Minnesota Should Avoid a High-Speed Rail Boondoggle | Citizens Against Government Waste

Minnesota Should Avoid a High-Speed Rail Boondoggle

The WasteWatcher

With the state set to receive an estimated $4.8 billion from the Infrastructure Investment and Jobs Act (IIJA), Minnesota will be well positioned to make significant investments in its infrastructure in the coming years.  One of the projects that could be funded is the proposed Northern Lights Express, which would run between Target Field in Minneapolis and Union Depot in Duluth.  Any use of IIJA funds for the Northern Lights Express, would prop up a project that cannot sustain itself without continuous taxpayer support.

Congress set aside nearly $100 billion for rail projects in the IIJA.  Among the funding programs that could be available to Minnesota are $41 billion for expansion of Amtrak service beyond the northeast and mid-Atlantic regions to include more cities across the country, $43.5 billion for intercity rail service made available to the states through Federal-State Partnership for Intercity Passenger Rail Grants, and $15 billion in additional grants.  With so much money available for Amtrak expansion, Northern Lights Express advocates have expressed optimism that the state could escape paying contributions to the project if Amtrak elects to operate the line.

Over the course of its 60-year history, Amtrak has never been profitable and has constantly been besieged by problems.  Established as a government-owned business to “save an American rail industry that had been pushed to the brink of collapse,” Amtrak cannot function without heavy taxpayer investments through federal and state subsidies.  In many instances, Amtrak expansion beyond the popular Northeast Corridor (running from Washington, D.C. to Boston) requires hefty investments from the states as well.  In fact, an Amtrak line that largely followed the path of the proposed Northern Lights Express was shut down after the state declined to contribute funding in 1985.

Proponents of the Northern Lights Express admit that the project will not be able to sustain itself without continued government subsidies.  A 2018 description of the project estimated the cost of construction to be $500-600 million.  The average annual operating costs for the first five years of operation were estimated to be $18.9 million.  Revenue from fares during the first five years of operation were estimated to $12 million annually, resulting in a shortfall of $6.9 million.  As a result, taxpayers will be forced to not only cover the cost of building the necessary infrastructure for the rail, but also provide continued subsidies for the project for it to remain operational. 

Even with this sizable taxpayer investment, the project will not reduce the cost or time required to travel between Minneapolis and Duluth.  For example, travelers could opt to drive or take the bus instead of paying the $30 one-way fare.  Although it would be slower, a one-way bus ticket costs as little as $9.  Cars could transport several people at a lower cost per person in less time than the proposed train route.  As Center for the American Experiment Economist John Phelan noted, travelers who opt for the train would also have to factor in travel to and from the stations and the inflexibility of train timetables.

In 2018, Citizens Against Government Waste President Tom Schatz observed that high-speed rail proposals offer a utopian vision in which “Cars will slide into obscurity, traffic will disappear, the environment will magically become clean, and America’s railroads will look more like those in Asia and Europe.”  Instead of spending billions of dollars only to fall short of this fantasy, Minnesota should reject any effort to establish a taxpayer-funded rail system in the state.