Railroading Taxpayers

By D. Dowd Muska
  • Friday, December 1, 2000

The train purchased by Amtrak to reestablish connection between Las Vegas and Los Angeles is finally in service. There’s only one problem: It’s serving the residents of Seattle and Vancouver. The plan to link Las Vegas to Los Angeles with a Talgo train is behind schedule, and Amtrak has allowed its Seattle-to-Vancouver route to borrow the vehicle. Yet despite this latest Amtrak failure, many officials from Southern Nevada’s public and private sectors continue to believe that taxpayers should fund the costs of connecting Southern Nevada and Southern California by rail. Herewith, a look at how Amtrak fleeces taxpayers, and an overview of the problems with a much-hyped “superspeed” train that might be built between Las Vegas and Los Angeles.

Behind Schedule—Way Behind Schedule

Over three years ago, Amtrak discontinued the Desert Wind, its route between Los Angeles and Salt Lake City. This cancellation meant that passenger trains would no longer serve Southern Nevada. But Amtrak quickly announced plans to rectify this gap with a Talgo train, which weighs less, moves faster and offers amenities not available on the agency’s standard cars. Amtrak believed that it could defray the cost of using a more modern train by convincing Las Vegas casinos to purchase blocks of tickets for use by their patrons. (Wisely, no casino has yet given a firm commitment to the agency.) Nevada’s state and federal politicians dutifully secured millions of dollars in subsidies for the project. The Talgo was originally planned to begin service in mid-1998, but a number of factors have led to delay after delay. Poor communication between Amtrak and Union Pacific concerning track upgrades led to the initial postponement, and now federal environmental and safety regulations are also holding things up. Officials have stopped giving estimates about when the train might start rolling. But even if the Talgo is put into service, it’s difficult to see how it could lure a significant number of travelers out of their cars and away from planes. Amtrak has estimated the cost of a roundtrip ticket to be $120 to $180—that’s more than the price of many roundtrip flights between the two cities. Furthermore, the time of the train journey, predicted to be about five and a half hours, is not significantly less than the length of a drive to Las Vegas, assuming light traffic.

On the Trak to Bankruptcy

Amtrak’s failure to start Talgo service on time came as little surprise to government-watchdog groups. (NPRI sounded a warning about the project in October 1998.) The agency has a long history of mismanagement. “Twenty-five years after I set out to save the American passenger train,” lamented Anthony Haswell, the father of Amtrak, “I feel personally embarrassed over what I helped create.” The agency has received over $30 billion in federal subsides since its inception in 1971. And not only does Amtrak hemorrhage money at an alarming rate, it contributes very little to the nation’s transportation system. More people walk to work than use the agency’s commuter trains. Only 0.05 percent of all intercity trips are made on Amtrak. “That a federal program of such marginal significance can obtain substantial federal subsidies,” writes the Heritage Foundation’s Ronald D. Utt, “… is a tribute to the political influence of train buffs, acrophobes, and unions, as well as upper-income travelers who account for a larger share of Amtrak passengers than any other form of transportation, including commercial airlines.”

Maglev—Private or Public?

For years, train enthusiasts around the world have preached the promise of magnetic levitation, or “maglev.” This technology uses electromagnets to lift a train, which hovers above its guideway as a propulsion system moves it at speeds of up to 300 miles per hour. In Germany, a short maglev route links the cities of Hamburg and Berlin. But technical feasibility is only one part of an effective transportation system. Profitability is also important. Amtrak is a perfect example of the dangers of ignoring profitability. By posting a loss year after year, the agency must be propped up by taxpayer subsides which could be better spent on improvements to the nation’s highways and airports—or better yet, returned to citizens. But undaunted by Amtrak’s example, several years ago maglev proponents successfully lobbied Congress to approve $1 billion for a demonstration project. Seven proposed maglev routes are competing for the federal windfall.

Government officials have made claims about the inevitability of a maglev between Southern Nevada and Southern California for over a decade. “It is not a question of if,” former Las Vegas City Councilman Arnie Adamsen once ludicrously asserted, “It’s a matter of when.” The California-Nevada Super Speed Train Commission, comprised of “community, business and government interests of Las Vegas, Clark County and the State of Nevada, with participation and support from corridor communities in Southern California,” envisions itself as a “public-private partnership” which will facilitate a 272-mile maglev link between Las Vegas and Anaheim. But like its Talgo counterpart, the private portion of this partnership has not taken the lead. The commission has spent millions of public dollars to advertise the project, study its feasibility and apply for the $950 million the federal government will award to the winning proposal. (As with most public projects, the numbers keep changing, but building the full 272-mile link could cost as much as $8 billion.) Meanwhile, Germany’s maglev continues to require massive government subsidies, and in America no private investors have been willing to fund such a system. Even the transportation curator for the Smithsonian Institution has doubts about maglev’s commercial potential. “Maglev is not ready for prime time,” said Bill Withuhn. “You’ve got wonderful potential … but the market questions are unknown.”


Given the federal government’s dismal record of running passenger-train service, it’s clear that Southern Nevada decisionmakers should not have looked to Amtrak for help in bringing Southern Californians to Las Vegas. And these same officials are compounding their error by seeking a huge federal subsidy for a train technology the private sector does not see as viable. Widening I-15, privatizing McCarran Airport and experimenting with toll roads are all forward-looking policies which would help give Southern Nevada a highly developed transportation infrastructure. Pouring public funds into an 18th century transit method will not make a significant contribution to such a system. Neither will gambling taxpayer dollars on unproven and economically shaky “21st century” technology.

D. Dowd Muska is a contributing editor for Nevada Journal, the Nevada Policy Research Institute’s policy and investigative magazine.

blog comments powered by Disqus