Almost All Aboard

May 21, 2007
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LANSING — A proposed nine-state passenger rail system would create more than 58,000 jobs, hike property values by almost $5 billion, and raise household income in the system's urban centers by over $1 billion, if an initiative called the Midwest Regional Rail System ever leaves the station.

If it does get to roll down its 3,000 miles of Midwestern track, Michigan could gain an estimated 6,970 new jobs, $138 million in household income, and $680 million in higher property values from being part of the system.

Of the nine states involved in the higher-speed rail service, Michigan would get the third-largest economic boost from it — one that would range from $2.3 billion to $3.5 billion on top of the increases in jobs and household income.

Only Illinois and Wisconsin would receive bigger payoffs.

"This report shows that an investment in providing frequent and reliable passenger rail services pays enormous benefits," said Kirk Steudle, director of the Michigan Department of Transportation, of the MRRS report.

The report said the rail service has a benefit-to-cost ratio of 1.8, meaning that it would return $1.80 for every dollar spent on the system.

It will cost $8.58 billion to get the service running on existing tracks in Michigan, Illinois, Wisconsin, Indiana, Iowa, Minnesota, Nebraska, Ohio and Missouri. Of that amount, $1.23 billion would be spent on 63 new trains, with the rest going toward infrastructure.

Trains would reach a top speed of 110 mph on some primary routes, 80 mph on others. About 9.6 million passengers would ride the rail each year.

The report estimated that 5.1 million auto trips would be diverted annually in favor of train travel, which would help unclog interstates in the Midwest for semi-trailers; 1.3 million air flights would also be diverted. The environmental gains from fewer auto trips and air flights could not be quantified in the report.

Chicago would serve as the system's hub with the routes designed as spokes emanating from Union Station. Michigan would have 19 stations, including in Grand Rapids and Holland. The state would have three routes — Chicago-Detroit-Pontiac, Chicago-Holland-Grand Rapids, and Chicago-Port Huron — and all would have intermediate stops.

The system has been projected to create from 460 to 685 jobs in Grand Rapids and from 180 to 270 jobs in Holland. Detroit could gain more than 1,200 new jobs, according to the MRRS report.

"These figures show that passenger rail development not only provides benefits to users, but also can provide important economic development benefits to Michigan communities in the form of increased jobs, income and property values," said Steudle.

The roadblock, of course, is finding funds for the system's capital outlay. Amtrak and the Federal Railroad Administration are partners with the states in the initiative, making federal dollars crucial to the system. But money for passenger rail service isn't a high priority in the nation's capital.

Congress failed last year to reauthorize funding for Amtrak, which has been frozen at $1.29 billion for two years. Amtrak has asked for $1.53 billion for next year. President Bush, though, included only $800 million for the service in his FY08 budget that he delivered to Congress in February. In March, the Senate earmarked $1.78 billion next year for Amtrak; that bill went to committee last month.

Supporters are also looking at federal loans and grants and state sources to help obtain the $8.58 billion needed to build the system.

Backers report MRRS could be built within 10 years; that all corridors could generate enough revenue to cover operating costs by 2025; that 102 cities would be served in the nine-state region; and that trips would be faster and more frequent than the corresponding Amtrak runs.

For instance, the current Amtrak route from Chicago to Detroit takes five hours and 36 minutes. The report said the same trip via MRRS would take three hours and 46 minutes.

More Than A Whistle Stop

Here are the estimated ranges of economic benefits the Midwest Regional Rail System would bring to 18 Michigan cities.




City

Increase in
Employment
(No. of People)

Increase in
Household Income
(millions)

Increase in
Property Value
(millions)

Albion

45-70

$0.9-$1.3

$4-$6

Ann Arbor

535-805

$11-$16

$48-$72

Battle Creek

425-635

$8.5-$13

$40-$57

Detroit

850-1275

$17-$25

 $76-$114

Dowagiac

65-95

$1.2-$1.9

$6-$9

Durand

45-65

$0.9-$1.3

$4-$6

Flint

475-715

$9-$14

$43-$64

Grand Rapids

460-685

$9-$14

$41-$61

Holland

180-270

$3.5-$5.5

$16-$24

Jackson

205-310

$4-$6

$18-$28

Kalamazoo

595-890

$12-$18

$53-$80

Lansing

470-705

$9-$14

$42-$63

Lapeer

75-110

$1.4-$2.2

$6-$10

Niles

95-145

$1.9-$2.8

$9-$13

North Detroit (Royal Oak)

300-455

$6-$9

$27-$40

Pontiac

260-390

$5-$8

$23-$35

Port Huron

105-155

$2-$3

$9-$14

South Detroit (Dearborn) 

400-600

$8-$12

$36-$54

Note: Increases in property values are based on 2002 figures.
Source: Midwest Regional Rail System, Transportation Economics & Management Systems Inc., November 2006

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