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By Steve Levy

The Economics of High Speed Rail

Uploaded: Dec 10, 2011

I have shared three major concerns with transportation and elected officials in California.


I travel to Los Angeles for business a few tines a year. If high speed rail were available now I would choose it over air travel.

But it is not available now and the HSR trip to Los Angeles will not be available for at least 20 years. In that time I expect techology to replace much business travel.

My trips to Los Angeles usually take a day (or two) for at most 2-3 horus of meetings. I appreciate the face to face contact but it comes with a big price in terms of time and travel costs. Just like more people are talking to family members via Skype or similar technology, I expect that technology will replace travel for an increasing number of business trips well before HSR reaches across the state.

I am concerned that the HSR Authority's ridership projections do not fully account for this reduction in business travel.

Job Impacts

Much is made in public discussion about the job creating potential of high speed rail. But the numbers are being exaggerated and jobs that are 10 years off won't help in today's era of high unemployment.

The Authority's consultants developed this concept of job-years. One job for one year is one job-year but the same new job for five years is five job-years. In addition in the publicity the "years" got dropped and 100,000 job years over the next five years became 100,000 jobs instead of 20,000 additional jobs for five years.

While I favor more infrastructure investment including on transportation and 20,000 new jobs are helpful, two things need to be remembered. The first is that even in the recession California has more than 15,000,000 jobs so 20,000 added jobs is not much. To put this in perspective the state has added more than 250,000 jobs during the past 12 months.

Moreover, this kind of funding only adds jobs when there is high unemployment. In many future years HSR funding would only compete with or replace other funding that would also add to job levels.

Since any new infrastructure spending will add jobs, this brings me to the third concern--is HSR the best use of valuable transportation infrastrucure funding.

From my experience working with regional agencies in California HSR is not the best use of scarce funds even if everything in the business plan worked out as they believe it will.

I am in favor of spending this much or more on transportation infrastrcuture. But I would focus it on more immediate people and goods moving investments serving intra-regional travel where most trips are taken. Such investments would serve more people and businesses and could be completed far before the now 2030s completion anticipated for HSR.

I am sure if the Governor and President asked regional leaders for ideas about large transportation investments they could come up with a list that is more immediate and with a better payoff than HSR funding as currently planned in California--bigger, bolder and better.