The New Mexico Rail Runner

Rail Runner train

The other day I found out about something called the Rail Runner, a commuter train system opened in 2006 and run by the New Mexico state government. It might be interesting given the Obama Administration's push to develop high-speed passenger rail. While the Rail Runner does not operate at high speeds, I suspect it is nonetheless illustrative of the problems with government-operated mass transit in general and rail in particular.

Some highlights from wikipedia:

The cost of the Rail Runner system, at $135 million for the first phase and around $250 million for the second phase, has attracted many criticisms. Some critics of the rail system believe that the funds would be better spent widening Interstate 25 between Santa Fe and Tramway Road in Albuquerque and also widening I-25 south of the Albuquerque International Sunport to Belen. However, the possibility of doing so is limited as the Pueblos I-25 passes through have refused permission for road widening.

Preliminary estimates indicate that the service will operate at a deficit, requiring up to $10 million in government subsidies annually. Supporters of the Rail Runner argue that roads require high construction costs and expensive maintenance as well, and that subsidies for roads in the corridor would likely be similar if not more.

In late 2007, the Rail Runner was the subject of more criticism as a transportation funding shortfall left many state road projects stalled. State officials said the rising cost of construction materials and less federal support were the cause, but some lawmakers cited the cost of the Rail Runner as a major factor of the shortfall.

The capital costs of the Rail Runner project were covered by state and local funds. Phase I of the project was set to cost $135 million while Phase II was set to cost $250 million.

Funding for operations of the system in its first few years was covered largely by federal Congestion Management and Air Quality (CMAQ) funds, along with ticket revenues and some state and local funds. Operational costs were expected to rise from $10 million for the first phase to $20 million after completion of the second phase.

Federal funding for the Rail Runner is expected to stop in 2009, and without sufficient funds from other sources would leave funding for the operational and maintenance costs for the system up in the air. To prevent a funding shortfall, local and state governments began looking into possible taxes in the counties the Rail Runner serves. Two separate gross receipts taxes for regional transit were approved by voters in central and north-central New Mexico in November 2008 and will cover a large portion of the operational funds of the Rail Runner. Additional funds will also come from bond revenue and money appropriated by the New Mexico State Legislature.

To summarize:

• It is projected to operate at a perpetual deficit of $10 million.
• Money spent on the project has eliminated funds for other possible transportation uses.
• New taxes have been implemented to pay for the cost of the project.

I expect all of these to come into play should the federal government increase its role in the passenger train business, which already performs poorly.