The case for taxpayer-subsidized commuter rail from Manchester to Boston has grown weaker, not stronger, in the seven years since the state released its major study of the proposed Capitol Corridor project. 

The New Hampshire Department of Transportation’s December, 2014, report on the Capitol Corridor project projected that a commuter rail line from Manchester to Boston would attract 3,120 riders per weekday. It predicted also that demand for commuter rail would grow as highway traffic increased in the coming years. 

In November of 2021, the department released an updated analysis of the Capitol Corridor project. It projects a peak ridership of 2,866 passengers per weekday, which is an 8% decline from the 2014 report.

That 8% decline in ridership occurs even as the number of trips per day to Manchester doubled, going from 16 in the original report to 32 in the 2021 update.

Making matters worse, as ridership falls, costs rise. 

The 2021 presentation noted that the price tag for the rail line would be higher than originally estimated due to inflation and the need for additional infrastructure beyond what was originally planned.  

The 2014 report estimated $246.5 million in capital costs, plus $10.8 million in annual operating costs. Both of those costs are expected to be significantly higher. 

Adjusted for inflation alone, the 2014 cost projections would come to $292.7 million for capital expenditures and $12.8 million for annual operating expenses.

In sum, if the Capitol Corridor project were to proceed, New Hampshire taxpayers would pay millions more dollars to transport thousands fewer people. 

Where would the money come from? The DOT’s 2021 analysis includes a breakdown of non-federal funding sources for other U.S. commuter rail operations. The largest sources of revenue are sales taxes.

The DOT projects that, if New Hampshire’s commuter rail were funded in the same way other similar operations are funded, the largest source of non-federal revenue would be a “transit sales tax” at 33%, followed by a “city/local sales tax” at 18%, a “state transportation tax” at 12%, “state other” contribution at 11%, and state “GO bonds” at 8%.

Without a sales tax, it is unclear how New Hampshire could possibly fund the construction and operation of a commuter rail line. 

As the math for the Capitol Corridor project grows worse, viable alternatives to commuter rail are expected to enter the market within just a few years, possibly before any rail project could even break ground: 

  • At the Consumer Electronics Show in Las Vegas last week, automakers announced aggressive timelines for the release of autonomous vehicles. General Motors announced it planned to make an autonomous vehicle available for the consumer market by the middle of this decade. Volvo announced that its autonomous driving system would be made available as soon as it clears safety reviews in California. 
  • Mobileye, an autonomous vehicle company owned by Intel, announced that it has teamed with China’s largest automaker to put an autonomous vehicle on the market in that country by 2024.   
  • And, to demonstrate advancements in self-driving technology, companies are already showing off autonomous race cars that compete at speeds up to 175 miles per hour.

The automobile industry is at the beginning of an autonomous vehicle revolution. It’s a safe bet that by the time any Manchester-Boston commuter rail line is completed and operational, autonomous vehicles will be available on the consumer market. 

Once the technology becomes advanced enough to allow large-scale consumer adoption, Granite Staters will have the option of taking a self-driving vehicle from their front door directly to the front door of a Boston office, restaurant, theater, ballpark or medical facility. This represents a tremendous advancement over rail, which requires obtaining transportation to a train station, taking the train along a fixed route to another station, then catching another form of transportation to one’s final destination. 

Perhaps the ultimate advantage of autonomous vehicles is that they will be made available to consumers (including as taxis and ride share vehicles, and eventually vans and buses) without the expenditure of hundreds of millions of dollars to build a new transportation system and the annual expenditure of millions more to run it.

Self-driving vehicles offer all the commuting benefits of a passenger train — the ability to work, read, or relax on the trip, rather than drive — without the taxpayer expense. Once they become widely available, the already shrinking demand for commuter rail is likely to collapse.

From an investment standpoint, it makes no sense at this moment in history to spend hundreds of millions of dollars to build and operate an increasingly obsolete, 19th-century mode of passenger transport.  

The Transportation and Climate Initiative (TCI) was supposed to kill fossil fuels by raising gas prices. Instead, high gas prices killed the TCI. 

Cooked up by the Georgetown Climate Center and pitched as an innovative way to cut carbon emissions, TCI is an old-fashioned carbon-trading scheme. The intended signatories, 13 states from Maine to North Carolina, and the District of Columbia, were to agree to cap carbon emissions from transportation fuels, then sell carbon credits to fossil fuel suppliers. 

States would decide how to spend the billions of dollars TCI’s creators projected the carbon credits would raise. The initiative’s Memorandum of Understanding states that signatories would “seek to invest strategically in lower carbon transportation options and other investments to further the goals described in this MOU.” 

That commits states to no specific carbon-reduction investments. The money would go into state general funds, to be spent at will by politicians.

By design, the TCI would achieve its carbon reductions by making gas and diesel fuel more expensive. That would serve as an incentive for consumers to take mass transit, share rides, or buy electric vehicles. Any state investments in alternative transportation systems would be gravy. 

The TCI’s own model initially predicted that gas prices would rise by between 5-17 cents per gallon as a result of the scheme’s carbon caps. A Tufts University study last year estimated price increases between 3-38 cents per gallon absent a cap on such increases. The initiative anticipated capping price increases at 9 cents a gallon. 

But a funny thing happened on the way to the compact. Gas prices shot up on their own in response to surging demand and limited supplies. By October, gas prices had risen by more than a dollar during the year, hitting a seven-year high. 

With citizens already highly sensitive to gas price increases, governors who had initially backed the TCI’s plan to raise those prices further bailed.

Last Tuesday, Conn. Gov. Ned Lamont announced that high gas prices made it impossible for his state to join.

“Look, I couldn’t get that through when gas prices were at a historic low, so I think the legislature has been pretty clear that it’s going to be a pretty tough rock to push when gas prices are so high, so no,” he said. 

Mass. Gov. Charlie Baker pulled his state out on Thursday. Then Rhode Island Gov. Dan McKee followed on Friday, just a day after announcing his intention to remain in the pact. 

To sell the scheme, TCI backers had focused on the supposed carbon emission reductions the initiative would create. But as the Josiah Bartlett Center was the first organization to point out in December of 2019, the TCI’s own model showed that almost all of its projected carbon reductions would occur regardless of whether the initiative were adopted. The initiative itself was projected to cut emissions by between one and six percentage points, not the 25 percentage points boosters claimed. 

The small reductions the proposal might be able to achieve came at an enormous cost of tens of billions of dollars. And those costs would be borne by motorists. 

Consumers would pay higher fuel prices with no guarantee that those prices would result in meaningful investments in lower-emission alternatives. The only certainty in the whole plan was that fuel prices — and government spending — would go up. 

New Hampshire Gov. Chris Sununu was the first governor to recognize this, saying in a Dec. 17, 2019 statement that he would not commit New Hampshire to the TCI because the program “would institute a new gas tax by up to 17 cents per gallon while only achieving minimal results. This program is a financial boondoggle and the people of New Hampshire will never support it.”

Just shy of two years later, the rest of New England’s governors effectively ratified Sununu’s decision. Better late than never. 

A September report from the Federal Reserve Bank of Boston found that transit ridership in New England plummeted during the pandemic. 

From March 2020 to July 2021, the Massachusetts Bay Transportation Authority lost 340,584,000 passenger trips, while the City of Nashua’s public bus system saw 339,000 fewer trips and Cooperative Alliance for Seacoast Transportation experienced a loss of 295,000 trips.  

Much more interesting, though, was how New Hampshire systems are funded vs. others in New England. 

Massive Taxpayer Subsidies

The study found that only four of the 38 New England transit systems it examined “relied on directly generated revenue to cover at least half of their operating expenses in 2019.”

That is, in 34 of 38 systems, taxpayers covered more than half of expenses before the pandemic. 

In 26 of 38 systems, directly generated revenue covered less than 25% of operating expenses, the study found. 

(Directly generated revenue includes fares, parking fees and advertising.)

A New Hampshire Advantage for Taxpayers

But in New Hampshire, those percentages were reversed.

“The smaller public transit systems in New England are, on average, less reliant than the larger systems on directly generated revenue to cover operating expenses, but there are a few notable exceptions. These include the small systems in New Hampshire, which, on average, fund 75 percent of their operating expenses with directly generated revenue. The smaller systems in the other New England states generally are more reliant on local, state, and federal appropriations.”

In other words, New Hampshire’s famous frugality affects even its municipal public transit systems. At least for the two systems included in this study, operating expenses are covered primarily by riders and advertisers rather than taxpayers.

Nationally, fares cover about 1/3 of transit system operating costs, according to the Federal Transit Administration. 

Subsidies Replacing Subsidies

The report also noted that the “combined appropriations from the three federal stimulus packages fully replaced transit systems’ lost revenues.”

But with only 12 receiving at least a quarter of their revenues from fares, fees and advertising, and only four of those 12 receiving at least half of their revenues from those sources, it appears that in most cases the federal government was replacing taxpayer subsidies with other taxpayer subsidies.

The Wall Street Journal reported in August that federal COVID relief aid for public transit agencies totaled $69.5 billion, or “$15 billion more than the country’s 2,200 agencies spent combined to run their systems in 2019, the last year before the pandemic hit.”

Note: The study covered “full-reporter” transit systems, which are those large enough that the Federal Transit Administration requires them to file monthly ridership reports. The Manchester Transit Authority and other municipal bus services in New Hampshire were not included in the study because they are not full-reporter agencies. The two New Hampshire systems covered in the report were Nashua’s city bus service and the Cooperative Alliance for Seacoast Transportation. 

Amid a historic collapse in transit ridership, the Executive Council has approved a $5.4 million contract to design a commuter rail line from New Hampshire to Boston. The contract is financed entirely with federal money, so New Hampshire taxpayers could choose to take some comfort in knowing that the state is throwing away what is mostly other people’s money. Nonetheless, it’s a waste of taxpayer dollars.

Americans have in the past year avoided mass transit like the plague, largely because of, well, a plague of sorts. But the trends before the rise of the coronavirus show a longer decline in ridership. 

In 2020, mass transit ridership fell by 50%, according to data kept by the American Public Transit Association. Commuter rail ridership fell by 62%. 

Transit ridership nationwide has been falling for years, according to federal data. (Commuter rail ridership has increased in the last decade, thought it’s leveled off in recent years.) 

In Boston, however, Massachusetts Bay Transit Authority (MBTA) commuter rail ridership has been in steady decline. 

The Pioneer Institute reported last year that MBTA commuter rail ridership fell by 11% (or about 4 million riders) from 2012-2018. 

In November, the MBTA reported that commuter rail was down to 13% of its normal ridership level.

Whether transit ridership will rebound to anything near its pre-COVID levels is an open question. It might. But commercial real estate rents, along with announcements by large and small companies that they are preparing to permanently switch portions of their workforce to remote work, suggest that urban work and commute patterns might forever be altered.

Again, even before the arrival of the coronavirus, technological advancements were driving declines in public transit. Ride sharing companies have given people another, more convenient way to move around cities and suburbs without relying on government-provided vehicles that travel pre-set, government-chosen routes. Those services are drawing riders away from mass transit, as this University of Kentucky study shows.

Rail is a 19th century technology that is ill-suited to solving 21st century transportation and environmental issues. The way forward is through innovation. Electric vehicles and autonomous vehicles will get people where they need to go while reducing greenhouse gas emissions and turning commute time into productive work time. They are far more versatile than trains and will serve people’s travel needs better.

That transition is already underway. And flying cars might follow, further changing the way we travel. New Hampshire doesn’t need to spend hundreds of millions of dollars to build a train to serve a declining number of commuters when tech companies are already working on alternatives that will better serve everyone. 

The regional cap-and-tax scheme called the Transportation and Climate Initiative (TCI) is a bad deal for New Hampshire, the initiative organizers’ own projections show.

Modeled on the Regional Greenhouse Gas Initiative, the TCI would cap carbon emissions from transportation sources (vehicles) and force fuel distributors to buy carbon allowances. A declining cap would force distributors to buy more allowances annually. The hope is to compel a switch to non-fossil fuels or to discourage driving by making it uncomfortably expensive.

Naturally, the costs of buying the allowances would be passed on to consumers. In effect, the TCI imposes an additional fossil fuel tax on top of the state and federal gas taxes consumers already pay.

The cost to consumers would be enormous. On December 17th, the TCI organizers released the results of their own analysis of the program’s impact. They project that the carbon allowances would generate revenue of between $1.4 billion and $5.6 billion annually in the 12-state TCI region (plus the District of Columbia), which covers Mid-Atlantic and Northeastern states, including New Hampshire.

That would be a cost of between $14 billion and $56 billion over the decade spanning from 2022-2032.

But the TCI organizers’ own projections show that almost all of the carbon emissions reduction projected during that decade can be attributed to existing trends and not to the TCI scheme.

In August, they projected a baseline reduction in carbon emissions of “roughly 20 percent” without the TCI.

“Total gasoline and diesel consumption and CO2 emissions both fall by roughly 20% from 2022 through 2032 as a result of increased fuel economy in light and heavy-duty vehicles and increased LDV EV shares,” according to the organizers’ own analysis. (LDV EV = light duty vehicle electric vehicle.)

In a presentation released on December 17th, TCI organizers projected that the TCI would cause carbon emissions to fall by approximately 1-5 percentage points above the roughly 20 percent that will occur under existing policies.

The worst-case scenario projection was a 20 percent drop in carbon emissions from 2022-2032, which could be as little as a fraction of a percentage point above the baseline projection. The best-case scenario projection was a 25 percentage point reduction, which would be, at best, 6 percentage points above the baseline.

Understanding the baseline is critical because groups that support the TCI are already claiming it will produce up to a 25 percent reduction in carbon emissions in the region. That is false. Roughly 4/5ths of that reduction will happen anyway, the TCI organizers’ own projections show.

At best, the TCI would reduce carbon emissions of a little more than 5 percent in 10 years — at a cost of $56 billion in that best-case scenario. Without the TCI, carbon emissions are projected to fall by roughy four times that amount. If the TCI’s worst-case scenario occurs, the cost would be $14 billion to achieve an emissions reduction roughly 1/20th the size of what would happen anyway.

The TCI organizers projected that their initiative would cause gas taxes to rise by 5-17 cents per gallon if distributors passed the costs on to consumers (which they would). That seemingly small figure would extract billions of dollars from the economy, giving it to governments to distribute to projects that they favor but that consumers might not. In fact, the whole point is to replace consumer and investor choices with those made by government officials.

The program’s assumed effectiveness relies heavily on the premise that government officials will spend billions of dollars in ways proven to be effective at generating additional carbon reductions. Not only would those projects have to be effective on their own, they would have to be more effective than the choices that otherwise would have been made by business, entrepreneurs and consumers in the absence of the TCI.

Rather than forcibly extract billions of dollars from consumers in yet another heavy-handed attempt to control people’s behavior, governments should scrap this carbon tax scheme and let the market continue to generate solutions.

SUMMARY: To promote taxpayer funding of a quarter-billion dollar commuter rail project, supporters last week touted a single poll question, without context, that appeared to show strong public support for commuter rail. It’s a tactic rail enthusiasts have repeated for years. Journalists, lawmakers and the public should be skeptical of such PR campaigns. This brief run through the complex commuter rail issue shows how misleading such PR boosterism can be. 


First, everyone should be wary of any poll that purports to show broad support for an expensive public policy without mentioning costs or alternatives. In some cases, it’s useful to know whether people favor or disfavor an abstract concept. But when a specific policy with known costs is being polled, it’s helpful to ask whether people are willing to pay for the nice idea in question.  

The New Hampshire Legislature votes on bills, not concepts. Casino gambling is a good example. Despite the concept frequently drawing broad support from the public and members of the House, no specific bill has been able to pass the Legislature once the details are laid out. Every issue involves tradeoffs, which abstract poll questions often miss.   

This particular commuter rail poll question did not inform respondents of the cost of the project. Nor did it tell them anything about rail’s impact on traffic, zoning regulations, population density, decreased funding for other public works projects, or other quality-of-life issues. Respondents also were not asked whether they would favor a state-run or private option. Without such details, we don’t really know whether the public supports the actual commuter rail projects under consideration.  

The St. Anselm College poll question asked, simply:

“Would you support or oppose commuter rail connecting Manchester or Nashua with Boston?”

Unsurprisingly, three-fourths of respondents (75.5 percent) were in favor. This is similar to 2015 poll that found 74 percent support for commuter rail in the abstract, with no cost mentioned. The 2015 poll was promoted by the New Hampshire Rail Transit Authority, the second by N.H. Business for Rail Expansion.  Advocacy groups are using abstract poll questions to promote a specific project, the taxpayer-funded, state-developed Capitol Corridor Rail Expansion Project. But the public is not being asked about any details of this project.

Before accepting these poll results at face value, journalists and lawmakers should consider whether they would publish a story or cast a vote after asking only a single, generic question. Commuter rail is a complex issue. Asking whether people would prefer commuter rail in the abstract is like asking if people would prefer to eat ice cream every day. Of course they would. But their answers will change if asked to weigh the tradeoffs. 

Regarding commuter rail, unless the topics listed in this briefing paper are covered, people have not been asked to make an informed choice between competing options. They have merely been asked whether they would like to see ice cream on the menu.  

Read the full paper in pdf form here: Skeptic’s Guide To Commuter Rail Brief.

It’s been a decade since New Hampshire increased turnpike tolls statewide, which means that the Department of Transportation’s Bureau of Turnpikes has awakened, like the mythical Kumbhakarna, ravenous and ready to devour more of your money.

Kumbhakarna was (is?) a Hindu demon cursed to sleep for long stretches. Periodically he would awaken, eat everything in sight, then fall asleep again. The Bureau of Turnpikes can be counted on, Kumbhakarna-like, to emerge every so many years and grab for whatever sustenance it can find.

This new proposal calls for a 25-50 percent toll increase statewide.

Why is it always a big increase (a Turnspike) rather than a series of small, gradual nudges upward? Does anyone plan ahead over there?

As is often the case with transportation projects, elected officials have mentioned “red-list bridges” as a reason to support this spike.

Yeah, about those bridges…

The proposal mentions red-list bridges only once. It states that the toll increases would allow the state to free up $32 million in federal funds slated for “Merrimack River Bridges Rehabilitation” and transfer it to 11 red-list bridge projects. Under the proposal, the DOT would begin the Merrimack River bridge project — in 2027 — and it can’t start without legislative approval. It requires moving Merrimack River bridges in Concord into the turnpike system, according to the proposal. That would free-up other money that could be used to fix other red-list bridges, but there is no guarantee that it would be used for that purpose.

What this means is that the toll hike is not about fixing red-list bridges. Those bridges are outside the turnpike system. The red-list bridges would be a small part of this plan and it doesn’t guarantee their funding. They would get $32 million (years from now) out of a plan that would raise $36 million a year in new revenue.

This hike is about permanently raising turnpike revenue. We know this because although the stated justification is to cover a spike in projects over the next decade, the toll hikes don’t expire in 2028.

We also know that the hike is not primarily about public safety. We know this because the department lists public safety as the primary benefit for only one set of projects, the reconstruction of Exits 6 & 7 in Manchester. There are serious safety concerns here, and the project should be accelerated. But a permanent 50 percent toll hike is not needed to do that.

The Exits 6 & 7 projects total $139 million and are scheduled to start after the $122 million widening of the Everett Turnpike from Nashua to Bedford, which is not as high a safety priority. If the DOT puts safety first, it should move this project ahead of the Everett Turnpike widening. It could defer other, less critical projects to cover the acceleration of this one. Instead, it’s asking for a permanent toll hike.

It should be no surprise that the DOT intends to divert millions of dollars from this proposed toll hike to… “alternative modes of travel such as transit, bike, rail.” The DOT wants to raise turnpike tolls in part to spend $27 million from 2020-2028 to encourage people to ride bikes and trains instead of drive on the turnpikes.

Bostonians who clog the Hampton and Hooksett tolls on Columbus Day and Memorial Day weekends are not going to opt to bike to Lake Winnipesaukee or The Flume unless the North Koreans, Russians, eco-warriors or asphalt-hating space aliens reduce our roads to rubble, crush all automobiles, and torch every last drop of fossil fuel on earth.

Unless the $27 million funds a first strike by any of these groups, it will be squandered on ineffective, feel-good projects.

A look at Bureau of Turnpikes revenue reports shows that the turnpike system’s revenue is healthy and growing (a 5.1% increase from 2015-2016).

In sum, this toll increase is neither essential nor justified. But it reportedly has the support of a majority of the Executive Council. Red-list bridges, you know. Kumbhakarna is a formidable foe.

November 18, 2015

As originally published in the New Hampshire Union Leader

The Pappas-Van Ostern Express is a good example of bad math driving debt and leaving taxpayers with an empty wallet. Last week’s news release was not a new train plan but simply the old unaffordable plan with all the estimates revised down to make it appear cheaper but grotesquely unrealistic. This sort of new math is how governments go bankrupt.

Efforts to spend $300 million on a train that would require large annual operating subsidies have stalled. In an effort to revive the plan — or perhaps just to put out a news release — Executive Councilors Colin Van Ostern and Chris Pappas put out what they described as a “draft financing option.” Their goal is to jump start discussions that have lagged.

Pappas and Van Ostern have been the leading supporters of the train since their elections in 2012. And for Van Ostern, he has it at the heart of his economic development agenda in his gubernatorial campaign.

Their news release is not a new plan but rather a wildly optimistic reworking of already unrealistic numbers in a train study from a year ago.

The train would require a huge capital investment and then an annual operating subsidy. Underestimating each of these factors leads supporters to conclude the train is suddenly more affordable.

The Manchester option would require a total capital investment of $303 million. As the initial study did, the Pappas-Van Ostern plan counts on a capital investment from Massachusetts of $63.6 million. Given the significant budget problems in Massachusetts, their aid seems less than realistic as does the hope that the federal government would count the Massachusetts contribution as part of our local commitment to be matched.

The federal matching program supporters hope to tap is described as “chronically oversubscribed and thus extremely competitive.” But then again there is no financial cost to optimism.

If all goes well and Massachusetts rides to our rescue and we win the competitive federal process, supporters would then have us use about 75 percent of the state’s bonding capacity for one year on the train project. The annual cost of bonding, if all goes well, will be about $6 million.
At this point, supporters are merely guilty of optimism. Now the problems come in.

Supporters would have to believe that — unlike any other commuter train in existence — operations will more than pay for themselves and reduce the state’s annual costs below the $6 million bonding payment.
The closest analogue to the proposed train is the Portland-Boston Downeaster. It is remarkably successful by train standards, carries 530,000 passengers per year, but requires an annual subsidy of $8.4 million. Despite that, the Pappas-Van Ostern projection is that their train would be the best performing in the entire country — better than any New York train where the population density is extraordinary, better than all the other Boston trains in any direction, and exponentially better than anything seen or projected. Rather than covering 45 percent of its costs like most trains and the Downeaster, the PVO projection is closer to 90 percent.
That sort of optimism leads to financial problems. In planning for our own train, we would be more realistic to think of the $8 million the much-touted Downeaster loses. That raises the state’s annual need to $14 million each year.
Both last year’s plan and the PVO news release assume some offsets. The plan anticipated parking revenue of $500,000 to $900,000. The PVO release raises that to $1 million on higher fees.

As a discussion starter, the PVO release suggests local property taxes — through a local development district and supplemented by a local charge when that falls short — to cover $1-$3 million. I’m sure that will be very popular in Manchester and Nashua.
Even if they’re right about parking and local property taxes, they need $10-$12 million per year or double their estimate.

The policy goal is to aid commuters. The Downeaster moved 530,000 people for $8.4 million. The express buses in the I-93 corridor moved 550,000 people for just $750,000 — and didn’t require $300 million in capital costs.
Too often government loses sight of the policy goal and the most efficient way to achieve it.

Even worse, politicians are regularly tempted to use unrealistic numbers to make choices easier. Optimistic but unrealistic budget numbers created a huge hole, required a federal bailout, and led to the largest budget crisis in history. This is how it starts.

Josh Elliott-Traficante

May 2015

Supporters of bringing commuter rail north from Lowell into New Hampshire have been touting the economic development potential of the project. But does rail in and of itself, construction and operation aside, create jobs? While studies of proposed passenger commuter rail lines often predict job creation, studies of lines that have been built and operating have found that these projects do not create jobs by themselves, but they can influence where already planned investments will happen.

The proposed MBTA extension would not be New Hampshire’s only passenger rail connection. The Downeaster, which runs ten trains a day between Boston and Maine, makes stops in Exeter, Durham, and Dover.

Service began in 2001, which provides an excellent case study to gauge the impact of rail here in the state. According to US Census data, after more than ten years of passenger rail service, the number of jobs increased in Dover, remained virtually unchanged in Durham, and fell in Exeter.[1]

Rail Chart 1


The St. Louis Federal Reserve has some words of wisdom for those who view rail as a tool for boosting the economy: “Rather than relying solely on rail to create economic development, city planners and officials should first address a key question: Why is economic development not occurring in a given area in the first place?”[2]

The Experience Studies:

While most proposed rail projects usually include projections of job growth, it is important to remember that these are projections, not actual experience. Rather than rely on these, looking at studies of passenger commuter rail lines that have been in service for a few years is more helpful. These studies have shown that simply having rail service does not create jobs.

The most comprehensive analysis of rail’s impact on job creation was commissioned by the Federal Transit Administration and concluded that “(r)ail transit investments do not stimulate real economic growth; rather they only influence where already-committed growth takes place,”[3] adding that “rail investments cannot overcome the effects of a weak regional economy.”[4]  One example the FTA study looked at was the experience of two cities along a commuter rail line in Pennsylvania. One city had substantial growth in both apartment development and commercial real estate, while another city had nearly none. They concluded that the rail line had not influenced outcomes, but the difference was a result of different attitudes towards growth, zoning laws, and land availability.[5]

More recent studies have come to similar conclusions. The experience of the Coaster commuter rail line in San Diego is particularly helpful because it shares many similarities to the proposed Capitol Corridor project. Both are roughly the same length and both connect midsized cities (40,000-100,000) to the largest city in the region. A study of the impacts of the Coaster found that though there were minor gains in value for some types of residential property near the non-Downtown San Diego stations, commercial property values fell nearly 10%.[6] Though an inexact proxy, weak demand for commercial property is not indicative of strong job growth. If the same experience is realized for the Capitol Corridor, Boston could gain jobs at Manchester and Nashua’s expense.

Researchers at the Brookings Institution also found little evidence that rail transit investments have significant impacts on urban form. The only way for rail to have an impact, they found, would be to make private car ownership and usage prohibitively expensive.[7]

Closer to home, a study of the MBTA commuter rail system, the operator proposed for New Hampshire, found that “development patterns are governed by the dominant forces of the day, and even given the large investments, commuter rail is no longer one of those forces.”[8] The director of Harvard’s Rappaport Institute, which conducted the study, summarized the findings stating “(T)he history of commuter rail in Massachusetts suggests that while commuter rail can be helpful, it generally has not revitalized communities or reduced sprawl.”[9]

The St. Louis Federal Reserve Bank conducted research into the economic impacts of light rail, and found that “the general consensus from the academic literature and the findings in this report is that light rail is not a catalyst for economic development, rather light rail can help guide economic development.”[10] In other words, rail does not create growth, but can impact where that growth happens. Though light rail and commuter rail fulfill different transit needs, the underlying argument that proponents use, that rail creates jobs, is the same.

The New Hampshire Experience: The Downeaster

New Hampshire has an excellent test case with the Downeaster, which runs from Boston north to Brunswick, Maine, and makes stops in Exeter, Durham, and Dover. Service to all of these stations began in December 2001. Though the Downeaster is technically not a commuter rail service, it is a functional equivalent by offering multiple departures a day and runs over a fairly short distance.

According to the data from the US Census Bureau, job creation between 2000 and 2012 between each of these towns is mixed. In Exeter, the total number of jobs located in the town dropped about 300. In Durham, the number of jobs was virtually unchanged, while Dover saw just over 1,000 new jobs.

These municipalities do not exist in a vacuum, so it is useful to pair them with similar, non-rail served communities, to act as control. Exeter was paired with Epping and Dover with Rochester. Durham, only seeing minor changes in jobs numbers, was left unpaired.

Epping and Exeter:

From an infrastructure point of view, Epping and Exeter are quite alike; both have access to NH 101, which links the Seacoast with Manchester. Exeter has three exits off the highway, with a fourth just over the line in Stratham.  Epping has two exits off 101, with a third just over the line in Brentwood and is roughly equidistant between Interstate 95 and Interstate 93.

Demographically, Exeter is more than twice the size of Epping, although Epping added nearly four times the number of people (935) between the 2000 and 2010 census that Exeter did (298). Despite having similar highway access, and Exeter having a much larger population and a passenger rail station, Epping added 1,442 jobs over the time period, while Exeter lost 328.

Rail Chart 2

Rochester and Dover:

Rochester and Dover are similar communities in in terms of transportation connections. Both are close to, or on the Maine border and have four exits off of the Spaulding Turnpike, which connects to Interstate 95 in Portsmouth.

Population wise they are virtually identical; Rochester has 29,752 residents, while Dover has 29,987. In the last census, Rochester added 1,291 people, while Dover added 3,103, displacing the former as the fifth largest city in the state. Though the two cities are next to each other, the economies are quite different.

Dover’s job base is more service oriented, with a large number of jobs in insurance and finance (Liberty Mutual) and healthcare (Wentworth Douglass Hospital). The latter is particularly significant as one of the few bright spots in jobs market has been in the healthcare sector. Rochester’s economy on the other hand is more manufacturing oriented, a sector which saw 35,000 jobs lost statewide in this time period. The city was not immune to that decline, losing more than 1,700 jobs.

Rail Chart 3


Drawing Conclusions:

An analysis of town by town jobs numbers here in New Hampshire shows that merely having access to passenger rail does not create jobs. After a decade of continuous rail service in Dover added jobs, Durham remained unchanged, while Exeter lost jobs.

Can Dover’s impressive growth be attributed to regular passenger rail service? Not necessarily; both Epping and Concord saw greater growth rates over the time frame, and neither has passenger rail service. With the exception of the redevelopment of the downtown mills, the majority Dover’s growth has been on the peripheries of the city in industrial and business parks.

Rail Chart 4

It does not appear that Rochester’s loss has been Dover’s gain either. Comparing the jobs figures, there is no evidence that Rochester’s lost jobs simply moved to Dover. Rather, larger employment trends explain this shift. Statewide, the number of manufacturing jobs has fallen by more than 35,000, replacing them with roughly the same number of service sector jobs. Dover, with its large service sector, was well positioned to benefit from this trend, while Rochester, with its large manufacturing sector, was harmed by it.

Exeter’s loss of jobs is particularly telling because it turns the entire notion that rail service creates jobs on its head. The argument that rail minimized Exeter’s job losses does not hold much weight since neighboring Epping saw substantial gains.

What does this tell us about commuter rail’s ability to create jobs? From the studies that have been conducted after rail service has started and the experience of the Downeaster here in New Hampshire, simply having commuter rail does not create jobs. Rail, whatever its benefits may or may not be, is not a tool to spur job creation.

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[1] United States Census Bureau, ZIP Code Business Patterns Survey

[2] Thomas A. Garrett, St. Louis Federal Reserve, “Light Rail Transit in America” pg 25.

[3] Federal Transit Administration, “An Evaluation of the Relationships Between Transit & Urban Form” Pg. 11.

[4] Ibid 15.

[5] Ibid 16.

[6] Robert Cervero and Michael Duncan, “Land Value Impacts of Rail Transit Services in San Diego County” Pg. 24.

[7] Brookings Institution, Urban and Regional Policy and Its Effects, Vol. 3. Pg 284.

[8] Eric Beaton, “Impact of Commuter Rail in Greater Boston” Pg 46.

[9] David Luberoff, “Commuter Rail Can Take Us Only So Far”, Boston Globe, November 3, 2006.

[10] Garrett, St. Louis Federal Reserve, “Light Rail Transit in America” Pg 25.


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Blue: The Road Toll, or ‘Gas Tax’. This tax generates the largest portion of revenue for the Highway Fund, is raised as a per gallon tax on all gasoline or diesel sold. Revenues are currently falling due to more fuel efficient vehicles using less gas.  However, vehicles are still putting the same wear and tear on the road, meaning expenses for maintenance are still the same. It was increased in 1991 and 2014.

Red: Motor Vehicle Fees (MV Fees). This is the portion of the Motor Vehicle Fee that is collected by the state. The amount paid depends on the weight of the vehicle.

Orange: Motor Vehicle Surcharge (MV Surcharge). This was a charge added on top of the existing Motor Vehicle Fees, that ranged from $30 to $75 depending on the weight of the vehicle. It automatically sun-setted in 2011.

Purple: The I-95 Transfer. In order to get money out of the protected Turnpike Fund, the state sold a 1.6mi portion of I-95 to the Turnpike System. The money was to be paid over a term of 20 years, but was accelerated to be paid in just 6. The total amount transferred, including interest, was 131 million.

Turquoise: Bond Proceeds. Bonds were issued in 2008 and 2009, backed by future Highway Fund revenue. The total amount raised from the issue was $60 million.

Periwinkle: Road Toll Increase (SB 367): This is the revenue raised from the most recent increase in the gas tax. The revenue in the first years was allocated to road work projects across the state, with funds in the later years dedicated to paying off the bonds for the expansion of I-93. This increase is due to sunset, once all of the bonds have been repaid in full. 

Green: Other. This is a catch all for other, minor sources of revenue to the highway fund, such as fines.