Caltrain Electrification, Bay Area Gas Tax, and other Post-Summit Thoughts

Jan 30th, 2011 | Posted by

Although I wasn’t able to attend, by the accounts I’ve heard and read, yesterday’s Friends of Caltrain summit in San Carlos was a very worthwhile event that has at least sharpened the discussion about the options available for saving this vital service.

Before discussing some of the possible funding sources, it’s worth taking a moment to discuss Clem Tiller’s excellent presentation (1.1MB PDF file). Tillier added in a blog post that he didn’t quite have time to drive home some key points:

• Need for metrics to assess various infrastructure proposals

• Caltrain has “failed miserably” to market electrification to the public, not explaining that it’s primarily about speeding up trip times

• Electrification faces political obstacles that must be overcome, or else the project will not get done

• DMUs aren’t really an option, particularly because they don’t help achieve faster trip times

• A “mid-line overtake” (see Clem’s presentation) could help with providing service to Transbay Terminal if the HSR route temporarily terminates in San José.

Tillier’s presentation also emphasized the importance of electrification as the second of three steps to improve service. The first step, schedule optimization, has largely been achieved within existing rolling stock and trackage, with trains 100% full at rush hour. Electrification is the second step, and the third step is targeted (Clem’s emphasis) work on segments of the route to help speed trains, from a midline overtake in the San Carlos area to a few grade separations.

All of this makes sense in a Caltrain-focused discussion, and as far as I can tell, it’s not wholly incompatible with future HSR plans – the midline overtake would become obsolete, and theoretically would not require very costly work to be done, when HSR tracks are built.

I hope that Clem’s points were understood by the attendees, because it’s important to keep in mind that saving Caltrain is about more than just filling the short-term operating deficit – it’s about improving the infrastructure of the system to enable faster and more frequent trips, which will increase ridership and help improve the system’s finances.

Still, the deficit is the big issue looming over Caltrain right now, and as David Herron reports, several funding ideas were proposed to deal with it, including a gas tax, backed by Congresswoman Jackie Speier and Sierra Club executive director Michael Brune. Transform’s Carli Paine proposed parking fees, tolling the Highway 101 carpool lanes, or even a payroll tax.

Let’s take a closer look at a gas tax. According to Herron:

One idea buzzing around is a 10 cent gasoline tax. The Metropolitan Transportation Commission (MTC) has legal authority to put a gasoline tax on the ballot, but it would requires a 2/3rds majority to enact. Polling suggests that there’s only 60% support for a new tax.

10 cents is probably too small an amount. We need to stop subsidizing driving through tax breaks on gasoline, and instead fund the retention and expansion of mass transit options via higher gas taxes. So what would a good tax be?

The most recent stats I could find, from the MTC, states that the 9-county Bay Area sold an average of 8,327,000 gallons of gas daily in 2007, for a total of 3.04 billion gallons sold that year. That figure is problematic given the impact of rising gas prices and the recession on gas sales since 2007, but let’s go with it for now.

At 3.04 billion gallons a year, here’s the revenue that would be generated annually by various gas tax increases:

10 cents: $303 million
15 cents: $456 million
20 cents: $608 million
25 cents: $760 million
30 cents: $912 million
35 cents: $1.06 billion

And so on.

How much is needed? That all depends on what the “needs” are. Last summer Mike Rosenberg, writing in the Contra Costa Times, reported that Bay Area transit agencies faced an operating deficit of $8.5 billion over the next 25 years, which translates to about $340 million annually. There’s also a capital projects deficit of $17.2 billion over the same time frame, or $68.8 $688 million annually. So a gas tax increase of 12-13 cents would about cover it. (OK, it actually wouldn’t – as you can tell, math is not my strong suit. But the point I make below still works.)

But surely you’d want to do more. As oil prices keep rising, as growth in the Bay Area core chokes freeways, and as the great shift away from driving continues, it’s not enough to maintain 2008 service levels. We need to massively expand services. So I’d argue for going to 35 cents per gallon, to bring in a billion dollars a year in new revenues for transit.

This is especially valuable from a political perspective, where you’ll need to show your work to voters after they’ve approved a gas tax. They’ll expect to see results, and rolling in some capital project funding as well as service improvements would go a long way to accomplish that.

Any gas tax increase – whether just 10 cents or as much as 35 cents – would need to be phased in over time. In 2005, Washington State voters agreed to a 9.5-cent gas tax increase, phased in by about 3 cents a gallon per year. Nobody noticed – as gas prices soared from 2006 to 2008, 9.5 cents made hardly a difference to drivers at the pump.

Phasing in a Bay Area gas tax over 3 years or so would be quite doable, and most people wouldn’t notice the difference, especially as prices are right now headed back up to $4/gal.

But we’d still need to deal with the issue of building political support. 60% support is pretty damn strong, but the moronic 2/3 rule for tax increases is a high hurdle. Not just the MTC but other Bay Area political leaders should work on dual tracks – building public support for a gas tax increase, and working with Governor Jerry Brown and the state legislature to reduce the vote requirement to 50%+1 or 55%.

While the discussion was focused on Caltrain, it’s really a much bigger matter of finding the revenue to sustain and expand the Bay Area’s mass transit systems. High speed rail needs those systems to be as robust as possible in order to bring people to and from the HSR stations to their destinations around the region. And Bay Area residents need to realize that their prosperity depends on solving this problem. Let’s get to work.

  1. Joseph E
    Jan 30th, 2011 at 16:22

    Re: “Bay Area transit agencies faced an operating deficit of $8.5 billion over the next 25 years, which translates to about $340 million annually. There’s also a capital projects deficit of $17.2 billion over the same time frame, or $68.8 million annually. So a gas tax increase of 12-13 cents would about cover it.”

    You missed the decimal place. 17.2 billion is 688 million annual (not 68.8 million), so we would need a total gas tax of around 35 cents to cover everything in the next 25 years, if those figures are correct and gas consumption is flat. If gas consumption goes up over time (as it has historically), or if we can save money on the capital plans and operating costs, a lower tax would be sufficient.

    Robert Cruickshank Reply:

    Heh, thanks for catching that. That correction makes my point even stronger.

  2. Joseph E
    Jan 30th, 2011 at 16:25

    Most developed nations charge the equivalent of 2.5 to 3 dollars per gallon of tax, so raising our gas tax by 10% (30 or 35 cents) is really not much. It wouldn’t stop most people from driving.
    Chart of gas tax (Euros per liter; there are 3.8 liters per gallon, and a Euro is worth $1.35 currently)

  3. Tony D.
    Jan 30th, 2011 at 18:15

    60% approval isn’t bad off the bat considering there’s been no campaign or public awareness on the issue. Show the good folk of the Bay Area WHAT THEY WOULD GET with a regional gas tax and I’m sure the moronic 2/3 threshold will be met/surpassed. I’d also sell it as a job creator because, would create jobs!

  4. joe
    Jan 30th, 2011 at 20:07

    We need to connect a healthy Caltrain to reduced 101 traffic and, assuming this correct, a lesser chance that on-ramp metering lights will backup traffic into the side streets.

    I also see reader commentaries in the newspapers that demand Caltrain pay as it goes without recognizing all taxpayers subsidize cars — cars that cost the owner 0.50 a mile to operate.

  5. jimsf
    Jan 30th, 2011 at 20:42

    off topic but I’m watching this documentary called The Sky’s the Limit, about the aviation industry and a couple points being made, one, in spite of the talk of increased greening and efficiency, the continuing growth of air travel is going to keep increasing the amount of greenhouse gasses. Also, the system globally is so far behind in capacity, that world wide, 70 completely new airports need to be built in the next 15 years to keep up, otherwise 40 percent of the travelers who want to fly will be told no due to lack of capacity. Oddly, as the documentary goes on and on about the problems and includes the increasing amount of protest against airport growth, there has yet to be any mention whatsoever of high speed rail for solving part of the problem. The airlines, as well as boeing and airbus etc, are focused entirely on the importance of the industry as if it must continue at any cost.

    jimsf Reply:

    India is building 30 airports in the next two years and industry leader’s view is that aviation worldwide is so important to the global economy, that while no one wants to say “the environment will have to take a backseat” that is basically view of business- that its worth the carbon footprint.

    Peter Reply:

    The interesting thing is that that is basically what China was doing 5 years ago. The sky was the limit. Airlines were hiring like mad, planes were being sold to Chinese airlines in large amounts. Then, suddenly, the HSR network took priority over the airlines, and the airlines began slashing prices and pruning routes to remain competitive. They’re not anymore.

    Does anyone know whether India has any major HSR plans?

    Alon Levy Reply:

    There was a post on it on TTP a while back. India has plans for HSR, but they’re less far-reaching than China’s, and the Indian government’s track record is of never getting anything done.

    Donk Reply:

    India? HSR? You’ve got to be kidding me. They do have a few “express” trains now that are half descent, but they have a loooooooooooooooooooooooooooooong way to go before they get anything resembling HSR. When I was there last year there were literally frickkin cows walking on the railroad tracks and sleeping IN the ticket offices.

    Infrastructure in India is a disaster, probably the #1 thing keeping them from growing faster. Their railroad infrastructure is extensive and so screwed up that they wouldn’t even know where to start. They have growing problems with separatists or terrorists bombing high profile tracks, their attempts at security are a joke, and they don’t have anyone that can operate these sorts of things safely and efficiently. I doubt the 1B people there would be too happy to see the govt spending money on HSR when the rest of the trains and tracks are basically falling apart and the majority of the 1B people there will never be able to pay more than $1 to ride a HSR train.

    Spokker Reply:

    Hahaha third world nations and their problems.

    Nathanael Reply:

    India has also decided, for no obvious reason, to standardize on broad-gauge tracks, just as the entire rest of the world is standardizing on standard-gauge tracks….

  6. Mike
    Jan 30th, 2011 at 20:46

    The “10 cent” amount may be insufficient, but it isn’t arbitrary; that is the largest amount that MTC is authorized to pursue under state law. Sure, it’s possible to go back to the Legislature and try to get the number raised, but it adds another step and another world of political battles.

    Mike Reply:

    Oh, and it’s not possible to reduce the vote threshold below 2/3 without a statewide ballot measure. (At least not possible based on any legal theories currently in circulation; perhaps a clever lawyer will find a loophole.)

    Nathanael Reply:

    Go to the CA Supreme Court to retroactively overturn Prop 13 of 1970-whatever for being a Constitutional Revision rather than a Constitutional Amendment. There’s your legal theory. (It was, after all, a wholesale revision of the Constitutional structure of government.)

    datacruncher Reply:

    The constitutional revision argument was rejected by the California Supreme Court just a few months after Prop 13 passed. The Calif Supreme Court ruled Prop 13 was an amendment and not a revision. The ruling was in the case Amador Valley Joint Union High School District vs. the Board of Equalization back in 1978.

  7. D. P. Lubic
    Jan 30th, 2011 at 21:36

    Off topic (latest edition of James RePass’s Destination Freedom), but of interest for having a Republican Congressman from Pennsylvania saying he prefers the upgraded Keystone Corridor to driving.

    Maybe we still have hope?

    Nathanael Reply:

    Don’t know much about Shuster. How old is he? If he’s too old, I can’t consider it a portent of the future.

    Those regions are so culturally Republican that even sensible people run as Republicans, so I wouldn’t be surprised if a few got into office…. and yet it’s also actually full of suburban Harrisburg.

    D. P. Lubic Reply:

    He’s relatively young–51 or so, a bit younger than me at 55:

    As to whether it’s much hope–well, I’ll let you decide.

  8. morris brown
    Jan 31st, 2011 at 08:02

    For the few who want to know the reality of High Speed rail, please read this article from Wendell Cox.

    Matt Reply:

    How much did oil and car companies pay him for that one?

    Peter Reply:

    I like how he implies that user fees (gas tax) covers all costs for highways and air travel. Talk about lying through your teeth…

    Donk Reply:

    I honestly tried to read this with an open mind, but the second I saw that he is still arguing that line goes from Borden to Concoron, he lost all credibility. If you are going to try to publish something like this you at least should have your facts straight.

    And I also don’t see why he can’t separate capital costs from operating costs. The point that the jackass doesn’t get is that we are willing to make an investment for the future and nobody is arguing that we will make back the $45B capital costs. The airports were not originally built using user fees, and they continue to be paid for using non-user fees. Also in Obama’s 2011 budget (from the NYT table) has $5.43B for airport security. Those are discretionary funds not user fees. That alone is almost twice the entire railroad budget.

    Peter Reply:

    Meh. I doubt that he doesn’t “get it”. I’m pretty sure he’ll just write whatever he’s paid to write.

    adirondacker12800 Reply:

    What is sadder is that Morris is unpaid

    Peter Reply:

    Hence why he doesn’t develop his own lies, just repeats those of other people.

    Spokker Reply:

    What does he actually do to make a living?

    Andre Peretti Reply:

    Then he is cheating his sponsors. All he has been doing all the time is copy/paste his previous article, just adding a few words to update.
    This time, he even bungled his copying. He left out the line about the TGV being highly subsidised. He is slipping. Time for Big Oil to replace him.

    Michael Reply:

    When I-280 opened (runs up in the hills on the Peninsula), it ended at SR 92 and started again at Farm Hill Road. Eight lane freeway dumped onto 2-lane Canada Road. There were signals at the intersection with 92 and Edgewood Road. What a scam! Oh, wait, you can’t always build everything at once.

    BruceMcF Reply:

    Why would anyone read Wendell Cox and hope to find reality? Someone paid to continue reaching the conclusion they reached years ago is not about to do anything but keep reaching that same conclusion.

    D. P. Lubic Reply:

    Why does anybody pay Wendell Cox to to spew such poorly-written garbage that Paulus Magnus can take said garbage apart with one hand behind his back?

    “Evil capitalists” just ain’t what they used to be.

    Alon Levy Reply:

    Hey, the people paying him are ultimately GM and its astroturf wing. They can’t run a business properly; why do you expect them to be good at lobbying?

    PeakVT Reply:

    More spam from Morris Brown. Look at this garbage.

    If the nation is going to reduce its out-of-control spending, the first step is to stop spending money on things we do not need. Despite President Obama’s call in his State of the Union speech for linking 80 percent of the nation by high-speed rail, it is hard to imagine a more unnecessary program.

    It’s easy to imagine a more unnecessary program. It already exists and it’s called the War in Iraq, which the idiots at the NR cheered on enthusiastically. And from there, the opinion piece goes downhill fast.

    The National Review is not a credible news source. It is an opinion journal crammed with falsehoods.

    Paulus Magnus Reply:

    I take that article apart on my own blog here

    D. P. Lubic Reply:


  9. Matt
    Jan 31st, 2011 at 08:08

    The problem with using a gas tax to fund public transit is that over the next 25 years the revenue will go down per year as gas gets more expensive and people start to use the public transit more. Also cars are going to be using less gasoline per mile as they improve in effciency.

    Its not a bad idea to tax gas 10c, just be aware it is not the most stable form of revenue.

    A 35c per gallon gas tax would be a huge incentive for people to drive outside the taxable zone to fill up.

    Victor Reply:

    Then make the taxable zone bigger(Like the whole state of California) and lower the amount down to somewhere under $0.35 a gallon, Also make It help Local Jurisdictions on Maintenance of local roads to sell It to the public(about 1/8 of the tax for roads), Which currently are under funded. This would be to sweeten the deal to the majority of the public.

    BruceMcF Reply:

    … as gas gets more expensive and people start to use the public transit more …”
    If people start using Caltrain more for trips other than commutes, its average load factor rises and it won’t need as much operating subsidy.

  10. Dennis Lytton
    Jan 31st, 2011 at 12:14

    Thanks Robert for the Washington state example of passing a gas tax in 2005. California Dems probably think it’s political suicide and it’s important for them to see what happened up there. Also I never thought of the idea of phasing it in over X years. Clearly a game changer idea for getting a gas tax.

    Yes, theorectically gas tax revenue will go down when driving falls off more significantly. But we’re nowhere near that problem today compared to Caltrain’s funding problems now. (When people driving so much less becomes our problem with the gas tax, it’ll be because they need a transit alternative).

  11. MGimbel
    Jan 31st, 2011 at 16:48

    OT: I just emailed DesertXpress asking about the timeline of the project (since we haven’t heard anything lately) and they said that the EIS from the FRA is still pending.

    And if anyone’s interested, I emailed the TJPA asking about potential connections to Bart. According to their spokeswoman, they’re studying the possibility of an underground people-mover connection to Embarcadero Station.

    jimsf Reply:

    O mg its only a block and a half. A three minute walk. Is people mover really necessary? I know they are thinking and an underground passage. at most, a moving sidewalk like at the airport could be used.

    Joey Reply:

    Did you expect any better from the TJPA?

    MGimbel Reply:

    I was thinking moving sidewalk would be the best too. Anyways, I guess it at least provides passengers with a weather-protected way to access Bart and Muni.

    Joey Reply:

    The key point is to have a pedestrian subway. Whether or not it has moving walkways is a lot more trivial.

    BruceMcF Reply:

    At a block and a half, if its nothing but a pedestrian subway with no shopping, food court, etc., then a people mover would seem appropriate.

    adirondacker12800 Reply:

    A three minute walk without luggage. Might be a bit more if you have luggage. ( If they don’t have much luggage I guess they won’t need baggage cars will they? ) Assuming of course walking three minutes is in your repertoire.

    Peter Reply:

    Does any high speed train in the world even have a luggage car? Hell, what first-world train operator other than Amtrak even has luggage cars anymore?

    D. P. Lubic Reply:

    “Hell, what first-world train operator other than Amtrak even has luggage cars anymore?”–Peter

    VSOE, which is admittedly a rather unusual operation.

    Interestingly, this seems to only be with the British Pullman set; the Continental set doesn’t seem to have one.

    Jim SF would like this train with its very fancy dining and sleeping cars, as would I, but those prices! I’m afraid I’ll never ride it, but I never anticipate taking a sea cruise, either.

    adirondacker12800 Reply:

    Via in Canada. But they offer land cruises just like Amtrak does.

    swing hanger Reply:

    Dedicated luggage cars are rare (they take away seat revenue space), but railcars with luggage spaces taking a portion of the car length are common.

    on the SBB (Swiss Railways). This fast local has a space in the front driving car for luggage that can be loaded from the platfrom:

    In fact the SBB has a nice baggage handling service called “fast luggage”, that I assume requires local trains to have luggage compartments:

    In Japan, no such luggage compartments exist. The majority either pack light or send their luggage ahead using the excellent package delivery services, akin to FedEx or UPS.

  12. Spokker
    Jan 31st, 2011 at 19:43

    Off-topic but Amtrak is going on the offensive.;filename=Amtrak_ATK-11-011_Amtrak_Statement_NEC_as_Public_Asset_(01-27-11).pdf

    I wonder how accurate the information is, but Amtrak claims to cover 76% of operating revenues out of fares. If services for other railroads and real estate contracts are thrown in, they recover 84%. Obviously, this is an average. The Acela express actually turns a profit while long distance routes lose money.

    They go on to point out that 57% of the FAA’s budget is paid by air travelers. They say that less than 60% of total highway system costs are covered by fuel taxes and user fees.

    Then they point out that unlike other modes, Amtrak must pay for its own traffic control, security, training and signals. When we talk about roads, we usually don’t talk about how much highway patrol costs.

    It’s good to see Amtrak defending itself.

    adirondacker12800 Reply:

    Toll roads in the East pay for the police.
    Median toll, last time I looked was 5 cents a mile. Or a buck a gallon, to pay for the toll road, if you get 20 MPG.

    BruceMcF Reply:

    They only pay for the highway patrol on the tollway, they don’t pay for the cost of policing motor vehicle ownership in general, which comes out of the general fund that in most states gas is exempt from paying into.

    adirondacker12800 Reply:

    The tolls purportedly pay for everything on the toll road. ( There are many hidden subsidies in toll roads ) The nicely maintained, patrolled etc toll roads have a median cost of 5 cents a mile. Much lower than the gas tax, even in high gas tax areas.

    Alon Levy Reply:

    You mean “much higher,” right? The gas tax is 1-2 cents per mile.

    adirondacker12800 Reply:

    Yes. buck a gallon at 20 MPG.

    BruceMcF Reply:

    “on the toll road” is a key part of the shell game. The trip by automobile requires, for example, parking somewhere in the vicinity of the destination, much of it provided in suburban areas by property takings in the form of zoning mandates. The toll roads participate in the general subsidies to the semi-private motor vehicle system, except for costs specific to the road itself.

    D. P. Lubic Reply:

    And let us recall that we have an issue of double taxation here; the auto on the toll road is burning fuel that has had taxes paid on it, which goes to subsidize the rest of the system.

    Truckers, by the way, hate toll roads for just this reason.

    At the same time, it’s my understanding that the truckers were supportive of an elevated gas tax in one state–either New York or Pennsylvania, I’m afraid I don’t remember which–as an alternative to a toll road or increased tolls. Someone told me that it turned out that a trucker could fill up on relatively lower-taxed fuel in states on either side of the one in question, and make it clear to the other side before he had to fuel up again. Translation: they got the benefits of higher fuel taxes without paying said taxes.

    Of course, there is still the matter of those tax stickers they have to have on the truck itself.

    Nathanael Reply:

    If *all* the roads were tolled…. but they’re not.

    Alon Levy Reply:

    Meh. Those, let’s not forget, are the same people who want the NEC to have regular high-speed rail for the cost of maglev because they can’t figure out how to do timed overtakes with commuter rail.

    Amtrak issues monthly and annual performance reports. Those do not show 84% farebox recovery. They show closer to 67%. Better than the Interstate system, but that’s an awfully low standard to aim for.

    BruceMcF Reply:

    They are not claiming 84% farebox recovery, they are claiming 76%.

    In the September 2010 monthly performance report, which I believe has the FY2010 numbers (its the end of the fiscal year), FY2010 Core Cost recovery looks to be between 75% and 80%.

    Paulus Magnus Reply:

    For the Fiscal YTD ending September 30, 2010, 77% Core (NTS) Cost Recovery Ratio, 66.3% total cost recovery ratio. To be honest though, I’m not really sure how they come up with the numbers in the cited PR release. The math simply doesn’t work out that way unless I’m missing out on some weird accounting things.

    Alon Levy Reply:

    Including depreciation, it’s about 67%-ish. Bear in mind, the highway system only achieves similar numbers by having dibs to all gas taxes, which is analogous to giving Amtrak and the commuter railroads dibs to all bus fares collected nationwide. The issue isn’t one of mode war; it’s one of Amtrak’s underperforming comparable intercity railroads worldwide.

    BruceMcF Reply:

    What intercity railroad worldwide has to compete against such a heavily subsidized car transport system?

    Alon Levy Reply:

    Most of them. The cost per km of driving isn’t much lower in the US than in Europe and Japan – the higher gas taxes double the price of gas, but encourage people to get 50% more fuel-efficient cars. The tolls are high, but aren’t more than what you’d pay on the Northeastern turnpikes and river crossings.

    But forget that. Let’s talk about how the Acela underperforms the average speed of older lines in Britain with lower top speed, and is about even with low-speed rail in Israel. Let’s talk about conventional HSR plans with the same cost as maglev, about on-time performance that by Swiss standards is approximately zero, about the ignorance of better signaling, about the decades when the company could’ve asked the FRA for technical rule revisions and didn’t, about the bizarre belief that timed overtakes of commuter trains are impossible…

    Nathanael Reply:

    For all we know, Amtrak did ask the FRA for technical rule revisions. That’s the sort of thing which would not have been made public.

    Nathanael Reply:

    Actually it’s worth noting that the deliberate wrecking of the intercity railroad system in the US simply never happened anywhere else. What intercity railroad worldwide has had to deal with a national 127 km/h speed limit for lineside signalling, a 144 km/h speed limit for ordinary grade crossings, a build-everything-like-a-tank rule for railroad car construction, and (during the period it was wrecked) a policy of private railroad ownership, regulated rates, and heavy taxation? Followed by a long period of the absolute smallest national railroad funding of any national intercity railroad in the world?

    Alon Levy Reply:

    I don’t know, but Israel achieves 120 km/h average speeds with trains hauled by 140 km/h Alstom Prima diesel locos. I believe 140 is the top speed nationwide (though some trains are capable of 160).

    But yeah, the wrecking of railroads is more or less a US- and Canada-only thing (VIA is just as bad as Amtrak, only without the NEC as a saving grace). Though, Britain did the same in the 1950s and 60s – it just did it less, and then went back to investing in trains afterward.

    James Fujita Reply:

    nothing wrong with private railway ownership as long as the private railroads are dedicated to passenger rail instead of freight.

    Henry Huntington should have built department stores instead of tract homes; built places for people to go to rather than places for them to live. the Pacific Electric ended up sowing the seeds of its own destruction by encouraging sprawl.

    Japanese railway companies were linked to downtown department stores, which continued to provide profits for the company, which allowed them to keep running the trains which suburban Japanese residents used to go shopping.

    separating freight from passenger also helps, less track maintenance and less “waiting for the freight to pass”

    Joey Reply:

    Private passenger operations are uncommon because, at least in this day and age, most (except some fast intercity operations, and of course some very dense parts of Asia) can’t operate without subsidies.

    James Fujita Reply:

    that’s true.

    of course, the private railway companies I’m talking about were contemporaries with Henry Huntington. the areas they serve aren’t even the densest parts of Tokyo or Osaka.

    America and Japan came to a fork in the road (or a switch in the tracks) and took two different routes.

    Nathanael Reply:

    Don’t include depreciation. I know it’s a legitimate expense, but it’s completely impossible for anyone to figure depreciation accurately on most things because it’s forward-looking, and the standard methods approved for GAAP are consistently wrong because they depreciate based on cost, not replacement cost.

    When analyzing financial reports I generally ignore the depreciation and use my own best guesses as to how fast things are falling apart and how much they will cost to replace.

    Alon Levy Reply:

    I’m pretty sure everyone depreciates based on cost and not replacement cost. If they depreciated based on replacement cost, New York City Transit would have a farebox recovery of, like, 5%.

    adirondacker12800 Reply:

    Too much opportunity for cooking the books. They can depreciate the replacement at replacement cost…

    Risenmessiah Reply:

    Actually it’s not off topic at all. The FAA Re-authorization Bill appears to have expanded the role of passenger facility charges (PFCs) to finance airport construction. There’s language that expands how airports can test new ways to collect the PFCs as well.

    It’s possible that there could be PFCs for HSR as well. So that if you book a ticket from SF to LA…you would pay a fee to support the cost of the station. That would make more sense that a gas tax.

    jimsf Reply:

    I suggested that 2 years ago.

    btw on the amtrak topic – yes we got a letter from Boardman today letting us know that the company intends to make sure that members of congress are aware of the important role the national railroad plays.

    Risenmessiah Reply:

    PFCs are notoriously arcane. I studied them for a project in grad school and my professor had no idea why I would pick the topic. I told him it’s because PFC were actually the policy that Washington used to make deregulation of the airlines a reality. Catch is, of course, that Southwest and other budget airlines have used PFCs against the legacy carriers by shifting their operations to older airports first, and then eventually entering the big new airports when they have a strangehold on the market. HSR of course won’t have that problem.

    The one thing that worries me about the expansion of PFCs is that it’s just an excuse to increase user fees when there’s no guarantee that its applicable to the rest of the transportation. And it’s not like the user fees are going to offset the current operations of airports, but instead be sucked into new projects and raise the cost of maintenance overall.

    BruceMcF Reply:

    Part of that may be to clear room for the upgrade to the air traffic control system.

    Sure, whenever too much of the ticket tax revenue has been allocated to capital projects, they routinely make up the gap in the FAA operations budget out of the general fund, but they have to maintain the pretense that that frequent operating subsidy is an unexpected event each time.

    Donk Reply:

    Its about goddamn time they are doing something like this. Amtrak is like the nerdy little kid in the yard who the kids make fun of because he keeps on getting wedgies by the bullies. But highways and Airports are the bullies who shit in their pants in the yard, but people are too scared of them to make fun of them. Its time for someone to take a stand against the highways and airports and expose the turds in their pants.

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