Amtrak Downeaster: Overview of Projected Economic Impacts

Photo: Brian Herzog via Flickr Creative Commons

In 2008, the Northern New England Passenger Rail Authority (NNEPRA) commissioned us to evaluate the economic impacts of existing and expanded rail service in Maine and New Hampshire.

Client: 
Northern New England Passenger Rail Authority

The questions before the Authority were whether to continue the current Downeaster service subsidy of approximately $8 to $10 million a year and whether to invest an additional $31.5 million in extensions of the system. Our analysis found that, forecasting out to 2030, many economic benefits would be realized from the proposed investments. Cumulative impacts resulting from construction investment would exceed $7 billion. Over 42,000 housing units and 6.8 million square feet of commercial space would be built near the stations. Almost 18,000 jobs would be created. Households would save $244 million every year by using the benefits of transit oriented development (rather than purchasing multiple cars) and visitors and residents would generate an additional $2.4 billion a year in purchasing power. Governments would realize an additional $76 million per year in state and local tax revenue.

Our twenty-five-year projection of the economic impacts associated with the Downeaster service, one of the very few analyses of full-corridor benefits for analogous rail services, helped convince Maine’s legislature to allocate $10 million in annual operating subsidies and $35 million in capital improvements to extend service to Brunswick. Those funds were later matched by $35 million from the Federal government and topped off by another $3 million from the State, allowing the Brunswick groundbreaking to occur in the summer of 2010.

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