Rails and Reauthorization The Inequity of Federal Transit Funding
by Randal O’Toole and Michelangelo Landgrave, CATO Institute, April 21, 2015
Federal transportation aid programs often create perverse incentives for states and metropolitan areas. The worst incentives are created by discretionary funds that encourage state and local governments to adopt wasteful programs in order to get the largest possible share of those funds.
For example, instead of encouraging cities and transit agencies to spend funds efficiently, the New Starts capital grants program encourages them to build the most expensive projects. By building a wildly expensive rail transit system, for example, Salt Lake City has collected $2.17 in federal funds per transit rider over the last 22 years. In comparison, by focusing exclusively on buses, Milwaukee has collected only 26 cents per transit rider. ...
Costs often continue to increase after the final engineering. For example, a rail line currently being built in Honolulu has already gone $910 million, or 17.5 percent, over the cost that was estimated by the final engineering....
Heavy-rail lines have much higher capacities because train lengths are limited only by platform lengths, which in most cases is 8 to 11 cars. But Honolulu is building a heavy-rail line whose platforms are only long enough to allow four 60-foot cars. While the railcar manufacturer claims the cars can hold 150 people, that would require more crowding that Americans find acceptable. At a more reasonable 100-people-per-car, the line’s capacity is about 12,000 people per hour. The $300 million per mile that Honolulu is spending on this line seems absurd when articulated buses could carry more people with a higher percentage of them being comfortably seated.
Ironically, rail interests actually benefit from installing such low-capacity transit lines. When the railcars are full—which, in many cases, they will be for an hour or two a day—rail advocates can argue this proves the systems are successful when in fact the problem is their capacities are too low.
Actual use never reaches capacity, of course, partly because of ebbs and flows in transportation demand over the course of a day and days of the week....
Costs of building heavy rail have also grown. In the 1980s, heavy-rail lines built in Atlanta, Baltimore, Miami, and Washington cost an average of less than $140 million per mile (about $265 million in today’s dollars).5 Heavy-rail lines in the 2016 New Starts plan cost an average of nearly $340 million per mile.6 For comparison, various state highway agencies estimate that building a new four-lane freeway typically costs around $10 million per mile ($2.5 million per lane-mile) in rural areas and $12 million per mile ($3 million per lane-mile) in urban areas.7 These numbers presumably do not include the costs of right-of-way acquisition. However, the 125,000 lane-miles of the Interstate Highway System cost less than $4 million per lane-mile, including right-of-way, in today’s dollars.8 One of the most expensive segments of the interstate system, Hawaii’s H-3, cost $20 million per lane-mile in 1997, or about $28 million per lane-mile in today’s dollars. Perhaps the most expensive road ever built, Boston’s Central Artery project, cost about $90 million per lane-mile, or about $100 million per lane-mile in today’s dollars.10 This is little more than half as much as the average cost of light rail today.
The high cost of rail relative to highways would be justified if rail carried far more people than roads. In fact, despite claims that rail lines can carry as many people as a multilane freeway, no mile of light-rail line in the country carries as many people per day as a typical lane-mile of urban freeway. Table 1 shows that, in urban areas with light-rail transit, the average freeway lane-mile carries more than three times as many passenger miles per day as the average two-track route mile of light rail....
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