NY explores ways to fund high-speed rail

September 27, 2013 Updated Jun 16, 2010 at 7:13 AM EDT

By Business First of Buffalo - The Albany Business Review

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NY explores ways to fund high-speed rail

September 27, 2013 Updated Jun 16, 2010 at 7:13 AM EDT

New York must make a long-term commitment to a high-speed rail system if the state expects the program to yield economic benefits.

"The key is, it must be sustainable. An initial investment will not continue to support the initiative," said Michael Tucker, president and CEO of the Albany-based Center for Economic Growth.

That was one of the messages delivered at Monday's high speed-rail summit held at the University at Albany's College of Nanoscale Science and Engineering. The event, which attracted 300 transportation, economic development and rail industry experts, was sponsored by Empire State Development Corp. and the state Department of Transportation.

Tucker made his comments during one of the five forums held at the day-long summit.

New York, which faces a $9.2 billion deficit, wants to upgrade the 263-mile Empire Corridor for high-speed passenger travel but does not have a long-term investment plan for the project. It would cost at least $3 billion to convert the corridor, which runs from New York City to Buffalo.

Earlier in the day, state Senate President Malcolm Smith, D-Queens, said the 2010-11 budget commits some funds to advance high-speed rail. Gov. David Paterson's office said last week that the executive budget contains $51 million over two years for rail improvements. Most of that money will be used to upgrade other rail projects.

Smith said state legislators may create a rail authority that could borrow funds to advance a high-speed passenger system. Government-created authorities operate independently and have legal power to bond projects.

A counsel general from China who attended Monday's summit told Smith his country is interested in loaning money for portions of the project, much like it has done in other countries. China recognizes that manufacturing for the project would be done in New York, Smith said.

As many as 3,500 workers in upstate New York are employed by 30 companies that manufacture railroad equipment and generate a combined $750 million in revenue, state officials said.

John Parisella, a delegate general from Quebec, said Canada wants to extend the rail system to Quebec and is willing to finance rail corridors beyond its own borders. Canada does a lot of trade with New York and much of the business comes from small- to medium-sized companies, he said.

Currently, passenger trains traveling north from New York City average speeds of 58 miles per hour. The goal is to increase speeds to 110 mph initially, and eventually to 150 mph, said U.S. Rep. Louise Slaughter, D-Fairport, a long-time proponent of high-speed rail.

Slaughter called New York's current system an "embarrassment that is falling apart."

New York received $151 million in first-round stimulus funds to advance high-speed rail along its Empire Corridor. Of that amount, $90 million will be used to build a second track from Rensselaer to Schenectady.

In a perfect world, the tracks from Albany to Buffalo could be completed in 2 1/2 years, Slaughter said. Actually, the improvements would be built in increments and take much longer.

Slaughter said the rail corridor has plenty of space for a third track; it once had four tracks before the system deteriorated.

Parisella and others praised rail's eco-friendly benefits, citing the advantages of having fewer cars on the road, fewer greenhouse gas emissions and less reliance on foreign oil.

President Obama designated $2.5 billion of stimulus money for a second round of rail funding in 2010. Applications for that money are due later this summer, said Marie Corrado, director of DOT's Major Projects Office. A long-term goal is to connect the Empire Corridor to large cities in other states, Corrado said.

Petra Todorovich is director of America 2050, a planning organization based in New York City.

Todorovich said it's impossible to determine a cost-benefit analysis for rail because there are so many variables.

"One thing we know is that rail doesn't pay for itself. And it shouldn't," she said. "New York City's subway system doesn't pay for itself, but it's necessary for economic growth.