High-Speed Rail Part 8: Alternatives to California’s HSR

The 2005 environmental impact statement for California’s high-speed rail includes two alternatives to building rail: a no-action alternative and a “highway-air” alternative that proposes major expansions of both freeways and airports in the rail corridor. The highway component alone of this alternative was projected to cost twice as much as high-speed rail, allowing rail proponents to claim that rail is cheaper than roads (page 4-1).

But this alternative was a “straw man” designed to make high-speed rail look good. One reason for the high cost is that the alternative proposed to expand every freeway along the rail route, even highways that are not expected to be congested in the rail project’s time horizon. For example, the alternative adds one-third more capacity to freeways in the Central Valley that are expected to operate at only 92 percent of capacity in the no-action alternative (page 3.1-12).

On top of that, the highway-air alternative is more than five times as effective at relieving congestion than the rail project. Where high-speed rail is expected to take 3.8 percent of cars off the road, the highway-air alternative reduces congestion by more than 20 percent (page 3.1-12). This suggests that an alternative that costs only one-fifth as much as the highway-air alternative, or about half as much as the rail alternative, would be more comparable to rail.

The Authority likes to say that the rail alternative has the same capacity as the highway-air alternative it designed (page S-3). But this assumes that the Authority would run far more daily trains than it actually plans to run and that it could fill every seat on those trains. Meanwhile, it assumes that cars on the highway only had average occupancies. If you really want to compare capacities, you would assume that every seat in the cars was full as well — or, for maximum capacity, that the freeways were filled with buses full of people. But the main point is that capacity isn’t really relevant; actual use is.

A relatively new alternative to simply building new roads is congestion pricing, which smoothes the peaks and troughs in travel demand and thus reduces the need for as much new capacity. California pioneered congestion-pricing in the U.S. even before the Authority was created in 1997. State Route 91, whose express lanes were opened in December 1996 to people willing to pay a variable toll, proved that congestion pricing not only relieves congestion, it can pay for new highway capacity on congested roads. But this is never mentioned in the EIS.

The Authority’s analyses also fail to distinguish between systems that are paid for largely out of user fees and systems that are paid for largely out of tax dollars. Currently, user fees (gas taxes, tolls, motor vehicle fees, etc.) cover about 76 percent of the cost of building, maintaining, and operating highways in California (based on tables FE9, SDF, LDF, SF21, and LGF21 of the 2006 Highway Statistics).

The resulting annual subsidy to roads of some $3.8 billion per year is nothing to sniff at, but those roads move more than 500 billion passenger miles (not to mention roughly 100 billion ton-miles of freight) each year. That’s less than three-fourths of a penny of subsidy per passenger mile.
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By comparison, if taxpayers manage to get away with spending “only” $40 billion building California’s high-speed rail line, that amortizes out to about $2.6 billion per year over 30 years. If the rail line carries the high ridership estimate of 58 million riders per year, and they go an average of 400 miles each (probably also high), that works out to 11 cents of subsidy per passenger mile, or 15 times the subsidies to driving. (And you won’t see the high-speed rail line carrying many ton-miles of freight.)

Instead of using existing highway subsidies to justify even large subsidies to rail, it is time to end all subsidies and let the transport chips fall where they may. The Antiplanner makes the following modest proposal as an alternative to building high-speed rail in California.

1. The California legislature should create regional or county toll road authorities, similar to the ones in Texas. The toll road authorities could sell bonds (backed solely by tolls), build roads, collect tolls, and/or contract out the construction and/or operation of toll roads to private companies.

2. Such toll road authorities would build all future limited-access roads and additions to existing limited-access roads. New local and collector roads and streets would be built by developers. Non-limited access arterial roads would be built by counties using a combination of tolls or gas taxes at the discretion of each county road office working with the county or regional toll road authority. (Toll road authorities have been known to build arterial feeders into their toll roads and not charge people who use those arterials.)

3. The California Department of Transportation should accelerate research into intelligent vehicle/highway systems (such as the Berkeley bus that can steer itself), settle on a standard system, begin installing necessary road sensors, and certify vehicles capable of using such systems.

4. Airport expansions should be made on an on-demand basis and funded out of user fees, not tax dollars.

In short, the Antiplanner alternative calls for funding California surface and air transportation out of user fees, not tax dollars. If, after highway subsidies are eliminated, anyone thinks they can build and operate a rail line out of user fees, more power to them. Until then, taxpayers should not have to throw good money after bad.

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About The Antiplanner

The Antiplanner is a forester and economist with more than fifty years of experience critiquing government land-use and transportation plans.

14 Responses to High-Speed Rail Part 8: Alternatives to California’s HSR

  1. aynrandgirl says:

    Are sales and income taxes included in that 76% number? I maintain that when I pay sales tax on my new car, sales tax on parts and service for that new car, or when the dealer pays income tax on the sale of the car and income tax on sales of the parts & service thereon, that should be part of the “user fees” when computing road subsidies.

  2. the highwayman says:

    Sales taxes are not user fees, they are taxes.

    If buy a chair, I’m going to pay sales taxes, not a user fee for chairs.

  3. C. P. Zilliacus says:

    > The California legislature should create regional or county toll road authorities, similar to the ones in Texas. The toll
    > road authorities could sell bonds (backed solely by tolls), build roads, collect tolls, and/or contract out the
    > construction and/or operation of toll roads to private companies.

    Interestingly, this is almost exactly what California’s legislature did for Orange County when it established the
    two toll road agencies that make up TCA (http://www.thetollroads.com/), though TCA did not develop and does not
    own the Ca. 91 Express Lanes. From the “About” section of the TCA Web site:

    WHY TOLL ROADS?
    Studies conducted during the 1970s identified several critical new roads needed to serve Orange County’s booming population. Roughly sketched into county road plans by August 1981, the future San Joaquin Hills, Foothill and Eastern corridors were so-named because road planners weren’t sure if they would be highways or freeways. No one initially envisioned them as toll roads.

    FUNDING SCARCE
    But the money to build these new roads was nowhere in sight. Compact, fuel-efficient vehicles were popular, gas purchases plummeted and, as a result, revenue from gas taxes declined as statewide maintenance needs for aging highways grew. Local officials dug in their own backyard for seed money that would demonstrate their commitment to building these roads. Then, they assumed, state or federal money would flow and the roads would blossom forth.

    The idea of charging tolls as a way to finance the proposed roads first surfaced in 1984, but no real decision was made until public joint-powers agencies were formed to manage financing, constructing and operating the roads. In 1986, two agencies were born – the Foothill/Eastern Transportation Corridor Agency and the San Joaquin Hills Transportation Corridor Agency.

    TURNING TO TOLLS
    Government transportation dollars were still scarce. It soon became apparent that the new roadways had to be tollways or they wouldn’t be built at all – a disastrous prospect given the county’s explosive growth. In 1987, Senate Bill 1413 passed, giving TCA the authority to construct the new roads as toll facilities and issue bonds backed by future toll revenues and development impact fees.

    PUBLIC INFRASTRUCTURE, PRIVATE INVESTMENT
    The San Joaquin Hills (73), Foothill (241), and Eastern (241/261/133) Toll Roads were the first public highways to be constructed in Orange County since 1987 when the Costa Mesa (SR-55) Freeway was extended for four miles. Remarkably, The Toll Roads – which are owned and maintained by the state of California — were built with virtually no taxpayer dollars.

    TCA is funded by the sale of bonds to both private individuals and institutional investors. The bonds can only be repaid by future tolls and development fees. Since the bonds are not backed by the government, taxpayers are not responsible for repaying the debt if future toll revenues fall short. Today, all toll and development impact fee revenue go toward retiring the construction debt , funding additional improvements, and covering costs of operating The Toll Roads.

  4. aynrandgirl says:

    Sales taxes are not user fees, they are taxes

    True, but not economically relevant. Since nobody would being ordering service for their car if mass transit were universal, taxes of whatever kind on car-related items should be considered when measuring the supposed government subsidy cars receive.

  5. jwetmore says:

    In Minnesota last year the legislation dedicated sales taxes on vehicles to the highway trust fund, just as fuel taxes are dedicated to the highway trust fund. It seems that with this mechanism those who do not not own vehicles – or have goods deliverd to their house, or the store, etc. by vehicles – will not pay for highways.

  6. Dan says:

    Since nobody would being ordering service for their car if mass transit were universal, taxes of whatever kind on car-related items should be considered when measuring the supposed government subsidy cars receive.

    Ah, yes. More government employees to move tax receipt money around. Beautiful.

    At any rate, in case anyone was wondering, we’ve already discussed how much of a shortfall there is for roads. “Supposed” is either written in ignorance or dissemblance.

    DS

  7. As much as I hate to disagree with anyone who calls themselves aynrandgirl, I am not sympathetic to the idea that sales taxes on autos should be counted toward highway user fees. I’ve heard various proposals in the past, some of which have been approved in some states, to apply sales taxes on bird seed to wildlife, sales taxes on fishing tackle to fish habitat, and so forth.

    Every good that is taxed can find some special interest that will argue that the sales tax on that good should be applied to something peripherally related to that good. But what goods will have their taxes dedicated to fire, police, schools, and other basic services?

    Let’s just forget about these numbers games anyway and just stop subsidizing roads and other forms of transportation. Pay for major highways out of tolls. Pay for collector streets out of gas taxes. We can still maintain local streets out of property tax assessments on the properties that line those streets if necessary, but no property taxes or other general taxes should go for construction or maintenance of anything other than a local street.

    I am willing to work as hard opposing general taxes for roads, and supporting user-fee-based alternatives, as I work opposing taxes for rail transit. Will any transit supporters join me?

  8. aynrandgirl says:

    I’m not arguing that we need more government employees, nor am I arguing that auto-related sales and income taxes should be specifically spent on roads. I am arguing that tax revenues that would not exist but for the road system (nobody would buy a car if there were no roads to drive them on) should not be ignored, and that it is grossly misleading to ignore them, when figuring the amount of subsidy roads are claimed to receive.

  9. the highwayman says:

    Tolls in them selves are not a bad thing, the problem is the current context that still includes the current highway welfare system.

  10. Dan says:

    I am arguing that tax revenues that would not exist but for the road system (nobody would buy a car if there were no roads to drive them on) should not be ignored, and that it is grossly misleading to ignore them,

    Nah. Adding up parts and tire sales** won’t help your argument much, even when taking, say, 2-3% of sales from 452x.

    Road costs (esp at the local level) are still subsidized by 20-30%.

    DS

    ** Mouseover.

  11. the highwayman says:

    AynRandGirl, sorry but, going back to that sales tax situation is too vague.

    Sales taxes are paid on all sorts of products & services.

    For that matter since Mr.O’Toole owns models of trains, now using your own logic shouldn’t the sales tax revenue collected from those sales count as some thing towards a rail user fee?

    Also roads have existed a long time before automobiles.

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  13. the highwayman says:

    O’Toole, you’re an asshole by profession!

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