positive train control systems designed to handle the hundreds of 110-mph trains per day that use the Northeast Corridor.

Worse, existing freight lines rarely go where people want to go, so ridership is often low and fares sometimes cover less than 10 percent of operating costs, and of course zero percent of capital costs. Orlando’s SunRail fares aren’t even enough to pay for the ticket machines, much less any of the costs of operating the trains themselves.

One commuter-rail line that may be in an even worse position than SunRail is New Mexico’s Rail Runner, which connects Santa Fe with Albuquerque. Although the two are 65 miles apart, connecting the state capital with the state’s largest urban area seems like a no-brainer, similar to connecting Salem & Portland, Olympia & Seattle; or Sacramento & San Francisco (not California’s largest, but still very large). It is pretty clear that the people who planned the Rail Runner have no brains.

They replaced a commuter bus that charged a $3 fare to go between from downtown Albuquerque to downtown Santa Fe in 60 minutes with a train that charges a $9 fare and takes more than 100 minutes. To make matters worse, the train station is nearly 1.5 miles from the capitol, which is a bit too far for most people to walk. Despite the tripling of fares, Rail Runner‘s revenues covered just 9 percent of its operating costs in 2015.

The state collected $2.6 million in fares in 2015 against operating costs of $30.3 million, not to mention maintenance costs of $2.3 million. Thus, the state could save $30 million in operating costs a year by shutting the trains down, which would also save the $50 million to $75 million estimated cost of installing positive train control.

However, Rail Runner planners left a poison pill in the system: hundreds of millions in debt incurred to start the rail service. This is being repaid at the rate of $30 million a year with balloon payments of $110 million scheduled in 2025 and 2026. The state could easily reschedule those balloon payments if it had a thriving rail line, but if it shuts down the train, it will still end up having to repay $784 million including debt and interest.

Most of these facts are cited in an Albuquerque Journal editorial that comes to the unhelpful conclusion that keeping the service is a question “that will soon have to be answered.” Even more scary facts are brought up in a legislative resolution directing the state DOT to study the possibilities of privatization or replacing the train with commuter buses.

The fact that should tip the balance in this decision has to do with ridership, which is steadily falling. According to data in the National Transit Database file the Antiplanner uploaded yesterday, in 2009 the Rail Runner carried 1.35 million riders. This number fell in all but one of the years since then and by 2016 was down by 37 percent to 0.85 million. The first seven months of 2017 saw 3.9 percent fewer riders than the same months of 2016.

The logical thing to do is to stop throwing good money after bad. Spending another $50 million to $75 million on positive train control is not going to stimulate new ridership. The state should save that money, as well as future operating losses, even though it has to pay the poison pill. Unfortunately, politicians do not operate on the same logic as everyone else, and so it is likely that New Mexico will unnecessarily spend another $400 million subsidizing this train in the next decade.

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26 thoughts on “Rail Runner Runs Away with Taxpayers’ Money

  1. metrosucks

    Buuut but but trains are so much cooler than buses! And stuff.

    Pretty much the argument planners make to build trains when they’re backed into a corner after all their other reasons fall apart under scrutiny.

  2. JOHN1000

    Sue the guys who created the poison pill for fraud,

    Or stop paying the bonds and tell the bondholders to go after the guys who sold them the bonds knowing they were worthless as the ridership and cost assumptions were all bogus.

  3. Frank

    Whataboutism is a form of defensive propaganda used to counter criticism with a “What about…?” question vaguely, if at all, related to the original issue. It is a specialized red herring version of the tu quoque fallacy, sometimes implementing the balance fallacy as well. An old favorite of Communists,] the strategy originates from the Soviet era, and was usually used in the form of “And at your place, they hang black people.”

    Simply put, whataboutism refers to the bringing up of one issue in order to distract from the discussion of another.

    STFU with your whataboutism.

  4. Henry Porter

    If there was an Internet-wide contest for Most Irrelevant Comment of the Day, the one about profitable sidewalks would surely be a top contender.

  5. metrosucks

    What we should really be talking about is how planners have weaponized traffic control devices to create additional congestion. Like how you can drive from red light to red light, a dozen lights in a row, with each light turning red just before you get to it. Does that seem accidental to anyone?

    Government traffic planners should all be lined up and shot. They’re responsible for who knows how many deaths, anyway. The death penalty seems appropriate.

  6. msetty

    Explaining how botched rail systems like New Mexico or Orlando can be quickly fixed to the group of morons on this blog is an utter waste of time.

    Metrosucks, my offer to meet you at a boxing gym in Seattle still stands (if I ever get up there again), if you are man enough to identify yourself. But I doubt you will, you’re such a chickenshit ass-wipe.

  7. prk166

    So what’s the real total cost for building this New Mexico Rail Runner line? That is, including interest payments on the bonds?

    From the structure the AntiPlanner describes, it looks like the politicians wanted to build it today and not have to figure out how to pay for it until it’s about time for medium maintenance if not major maintenance on the line.

  8. the highwayman

    “Highways are there regardless of economic conditions”

    You teahadi’s couldn’t be so cocky if you weren’t so heavily supported by big government. I have to get up in the morning and go to work to pay bills. Yet you teahadi’s don’t have to work for a living :$

  9. the highwayman

    MSetty; “Explaining how botched rail systems like New Mexico or Orlando can be quickly fixed to the group of morons on this blog is an utter waste of time.”

    THWM; Teahadi’s aren’t necessarily morons. They’re primarily crooks :$

  10. the highwayman

    Henry Porter; If there was an Internet-wide contest for Most Irrelevant Comment of the Day, the one about profitable sidewalks would surely be a top contender.

    THWM; Dude, Mr.O’Toole is a charlatan. His arguments are political, not economic.

    Under 1930’s German law, the Holocaust was totally legal.

    Just as now, government is anti-rail, roads are not expected to be profitable to survive :$

  11. prk166

    So what’s the real total cost for building this New Mexico Rail Runner line? That is, including interest payments on the bonds?

    From the structure the AntiPlanner describes, it looks like the politicians wanted to build it today and not have to figure out how to pay for it until it’s about time for medium maintenance if not major maintenance on the line.

  12. Henry Porter

    Highwayman,

    If government were anti-rail, we wouldn’t have subsidized boondoggles like the Rail Runner.

    Passengers are anti-rail. If there were enough passengers willing to share the high cost of rail, there would be no need for subsidies.

    O’Toole at least links his sources.

  13. prk166

    I’m befuddled as to how a 97 mile line set up and scheduled to focus on carrying people from ABQ or Santa Fe to the other – not set up just to get 5 miles down the road can have this sort of “performance”. If they had a million trips, which this article seems to say it was more, they’d be pulling in a mere $2.80 per trip for 97mile trip!

    Something is going on here. Either they’re giving away a lot of free trips, they’re lieing about their ridership, or a lot of people are hoping on in ABQ just to get to the next staation and hoping off.

    https://www.abqjournal.com/581203/nms-rail-runner-faces-financial-burdens.html

    The train earned $2.8 million last fiscal year in fares from more than a million riders but cost $28.4 million to operate.

  14. the highwayman

    In general government is anti-rail, but there are exceptional blips where it isn’t.

    Again streets, sidewalks, etc are not expected to be profitable to survive.

    It’s politics, not economics :$

  15. the highwayman

    Henry Porter; O’Toole at least links his sources.

    THWM; Well I look out the window and see the street, sidewalk, street lights, etc. I look up and then I see the sky. They aren’t expected to be profitable to survive :$

  16. prk166

    I’m befuddled as to how a 97 mile line set up and scheduled to focus on carrying people from ABQ or Santa Fe to the other – not set up just to get 5 miles down the road can have this sort of “performance”. If they had a million trips, which this article seems to say it was more, they’d be pulling in a mere $2.80 per trip for 97mile trip!

    Something is going on here. Either they’re giving away a lot of free trips, they’re lieing about their ridership, or a lot of people are hoping on in ABQ just to get to the next staation and hoping off.

    https://www.abqjournal.com/581203/nms-rail-runner-faces-financial-burdens.html

    The train earned $2.8 million last fiscal year in fares from more than a million riders but cost $28.4 million to operate.

  17. the highwayman

    So why is it that for you teahadi’s “numbers” matter for railroads, but don’t matter for roads? Could it be something political perhaps? :$

  18. Frank

    “So why is it that for you teahadi’s “numbers” matter for railroads, but don’t matter for roads? Could it be something political perhaps? :$”

    What about how you are hanging Negros?

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