4.3. SR 06-16-2003 - Laserfiche WebLink

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Review of Benefit-Cost Analysis of Northstar Commuter Rail First is the assumption that the federal share of the cost is not paid by Minnesota residents. In fact, the federal share is paid out of federal gasoline taxes, and Minnesota residents pay as much federal gas tax as anyone else. Second is the assumption that commuter rail is the only way that Minnesota can capture federal transportation dollars. In fact, Minnesota can use its share of federal transportation funds for a wide variety of projects. Some of them would actually produce a greater "return" than commuter rail. For example, while the federal government will fund only 50 percent of commuter rail projects, it iVil-1 fund up to 90 percent of any expansions to Interstate 94. Other problems-A more detailed analysis could identify even more problems. For example, MnDOT's estimate of 9,594 daily riders is probably too high. After two-and-a-half years of operations, Seattle's commuter rail line is carrying fewer than 3,000 riders per day. In order to achieve 9,594 riders per day, the Northstar rail line would have to carry more than 2,400 passenger miles per directional route mile. In urban areas comparable to the Twin Cities-areas such as San Jose, Dallas, and Seattle- commuter rail lines are carrying just 200 to 1,200 passenger miles per directional route mile. Finally, the entire premise of this analysis--that only social benefits of commuter rail should be compared against only dollar costs. An alternative analysis would compare the amount that potential riders are willing to pay for riding a commuter rail line with the costs. Fares aren't even considered in the MnDOT and Anton, Lubov analysis, but fares fail to cover costs in any new commuter rail line in the U.S. Conclusions More information will be needed to correct many of the flaws in the Anton, Lubov analysis. However, at least four flaws can be corrected immediately: · The benefit of vehicle operating cost savings must be reduced by $106.8 million. · The benefit of parking cost savings must be reduced by $34.6 million. · The $134 million "future value of depreciated capital stock" should be eliminated from the benefits. · The operating cost of commuter rail should be increased by $137.7 million. Fixing these errors reduces benefits from $578.9 million to $301.9 million and increases costs from $501.4 million to $639.4 million. This changes the benefit- cost ratio from 1.15 to 0.47. In other words, for every dollar invested in Northstar commuter rail, only 47 cents will be returned.