Hang on, taxpayers, we’re going for a bumpy ride.
There’s trouble ’round the bend for New Mexico’s Rail Runner commuter train, which is heading for a financial reality check. The first obstacle on the track is an immediate cash flow problem — $1.2 million in annual federal clean air funds has reached the end of the line. The state, which has its own budget problems and already spends piles of cash on debt service for the train, so far has declined to jump aboard.
Fares would have to be raised by 40 percent just to cover this year’s $1.2 million shortfall. But members of the board that runs the train say doing so could drive riders away. To cover the shortfall, the transit system’s governing board canceled weekend routes.
That finally has prompted more serious discussion about the future of the train and how to pay for it.
At the direction of former Gov. Bill Richardson, the state issued $450.8 million in highway bonds to purchase track and trains. By the time the highway revenue bonds are paid off in 2027, the overall tab for principal, interest and operating costs, at current levels, will be in the neighborhood of $1.3 billion — that’s right, it starts with a b — with only $60 million generated by fares.
With principal and interest, the state is on the hook for $843.3 million whether the train runs or not. Basically, it will cost state taxpayers $41.7 million a year in financing through 2027, including a couple of $235 million balloon payments.
Yet to come: In December, another source of the Rail Runner’s federal clean-air funding that makes up about 23 percent of this year’s projected operating revenue will also be gone, leaving a $5.4 million deficit in the 2012-13 budget.
Despite the Rail Runner’s popularity with many users and with Santa Fe businesses that benefit from tourists who take the train to enjoy the City Different, its fare revenue is abysmal — just $3.24 million of its $25 million annual operating cost.
Rail Runner operations are also funded by a one-eighth-cent gross receipts tax levied in the four counties it serves, but that revenue is running short of projections. This year, the tax is expected to generate $12.6 million, about 53 percent of the train’s expected revenue of $23.8 million.
Commuter trains can work in places where lots of people have easy access to them to get to and from work, but there are no guarantees. The Coaster line that runs between San Diego and Oceanside, Calif., attracts just 4,800 boardings daily.
And, what’s missing here is the “mass” in mass transit. Rail Runner’s route from Belen to Santa Fe averages about 4,500 boardings (a round trip counts as two boardings) on weekdays and far fewer on Saturdays and Sundays. Though the train operates in the most populous part of the state, people have other options to get from point A to point B — and a 50-minute drive from Albuquerque to Santa Fe takes about an hour and a half on the train. Unfortunately, the Rail Runner heads north-south, while the pressing traffic demand in the Metro area is east-west.
As this venture runs out of steam, officials are faced with raising fares, increasing taxes — never popular with voters — and attracting more riders.
Public transportation typically is heavily subsidized — and not just rail. Highways, bus systems and ports all get help from taxpayers. Amtrak, which has never made money, is the granddaddy of federal subsidies, to the tune of about $40 billion so far in its four decades.
That said, the Rail Runner can’t run on self-esteem and tax dollars alone. It’s going to have to start pulling some of its weight and become part of an integrated transit or economic development plan.
Without major changes, the Rail Runner faces becoming an expensive relic we’ll be paying off for a long time. That’s expensive self-esteem in a state where lawmakers decided they couldn’t afford an extra $9 a month in food stamps for disabled and elderly people.
This editorial first appeared in the Albuquerque Journal. It was written by members of the editorial board and is unsigned as it represents the opinion of the newspaper rather than the writers.