Caltrain Budget Projections Demonstrate Reliance on Electrification/High-speed Rail

By

April 26, 2010

Recently released budget projections show that electrification is essential to Caltrain’s survival. A modern, electric-powered railroad will provide quicker, more frequent service, which will attract more riders and generate more revenue. Revenue is projected to increase 49 percent by 2019, while operating costs remain flat. The commuter railroad, which currently uses diesel-powered trains, is facing budget deficit in the upcoming fiscal year.

The current deficit, the result of reduced contributions from Caltrain’s partners - the City and County of San Francisco, the San Mateo County Transit District and the Santa Clara Valley Transportation Authority - and a decline in ridership, could mean the elimination of mid-day, night and weekend service.

The shortfall is the latest in an annual scramble to come up with funds to finance the operation of the commuter railroad. Since the agency purchased the right of way in 1992, Caltrain has relied on annual contributions from its partners to subsidize its operating budget. In Fiscal Year 2010, partner contributions made up about 39 percent of the operating budget and fares made up another 40 percent. Caltrain uses one-time funds from a variety of sources to cover the remaining shortfall.

Caltrain faced a similar budget crisis in 2005, when declining ridership threatened to derail the commuter line. Faced with a choice - either cut service and risk losing even more riders and revenue, or pursue capacity-increasing service changes - Caltrain chose the bold course and reinvented its service. The increase in express service was wildly successful, generating dramatic increases in ridership that continued until the current recession.

Unfortunately, operating costs have continued to increase and, year after year, Caltrain has pieced its operating budget together with whatever state, federal or regional one-time funds were available.

Increasing service, the strategy that was so successful in 2005, is no longer an option. The diesel system is operating at maximum capacity and more trains cannot be added during peak commute hours.

Instead, Caltrain has planned a series of capital improvements that will transform the railroad into a modern, electric-powered system. These improvements will reduce operating costs while allowing Caltrain to operate more trains and attract more riders. With a new, modern electrified system, by 2019 the additional subsidy needed to balance the budget would be 45 percent less than today.

The cost associated with these improvements is overwhelming. In order to electrify the corridor, improve its signal systems and purchase new rolling stock, Caltrain will need to secure over $1.5 billion.

Fortunately, in 2008 California voters approved funding for a statewide high-speed rail system that includes service along the Caltrain corridor between San Francisco and San Jose. Recognizing this as an opportunity to preserve and enhance commuter rail service on the Peninsula, Caltrain’s Board of Directors entered into an agreement with the California High-Speed Rail Authority that makes the electrification and modernization of Caltrain a joint project with the implementation of high-speed rail.

Through this agreement, Caltrain is working with high-speed rail to fund improvements essential to its long-term survival.

For those who live or work between San Francisco and San Jose, this opportunity could not have come at a more critical time. With the recent economic downturn, decreased ridership and state funding cuts, Caltrain’s member agencies have once again been forced to reevaluate their yearly contributions to the system. Any substantial reduction in these subsidies would reverberate through the Caltrain system and result in deep service cuts.

Without an ability to expand capacity and attract new riders with improved service, the system’s structural deficit will continue to increase and will eventually threaten the entire Caltrain system.