Greater Albuquerque Chamber of Commerce – Santa Fe Chamber of Commerce

Rail Runner Position Paper

Background

In 2003 the New Mexico legislature and the Governor passed a $1.4 billion dollar transportation package called GRIP which was to be funded primarily by bonds. Over 1 billion dollars in the package was for roads that benefited cities throughout the state and $450 million was for capital to build the commuter rail component subsequently called the Rail Runner. The Greater Albuquerque Chamber of Commerce supported the GRIP package and most of the recommended financing mechanisms recommended at the time.  The Regional Transit District (RTD’s), the legislature and the office of the Governor negotiated and reached a verbal agreement on how the operations of the commuter rail would be funded.  It was verbally agreed by all parties that 75% of the operations for the commuter rail component would be funded from the four governments (Bernalillo, Sandoval, Valencia, Santa Fe County) through the RTD’s by a required election that would propose a 1/8 cent GRT tax. Additionally, and because it was a state-initiated project, 25% was committed for operations from the state as a part of the agreement.   A vote of the people in the four counties occurred in an election held in 2008.  The issue was passed by a majority of the people for both the commuter rail project and for the tax to fund it.

The election secured the RTD’s commitment for 75% of operations funding, but the 25% (or about $6 million) of state funding was never permanently secured.  The state’s commitment was instead funded by federal funds.  The lack of a permanent funding mechanism  at the state level and  to some extent, the poor economy has created the operations deficit problem for the Rail Runner. In an attempt to cut costs in the short term, the Rio Metro RTD voted on a 6-5 vote to end weekend service beginning mid-August. However, for the long term, the Rail Runner is facing a $1.2 million dollar operations deficit in FY 2012. The state is obligated to pay the $450 million over the next 16 years regardless of whether the Rail Runner is operational or not, as well as  the bond obligation payments for the larger road projects which was included in the GRIP package.  The state must currently use the federal dollars it receives to pay off the bonds which leaves few resources to maintain and expand roads in New Mexico.  Finally, unlike many other states, New Mexico does not have a long-term sustainable transportation fund dedicated to transportation systems which further aggravates the present problem.

Board Position

The Greater Albuquerque Chamber of Commerce and the Santa Fe Chamber of Commerce believe that a comprehensive transportation system is an economic development necessity. A comprehensive transportation system which efficiently moves both people and product is essential to creating a vibrant and competitive city and state. The Chambers have conducted several benchmarking trips to cities which have been successful at creating a comprehensive transportation system. All of those systems combine roads, commuter rail, light rail and bus systems in a synchronized plan which is designed to efficiently move people and product. None of those systems, roads included, can operate self sufficiently; all transportation systems need financial support from the people in the form of taxation, fares and in some places, toll charges.

The decision to end weekend service by the Rio Metro RTD , while bringing  the issue to a head, was nonetheless surprising and, we believe premature.  The Governor’s office should have been consulted and been a part of the debate at some level prior to any action being taken on a project which from the beginning has been a partnership between the local governments and the state.

The decision by the previous administration to use federal stimulus dollars and decline- for 4 years- to identify a permanent funding source ($6 million) to fulfill the state’s commitment was a mistake.

The Chambers urge all parties back to the table to creatively solve the dilemma. The investment has been made for the Rail Runner (and all other GRIP projects); the debt for it is still an obligation and tax revenue from the election result continues to come in for the project. We should not nickel and dime this project but solutions should recognize the problems, including, mistakes of the past. In the short run, questions like: How can we make this better? More  effective? More fair? … should  be answered. And then, the bigger problem should be solved – by all of us – how New Mexico can join the many other states who recognize transportation (roads and transit) as an important economic development tool and have created a long-term sustainable fund to pay for it.

 

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