Charlie Arlinghaus- Derail the next boondoggle train before it really costs us

By CHARLES M. ARLINGHAUS

With a little luck, President Obama will save us from ourselves and derail the train project we can't afford but that state officials are eager to pursue. New Hampshire's past experience with commuter rail provides a good excuse to reject the not-so-high-speed rail plans of the New England governors.

Word comes this week that the six New England governors have banded together to seek a share of the $8 billion the stimulus package set aside for high-speed rail. On a per capita basis, New Hampshire's share would be about $40 million, although generally railroad money would be likely to benefit states with a larger urban population.

When the President talks about high-speed rail in the United States, we usually envision 200-mph maglev trains or speedy bullet trains like the famed TGV in France, a modern streak of steel flying over the ground from one urban core to another. In reality, the projects proposed for federal subsidy are more typically expansions of medium-speed projects. The most prominent New England proposals relate to commuter-targeted services.

The priority project that concerns New Hampshire is trying to get a portion of the required funding to extend greater Boston commuter rail all the way north to Concord. It sounds exciting, but we can't afford it. The financial struggles of the widely praised Downeaster service on the Seacoast suggest this would be a bad investment.

Since the demise of train service in New Hampshire in the 1960s, rail fans have long hoped for the return of some trains. In 1980, we got a taste of what could be. The federal government paid for a modest train service from Concord to Boston, the same route proposed for the current Capitol Corridor Project. When funding dried up in January 1981, the service did too. The state couldn't afford it without a federal subsidy.

Amtrak's Downeaster train is an example of how successful trains can be today in northern New England -- and of the limits and cost of that success. The Portland-to-Boston Downeaster has seen relatively strong ridership since it began in 2001. It is routinely touted as one of the most successful passenger rail projects in recent history. Federal grants paid for a lot of the capital development costs, and still an operating subsidy is required.

The Downeaster is a model for the proposed New Hampshire service. Its operating costs are about $13.5 million per year. Its revenues are $6 million, with government subsidies making up 55 percent, or $7.5 million, of the costs. The federal portion of the subsidy has run out (just as in New Hampshire in 1981), and the state of Maine cut its portion of the subsidy from its current budget.

A New Hampshire commuter rail project would almost certainly face a similar struggle. The costs of rebuilding the line and making other capital improvements are estimated to be around $300 million. While the federal government might subsidize some portion of that construction, it almost certainly wouldn't pay for the whole thing. It probably would cover less than half of it.

So, New Hampshire will face a policy question. Do we want to spend tens or hundreds of millions of dollars to build a commuter rail line? In other words, taking millions from the federal government would only get us part of the way there. State and local governments would still have to spend a lot of tax money for tracks and to help build stations.

Once we spent millions of tax dollars to match the federal grant, there would still be a question of operating costs. Conceivably, part of the operating subsidy would be paid by the federal government, as it was in 1980 in New Hampshire and until this year for the Downeaster. But once the federal seed money went away, New Hampshire taxpayers would have to either pay millions of dollars in subsidy or shut down the service, just as we did in 1980.

Before we accept any hypothetical grant, we should know how much it's going to cost us in the end. New Hampshire taxpayers won't want to use part of the state's shrinking credit to pay for a train we'll have to subsidize. Any subsidy would be cut the first time we have a difficult budget (which looks to be for the foreseeable future).

With a little luck, the President will save us the trouble by just saying no. It's probably a waste of federal money, too.

Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.