WASHINGTON — Rail advocates are urging the federal government to partner with states to develop a national high-speed rail network. The partnership should be modeled after the Interstate highway system, and Washington should share the costs of projects and create a dedicated funding source similar to the federal highway trust fund, they told members of the House Transportation rail subcommittee Wednesday afternoon.
States can afford to pay 20% of the costs of developing a national high-speed rail network, but the federal government should contribute 80% to the effort, as currently happens with Interstate highways, Wisconsin Transportation Secretary Frank Busalacchi testified at a hearing held by the rail panel.
The network must have an “ongoing source of federal revenue,” said Busalacchi, who also chairs the States for Passenger Rail Coalition. However, Busalacchi and others did not say what revenue source the federal government should rely on to make payments to states. The federal highway system is currently funded through user fees including gasoline and diesel fuel taxes.
“States will need the program stability and contract authority” to be able to pursue intercity passenger rail and high-speed rail initiatives, said Patrick B. Simmons, director of the North Carolina Department of Transportation’s rail division.
“Collaborative partners and a balanced mix of public grants, tax-credit incentives, and private contributions will be required” for a comprehensive rail network,” Simmons said in prepared remarks on behalf of the American Association of State Highway and Transportation Officials’ rail committee.
States already are spending money to develop high-speed rail, Busalacchi noted. Wisconsin recently invested $47 million in new train sets that will be manufactured overseas, he told the panel. In addition, California voters last year approved a $9 billion bond issuance that would help pay for a rail connection between Southern California and the Bay Area.
A witness from the private sector backed the idea of a dedicated federal funding source. Michael Pracht, president and chief executive officer of US Railcar LLC told the panel that “every stakeholder in our emerging industry” wants Congress to “enact, as part of the surface transportation authorization or other legislation, a new dedicated funding source for high-speed and intercity rail development.”
However, there are opponents to funding high-speed rail projects in the manner of the Interstate system. The Cato Institute, a Washington-based pro-free market think tank, argued in a report last month that a high-speed rail network would cost at least $90 billion to create, and that it would be used by and accessible to much fewer people than the Interstate system.
Others, including subcommittee chairwoman Rep. Corrine Brown, D-Fla., prefer a joint effort between the public and private sectors. Brown said during the hearing that there must be a “marriage” between state, local, and federal governments as well as private companies.
The leaders of the committee have proposed a federal commitment of $50 billion for high-speed rail as part of the six-year surface transportation reauthorization bill that is still pending.
Susan A. Fleming, director of physical infrastructure issues for the Government Accountability Office, told the subcommittee that dependable financing is a major hurdle facing high-speed rail project sponsors right now.
“Federal funds for high-speed rail in the past ... have been derived from general revenues, not trust funds or other dedicated funding sources,” she said. “This makes ongoing capital support for high-speed rail projects challenging, because such projects compete for funding with other national priorities, such as health care, national defense, and support for ailing industries. States face similar challenges as they develop these systems over a decade or more.”
That “potential problem could be compounded” when rail lines cross state borders and states must jointly fund their operations, she said.
Meanwhile, the Federal Railroad Administration probably will wait until after the first of the year to announce the winners of $8 billion of high-speed rail grants authorized by the American Recovery and Reinvestment Act, administrator Joseph Szabo said during the hearing.
But “a short, three [or] four month delay ... is miniscule” in the larger picture of high-speed rail development, he added.