Funding High-Speed Transportation in America with Public-Private Partnerships
The public sector is able to mitigate risks while the private sector uses its resources to expedite infrastructure investment.
The cities that are home to HSR stations can be expected to have concerns about the diversion of property tax, but the increase in business activity around the stations and resultant sales taxes can help to mitigate that issue.
The Win-Win
Lawmakers at both the state and federal level will have to work hard to resolve these complicated issues. But reasonable parties will hopefully be able to reach consensus because the potential benefits are so great. A preliminary estimate is that the $10 billion average infusion from the HSPT user fee for 25 years (total infusion of $250 billion) could yield up to $1 trillion in investment in HSR infrastructure and transit-oriented development. The federal government will be able to leverage this growth and develop a 21st-century, state-of-the-art, high-speed passenger transportation infrastructure without tapping general tax revenues.
Other ancillary benefits arise from the formation and related economic activity related to the tens of thousands of jobs created, not just in construction, but also in engineering, design, product support and domestic manufacturing.
Americans are by nature impatient, but patience will be required. Concerns have been opined that the airlines and their allies would never agree to the 6 percent user fee. It is a valid point, but it is important to put that argument into perspective. It is taken for granted that 20 percent of the Highway Trust Fund has always been dedicated to transit. When the current House committee tried to strip the transit support section out of the Highway bill, a bi-partisan group of representatives saw to it that an amendment was passed to restore transit funding.
But back in the 1972, the Commonwealth of Massachusetts under Republican Governor Francis Sargent took a very bold decision to not build Interstate 95 into the city of Boston. He petitioned the U.S. Department of Transportation that the highway monies for the first time be flexed instead to the Orange Line subway. When Democrat Michael Dukakis followed in the governor’s chair he continued the request, which was again granted on an ad hoc basis. It was not until 1982 under a Republican president named Ronald Reagan that this transit allocation was formally codified into law for all the states.
The lesson for transportation advocates is that it will take some time to establish a formal mechanism for a High Speed Passenger Transportation fund. It would be unrealistic to assume a yes answer right out of the box. Hopefully it will not require a protracted amount of time to make it operational in some form. But as an economic imperative, the time to start asking is now. MT
Richard J. Arena (rjarena@aptmarp.org) is the president of the Association for Public Transportation (APT) and is on the advisory board of US High Speed Rail (USHSR). The views in this article are his own and do not necessarily reflect those of APT or USHSR.
