Another Fine Mess in the Making: New Mexicos Proposed Commuter
By Kenneth M. Brown
Rio Grande Foundation
So New Mexico needs a passenger rail system, or so some would argue.
The Albuquerque Journal has devoted a series of articles, mostly favorable
in slant, to this proposal. Certainly rush hour traffic is dense between
Belen, Albuquerque, and Bernalillo, and it makes sense, in the abstract,
to believe that commuter trains would ease some of this congestion.
Those who share the Rio Grande Foundations concerns about economic
liberty and the overreach of state government, however, will have serious
doubts about the legitimacy of such projects. They will be alert to the
strong likelihood that such a project would lose huge sums of money and
fail to accomplish its objectives.
Higher taxes are guaranteed
First of all, the ground truth of commuter rail systems in the United
States is that all of themevery single onerequires a subsidy
from taxpayers. This necessarily involves a transfer of money from all
taxpayers to those who happen to benefit from the cheap transportation
Traffic experts will point out the benefits to those who
continue to drive cars at rush hour, but those benefits usually evaporate
as roads continue to fill up, owing to economic expansion and population
The rail proposal is reasonable only in the abstract; in New Mexico the
situation is such that a commuter rails system is sure to be a money loser
on a massive scale.
Although several studies of the proposed system have been made, it appears
that no one has a firm grip upon the following magnitudes:
1. Initial cost of construction and equipment.
2. Annual operating costs
3. Number of passengers (for a range of fares)..
4. Revenues from fares.
5. Required subsidy from the state,
Number 1, initial cost, is uncertain. Numbers like $250 million and $300
million have been conjectured, but as we will see later such off-the-cuff
figures are likely to be much too low.
Number 2, annual operating costs, appears to be a complete unknown.
Numbers 3 and 4, the projected demand for rail services, are very uncertain
and have usually been the downfall of failed systems across the country.
The basic problem is that New Mexico is just not situated properly for
commuter rail to make sense.
Number 5, the required subsidy, is just revenue minus the costs of construction
and operation. This tabulation is a simplified version of whats
needed, but it is at least a framework within which we can consider whether
such a system would be beneficial or a vast albatross for the tax payers.
Does rail transit ever work?
Lets look at the more instructive examples, some of which have been
cited as proof that passenger rail would work out in New Mexico.
Fort Worth and Dallas
This example has been cited by proponents of an Albuquerque-area system.
Rail service between these cities is one of the more successful situations
because of the demand for services. The population of the two cities is
substantially greater than that of all of New Mexico, and many times the
population of all the cities along the route of New Mexicos planned
system. Furthermore, there are plenty of buses and parking lots to serve
rail riders whose destination is not exactly at the rail terminals.
Bay Area Rapid Transit
This system looked like a natural, given the crowded roads and dense population
of the San Francisco Bay area, but it has never paid for itself.
Fredericksburg (Virginia) to Washington, DC.
This line has every advantage but still loses money and has done little
to alleviate traffic congestion. An already existing passenger rail line
reduced initial costs. Commuters into Washingtons Union Station
can easily transfer onto the Metro, which takes them anywhere in the city.
Moreover, auto congestion is so hideous between Fredericksburg and Washingtonfar
worse than anything seen herethat commuters are anxious to escape
it. Nevertheless, the existence of this line has made no detectable difference
in road congestion.
The key point in all these examples is that New Mexico is different,
in ways that will prevent ridership from ever reaching levels to make
rail economically viable. And only in the most favorable cases does passenger
rail come even close to paying for itself.
Another factor in the relative success of existing rail systems is that
they were built decades ago, when construction was cheaper and before
urban sprawl had taken over. Once a city has grown into the spread-out
fashion of Albuquerque, it is too late to change. As one letter to the
Albuquerque Journal put it, You cant have sprawl and public
transit. Its one or the other.
Passengers do not move merely from one rail station to another. They
must travel from their homes to the station, and then from the terminal
to their work places. This means that the great majority of them must
drive from home to a parking lot near the station, and then take a bus,
or whatever, from the terminal to their ultimate destination. This has
1. The state has to build parking lots and furnish connecting buses.
Both of these would increase operating costs very substantially.
2. More important, many commuters will find that this three-part commute
is just too expensive and time consuming to bother with; they will prefer
a shorter and less expensive drive in their own cars. Imagine someone
who lives in Belen and works in northeast Albuquerque; the rail-bus journey
would take twice as long as driving, even assuming there was connecting
bus service taking him anywhere near his job.
It is this second factor that will doom the proposed system to failure.
The small New Mexico towns at the end points of the route simply do not
contain enough people who will find the system useful enough to pay for
Does anyone benefit?
At this point some readers may object to our repeated assertions that
the proposed system would not pay for itself and would require a large
subsidy from the state. Of course it will lose money, they might say,
but this loss will be more than outweighed by the benefits of reduced
congestion on highways.
This is a foggy argument at best. Even supposing that ridership is enough
to reduce traffic appreciably, this relief would last for only a short
time. Less highway congestion is an incentive for still more urban sprawl,
as people choose to house themselves farther from their jobs, thanks to
eased driving conditions. Before long, the highways would be back to their
Once again, we have no clear estimates of what decongestion might be
worth. Moreover, we would also need to figure in the depressing effects
of the higher taxes needed to construct and run the system.
Could we at least see some attempt to cost out the proposed rail system
before it is too late to cancel it? Proponents of the rail system scoff
at the several studies that have already been done, saying that we need
concrete plans, not more studies. But none of these studies has satisfactorily
addressed the issues raised here, and unless some clear headed analysis
is produced, the system may be assumed to be a clear money loser for as
long as it exists.
Of course, the mere existence of a study with favorable conclusions
does not guarantee the soundness of a rail system. Cost and revenue projections
are inevitably paid for by proponents of rail systems. Thus, we would
expect them to be biased.
Indeed, such bias appears to be the general case. The Independence Institute,
located in Denver, cites a survey of major urban passenger rail systems.
Of 16 regions that ultimately built rail systems, 15 were based on studies
that grossly underestimated construction costs. Of the ten projections
of ridership for major projects, all ten overestimated ridership, and
by margins of 50 percent and more. Even projections of improved safety
were overly optimistic.
Again, we return to the principles that guide the Rio Grande Foundation.
New Mexicos economy is weak mainly because of high taxes and intrustive
government. So when someone proposes a huge new government project based
on platitudes rather than clear analysiswatch out.