There has been debate in North Carolina about the wisdom of accepting grants under the federal high-speed rail program to add a third and fourth Piedmont train. Similar controversy has erupted in other states, leading three governors to refuse high-speed rail funding (Florida, Wisconsin, and Ohio), while a legislative committee declined to include high-speed rail funding in the budget in a fourth state (Missouri).
This report outlines issues with respect to the proposed expansion of passenger rail service. Overall, it is noted that:
- There is opposition to additional public expenditures on passenger rail, both because of the potential for capital and operating costs to be higher than projected and the potential that the state would be required to pay for any cost overruns and any additional operating subsidies.
- There is also opposition to additional public expenditures on passenger rail, because of the serious financial difficultly faced by both the nation and the state of North Carolina. Specifically, there is an objection to spending on a lower priority, such as high-speed rail, while higher priority expenditures are threatened with reduction.
- The new trains would have minimal impact on traffic volumes between Charlotte and Raleigh.
- The new trains could contribute to 20 year subsidy requirements of from $250 million to $600 million or more. The subsidy levels may not be financially sustainable.
- There is a substantial risk for taxpayers. North Carolina would be required continue to operate the trains for 20 years and complete the improvements, or it would be necessary to return part or all of the grant funding to the federal government ($550 million).
- The additional passenger trains would, in the longer run, emit more greenhouse gases than the automobiles removed from freeways and would increase fossil fuel consumption.
- An alternative system of intercity buses would reduce greenhouse gas emissions and energy consumption 50 percent to 75 percent relative to the new passenger trains.
- The projected employment impact of expanding passenger train service excludes any analysis of the displacement of private sector jobs that would take place as a result of the project. Government reports have shown the employment impacts of similar infrastructure spending to be minimal.
- In the longer run, additional passenger train service on the North Carolina Railroad could diminish its value and earnings, principally because high-speed passenger trains and freight trains have materially different operating characteristics (such as speed and weight). The potential for a loss of value is especially great as the state seeks to implement the 110-mile-per-hour Southeast High Speed Rail Corridor program.
For the reasons outline above, North Carolina should return the federal high-speed rail grant funding, withdraw its pending application and seek no more funding for passenger rail.