Don’t run trains on taxpayer dollars
Passenger trains tie us to our nation’s history and they remind us of far-away destinations and adventures. But we should not allow our nostalgia to cloud our rational thoughts about good public policy. Especially when it involves taxpayer dollars.
The plan to restart passenger service from Mobile to New Orleans, with stops along the Mississippi Gulf Coast, is a great example of letting pleasant sounding promises overpower railroad cars full of empirical evidence and common sense. Mississippi leaders have committed $15 million of taxpayer money to the initial infrastructure costs to restart the Gulf Coast line. The project has also received $33 million in federal grants.
Even though this line of passenger travel, which runs on railroad lines owned by CSX, was discontinued in 2005 due to declining interest, we’re being told this attempt will be different. Has the mindset of travelers along the Coast changed that much?
To be fair, there was an economic impact study produced by the Trent Lott National Center for Excellence in Economic Development and Entrepreneurship at the University of Southern Mississippi that claimed a potential creation of somewhere between 1,600 and 16,000 jobs annually. That study also estimated the potential economic impact of over $1 billion. Having been deeply involved in feasibility studies and economic impact modeling in support of municipal funding in my earlier life, I wouldn’t bet the mortgage payment on the likelihood of actual results ever crossing paths with these estimates. Call me cynical.
There are some less promising estimates than those from the Trent Lott Center. Amtrak’s own study admits that this new line would attract just 26 riders per train and require a $6 million annual subsidy to stay afloat.
The Amtrak passenger rail boondoggle isn’t just on the Coast. To date, Amtrak has yet to produce a profit while operating a monopoly with almost zero competition from private market participants. For 48 consecutive years, going back to passage of the National Railroad Passenger Corporation in 1970, Amtrak has lost money. It produces those losses even though it receives nearly $1 billion in federal and state subsidies every year.
Another factor that complicates the establishment of the service is the need for CSX, which owns the 136 miles of track that Amtrak wants to use, to agree to the terms of a use agreement. CSX moves freight on the line for 250 customers, operating approximately 20 trains each day. There are potential conflicts of service delivery to work through and both sides have agreed to a third party analysis and report.
Taxpayers in Mississippi should not have to fund pet projects that residents are not willing to pay for. If the passenger train demand is so strong in the region, we should invite private operators to put forward their plans. If profits can be generated from such a service, you can rest assured the private providers will do it much better than the public ones.
Jon L. Pritchett is president and CEO of the Mississippi Center for Public Policy, the state’s non-partisan, free-market think tank.