Passenger

It's easy to forget that passenger train service in the US has always been subsidized by the government. In the 19th century, the US and most states offered land-grant incentives to encourage railroads to be built. The railroads rec'd large tracts of land that they could use or sell as they saw fit.

Later, the federal government contracted with the railroads to haul the mail. Private passenger service collapsed after the mail contracts were withdrawn in the 1960's, since many passenger trains that were profitable (or at least breaking even) when hauling the mail were unsustainable without the federal money and had to be abandoned. It was at this point that the railroads went to the government asking (begging?) them to take over passenger service.

There's a strong connection in American myth to the "rugged individual" and all that, but if you go back into real history, it's surprising how much the government was involved along the way.

wjstix:

if you go back into real history, it's surprising how much the government was involved along the way.

Very true.  There is a lot of evidence that our attitude toward government changed starting in the late 1970's.

schlimm:

wjstix:

if you go back into real history, it's surprising how much the government was involved along the way.

 

Very true.  There is a lot of evidence that our attitude toward government changed starting in the late 1970's.

klahm:

There are two plain facts: 1) Passenger rail doesn't make economic sense except where (a) passenger density is substantial and tracks/stations reach useful destinations (e.g., NE corridor, California, Europe, perhaps a few other places E of Mississippi River) or (b) there is sufficient demand for cruise trains. 2).............. My longstanding view is that interstate trains should be sponsored by groups of states along the route, with federal matching dollars available on a basis similar to the highways. Trains within a given state can be handled by the state DOT, again with a federal match. The states and groups thereof can contract whoever they want to run the trains. Maybe some Class Is would be willing to do that. The Amtrak monopoly should be quietly legislated away.

I agree with most of the sentiments expressed in this post.  However, I don't think that the federal government should underwrite passenger rail services, especially long distance trains. 

The notion persists in the minds of many people that the government unfairly subsidizes highway and airways users, largely because pump and ticket prices don't reflect the full cost of building and maintaining these facilities.  By the way, if they did reflect the full cost at the pump or in ticket prices, it would put passenger rail on a more even footing with cars and planes.

The overwhelming majority of motorists, as well as commercial aviation users, pay federal, state, and local taxes.  These taxes flow into the general fund of the taxing authority.  Some of the monies are transferred to the highway trust fund or aviation trust fund, in the case of the federal government, or state and local highway and aviation funds. 

Most of the roadway and airways costs in the U.S. are paid for via user taxes, e.g. fuel taxes, license fees, ticket taxes, etc.  To the extent that these taxes or fees are inadequate to cover the costs of the highways and airways, monies are transferred from the general funds to make up the difference. 

The transfers referred to above involve some cost shifting.  High income motorists tend to pay more in user and general taxes than low income users, who in some instances pay no income tax and little general taxes.  Thus, it can be argued that these high income earners subsidize low income motorists.  The same might be argued for airline passengers, although the per mile subsidy for them is very small, thereby largely negating the cost shifting argument.

Given the large number of motorists, as well as commercial airline users, they are paying for the highways and airways that they use, either directly or through transfers from the general funds.

Passenger rail users also pay taxes.  And some of them find their way from the general funds to support Amtrak or local rail operations.  However, because the percentage of the population that uses passenger rail, compared to the percent that drive or fly is relatively small, passenger rail users require a significant subsidy from non-users, many of whom could not take a train even if they wanted to because there is no service available to them. 

oltmannd:

schlimm:

wjstix:

if you go back into real history, it's surprising how much the government was involved along the way.

 

Very true.  There is a lot of evidence that our attitude toward government changed starting in the late 1970's.

You are correct. Our attitude from 1900 to 1980 was that is was OK for gov't growth to outstrip overall growth of the economy. The change occurred at teh end of the era that featured spectacular gov't growth. In the mid-60s, Federal spending was less than 25% of GDP, by 1980, it was 30% of GDP. (Pre WW I, it was about 5%. During the Depression, it was 15%. In the early 50's, it was 20%) Since 1980, the gov't % of GDP has wandered around the 30% mark.

1. wjstix and I were referring to Federal functions, not just spending.

2. As recently as 2006 TOTAL spending by ALL government in the US is 36.1%.  Of that, about 57% was Federal (20% of the total).  Of course, that has changed since then.

3. Clearly, the diminishment of numerous regulatory functions since the late 70's has had a role in our current financial mess.  Also the Reagan slogan re: government being the problem has had a deleterious effect as well, IMHO.

Sam1:

Most of the roadway and airways costs in the U.S. are paid for via user taxes, e.g. fuel taxes, license fees, ticket taxes, etc.  To the extent that these taxes or fees are inadequate to cover the costs of the highways and airways, monies are transferred from the general funds to make up the difference.

More precisely:

For 2004, the FHWA reports that of the $136 Bil. spent by all governments on construction and operation,$106 Bil. was from user fees, or 78%.  The other 22% comes from general funds. 

Sam1:

High income motorists tend to pay more in user and general taxes than low income users, who in some instances pay no income tax and little general taxes.  Thus, it can be argued that these high income earners subsidize low income motorists.

Oh really?  Although the contribution of high income motorists is higher for income taxes, the user fees (fuel taxes, license fees, etc.)  are relatively flat taxes which hit poorer, but working people who drive to work disproportionately harder everyday.

Sam1:

The notion persists in the minds of many people that the government unfairly subsidizes highway and airways users, largely because pump and ticket prices don't reflect the full cost of building and maintaining these facilities. 

I ran into this outdated quote, but I suspect it is still largely true: " When the Reagan Administration claimed that each rail passenger required a $35 subsidy, Amtrak President Graham Claytor countered that air passengers were subsidized at $42 each, including $9 for the air traffic control system." -Source: US News and World Report, April 29, 1985

schlimm:

Sam1:

The notion persists in the minds of many people that the government unfairly subsidizes highway and airways users, largely because pump and ticket prices don't reflect the full cost of building and maintaining these facilities. 

 

I ran into this outdated quote, but I suspect it is still largely true: " When the Reagan Administration claimed that each rail passenger required a $35 subsidy, Amtrak President Graham Claytor countered that air passengers were subsidized at $42 each, including $9 for the air traffic control system." -Source: US News and World Report, April 29, 1985

In FY08 the average federal subsidy for Amtrak was $48.50 per passenger or 22.61 cents per passenger mile.  The average federal subsidy for the nation's commercial airlines was $3.92 per passenger or .45 cents per passenger mile, whilst the average subsidy for a motorist was $38.86 or .0026 cents per motor vehicle mile traveled.

Each mode, including Amtrak, may receive a state and local subsidy, i.e. city owned passenger stations, airports, local roadways, etc.  It would be nearly impossible to determine the extent of these subsidies. 

No matter how one slices and dices the numbers, at the end of the day, rail passengers require a greater subsidy per unit of travel at every level than is true for airline passengers and motorists. 

schlimm:

Sam1:

Most of the roadway and airways costs in the U.S. are paid for via user taxes, e.g. fuel taxes, license fees, ticket taxes, etc.  To the extent that these taxes or fees are inadequate to cover the costs of the highways and airways, monies are transferred from the general funds to make up the difference.

 

More precisely:

For 2004, the FHWA reports that of the $136 Bil. spent by all governments on construction and operation,$106 Bil. was from user fees, or 78%.  The other 22% comes from general funds. 

Sam1:

High income motorists tend to pay more in user and general taxes than low income users, who in some instances pay no income tax and little general taxes.  Thus, it can be argued that these high income earners subsidize low income motorists.

Oh really?  Although the contribution of high income motorists is higher for income taxes, the user fees (fuel taxes, license fees, etc.)  are relatively flat taxes which hit poorer, but working people who drive to work disproportionately harder everyday.

Upper income people tend to buy larger vehicles that consume more fuel than lower income people, although clearly there are exceptions.  Moreover, because they can afford to do so, they tend to drive them more; thereby using more gasoline and paying more in fuel taxes.  This impacts the amount of money flowing into the federal and the state general funds.

Fuel taxes, property taxes, sales taxes, excise taxes, etc. are not progressive in the sense that most income taxes are progressive.  But the amount of tax revenue generated by these taxes from rich people is greater than the amount of the tax contributed by lower income people.  Here is a Texas example.

A motorist who drives a vehicle getting 20 miles per gallon 18,000 miles per year would use approximately 900 gallons of gasoline.  She would pay $346.50 in gasoline taxes.  A motorist who drives a vehicle getting 28 miles per gallon 12,000 miles per year would use approximately 429 gallons of gasoline.  He would pay $165.17 in fuel taxes.  Clearly, the higher income motorists is contributing more to cover the cost of the highways that she is using.  In all likelihood the high income person would also pay more in those taxes mentioned above that would be deposited in the general fund and could be transferred to a dedicated purpose fund like the highway trust fund.   

If the high income motorist had an income of $150,000 per year, the fuel tax bite would be .231 per cent of her income, whereas the lower income person with a median Texas family income of approximately $52,500 would be paying .316 per cent of his income in fuel taxes.

2004 data is dated.  Data for 2008 is available in a variety reports from Amtrak, DOT, FAA, etc.  I load the data into a spread sheet and perform a variety of calculations to measure the impact of the so-called subsidies. 

In any case, I believe all transportation is a proper government function.  My question is: should we continue maintaining a system of roads and airways that are near capacity?  The cost to relieve congestion by building new roads would be exorbitant as would building 10's of new airports.  Even then, the air in many areas is reaching capacity.  Doesn't make more sense to relieve the strain by upgrading and constructing a viable mass transit and HSR network (routes generally under 500 miles) , shifting shorter route air traffic to rail, as well as diverting some of the highway traffic?

schlimm:

I realize air traffic has increased greatly in the 23 years, but it is hard to imagine the subsidy dropping by 90%?

In any case, I believe all transportation is a proper government function.  My question is: should we continue maintaining a system of roads and airways that are near capacity?  The cost to relieve congestion by building new roads would be exorbitant as would building 10's of new airports.  Even then, the air in many areas is reaching capacity.  Doesn't make more sense to relieve the strain by upgrading and constructing a viable mass transit and HSR network (routes generally under 500 miles) , shifting shorter route air traffic to rail, as well as diverting some of the highway traffic?

Many people, especially journalists who are not schooled in accounting, finance, and statistics, take raw numbers to be the gospel truth.  They don't know how to analyze them.  Thus, they attribute a subsidy to the airlines, let's say, without understanding the numbers.  Here is one example.

NARP claims that the airlines receive a greater federal subsidy than is the case.  Their calculation is in error.  They attributed the entire federal transfer to the FAA in 2007 to the commercial airlines, when in fact it covers commercial, general aviation, and military operations in civilian airspace.  The commercial airlines only use approximately 30 per cent of the air traffic control system's capability.  Accordingly, only 30 per cent of the transfer applicable to FAA operations should be attributed to the commercial airlines.  I pointed this out to NARP, but they did not respond.  

I support the development or enhancement of passenger rail in high density corridors where the cost of developing or enhancing roadways and airways is prohibitive.  But I don't delude myself.  Passenger rail, especially high speed rail, is very expensive and requires a large per passenger and per passenger mile subsidy.

It is appropriate for the federal government, as well as state and local governments, to jump start the development of transport infrastructure.  However, I don't think that they should be involved in running transport operations.  With the exception of local public transport, they should be required to stand on their own.  In the case of public transport, local governments or transport authorities should contract with private business to run it ala Melbourne, Australia.    

schlimm:

I realize air traffic has increased greatly in the 23 years, but it is hard to imagine the subsidy dropping by 90%?

In any case, I believe all transportation is a proper government function.  My question is: should we continue maintaining a system of roads and airways that are near capacity?  The cost to relieve congestion by building new roads would be exorbitant as would building 10's of new airports.  Even then, the air in many areas is reaching capacity.  Doesn't make more sense to relieve the strain by upgrading and constructing a viable mass transit and HSR network (routes generally under 500 miles) , shifting shorter route air traffic to rail, as well as diverting some of the highway traffic?

1)  Maybe the airline subsidy, instead, had been overstated by a factor of 10.

2)  Even if transportation is properly a government function, transportation is still not removed from market forces and the need to get value for the money spent.  That Amtrak requires multiples of the subsidy rate for other modes is a subject the advocacy community tries very hard to drop rather than address head on.

3)  I am old enough to remember the 1960s as being a time of transportation crisis, of congested highways and crowded airways, and that trains were advocated as the solution.  Somehow we have managed to muddle through without much in the way of trains relative to what was envisioned 40 years ago.

True, highway construction has largely stalled since the 1960's, but it has been suggested that the capacity of highway lanes has somehow kept pace with increased traffic over that time.  A 2000 model year car has much, much better brakes than a 1960 model year car, and it is understood that motorists have gotten used to driving faster at closer separation.

What may continue that trend of increased capacity in existing roads is some form of automation.  Although "automated highways" have not come to be, there will be certainly be enhanced capabilities in the cars.  Already there are such things as Adaptive Cruise Control, Lane Centering, and Automated Braking on some luxury cars, and these devices may acquire the capability of cooperating with other equiped vehicles along the lines of the Collision Avoidance systems in today's airliners.  So the automated highway will not come as a ribbon cutting ceremony "Welcome to the Automated Highway.  Everything is under automatic computer control.  Nothing can go wrong . . . go wrong . . . go wrong . . ."  Instead, it will be an evolutionary approach of gadgets to assist and supplement the skills of the human driver who will still be in charge, much like power brakes, anti-lock brakes, stability control, and so on.

Even if the capacity gains from such devices are only modest, they will exceed the capacity achieved with even the most ambitious (and also expensive) rail building project the advocacy community can imagine.

As to diverting highway traffic, Metra perhaps substitutes for dozens of highway lanes.  Amtrak NEC substitutes for at least one highway lane in each direction, although the commuter segments of the NEC substitute for more.  Outside of the NEC, I cannot see Amtrak replacing even a full highway lane in each direction, and I include the Hiawatha and Pacific Surfliner as being below that threshold. 

With regard to the Transportation Crisis, it has also been said for all of the concern about highway congestion, the average auto commuter has about half the travel time as the average transit commuter.  I remember travelling inbound on Metra with a train advocacy colleague who looked out the window on the final stage of the trip and offered pity on the "poor souls" bogged down in traffic on the freeway lanes.

Yes, that certainly is a feature of Metra.  The inbound Metra trains become limited-stop expresses upon entering Chicago city limits on account that Chicago is served by CTA, and the lines parallel the Kennedy and other Expressways over the portions where they are heavily congested.  Back in the day, Chicago and Northwestern used to run radio ads emphasizing how the rail passengers just sailed by the stuck cars -- one ad featured the "orchestra" playing the radio "jingle" for the Northwestern Railroad, where a foreign-accented conductor was scolding and mocking a gaggle of musician who showed up late for "carpooling" on the Expressway, after which time the orchestra launched into the "Go Northwestern" song.

But people forget that "Kennedy from Clybourne to the Ohio Street off-ramp" is a queue where people wait for a portion of their journey.  People also queue up and wait on platforms for inbound trains, and they have another portion of their journey just getting to the train platform, but somehow those wait times don't count whereas the wait time for motorists on the inbound leg somehow does.

Now schlimm/Berhold has stated opposition to spending on LD trains at the expense of congestion-relieving corridors, but there was a thread about how Amtrak is taking bids for new Viewliner sleepers and diners.

Don Oltmann has been advocating for an Atlanta commuter rail proposal that he had represented as a cost-saving over urban freeway construction and had expressed some frustration over a Georgia politician (Governer?  Atlanta Mayor?) who had stymied it.  On the other hand, I don't see the Pacific Surfliner as being at the traffic level to replace entire lanes of I-5 quite yet, although one of the arguments in favor of such trains is that it offers an alternative for people willing and able to take the train to being stuck on I-5.  But the California HSR is beginning to look like an high-cost system that is challenging the assertion that freeway or airport construction is unaffordable.

I guess my position is that trains may yet take an important role in that "balanced transportation system", but the reason we don't yet have the trains is that there are significant problems to work out as to how to use trains in a cost effective manner, that it is more than a question of opposition from "The Concrete Lobby" or "lack of political will", and that the advocacy community could benefit from more soul searching on the topic rather than more-of-same "just give us more trains" from the past 40 year.

Sam1:

n FY08 the average federal subsidy for Amtrak was $48.50 per passenger or 22.61 cents per passenger mile.  The average federal subsidy for the nation's commercial airlines was $3.92 per passenger or .45 cents per passenger mile,

Fact check:  In the 2009 budget, total FAA = $14.6 Bil. ATC = $9.7 Bil; total commercial passengers = 675 mil., which works out to a subsidy of $21.63 per passenger, of which $14.37 is for ATC.  sam1 makes the point that commercial aviation only uses ~30% of the budget, but in fact the facilities would require about the same level of infrastructure costs and operating expenses for just the airlines; private aviation and the military piggyback on.  Even if one accepts the allocated expense percentage, the subsidy (not including local taxes to build airports) is $6.49, not 3.92.

Paul Milenkovic:

2)  Even if transportation is properly a government function, transportation is still not removed from market forces and the need to get value for the money spent.  That Amtrak requires multiples of the subsidy rate for other modes is a subject the advocacy community tries very hard to drop rather than address head on.

Agreed.  I am advocating rail transport that is rational, not a return to pre-1960.  If there were competitive, fast, frequent relatively short routes, the increase the traffic would reduce the per passenger and per passenger mile rates to a much lower level.

Paul Milenkovic:

Somehow we have managed to muddle through without much in the way of trains relative to what was envisioned 40 years ago.

That is the problem.  It isn't going away.  Every other country has or is rapidly building HSR.  Are they ALL out of step with us? Have you been to China lately and noticed HSR all over the place?  Are they building for fun or sentiment?

Paul mentioned the San Diegans or now better known as the Surfliners and there ridership. What he did not take into consideration is Metrolink and the San Diego commuter agency whos name escapes me for the minute. Both of these take huge amounts of traffic off of I-5 in fact they almost overlap each other if I am not mistaken. There are more trains offering more seats between Los Angeles and San Diego than ever before I would say that certainly counts for relieving some of the congestion on I-5.

One of the fastest growing routes in the US is the Sacramento Capitol corridor trains. They have taken more and more traffic off of the I-80 saving the California taxpayers billions which is the what it would cost to try and add lanes to I-80. Land is not cheap anywhere along the I-5 corridor between LA and SD. The same is true for land along I-80 between Sacramento and Oakland. One estimate published by Caltrans put the price tag for adding one lane in each direction between SD and LA on I-5 at 24 Billion.

Being an already overburdened California taxpayer I would rather see HSR or additional Surfliners in service before paying for extra lanes which would already be obsolete by the time they were completed anyway. Land is not cheap anywhere along that corridor, and besides if the State would try to acquire the land by imminent domain it would be tied up in the courts for years and Caltrans is well aware of it that is why the estimate is 24 Billion. Every overpass would have to be rebuilt at an outrageous cost alone.

Thank you leave my California trains alone unless you live here. They are doing a pretty good job of moving Californians around the state.

Al - in - Stockton