New Mexico's commuter rail line faced with financial burdens

AP News
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Posted: May 07, 2015 3:08 PM
New Mexico's commuter rail line faced with financial burdens

ALBUQUERQUE, N.M. (AP) — When launched in 2006, a New Mexico commuter rail line that would one day connect two of the state's most well-known cities was hailed as a progressive step toward taking people out of cars and putting them on the train.

But as impressive a feat as it was for a poor state's huge foray into mass public transit, it comes at a price: The train earned $2.8 million last fiscal year in fares from more than a million riders, but cost $28.4 million to operate.

Now the question of whether the huge state investment in the 97-mile commuter rail system is worth it will be visited anew after state lawmakers asked the New Mexico Department of Transportation to conduct a study on the long-term finances of the line. The study will look at everything from future costs and debt obligations to examining whether the state should sell the Rail Runner and replace it with a bus service.

The finances surrounding the Rail Runner have created a divide in New Mexico. To some, the price tag makes no sense, especially considering relatively low ridership numbers and little congestion on the roads. Others, pointing out large price tags for road projects, suggest it's an asset worth keeping.

"I look at it this way: We pay millions of dollars for repairs of the highways," said Micky Hogue, waiting recently with a friend at an Albuquerque station for a midmorning ride to Santa Fe. Retired from Sandia National Laboratories, she said many of her friends ride the full morning train to work.

For those who ride the train, it's one of the best deals in the country.

The average fare is $2.47, compared with the average trip length of 40.7 miles. That adds up to 6 cents per passenger mile. A 2011 Department of Transportation study of several train systems around the country found the rates to be among the lowest.

Meanwhile, the costs are rising. On top of operating costs, the state is paying about $28 million a year in debt for the train until 2024, and will have to shell out $112 million in 2025 and 2026 in balloon payments. Taxpayers also are on the hook for nearly $493 million in infrastructure for the rail line. The Department of Transportation estimates the total debt repayment over 20 years, including principal and interest, works out to nearly $784 million.

"I don't know how we're going to deal with it in those (balloon payment) years," Transportation Secretary Tom Church said. "There's no silver bullet."

A fallback for the state could be to refinance the final two payments, a call that lawmakers will have to make.

Academics and others agree it's not easy to quantify the value of a rail system, which brings multiple benefits aside from relieving congestion. Benefits include reducing pollution, safety, and providing transportation for those in need.

University of New Mexico civil engineering professor Gregory Rowangould says it's difficult to put into perspective because "what's appropriate for New York city is not appropriate for Albuquerque."

However, he said the rail line has potential given that population and traffic patterns can change. "I'd think that there's value in keeping it around," he said.

But in a state like New Mexico with low population density, it's questionable whether a train is worth the cost, said Clifford Winston, a senior fellow at the Brookings Institution in Washington D.C., who studies urban rail systems.

"If it is socially undesirable, then cut your losses and no longer incur the cost ... and try to recover the capital that you can and walk away," Winston said.

A House measure sponsored by Rep. Bill Rehm, R-Albuquerque, calls on the transportation department to produce a Rail Runner feasibility study by mid-November.

Rep. Jeff Steinborn, D-Las Cruces, said he voted against the measure — which passed 31-13 — in the recent legislative session because he felt its language created a "negative bias" against subsidies for commuter rail when other forms of transportation are also subsidized.

"As if when we ride on the freeway we're using Monopoly money," said Steinborn.

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Online: The NM State Rail Plan 2014 http://bit.ly/1HRhVPR.