Passenger

henry6:

But Paul, wouldn't those numbers go down if passenger miles and or quantity of services go up?

We should be able to get a peak at the answer to this question by checking Amtrak's record year (last year) against previous years.

We can also check on some routes that were scaled up:  The two state sponsored routes out of Chicago where the frequency doubled a couple of years ago.  Also, the Keystone trains where service and frequency were improved.

Anybody up to doing the digging?

clarkfork:

Well, If the airlines did actually pay for their share of the Federal airways, why the .43 cent per passenger mile subsidy?  .43 cents may be a small subsidy, but it is still a subsidy.  Also, do we know if airlines pay the full cost of the airline terminals they use.  Typically these are owned by local government entities.  Are the terminals profit makers, break even, or loss generators for the local governments.  Do local taxpayers have to subsidize them?

By the way, I assume the subsidies you listed are thus:

$0.0043 for air and $0.2261 for rail

Every user of the nation's airways gets a proportional share of the federal transfer payment to the Aviation Trust Fund, which is used for a variety of purposes.  There is no evidence that the commercial airlines enjoy a higher or lower benefit than their proportional share of the use of the facilities.  According to the ATA, the airlines pay a disproportionately higher percentage of the cost of operating the nation's airways.

Most airports in the United States are owned by local or county governments.  They in turn set up an authority to manage them.  They are classified as enterprise funds for accounting purposes, which means they are expected to cover their costs, including debt service.  They are also expected to have a positive fund balance, which means that they take in more revenues than they spend in the short run, but in the long run they are expected to break even.  Accordingly, not-for-profit accounting rules are used to account for the funds activities.  However, this can differ from location to location.  In some instances, for example, positive balances in the enterprise fund can be transferred to the sponsoring government's general fund, although this is, I believe, rare.  

The cost of the terminals is covered by gate fees, landing fees, excise taxes, etc., all of which are paid by the airlines as well as other users, e.g. UPS, FedEx, general aviation, etc.  Investment earnings may also cover a portion of the cost.  At the nation's major airports, which are relatively few in number, vendor rentals, including parking fees, contribute a significant amount to the coverage of the cost of the terminals.  So in a sense the airlines don't pay the full cost of the terminals.  Other users and vendors pick-up part of the tab.  However, it is important to remember that if the airlines did not use the terminals, there would be not need for them, most of the vendors, etc.

To determine whether the costs of the terminals are covered by the aforementioned fees and taxes would require one to go through the financial statements of each airport.   Most of the larger airports cover their costs; outlying airports may require local subsidies.   

One could argue that local taxpayers subsidize their airports through the property taxes that they pay to build the roadways to and from the airports.  This argument would also apply to the roadways that have been built to get to Amtrak's stations.  The big difference would be that in the case of the airports, the roadways were constructed more recently, whereas in the case of most of Amtrak's stations, the roadways were constructed many decades ago, so maintenance is the biggest item in the local budget.

Question:  How much in property taxes are paid by the airports vs. railroad stations and related terminal properties?

Don't forget the property tax that the RR pays on it's right of way.

 I suspect most airports pay $0 property tax since they are city or county-owned.

CSSHEGEWISCH:

Question:  How much in property taxes are paid by the airports vs. railroad stations and related terminal properties?

Most airports don't pay any property taxes, although they may be required to pay a transfer fee that emulates a property tax or utility fee, depending upon the governance agreement of the sponsoring government.  One would have to go through every airport financial statement to make a determination.

Amtrak owns only 46 of the 525 stations that it serves.  It is responsible for the maintenance of 181 other stations.  The other stations, for the most part, are owned by the communities that they serve.  Amtrak pays a nominal rental in some of these stations; in others, e.g. Deming and Lordsburg, New Mexico, it pays nothing, since the stations are simply platforms with a shelter.    

Title to the major stations that are owned by Amtrak reside with a wholly or partially owned subsidiary, e.g. Chicago Union Station and Penn Station Leasing, LLC; its 99.9% interest in Washington Terminal Company, and its 99% interest in 30^th Street Limited, L.P.  

Pursuant to the provisions of Title 49 of the United States Code, section 24-301, Amtrak is exempt from all state and local taxes, including income and franchise taxes that are directly levied against the company.  Not only does this mean that it does not pay property taxes on its stations and related terminal properties, it does not even pay sales taxes. 

Amtrak not only receives federal and state subsidies to cover its operating losses, as well as an exemption from all state and local taxes, it gets a variety of other subsidies.  Here are a couple of examples.  In 2002 it received a $100 million loan from the Federal Railroad Administration for certain qualifying capital expenditures.  The interest rate was 1.18% per annum, which was considerably below the market rate even for municipal financing.  In 2003 the Pennsylvania Economic Development Financing Authority issued $50 million of tax free bonds to build a parking garage at 30^th Street Station in Philadelphia.  As part of the deal, Amtrak pledged the revenues, as well as certain other assets associated with the garage and air rights, to guarantee the bonds, with any excess profits accruing to Amtrak.  Upon retirement of the Bonds, Amtrak gets ownership of the garage, which presumably will be an earning asset far into the future.   

Amtrak operates approximately 21,000 passenger route miles.  Approximately 97 per cent of these miles are owned by freight and commuter railroads.  The freight railroads pay property taxes, including inventory taxes, income taxes, sales taxes, etc.  The commuter railroads are owned, for the most part, by state or local authorities that operate similar to airport authorities.  They pay no local property taxes, although they may pay sales taxes, and they may be required to transfer some or all of any enterprise fund surpluses to a general fund, although I doubt it.  Based on the provisions of Title 49, however, it appears that the freight railroads, as well as the commuter roads, are prohibited from passing these taxes through to Amtrak. 

All forms of public transport in the U.S. receive some subsidy; that is to say, they get monies from non-users, generally taxpayers, although in the case of motorists, because there are so many of them, the majority of them pay the general transfer subsidies.  However, a supporter of Amtrak, as well as other forms of public passenger rail, would be well advised not to raise the subsidy issue.  The subsidy per passenger or passenger mile for Amtrak, as well as most forms of passenger rail, dwarfs the subsidies for motorists and airline passengers.

It seems one factor missing in the cost-anlysis in this and other threads is a future-orientation discussion.  In most of our metro areas as well as the corridors of 100-500 miles, either or both interstate and air transport are already pretty maxed out.  Unless we want to build more DFX's and ORD's at $13+ Bil. each, we had better reduce the congestion on the short hauls for the future so the airlines can concentrate on longer hauls where they excel.  In any case the airways are fairly finite and nearing capacity now.  Highways for autos are expensive to construct and use a lot more land (which is increasingly scarce and valuable)  than a comparable rail line, especially for extended transit lines in metro areas.  I imagine we will continue to experience population growth as a nation, though hopefully at a more measured pace than recently.  I imagine I won't be around in 2050, but it does seem the Vision report is factoring those realities in.  As a society, we cannot continue with the "same ol' same ol'" unless we want a total gridlock in passenger traffic.  To listen to litany of some of the pundits, (they imply, at least) that we would be better served with more and more highways and airports and not bother much with passenger rail.

 For another fascinating study by the NSTB see:

Somewhere on one of these threads it was stated that rail is only marginally more efficient than air.  Au Contraire!   

schlimm:

intercity passenger rail consumes 17 percent less energy per passenger mile than airlines and 21 percent less per passenger mile than automobiles.

17% is not much compared to the 300+% for frt RRing over trucking.

If you car got 20 mpg, a 17% improvement is 23.4 mpg.  Not much.

With the new CAFE stds coming, Rail will be LESS efficient than driving unless something changes.

schlimm:

both interstate and air transport are already pretty maxed out. 

Which is why some targeted short haul corridors make sense.  The total cost is cheaper than expanding capacity for road or air.  It saves airport slots for the long haul stuff and avoids building more expensive urban highways.

 Yes, Don, but 50-60% less CO2 seems worthwhile to me, unless one is in favor of a warmer climate!

The planned rail route improvements seem focused on under 500 mile long corridors, as they should be.  I think long distance rail travel should be farmed out to private contractors to run as cruise liners or whatever they want to try, as Sam suggests.

schlimm:

Yes, Don, but 50-60% less CO2 seems worthwhile to me, unless one is in favor of a warmer climate!

There's more "there" there, but CAFE is  going up 30%, so the status quo for rail ain't gonna cut it!

oltmannd:

schlimm:

both interstate and air transport are already pretty maxed out. 

Which is why some targeted short haul corridors make sense.  The total cost is cheaper than expanding capacity for road or air.  It saves airport slots for the long haul stuff and avoids building more expensive urban highways.

Spot on!  Amen!

oltmannd:

schlimm:

intercity passenger rail consumes 17 percent less energy per passenger mile than airlines and 21 percent less per passenger mile than automobiles.

17% is not much compared to the 300+% for frt RRing over trucking.

If you car got 20 mpg, a 17% improvement is 23.4 mpg.  Not much.

With the new CAFE stds coming, Rail will be LESS efficient than driving unless something changes.

But what if that 17% improvement is turned into dollars and cents:  1000 miles at 20 mpg is 50 gallons times lets say $2.75 = $137.50 while 1000 at 23.4 mpg is 42.74 gallons times $2.75= $117.54 or $19.96 savings.  Multiply that by millions of miles or tens of millions of miles and the dollar savings alone will add up handsomely. 

Rockefeller gave away nickles reminding the recipient that it represented the interest for one year on a dollar.  Wrigly sold gum at a nickle a pack, Astor sold subway rides at a nickle a ride.  They all became multimillionairs a nickle at a time.  We are not in such good shape today that we should be ignoring nickles.