RailRunner Costs Eating NM Alive
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The recent infusions of cash to keep the RailRunner running continue a history of project costs and operating losses exceeding expectations. The RailRunner’s red ink means money is being denied other surface transportation needs. While the RailRunner continues to get money to cover its shortfall, major transportation needs are going unmet.
Initial Cost Projections Rendered Meaningless
The intial cost projections for the RailRunner were so far off target the question arises whether the Legislature and the public were intentionally misled. The RailRunner was supposed to cost the state of New Mexico only $122 million. That’s what legislators and staffers claim they were led to believe, according to a December 9, 2005 report by the Albuquerque Journal. But by December 2005, the New Mexico Department of Transportation put the cost of the RailRunner to the state at $318 million.
The cost of the RailRunner to the state of New Mexico has now grown to over $475 million. That’s the sum cited by the Legislative Finance Committee in its January 2009 report to the Legislature. Of the $600 million in highway projects assigned to the I-25 corridor, the RailRunner’s costs consumed more than 79% of designated funds. The RailRunner’s cost has weighed heavily on the state’s ability to fund future highway construction and maintenance. Adding the costs of the RailRunner to the state’s debt service has further reduced the funds available for needed highway projects. As the LFC summarized the situation in 2009, “As federal appropriations continue to shrink, this may result in increased state funding for debt payments, leaving less funding available to meet the state’s highway construction and reconstruction needs.”
The debt service constraints on highway project funding are directly impacting some desperately needed highway improvements. In its Janaury 2010 report to the Legislature, the LFC wrote, “because GRIP requires almost 50 percent of expected federal revenue for debt service payment, revenues are insufficient to meet the projected needs of the state transportation system. This is why the department cannot program the Paseo del Norte interchange in Albuquerque or the North West Loop between Interstate 40 and Interstate 25 for completion in the near future.” The report points out one half of federal funding received has been committed to just debt service for the next 20 years.
RailRunner Claims Discretionary Millions
In addition to the $475 million allotted to the RailRunner out of the state’s transporation funds, New Mexico Watchdog identified another $2 million in discretionary funds allotted to the RailRunner unilaterally by Governor Bill Richardson. Exercising discretion without any legislative oversight, he designated two separate $1 million grants to the RailRunner from federal stimulus funds awarded New Mexico under the 2003 Jobs Growth and Tax Relief Reconciliation Act. One grant went to the Middle Rio Grande Council of Governments. The other went to the New Mexico Department of Transportation.
RailRunner Operating Losses Grow Beyond Projections
The LFC’s January 2010 report says the projected operating costs for the RailRunner were expected to increase from $14 million a year to $20 a million a year when the system was fully complete. The report stated that the system was 97% complete.
But the RailRunner’s operating costs–and red ink–are already above those projections. We previously reported that the RailRunner’s operations costs for the FY ending June 31, 2009, topped $21 million. With ticket revenues of only $1.9 million, the year’s operating losses exceeded $19 million. The operating costs for the current FY are now estimated at $22 million.
A 1/8 percent gross receipts tax was approved by voters in the Rio Metro Transit District (Bernalillo, Sandoval and Valencia counties) and the North Central Transit District (Santa Fe, Los Alamos, Rio Arriba and Taos counties) in the 2008 general election. This special dedicated tax was predicted to raise $28 million annually to cover the RailRunner’s operating shortfalls. But, as the LFC noted in its January 2010 report, the gross receipts tax revenues for all these counties are “well below expectations.”
To cover the gross receipts shortfall, the Richardson administration has shifted over $1.3 million to the RailRunner’s books from other accounts. A federal “flexible” fund for transportation projects provided $750,000. Another injection of $643,000 came from the state’s share of stimulus funds provided under the 2009 American Reinvestment and Recovery Act. Those funds will not be available to pay for highway construction and maintenance.
Did the RailRunner Cost More Than $475 Million?
In preparing this report, we were told by several legislators that the actual costs of just getting the RailRunner rolling have substantially exceeded $475 million. That possibility will be the subject of an ongoing investigation and future reporting.
[Steve McAllister contributed to the research for this story].
Posted under News.
Tags: RailRunner
14 Comments For This Post So Far
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Errors of Enchantment » RailRunner Costs Are Eating New Mexico Alive
[...] red ink and its consequences for our state. Read the latest report at New Mexico Watchdog here. Posted on February 22, 2010 at 11:57 am by Jim Scarantino · Permalink In: Uncategorized [...]
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RailRunner Costs Eating NM Alive
[...] You find the original post here newmexico.watchdog.o … | Jim Scarantino [...]
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Errors of Enchantment » A Possible “Revenue Enhancer” to Consider?
[...] is no secret that the Rail Runner has sucked massive amounts of taxpayer money away from New Mexico’s roads and highways. But, the point remains that — regardless of [...]
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Errors of Enchantment » Denver’s Transit Debacle
[...] this story (from the Economist) about their over-promised, under-delivered transit system certainly sounds familiar. Posted on February 28, 2010 at 5:44 pm by Paul Gessing · Permalink [...]
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A Very Costly Ride on the Rail Runner
[...] There are no plans to extend Rail Runner service to Raton or Las Vegas for the foreseeable future. The Rail Runner is running an annual shortfall between its operating revenue and costs of over $19 million. In order to maintain service along its established line, the train has required infusions of federal stimulus money and transfers of funds from other transportation budgets. We reported on the Rail Runner’s red ink in our 2/22/10 report “Rail Runner Costs Eating New Mexico Alive.” [...]
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Errors of Enchantment » Another one bites the dust!
[...] least constrain the growth of) programs like the $80 million film subsidies, never have built the RailRunner or Spaceport, and gotten serious about reducing government employment, we’d be dealing with [...]
1:07 pm on February 22nd, 2010
You still have failed to compare these costs to the alternative — expanding I-25 to six lanes. How much money did the state save with a train? How many millions of dollars are put into highway maintenance annually versus the train?
1:57 pm on February 22nd, 2010
The estimated cost of the I-25 expansion outside of ABQ is $28 million. If you did that all the way to Santa Fe, probably less than $150 million. The traffic from Bernalillo to ABQ along that stretch is roughly 65,000 a day. The ridership on Rail Runner is about 4,500 per day based on last estimate I saw.
I would guess that maintenance on roads is much less than operating RR, but what you really have to look at is the cost per person to maintain. I am sure it has to be less on highways. On another note, the Monorail in Las Vegas just recently declared bankruptcy. It is becoming clear that only a Washington D.C. or New York can justify a rail system. Of course, Obama is planning on building this massive rail system that makes no sense whatsoever!
4:21 pm on February 23rd, 2010
Perhaps they could use the train to haul some of that ” bovine manure ” Bill was talking about and deposit it on farm fields where it would do some good.
10:44 am on February 24th, 2010
Look in the mirror. These guys were voted in by the people of New Mexico. So, we get a $500M state deficit but we have a new train, what’s the problem? We also got some purchased votes with the $250M tax refund. No problem, just raise taxes to cover the shortfall. Even if the people riding for free on the Rail Roader chipped in, this would be the most expensive per user trip around for the tax payer. However, don’t dispair, we took 4,500 people a day off the road. Outstanding!
9:22 am on February 25th, 2010
This is all too simple. Just use the Washington logic. Increase the ticket prices ten-fold….the same 4,500 people will contine to ride every day and voila, we’re at break-even.
Of course, that is all predicated on the idea that the train will NOT be pushed north to Taos, as Bill R. promised some of our locals.
12:36 pm on February 28th, 2010
Transparency under the Richardson administration does not exist. There is the escrow account that is not mentioned in this story – $50 million funded with debt for environmental clean up of the tracks. The administrative overhead costs by MRCOG if audited would show expenditures to be extreme, more than what is needed to run a train. The cost for construction, operations and maintenance plus the escrow account for the first year of full operation is well over $500 million.
7:55 pm on March 1st, 2010
It is no secret the Rail Runner is a huge money pit. I voted against the tax increase that was supposed to sustain its huge appetite for our tax dollars. I will probably never ride this huge white elephant since it is neither convienant nor the only method of travel to Santa Fe.
New Mexico should cut its losses and shut the Rail Runner down. Sell off the assets, to include the new track down the middel of I-25… That is if they can find anyone who will buy it.
Additional traffic lanes could have been constructed on I-25 for a lot less money and it would have benefitted everyone. The additioanl lanes could have been carpool lanes during rush hours. Oh well, maybe next time…
9:28 pm on July 8th, 2010
Never mine watchdogging the inevitale future of transportation and urbanizing. Instead, why not investigate the companies in New Mexico who are breaking laws by not fully checking the validity of citizen or identification claims by undocumented workers? If you are not concerned about this, then I recognize your partiality to cpmpanies and not the workers.