Yes, we do subsidize highway transporation

“Lately, commuter rail has been the thing to attract people…. But, we just don’t believe it’s viable in New Hampshire. Commuter rail has not been over well-received in the Committee [on Public Works and Highways]… The subsidies are the deal-breaker in New Hampshire.”

That’s New Hampshire Speaker of the House Gene Chandler (R-Bartlett) speaking to Andover, Massachusetts’ Eagle-Tribune back in June. Chandler was explaining why the Republican-controlled New Hampshire House of Representatives declined to okay a $4 million commuter rail study and pointed to neighboring Maine.

Maine’s Downeaster is run by Amtrak and managed by the Northern New England Passenger Rail Authority, an independent agency of the state government. The Federal Transportation Administration pays 40-45% of the cost of the line while the Maine Department of Transportation and local governments pay 10-12%. In 2017, that meant Maine was on the hook for $2.37 million to operate the Downeaster, or about $2 for every person in the state.

A typical Downeaster consist containing 3 or 4 coaches, 1 business/cafe car, an NPCU, and a GE Genesis P42 lays over just west of Brunswick Maine Street Station in July 2013. Photo credit: Bubblecuffer

Subsidies for transportation can be a difficult topic. As Americans, we like to think of ourselves as self-reliant. We don’t need a government handout and we don’t need your help, thank you very much. Perhaps nothing better reflects this than our love for cars: Americans love cars, we own tons of them, and we pay our car registration fees.

Those registration fees, we believe, cover the cost of our roads. If people want passenger rail services like the Downeaster then they should be willing to pay 100% of the cost, no subsidy required.

My new (fake) car

Today, I’m buying a car.

Not a real car. I’m buying a fake car, a nice new 2019 Jeep Cherokee. It’ll cost me $24,195 in fake bucks, but it’s worth it. After all, I live in New Hampshire but I work in Massachusetts. I need a car.

According to the 2006-2010 American Community Survey, some 83,000 New Hampshire residents commute to Massachusetts every day. Another 30,000 Massachusetts residents commute to New Hampshire every day, bringing cross-border work commute traffic to 123,000 people per day.

portsmouth nh reg

Using this handy tool from the Portsmouth city government, I estimated that the cost of registering my “new car” would be $608, straight to the state coffers.

Well, not quite.

Portsmouth keeps a chunk of that car registration fee. In New Hampshire, which has no state sales or personal income tax, car registration fees can be a substantial part of municipal revenue. Portsmouth brought in $4.23 million in car registration revenue in 2016. That’s two-thirds of the budget for the city’s Department of Public Works, which also handles waste removal, snow removal, pest control, and park maintenance. It’s a good deal for the city.

The state gets some, too, don’t worry

For the 2019 fiscal year budget, the state projects a nice $379 million in revenue from highway and turnpike funds. Under state law, turnpike revenues can only be used for turnpike expenses while highway revenues – like car registrations – can only be used for highway expenses. Those expenses can include related things like funding for state police highway patrols, too.

Back in 2016, car registrations brought in $84.3 million. The state’s gasoline road toll – gas tax – brought in $124.3 million. Together, that’s $241.6 million in revenue from car operators. Other revenue sources brought in $277.7 million; most of those other revenue sources are federal funds but some are things like selling state lands owned by the DOT or reselling gasoline to municipal governments. The New Hampshire Turnpike System brought in $132 million; New Hampshire’s toll-funded turnpikes cost $131 million in 2016.

New Hampshire’s total 2016 DOT expenses? $600 million.

The share of that from car registration and gasoline taxes? 40%.

Oh, and New Hampshire has a publicly-funded commuter bus system

After all, New Hampshire isn’t afraid to subsidize public transit. Many communities around the state operate some kind of bus system: Advance Transit, COAST, Manchester Transit, the Nashua Transit System, and others. Plus we give Concord Coach $14.1 million to run a couple buses to Boston.

Interstate 93 near Candia Road, Manchester. Photo by Doug Kerr.

Around 1,590 passengers take Boston Express, which operates two routes from New Hampshire to Boston. The routes are part of an environmental impact reduction effort by the state as part of projects on the Everett Turnpike and Interstate 93.

Both Boston Express routes are fully funded by the Federal Highway Administration. New Hampshire taxpayers can rest easy knowing that they only fund those routes through their federal tax payments, not through their state taxes.

I’m not necessarily saying that Concord Coach leans on the state to stop passenger rail. Concord Coach has actually been a good partner with the Downeaster; the two share several stations, including the Portland Transportation Center. But I am saying that $14.1 million in subsidies is a lot of money and I’m sure Concord Coach would rather that money stayed with them than that it was switched to a passenger rail service.

$14.1 million is a lot. New Hampshire’s commuter bus system receives more in federal subsidies than Maine’s commuter rail system. The cost that Maine pays for the Downeaster is five times less than what New Hampshire’s DOT earns by selling gasoline to local governments.

Mr. Chandler can say that “the subsidies are the deal-breaker in New Hampshire,” but that just doesn’t pan out. Passenger rail reduces wear on highways. It’s safer than commuting long distances by car. It boosts local economies. And it costs less than New Hampshire spent on overtime pay for DOT workers in 2016.