The High-Speed Intercity Passenger Rail (HSIPR) Grant Program: Overview

Since 1964, when Japan opened the first rail line allowing trains to travel safely at speeds greater than 150 miles per hour, several European and Asian countries have built high-speed rail lines. There have been frequent calls for the United States to develop similar high-speed rail services, but none have been built. The financial challenge of building high-speed rail lines, which requires many billions of dollars to be spent over a lengthy period before service opens and revenues begin to be collected, makes government financial support unavoidable. Governments in other countries have provided such support, but over many years efforts to get federal support for the construction of high-speed rail lines have, with the partial exception of Amtrak’s Northeast Corridor, been unsuccessful. In fact, Congress provided little funding even for expansion of non-high-speed passenger rail service. Opponents of increased funding for intercity passenger rail have contended that it was economically inefficient compared to other modes of travel. For a brief period in 2008-2009, it appeared that the situation had changed. The 110th Congress authorized several programs to make grants to states for intercity passenger rail development in the Passenger Rail Investment and Improvement Act of 2008 (Division B of P.L. 110-432). The following year, in the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5) and the FY2010 Department of Transportation Appropriations Act (Division A, Title I, P.L. 111-117), the 111th Congress appropriated $10.6 billion to develop both high-speed and conventional intercity passenger rail services. The Federal Railroad Administration of the U.S. Department of Transportation used this money to award 158 grants under the new High-Speed Intercity Passenger Rail (HSIPR) Grant Program. Some 80% of the funding went to a relatively small number of large-scale projects. These included multi-billion-dollar grants to California and Florida for high-speed rail lines; Florida subsequently turned down its grant. This dramatic change in policy ended just as suddenly, as the 112th Congress rescinded $400 million of the $10.6 billion previously appropriated and rejected the Administration’s requests for additional funding. Succeeding Congresses have also not responded to requests for HSIPR funding. In addition, several states declined significant grants for improvements to their intercity passenger rail lines. That funding was reallocated to other states. All but two of the HSIPR projects are expected to be complete by 2017, but the most ambitious and expensive, the California High-Speed Rail project, will not enter service for many years. Congress’s creation, then abandonment, of the HSIPR program illustrates the challenges of funding major construction projects that take years to complete without a stable source of financing. At the beginning, the federal and state governments lacked the expertise and program framework to implement the program. Now that the expertise and program framework have been developed, they are at risk of disappearing due to the lack of continued funding. Also, such funding spurts make long-term project planning and implementation very difficult. A challenge facing the future of the HSIPR program is the large amount of funding required for high-speed rail development, combined with the lack of a dedicated funding source and the funding shortages facing other federal transportation programs even with their dedicated funding sources. Another challenge is contending with arguments against intercity passenger rail. Critics assert that it requires larger per-passenger subsidies than other travel modes, that it is not well-suited to the economic geography of the United States, and that near-term technologies may provide better alternatives.