Public good or private interest: The debate over funding a future U.S. high speed rail

Public good or private interest: The debate over funding a future U.S. high speed rail

Taiwan High Speed Rail trial run in June 24th, 2006 (Wikimedia Commons).

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It is no secret that the United States doesn’t have an integrated, convenient, and flashy high speed rail, or HSR, system like those in Europe and Asia. Yet, it’s a mode of transportation long touted by critics as more efficient, affordable, and sustainable compared to cars and airplanes. 

Circumstances may have reached a new junction as one main project is underway on U.S. soil, and a $205 billion national HSR system proposal was recently introduced into Congress. More importantly, studies show that HSR is a smart, economic and green plan; a case analysis for one proposal found that the system would create an 8:1 return on investment. 

What remains is determining which player is going to take on this long-awaited task: Should the government or private entities fund development?  

Why trains are so bad in the United States 

It may be hard to believe, but the U.S. was once the global poster child of railway transportation. Cities were filled with street cars, and most people did not yet live in suburbs or own a car, making it sensible to travel from city to city on steam engines. 

But according to Andy Kunz, the president of the National High Speed Rail Association (NHSRA), that began to change after the World War II economic-boom. The American lifestyle became associated with living far away from city centers and owning an automobile to get from place to place. By 1940, 60 percent of Americans owned a car, and the government began relocating money in 1955 to build our current interstate highways.

“Amtrak is basically the remnants of our history: leftovers after cuts from this and that,” Kunz said. “Since the government has spent trillions of dollars on building highways that connect every inch of America, there has been an anti-rail bias coming from Congress, the White House, and the U.S. Department of Transportation.”

It was not until former President Barack Obama’s administration that $8 billion was set aside for the development of an HSR system. Kunz said although he is more than appreciative of the funding, that money is just a fraction of what would be needed for a trans-continental system. 

Unlike construction in other parts of the world, American developers face several bureaucratic hurdles and costs when building such large-scale projects, Kunz added, namely environmental regulations and private land battles. 

“It’s like building a new highway: You can’t do it overnight,” he said.

The projects currently underway

Despite bureaucratic and political pushback, enthusiasm from leaders like Obama and Rep. Alexandria Ocasio Cortez has transformed American HSR from some fantasy into an expected service within the next couple of decades. 

The most ambitious publicly led effort is the California High Speed Rail Association’s project, which is currently under phase one construction in the state’s Central Valley. According to Boris Lipkin, the authority’s northern regional director, the current goal is to have the train connect San Francisco with Los Angeles by 2033 and expects to run on 100 percent clean energy, which would reduce between 1.5 to 1.8 million tons of carbon dioxide emissions by 2040. 

“I know California certainly likes to compare itself to other countries, but this kind of state-wide scale and magnitude is equivalent to what other nations have done,” Lipkin said. 

Once in operation, California’s trains will operate at over 200 miles per hour, which would be among the fastest in the world. To take on such a tremendous project, Lipkin said the authority already has created 50,000 job years (which also represents employees who only worked for a few months), including 4,000 construction workers. 

The director added that despite COVID-19 hurdles, California Gov. Gavin Newsome’s executive order designates construction workers as essential employees. There are currently about 1,000 construction workers on site every week. 

“This is having big effects in the Central Valley, where many people in these communities have been hit hard and have been historically poorer than the rest of the state,” he said. 

Although there are no private companies to break ground on a brand-new HSR system, the two most prominent efforts underway are the Texas Central Railway to connect Houston with Dallas and Virgin Trains’ (formerly Brightline Trains) XPress West project connecting Las Vegas with Los Angeles. Nevada recently allocated a $200 million bond to Virgin Trains, and the company said it plans to break ground by the end of 2020.

Today’s debate: Public or private HSR?

The question now isn’t whether we should be developing HSR: It’s now about who should oversee the development. 

Some potential American HSR users, like transit-geek Nathaniel Zhu, believe American technological development is rooted in capitalism, and he said he believes HSR initiatives should observe current American space technology programs, where several private actors like Virgin Galactic, SpaceX, and Boeing compete among one another to produce the best and most affordable technology. 

“The United States would be such a more efficient country if it had a high speed rail system,” Zhu said. “For such a technologically advanced country, it’s a shame we don’t already have one.”

However, he said there is a distinction between innovation and economic sustainability and added that an American HSR would probably not help reduce automobile and plane use if ticket prices are not competitive.

Having lived in both China and Europe, he said the reason he used HSR in both places was because it was often a much more affordable and convenient alternative to flying or driving, and he acknowledged that publicly operated HSR systems do make HSR cheaper.

“Until it’s treated as a public service and (while) ticket prices are still expensive, I don’t think I would even take a train from say Chicago to Minneapolis,” he said. 

Others, like California’s Boris Lipkin, argue that the public sector is necessary for development because the government has a strong incentive to economically link together several communities it tresspasses, not just create a link between two cities.

Unlike the project in Texas, where both the Houston and Dallas stations are planned to be constructed on the city outskirts, Lepkin said the California project will provide easy access to downtown stations and stop along smaller cities between San Francisco and Los Angeles.

Although more expensive, Lipkin said the goal is to provide economic opportunities for the historically marginalized communities in the Central Valley — an investment that will offset the costs tremendously. 

“From an economic, equity, and connectivity standpoint, we want Fresno to be an hour away from San Jose; we want Bakersfield to be an hour away from Los Angeles,” Lipkin said. “That changes the entire way the state operates; it changes the way our economy works.” 

And in a few decades, it is quite possible that Americans could have an HSR that would connect them from cities all across the country. In May, Rep. Seth Moulton introduced a $205 billion economic recovery bill into congress that would provide the foundations for a national high speed rail system.

Ultimately employing up to 1.16 million people, Moulton’s plan would build off existing Federal Transit Administration plans to provide new transportation alternatives for business commuters between large, innovative cities like Chicago to Milwaukee, Portland to Seattle, and Dallas to Oklahoma City.  

Lipkin added the federal government historically has helped navigate transportation projects like the interstate system, so he said he would not be surprised if a future administration or Congress would take on the project.

“Federal funding will be a necessary component to finishing that project — I have no doubt in my mind about that,” he said.

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