Caltrain budget projections demonstrate reliance on electrification/HSR

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.