Sunday, October 6, 2013

All Aboard Florida shows why private passenger rail is still a victim of hostile government

(Note - I'm strictly non-ideological when it comes to how to provide a quality passenger train. For profit? Government subsidized? Don't care. I just care it happens. This rant will concentrate on attacking those who demand profits for their apparent complete silence when it comes to a railroad that's trying to do exactly that.)

Given the attacks on Amtrak by the "free market" right over the years, and their insistence that passenger rail only failed in the US because of market forces, and nothing else, you'd think they'd be jumping on the FEC's All Aboard Florida project as a chance to show "how it should be done", lobbying for pro-rail policies in Florida that do everything except issue a subsidy.

In particular, you would assume:

  • Land that's State owned, unused, only suitable for right of way use, and less likely to be necessary for future expansion if a train is taking passengers off the roads, should be made available to the railroad at low cost.
  • The system of taxes, levies, etc, waged against railroads that seemed relevant in 1902 when trains were the only viable means of medium/long distance travel should be reformed so passenger trains aren't subsidizing cars and airports.
  • Given that choice is supposedly a keystone of a free market, and given rail is actively harmed by a lack of choice, you'd expect planning reforms from communities wanting in on a private train service.
Those are three Pretty Big Deals. The first is necessary because private passenger systems are unlikely to succeed if they're limited to travelling on existing rail lines, especially given the massive cuts in routage the national system has suffered in the last 100 years. Case in point - there's only one line, owned by CSX, that goes from West Palm Beach to Orlando, which is a connection the FEC wants to make.

The second is ridiculous: it remains the case today that passenger systems are essentially punished by the tax code. I don't mean that in a "I'm a billionaire and I have to pay a 30% tax rate boo-hoo I'm being punished leave job creators aloooooooooooone!" sense, I mean actually punished - railroads provide a service, and they're penalized for doing so. How?

Well, passenger rail, whether used or not, adds value to local communities. By all accounts, a neighborhood's property values increase by approximately 80% compared to similar neighborhoods, if connected to a rapid transit system. But this happens regardless of how well the system is used. People like having a train available, and are prepared to pay higher property premiums (and, uh, property taxes - take note) to live in a place that's connected, even if they don't plan to use the train on a regular basis.

Couple this with current planning laws, where all new (since the 1950s) neighborhoods are built such that usage of a car to transport yourself is all but mandatory, and you reduce the chance that any passenger system will ever be able to pay for itself. Most passenger services have, and always have had, low margins. Requiring any passenger service that's desired by local residents, but not heavily used, to pay high taxes for its infrastructure, makes it much harder to succeed as a private for-profit enterprise. And this is in large part why most railroads went freight only in the 1970s. Shooting a freight line through a neighborhood damages that neighborhood's value rather than increases it, which reduces the taxable value of much of the infrastructure owned by the railroad located there, as well as requiring less infrastructure (typically well used passenger lines need to be double tracked) to be taxed in the first place.

The State seems dysfunctional

So, the State of Florida, which suffered an abrupt end to the FEC's passenger service in 1969, and everything else in 1971, thanks in large part to hostile rail policies, has learned its lesson, right? Right?

I'm not going to say the State doesn't get it completely. They're relenting on the aforementioned stupid car-only planning policies from Jupiter to Miami, but otherwise they appear to be looking at All Aboard Florida not as a chance to relieve themselves of some of the burden of providing transportation infrastructure, but as a chance to make a fast buck.

The FEC needs a right of way to get it to Orlando. For decades the FLDOT has had such a right of way available, making it clear that part of the land currently adjacent to I-4 and various turnpikes was intended for rail use, publishing maps describing this.

Nobody else has expressed any interest in building a railroad on these rights-of-way, and the FLDOT even, when the FEC made a request to use the line, opened up the proposal to ask for counter offers. Which is right. They should have done. But there weren't any.

So, the FEC's getting the land for free, right? Or perhaps for a nominal charge like $1, or $1 + a $500 filing fee?

Well, no, staggeringly the amount of cash the FEC is paying varies, but at least one portion will cost over $275,000 a year. There's no suggestion property taxes are being reformed.

But the bit that stunned me is that All Aboard Florida will actually pay one of the turnpikes - yes, turnpikes, owned by the State of Florida - compensation for lost revenues caused by people choosing to take a train instead of driving.

There's no suggestion property taxes are being reformed. So essentially the State wants AAF to increase the extent to which passenger trains subsidize car owners, not decrease it recognizing that passenger trains inherently reduce costs for road infrastructure.

There were plenty of articles when the service was being proposed about local politicians up and down Florida's Treasure Coast, where I live, and an area through which the FEC passes through, excitedly requesting the service serve us because, you know, c'mon! There's a lot of us, and we'd like to use it too. And I know it's not going to happen. It just isn't. It's not that the FEC couldn't get enough of us to use it to cover the direct costs of providing stations here (and presumably additional trains because you don't want the main Miami-Orlando service to be slower), it's that the amount of additional revenue would be slight, and the effect on its tax burden massive.

And those same politicians aren't actually instituting reforms that would increase the number of passengers. I'm not seeing a single Martin County politician who's taking concrete steps to end suburban sprawl - indeed, Martin County's "slow growth" policy has always been anti-urban, with bans on buildings four stories high, and with the usual parking mandates and mixed development bans that prevent walkable communities from ever happening. Martin County is a cluster of HOA-controlled "communities" and strip-malls, as a matter of public policy. Why would a politician who refuses to change that think that a private train company would be remotely interested in serving that community?

But they're going ahead anyway

Despite the ludicrous attitude of the government, All Aboard Florida is still on track, so to speak. And good for them. They expected it to make a large amount of money, and they're looking at a million here, a million there, etc, as relatively minor in the great scheme of things. But without significant reforms, AAF isn't going to be a demonstration that private rail service works. AAF will, at best, prove that certain types of express service can be profitable and unsubsidized. AAF will be able to link large transit-served population centers, separated from one another by long distances. 

Meanwhile I'm not hearing criticism of the demands that AAF find additional ways to subsidize car owners, that existing subsidies for the roads from railroads be lightened, and that planning laws continue to prevent people from using any form of transportation other than cars in most of Florida. Why the silence?

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