Minnesota should avoid high-speed rail mess
With the state set to to receive According to the Infrastructure Investment and Jobs Act (IIJA) estimate of $4.8 billion, Minnesota will be well positioned to make significant investments in its infrastructure in the years to come. One of the projects that could be funded is the propose Northern Lights Express, which would run between Target Field in Minneapolis and Union Depot in Duluth. Any use of IIJA funds for the Northern Lights Express would support a project that cannot sustain itself without continued taxpayer support.
Congress together set aside nearly $100 billion for rail projects in the IIJA. Among the funding programs that could be available in Minnesota are $41 billion for expanding Amtrak service beyond the Northeast and Mid-Atlantic regions to include more cities across the country, $43.5 billion for rail service intercity rail made available to states through the Federal-State Partnership for Intercity Passenger Rail Subsidies, and $15 billion in additional subsidies. With so much money available for Amtrak expansion, Northern Lights Express advocates have expressed optimism that the state could escape paying contributions to the project if Amtrak chooses to function line.
In its 60-year history, Amtrak has never been profitable and has constantly been beleaguered by problems. Established as a government-owned enterprise to “rescue an American railroad industry that had been pushed to the brink of collapse”, Amtrak cannot operate without heavy taxpayer investment through federal and state subsidies. In many cases, Amtrak’s expansion beyond the popular Northeast Corridor (which runs from Washington, DC to Boston) also requires significant state investment. In fact, an Amtrak line that largely followed the route of the proposed Northern Lights Express was closed after the state decreases contribute financially in 1985.
The supporters of the Northern Lights Express admit that the project will not be able to sustain itself without continued government funding. A 2018 project description estimated the construction cost at $500-600 million. Average annual operating costs for the first five years of operation were estimated at $18.9 million. Fare revenue over the first five years of operation was estimated at $12 million per year, resulting in a shortfall of $6.9 million. As a result, taxpayers will be forced not only to cover the cost of building the necessary infrastructure for the railroad, but also to continue to subsidize the project to keep it operational.
Even with this significant taxpayer investment, the project will not reduce the cost or time required to travel between Minneapolis and Duluth. For example, travelers could choose to drive or take the bus instead of paying the $30 one-way fare. Although it’s slower, a one-way bus ticket costs as low as $9. The cars could transport several people at a lower cost per person in less time than the proposed rail route. As Center for the American Experiment Economist John Phelan Notedtravelers opting for the train would also have to consider journeys to and from stations and the rigidity of train schedules.
In 2018, Tom Schatz, president of Citizens Against Government Waste observed that the high-speed rail proposals offer a utopian vision in which “cars will fade into darkness, traffic will disappear, the environment will become magically clean, and America’s railroads will look more like those of Asia and Europe” . Instead of spending billions of dollars just not to fulfill this fantasy, Minnesota should reject any effort to establish a taxpayer-funded rail system in the state.