What Happens to Rail When the Money Runs Out?

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by James A. Bacon

Good news from the Governor’s office: Amtrak will commence its Norfolk service by December 31, 2012 — 10 months earlier than expected! A round-trip train will bring intercity passenger rail to the city for the first time since 1977, linking Hampton Roads to Richmond, Washington, D.C., and the northeastern corridor!!

“The Commonwealth’s Virginia Department of Rail and Public Transportation (DRPT), CSX, Norfolk Southern and the City of Norfolk have been working speedily to make the necessary upgrades for the service,” boasts a press release from the Governor’s Office.

Just one little problem: The project will cost $12 million more than $102.6 million already allocated to the project. On Wednesday the Commonwealth Transportation Board allocated the additional sum, which it scraped up by bumping the Nokesville-to-Calverton double-track project, one of several integral to Norfolk Southern’s Crescent Corridor initiative for boosting freight traffic in Virginia, to FY 2015 and 2016. The press release didn’t mention the overrun.

Deferring the Nokesville-Calverton project is not expected to cause any problems for Norfolk Southern. But bumping the Nokesville-Calverton project to FY 2015 will require bumping some other project, as yet unidentified, that would have gotten its money then.

Turns out that a few previously unidentified costs were identified as the Norfolk passenger-rail project unfolded. Norfolk Southern needs to construct additional siding capacity at New Bohemia to alleviate freight train interference and provide capacity in the congested Petersburg area. Oh, and it needs to acquire additional property at the St. Julian’s Street Train Servicing Facility to prevent the rerouting of heavy truck traffic through residential neighborhoods. And come to think of it, there’s the minor matter of upgrading crossovers between Petersburg and Norfolk and upgrading the CSX railroad diamonds in Suffolk to allow for faster passenger speeds.

But other than that, they’d accounted for everything!

The CTB didn’t have any problems with all those oversights and approved the re-allocation of funds. The Hampton Roads representatives to the CTB were all in favor of passenger rail.

The only voice of skepticism came from Allen Louderback, a rural at-large member from Luray, who cited figures from mass transit projects in Northern Virginia whose massive operating deficits were covered by federal and state funds. He questioned the wage rates for mass transit employees, and he wondered what would happen to these ventures if and when federal and state  governments could no longer afford to subsidize them. “If things get tough,” he said, “what are you going to tighten?”

Louderback addressed the issue that no one else on the CTB, the McDonnell administration or supporters of mass transit have been willing to confront. What happens to massively unprofitable rail and mass transit projects when the money runs out?

No one had an answer. No one even responded to Louderback’s point. The CTB just went ahead and approved the reallocation of funds.

Update: According to Peter Bacque’s story in the Times-Dispatch, the Norfolk passenger rail service is expected to cover its operating costs. Norfolk-to-Washington fares will run about $33 one way, and state officials expect high demand for the service. That would obviate Louderback’s concern for this project, and possibly for inter-city rail service from Lynchburg to Washington, which is one of the most profitable state-partnership services in the Amtrak system.

However, Louderback’s larger point remains valid for Washington Metro, the Rail-to-Dulles extension, the Norfolk Tide and other mass transit projects.

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2 responses to “What Happens to Rail When the Money Runs Out?”

  1. When you consider that EVERY Trip on the VRE Commuter Rail is subsidized to the tune of $20+ and financed with a 2.1% tax on gasoline… – and most important – is apparently an acceptable and sustainable model to motorists who pay the tax…

    then why not use that same approach for rail? In the Amtrak corridors, levy a 2.1% gas tax… to fund it or alternatively give Amtrak a portion of the sales taxes already levied and proposed to increase?

    rail is a chicken/egg argument. you have to get it built and operating before people will start to depend on it but where do you get the start-up money?

    …and we have to reach an agreement on how much of non-road transit should be recovered at the farebox and how much should be subsidized.

    I note that when the .5% sales tax was implemented.. there were no cries that roads were being “subsidized” and even now as McDonnell proposed to increase the sales tax.. for roads. ,there STILL are no cries of “subsidy subsidy”… rather there are cries of ” you’re stealing from education”.
    (which is also heavily subsidized).

  2. I hear a train a commin. It’s rollin round the bend.
    I bet it’ll be jam packed full. When it heads out agin.
    It’s that shadow housing special, burning up the tax.
    And all them broke folks on it, ain’t never coming back.

    Funny thing happened the other day. The builders have been in filling their vacant lots with brand new houses. A guy down the street moved into one about a year or so ago. One day some Pods showed up in his drive way. Then last weekend there was a U haul. And now the place is empty. The funny part is that it seems to be a new contagious winter flu.

    On my way to work I pass a dozen rural houses with two signs out front. One says For Sale. The other For Rent.

    Statistics say that 60 percent of the Newport News Amtrak passengers are actually from Norfolk. I wonder if splitting the ridership is a good idea when NN was already on a previous funding chopping block and Tax Increase is the new song of the day.

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