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Economic Benefits of High-Speed Rail
The $8 billion initial investment in high-speed rail is expected to produce about 320,000 jobs and roughly $13 billion in economic benefit, according to published reports.
These benefits include construction and operations jobs, as well as manufacturing and supply chain opportunities. By increasing mobility while decreasing congestion and sprawl, high-speed rail makes our country more competitive while simultaneously spurring economic development.
Congress’ ‘Buy America’ program ensures that high-speed rail lines and trains will be built and operated using items made by American industries. Immediately after the high-speed rail funding announcement, more than 30 rail manufacturers and suppliers committed to establish or expand their United States operations if they are chosen to build America’s next generation high-speed trains.
Companies are already following through on that commitment.
- American Railcar Industries, a St. Charles, Mo.-based freight car manufacturer, announced a joint venture with Columbus, Ohio-based US Railcar to manufacture passenger cars in the United States.
- Siemens AG has purchased 20 acres of land adjacent to its existing 34-acre light-rail manufacturing plant in Sacramento, Calif. It will be the site for manufacturing high-speed-rail passenger trains traveling at up to 220 miles per hour.
- Talgo America, established new assembly and maintenance facilities in north Milwaukee. In light of Wisconsin’s refusal of high-speed rail funding, Talgo announced plans to leave the state for an area that supports high-speed rail development. It will provide new trains sets to Oregon.
Beyond bolstering American manufacturing, high-speed rail will help communities prosper. Rail improvements have a rich history of positive economic impact.
- Infrastructure spending has historically produced a 6:1 return on investment.
- Train stations drive economic growth in the communities where they are located.
- In recent years, communities showing significant, demonstrable economic benefits due to rail station construction or renovation include Philadelphia; Davis, Calif.; Meridian, Miss.; Lafayette, Ind.; Washington, D.C.; Seattle; Milwaukee; and Saco-Biddeford, Maine.
- That new station in Saco-Biddeford, Maine will generate $3.3 billion in construction investment and create more than 8,000 new jobs over the next two decades, according to the Center for Neighborhood Technology. It is also projected to create $55 million in new state tax revenue annually and nearly $1 billion new purchasing power by 2030.
- Research shows that family residences located near commuter rail stations in St. Louis command a 32% premium over homes located elsewhere.
- In 2002, commercial land located within 1,300 feet of the VTA Light Rail in Santa Clara County (San Jose, Calif.) commanded a 120% premium, according to a Reconnecting America report.
- Increased land values also generate more property tax revenue to fund public services and balance local budgets
The economic impacts seen across the country show local projects can have big benefits on the surrounding area, while regional efforts are likely to generate a ripple effect.
For example, a $17 million renovation of the Milwaukee Intermodal Station is projected to increase land values around the station by $227 million and create 3,000 new jobs in the Milwaukee area, according to multi-state economic impact study. Building out the entire 3,000 mile Midwest HSR corridor is expected to produce an overall economic benefit of $23.1 billion, creating 57,450 permanent new jobs at an average of 15,200 new jobs annually.