SEMCOG’s Crazy Train

The Southeast Michigan Council of Governments is working with Amtrak on a proposal for a commuter rail line between Detroit and Ann Arbor. However, a $100 million federal grant to "study and develop" the proposal has been derailed after an initial $3 million "study" of several alternative routes revealed that anticipated demand for the service would be too low to justify the estimated cost.

Critics of government spending should take heart that there are indeed proposals so costly that even the federal government knows to leave well enough alone. But SEMCOG, transit advocates and Amtrak are undaunted in their desire to see the project through and will press ahead (at unspecified cost) in the hope of reinvigorating federal interest — and the accompanying $100 million grant — in the project.

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The details of the SEMCOG study show that the federal government was wise to keep the money. This is one train that should never leave the station.

SEMCOG predicts that if they build any one of the five plans studied, between 600 and 6,000 people daily will ride the train between Detroit and Ann Arbor. The cost of building it will run from $600 million to $3 billion, depending on the plan used, with additional annual operating costs of $25 million to $110 million. Looking at the details of the specific plans and putting the estimates in perspective reveals what frightened off the federal funding.

The least expensive of the five proposals is estimated to serve 5,800 daily passengers. It will cost a minimum of $151,000 per passenger to build and cost another $3,900 per passenger per year to operate. This equates to buying each rider a brand new Chrysler PT Cruiser every five years for the next 40 years, and throwing in a $3,900 annual gas and maintenance voucher. Not a bad deal if you are one of those 5,800 lucky commuters, but not so pretty if you are a Michigan taxpayer.

And that’s the most economical option studied by SEMCOG. Another proposal would serve just 600 passengers each day, cost a minimum of $1.8 million per passenger to build and cost another $58,000 per passenger each year to operate. In PT Cruiser terms, that’s two new cars per passenger, every year, for 100 years. And it still leaves $40,000 left over per person each year for gas and maintenance. And this is the "low" estimate for the 600-daily-rider proposal. On a per-passenger basis, the "high" estimate would cost nearly $2.4 million per passenger to build and annually $70,000 per passenger to operate.

As eye-popping as these comparisons to personal automobile use may be, transit advocates often claim that such juxtapositions fail to account for the cost of subsidizing roads. Fair enough. Consider then that the most expensive of the SEMCOG estimates for the commuter rail project construction costs, $3 billion, equals the entire 2005 state of Michigan transportation budget, which itself includes federal road funding. Even the least costly plan has a high-end estimate of nearly $1 billion, and this is all before the various additional estimates for annual commuter rail maintenance costs are figured in. At best, these expenditures will serve the commuting needs of just 6,000 of the state’s 10 million people.

It also is important to note that by law about 9 percent of the state transportation budget is already dedicated to mass transit projects.

To date, it has cost at least $3 million to learn that the obvious options for this commuter rail plan will cost astronomical amounts of tax money and grossly underserve the transportation needs of Michigan taxpayers. With that cost already sunk, it seems highly unlikely that millions or even hundreds of millions more in study and research funding will produce a more credible and cost-conscious proposal. The central planners at SEMCOG should learn a lesson from the federal government’s rejection and quit wasting millions on plans to waste billions.


Kenneth M. Braun is a policy analyst specializing in fiscal and budgetary issues for the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited.