A Few Ideas for Funding High Speed Rail

The big challenge for getting high speed rail built in the US is not technology, political will or popular support. Those import elements seem to be in place. No the big challenge will be finding the funds to pay for it.

With a sky high national debt and two political parties dedicated to not solving the problem this could be trickier that we think but not impossible. After all other nations with massive debt problems have managed to build massive infrastructure projects including high speed rail lines. Argentina is even trying to build one now despite debt and inflation that make ours look tame in comparison.

So here are a few proposals for high speed rail funding:

• A 5% or 10% tax or tariff on imported oil with part going to highways, part to alternative energy, part to mass transit and part to high speed rail. Democrats would love this because it would encourage alternative energy. Republicans should like it because it would reward domestic production.

• Since a lot of high-speed rail lines would pass through undeveloped areas with a lot of federally owned lands particularly in the West. Give high-speed rail developers the right or ability to sell undeveloped federal or state land along the right to sell it off. This is called land grants and it is how the transcontinental railroads were financed in the 19^th century. A related idea to this would be to give rail developers the right to sell unused or foreclosed land near rail stations in big cities.

• Property taxes. Since transportation infrastructure projects often increase property taxes. Tax property values or property sales along the route to pay for the line. An example of this could be special tax districts around stations and lines.

• Trackage rights. The owners of new high speed rail lines could sell other railroads such as freight railroads the right to operate trains on their routes. I know the self proclaimed rail experts that reporters like to interview claim that high speed rail will not be profitable. I tend to doubt them because high speed freight trains will be far cheaper to operate than planes. Therefore a large percentage of the freight now moved by air will shift back to the rails when high speed rail lines become available. Also a lot of freight that moves by trucks will shift to this method. Examples of companies that might run these trains include fruit and vegetable growers or packers, UPS, FedEx, and big retailers like Wal-Mart or Safeway. The big freight railroads may also want to run trains over high speed lines.

• Finally, there are passenger fares. People will have to pay to ride the trains. Since high-speed trains can attract high rider ship passenger fares can cover a large percentage of their costs. One way to generate additional income would be to launch luxury passenger trains similar to Europe’s Eurostar. These could be competitive with the airlines. Especially if such features as private compartments and the ability to ship your car with you on the train were added.

These are just a few ideas, I’m no expert here but if my brainstorming could come up just a few proposals. Think what the professionals that work in the industry might think of.