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Posted by Phoebe Vet on Sunday, June 7, 2009 5:49 PM

Sam:

I have to disagree.  A commercial enterprise is privately owned and operated for profit.  If it's run by the government, it is not a commercial enterprise, whether or not it operates in the black.

The fact that a commercial enterprise serves a similar function is not the test.  Blackwater Security (by whatever name they are known this week) and Kellogg, Brown, and Root are commercial enterprises that are carrying guns, transporting supplies, and engaging in firefights in a war zone.  That does not mean that the US Army is a commercial enterprise.

The Feds own and operate the airways.  The airlines do not pay to use them.  Fees imposed by airports are separate and are imposed by the owner of the airport.

The Feds own and operate the roads.  With just a few exceptions, the truck and bus companies do not pay to use them.

The railroads must purchase, build and maintain their own ROW and even pay property tax on them.

Fuel and use taxes paid by the airlines, truck, and bus companies do not pay anywhere near the entire cost of the infrastructure they use to operate.

Comparing their profitability is not an apples to apples match.

What is holding Amtrak back is their attempt to do too much with too little.  To be a viable transportation option they need to be frequent, fast, and run more or less on time and go to the destinations to which the tavelers want to go.  The NEC meets that test.  Most of the rest of the system does not.

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Posted by passengerfan on Sunday, June 7, 2009 8:05 PM

Phoebe Vet

Sam:

I have to disagree.  A commercial enterprise is privately owned and operated for profit.  If it's run by the government, it is not a commercial enterprise, whether or not it operates in the black.

The fact that a commercial enterprise serves a similar function is not the test.  Blackwater Security (by whatever name they are known this week) and Kellogg, Brown, and Root are commercial enterprises that are carrying guns, transporting supplies, and engaging in firefights in a war zone.  That does not mean that the US Army is a commercial enterprise.

The Feds own and operate the airways.  The airlines do not pay to use them.  Fees imposed by airports are separate and are imposed by the owner of the airport.

The Feds own and operate the roads.  With just a few exceptions, the truck and bus companies do not pay to use them.

The railroads must purchase, build and maintain their own ROW and even pay property tax on them.

Fuel and use taxes paid by the airlines, truck, and bus companies do not pay anywhere near the entire cost of the infrastructure they use to operate.

Comparing their profitability is not an apples to apples match.

What is holding Amtrak back is their attempt to do too much with too little.  To be a viable transportation option they need to be frequent, fast, and run more or less on time and go to the destinations to which the tavelers want to go.  The NEC meets that test.  Most of the rest of the system does not.

I sure wish you would have talked to my accountant about my three trucks not paying taxes for running on the highways. To clear up one thing at a time first the feds only maintain the federal highway system and the states maintain the state highway system. When I purchased new trucks I paid federal excise taxes on the tires and the sales tax was collected by the state for there general fund. Each time I purchased new tires for my trucks more excise tax and that also applied to recaps. Every gallon of fuel that went into the trucks had to be accounted for. Each state wanted the taxes for the amount of fuel your truck consumed while crossing there state. And the feds wanted there share for road use taxes from this same fuel. Most states you operated in required permits to operate within that state. On top of that there was license fee for trucks based on the value of your truck each year in most states. Some states also have a tax based on the tonnage your truck is licensed for with most trucks based on 80,000 lbs. So I really do not want to hear that trucks don't pay to use the highways. My accountant would be the first to disagree with you.And remember most trucks don't get 10mpg. When I first began driving 3mpg was considered good today most get between 6mpg and 8mpg. And then people wonder why trucking is not a very glamorous and few drivers that own there own trucks last more than a few years at it.   

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Posted by schlimm on Sunday, June 7, 2009 8:28 PM

Points of accuracy: 

1.  The federal government not only contributes heavily to interstate highway maintenance, it also paid 90% of construction and re-construction costs.  I am not aware of much of a government contribution outside the NEC and Conrail for trackage in the last 100 years.

2.  All of us who own vehicles also contribute directly to roads through taxes on fuel and tires.  However, few of us are able to use these expenses as a deduction to reduce our income taxes.  I also doubt that my sedan causes even 1% of the damage to roads inflicted by heavy trucks.

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Posted by Railway Man on Sunday, June 7, 2009 8:49 PM

schlimm

Points of accuracy: 

1.  The federal government not only contributes heavily to interstate highway maintenance, it also paid 90% of construction and re-construction costs.  I am not aware of much of a government contribution outside the NEC and Conrail for trackage in the last 100 years.

2.  All of us who own vehicles also contribute directly to roads through taxes on fuel and tires.  However, few of us are able to use these expenses as a deduction to reduce our income taxes.  I also doubt that my sedan causes even 1% of the damage to roads inflicted by heavy trucks.

 

Your sedan is about 1/3000th as damaging to the pavement as an 80,000 lb. truck.  Pavement damage varies as the 4th power of the weight on the axle.

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Posted by Phoebe Vet on Sunday, June 7, 2009 8:57 PM

Al:

Build, maintain, and pay property tax on your own roads and then I will accept that you are playing on a level field with the railroads.

I am well aware of the permits and taxes trucks pay, I used to check trucks for those permits.  We all pay taxes on our fuel, tires, etc.  We all pay sales tax when we buy our vehicles.  The reason for the permits is that those are mostly state taxes on the fuel, and having huge fuel tanks enables trucks to buy fuel in the states where the taxes are the lowest, so the other states in which you drive don't get their fuel tax.  I am aware it is an accounting nightmare.

That said, I was not advocating for any changes, I was just making the point that Amtrak is not trying to operate as a for profit commercial enterprise.  It is a government service that benefits more than just the actual passengers.

I believe that someone with enough money and a few good ideas could make a profit in passenger rail.  After all, why do people pay thousands of dollars to cross the Atlantic on the QE2 when USAir will fly them there faster for a few hundred dollars?  Why do people pay FedEX rates to get a package delivered over night when the Post Office will deliver it to more addresses in 2 or 3 days for less than half the price?

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Posted by passengerfan on Sunday, June 7, 2009 10:05 PM

Phoebe Vet

Al:

Build, maintain, and pay property tax on your own roads and then I will accept that you are playing on a level field with the railroads.

I am well aware of the permits and taxes trucks pay, I used to check trucks for those permits.  We all pay taxes on our fuel, tires, etc.  We all pay sales tax when we buy our vehicles.  The reason for the permits is that those are mostly state taxes on the fuel, and having huge fuel tanks enables trucks to buy fuel in the states where the taxes are the lowest, so the other states in which you drive don't get their fuel tax.  I am aware it is an accounting nightmare.

That said, I was not advocating for any changes, I was just making the point that Amtrak is not trying to operate as a for profit commercial enterprise.  It is a government service that benefits more than just the actual passengers.

I believe that someone with enough money and a few good ideas could make a profit in passenger rail.  After all, why do people pay thousands of dollars to cross the Atlantic on the QE2 when USAir will fly them there faster for a few hundred dollars?  Why do people pay FedEX rates to get a package delivered over night when the Post Office will deliver it to more addresses in 2 or 3 days for less than half the price?

I do agree with you that some operators can make a profit on passenger rail. Among them are the ARR and the tour operator out of Vancouver to Calgary and Edmonton. I also would like to see the figures for Via Rails Canadian. Not all of Via Rail but just the Canadian. I don't think Acela is paying its way yet and they charge a premium for not much faster service than the Northeast Direct trains provide. Even the Amtrak California services do not come close to breaking even. I personally wonder if much of Amtraks problems is not enough money has been spent on new equipment over the years and I for one think the heritage equipment was retired far to soon. If Via Rail can still successfully operate the Budd equipment than I see no reason that Amtrak could not have properly rebuilt that equipment and put in retention toilet systems as Via Rail has. I personally find the ride on the Canadian very comfortable. For one thing the mattresses are thicker and beat those on Amtrak. The Superliners are comfortable and I personally think Amtrak needs about twice as many as they already have. I personally do not think Amtrak should purchase any additional Viewliners as they are very noisy and do not have as comfortable a ride as the former Budd 10-6 sleepers had. As I have mentioned before I think Amtrak should look at the double deck cars operated by New Jersey transit for eastern long distance equipment I am sure they could put just about any interior desired in that equipment. For the west additional California car for short corridor services and more Superliners for the western long distance services. If the old Budd Diners built for the NP North Coast Limited have soldiered on this long reliably then I see no reason they cannot be rebuilt like the Via Rail cars.

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Posted by Railway Man on Sunday, June 7, 2009 10:31 PM

ARR makes a profit on passenger rail?  I need to see how they calculate that.  Grants provided by the federal treasury to the ARR since 1996 total $795.4 million, including $105 million in 2009. 

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Posted by Phoebe Vet on Sunday, June 7, 2009 10:55 PM

Al:

I ride the "Autumn Train" excursion from the NC Transportation Museum in Spencer, NC to Charlottesville, VA and back. We ride upstairs in an old restored Vista Dome car.  It is a very pleasant trip and everyone socializes.  There is a car attendant in each car that tells everyone about the car and sees to everyone's needs.  The view from the dome is a lot different from the view out the window of a standard Amtrak coach.  I think it was a mistake to stop using those cars.  A for profit carrier would have to pay more attention to passenger comfort and entertainment.  They need more bar and lounge cars.  Perhaps a car with some coin operated video games for the youngsters.  How about a Wi-Fi hot spot?  A GPS annunciator or even a GPS map display that shows the next station, the train speed, and the current location.  Perhaps Starbucks would be interested in paying the RR to pull a car belonging to them.  Just thinking outside the box.

Then advertise.  When I tell people we took a train from Charlotte to (wherever), the most common response I get is:  "We have Amtrak in Charlotte?  Where is the station?"

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Posted by schlimm on Sunday, June 7, 2009 11:33 PM

 RWM:

Thanks for the engineering info.  I only wish I paid 1/3000th of the fuel tax per gallon as a coomercial truck!

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Posted by oltmannd on Monday, June 8, 2009 6:37 AM

Phoebe Vet
A for profit carrier would have to pay more attention to passenger comfort and entertainment.  They need more bar and lounge cars.  Perhaps a car with some coin operated video games for the youngsters.  How about a Wi-Fi hot spot?  A GPS annunciator or even a GPS map display that shows the next station, the train speed, and the current location.  Perhaps Starbucks would be interested in paying the RR to pull a car belonging to them.  Just thinking outside the box.

Then advertise.  When I tell people we took a train from Charlotte to (wherever), the most common response I get is:  "We have Amtrak in Charlotte?  Where is the station?"

Ah, ha! 

A for profit carrier figures out how to earn another nickel, they get to keep it.  Amtrak earns another nickel and their subsidy goes down a nickel.

So, why in the world would anybody at Amtrak ever bother to come up with an idea how to earn the company another nickel. All it would bring is more work and trouble.

Boardman has stated that the attitude of some employees is not what it ought to be.  Let's see what he comes up with to fix the problem. "What's in in for me?" is a good place to start.

(there is plenty of room on my soap box)Smile

 

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Posted by henry6 on Monday, June 8, 2009 7:51 AM

Phoebe Vet

Al:

I ride the "Autumn Train" excursion from the NC Transportation Museum in Spencer, NC to Charlottesville, VA and back. We ride upstairs in an old restored Vista Dome car.  It is a very pleasant trip and everyone socializes.  There is a car attendant in each car that tells everyone about the car and sees to everyone's needs.  The view from the dome is a lot different from the view out the window of a standard Amtrak coach.  I think it was a mistake to stop using those cars.  A for profit carrier would have to pay more attention to passenger comfort and entertainment.  They need more bar and lounge cars.  Perhaps a car with some coin operated video games for the youngsters.  How about a Wi-Fi hot spot?  A GPS annunciator or even a GPS map display that shows the next station, the train speed, and the current location.  Perhaps Starbucks would be interested in paying the RR to pull a car belonging to them.  Just thinking outside the box.

Then advertise.  When I tell people we took a train from Charlotte to (wherever), the most common response I get is:  "We have Amtrak in Charlotte?  Where is the station?"

A couple of notes:  Amtrak was born in the airline era whose leaders believed you sat down, buckled your seat belt, downed a belt and either read a magazine or watched a movie; who looked out a window?  Also, broken windows were liabilities, so, make the small and maybe nobody will get hurt.  Most of all, keep it as bland and user unfriendly as possible and they'll go away.  As for advertising: why?  It only brings attention to you and might mean enough people will show up to make you successful, and they didn't want that to happen.  Boardman is right in that he has to get rid of the politicals and get real railroaders in there.

RIDEWITHMEHENRY is the name for our almost monthly day of riding trains and transit in either the NYCity or Philadelphia areas including all commuter lines, Amtrak, subways, light rail and trolleys, bus and ferries when warranted. No fees, just let us know you want to join the ride and pay your fares. Ask to be on our email list or find us on FB as RIDEWITHMEHENRY (all caps) to get descriptions of each outing.

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Posted by oltmannd on Monday, June 8, 2009 1:37 PM

henry6
A couple of notes:  Amtrak was born in the airline era whose leaders believed you sat down, buckled your seat belt, downed a belt and either read a magazine or watched a movie; who looked out a window?  Also, broken windows were liabilities, so, make the small and maybe nobody will get hurt.  Most of all, keep it as bland and user unfriendly as possible and they'll go away.  As for advertising: why?  It only brings attention to you and might mean enough people will show up to make you successful, and they didn't want that to happen.  Boardman is right in that he has to get rid of the politicals and get real railroaders in there.

A couple more comments:

The Metroliner was designed right smack dab in the middle of the push to go to the moon.  Jetliner travel was less than a decade old.  The LAST thing you wanted a train to be was a train.  Making a train as "sexy" as a jetliner was a good thing.  The Metroliner tried to be exactly that.  As a space program enthused young teen, I thought Metroliners were very cool!

As for Boardman's judgment of employees, it wasn't "politicals vs. railroaders", it was about "survival vs growth" in Amtrak's headquarters.  http://www.trains.com/trn/default.aspx?c=a&id=4642 

He said, "There are a whole host of people here who don't know whether to believe," he said. "People are going to have to get on the train. We will make some judgments very soon."

Those people could care less about finding new market niches or exploiting the exisiting ones.  That's just too much work.  It's hard enough just trying to make yesterday happen again today.

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Posted by Deggesty on Monday, June 8, 2009 9:06 PM

passengerfan
I personally find the ride on the Canadian very comfortable. For one thing the mattresses are thicker and beat those on Amtrak.

I agree with Al. The mattresses in the sleepers on the Canadian are, if not the original, so much like the original Pullman mattresses that they are equivalent (I have slept in Pullman roomettes, bedrooms, and a drawing room). The first time I rode in a Superliner "deluxe bedroom" (as it was called then),I noticed that the "mattress" on the upper is little more than a thick pad, and the "mattress" on the lower was a much thinner pad spread over the seat cushion. Since, I have spent many nights in both Superliner and Canadian cars (also, I have spent three nights in Renaissance cars; I prefer even the Viewliner). I ws not surprised to find the "mattress" in what Amtrak now calls a "roomette" to be little different from the "mattress" in a slumbercoach.

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Posted by Deggesty on Monday, June 8, 2009 9:14 PM

Phoebe Vet
"We have Amtrak in Charlotte?  Where is the station?"

I wish it were still on Trade Street, just a few blocks from Tryon (and it was about a block and a half from the bus station). I loved that station, but there was quite a bit of congestion on Trade whenever a passenger train was worked. I have come in to, and left from, the current station three times. It will take me a while to count how many times I used the old station, which was much more convenient to the center of town.

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Posted by Phoebe Vet on Tuesday, June 9, 2009 5:49 AM

Deggesty

I wish it were still on Trade Street, just a few blocks from Tryon (and it was about a block and a half from the bus station). I loved that station, but there was quite a bit of congestion on Trade whenever a passenger train was worked. I have come in to, and left from, the current station three times. It will take me a while to count how many times I used the old station, which was much more convenient to the center of town.

Johnny

Then you will be happy to know that they are working on building the new Charlotte Gateway Station on that exact site.

 

http://www.charmeck.org/Departments/CATS/Rapid+Transit+Planning/Gateway+Station/Home.htm 

 

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Posted by Anonymous on Tuesday, June 9, 2009 2:38 PM

A commercial enterprise is defined by its activities, not by its corporate form.  Amtrak is a government owned corporation.  The preferred stock is owned by the federal government.  The common stock was issued in 1971 to the railroads that contributed capital and equipment; these shares convey almost no benefits, but their current holders declined a buy-out offer by Amtrak. 

The objective of Amtrak at its formation was to earn a profit, although it has never come close; in fact, it cannot even cover its operating expenses.  It is a government sponsored commercial activity, just like the TVA, Bonneville Power Authority, Lower Colorado River Authority, etc., which are owned by federal or state government authorities.  They sell power, often times in competition with investor owned electric utilities, at commercial rates.  They are commercial power sellers.  

The nation's commercial airlines account for approximately 30 per cent of FAA operations.  They pay fuel taxes, licensing fees, etc. to cover their share of the FAA's costs.  They also pay landing fees, gate fees, and TSA assessments.  They pay federal income taxes, state and local income taxes, inventory taxes and property taxes.  In 2008 these taxes and fees did not cover all of the FAA's costs driven by airline operations, thereby necessitating an average federal subsidy of .43 cents per passenger mile.  This compares to an average Amtrak subsidy of 22.61 cents per passenger mile.  The notion that the airlines do not pay their share of the cost of the federal airways is wrong.  The numbers can be found at FAA, USDOT, TSA, OMB, CBO, etc.  Anyone is welcome to dig them out.  I do so every year and post them to a spreadsheet.

All motorists, including truckers and bus operators, pay a variety of direct user taxes that cover most of the cost of federal and state highways.  They also pay federal income taxes, state and local income taxes where applicable, inventory taxes if they are a business, state licensing fees, and property taxes.  Whether they pay their proportional share is debatable, but as I have shown in more detail in other postings, most of them cover the tab one way or the other.  Only passenger rail requires a large subsidy that is largely paid by nonusers.

As one example, in 2008 J.B. Hunt, one of the nations most successful truckers, in addition to its fuel tax bill, had federal income tax expense of $121.6 million plus $32.2 million in other taxes and license fees. The amount of inventory and property taxes is not set out separately in the company's annual report, but they are probably embedded in the $32.2 million.  This is just one trucking company.  

Whether the government(s) should fund high speed rail, which was the presenting issue for this thread, or any form of passenger rail, has nothing to do with airlines, trucks, etc.  The question is what problem is high speed rail addressing, is it the optimum solution, and can the country afford it? 

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Posted by Railway Man on Tuesday, June 9, 2009 3:23 PM

Sam: 

Going to your last paragraph:  You've laid out a fair, defined question, and I agree that the narrow question is worth asking without the distractions of "fairness" with other modes.  

Not trying to be glib, but I think the answer to your question is rather simple:  the voters asked for it because they think they need it and they think they want it.  I don't think it goes much deeper than that.  I've been to so darn many meetings with state officials, city officials, and federal officials about HSR and passenger rail lately that I could cry, and nowhere in those meetings did I get a sense that the level of public analysis is any deeper than that.  I know that sounds lame, but my goodness, we go invade countries based on less than that, and I was present to design policy on the aftermath which likewise was based on nothing but abstractions, so it's not new to me.

Now, I think that what you want is to say, "OK, fine, the voters said, that, but can we bring a level of analysis to it that has some depth."  I wholeheartedly encourage your asking that question.  I like you am not particularly interested in whether it's "fair"  to spend $1 on rail for every $10 on highway and every $1,000,000 on F-22s.  So what.  The voters spend money on all sorts of things that make little sense to me, but that's neither an excuse for throwing good money after bad, nor a guideline to what's fair. 

For anyone that's a passenger advocate, my advice is that the more one focuses on net public value, and quantification of that value, and the less one focuses on what's fair among transportation modes or other sideshows, the more effective the argument for high-speed rail will be.

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Posted by henry6 on Tuesday, June 9, 2009 4:09 PM

But the arguement can be made that the public did not vote on Amtrak, that is was a political maneuver by the Federal government to take the passenger service from the private railroads who did not want to provide the service any longer.  That was so private enterprise could save face by not being the bad guys who eliminated the passenger train.  There are charges that Richard Nixon operated under the assumption that Amtrak would be gone within a short period of time and the railroads(and the nation) would be without passenger services.  In other words, it was actually shoved down the public's throat with a sugar coating saying it was the answer when it was only the beginning of many questions about its survivability, its function, its funding, its total existance!

RIDEWITHMEHENRY is the name for our almost monthly day of riding trains and transit in either the NYCity or Philadelphia areas including all commuter lines, Amtrak, subways, light rail and trolleys, bus and ferries when warranted. No fees, just let us know you want to join the ride and pay your fares. Ask to be on our email list or find us on FB as RIDEWITHMEHENRY (all caps) to get descriptions of each outing.

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Posted by Deggesty on Wednesday, June 10, 2009 3:55 PM

Thanks, Phoebe Vet. When I looked at the drawing, I had great difficulty visualizing the exact location; when I pulled a map of that part of Charlotte up, I saw that the drawing is rotated 90 degrees to the right. Apparently, there will be an elevated passage to the railroad platform.

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Posted by Maglev on Thursday, June 11, 2009 5:37 PM

I was reading previous posts in this thread, and scrolled a bit too quickly past the sketch of Charlotte's new station... What is that "Pork" building in the bottom center?  Aren't all government projects "pork?"

What is "pork?"  What is "profitable?"  What is "subsidized?"  What is "socialism?"  Our nation's economic stability, environmental sustainability, and transportation infrastructure are all crumbling.  If we don't look seriously at what we expect from government and industry, the whole thing is going to collapse into a Marxian nightmare...

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Posted by Phoebe Vet on Thursday, June 11, 2009 7:01 PM

Maglev

I was reading previous posts in this thread, and scrolled a bit too quickly past the sketch of Charlotte's new station... What is that "Pork" building in the bottom center?  Aren't all government projects "pork?"

What is "pork?"  What is "profitable?"  What is "subsidized?"  What is "socialism?"  Our nation's economic stability, environmental sustainability, and transportation infrastructure are all crumbling.  If we don't look seriously at what we expect from government and industry, the whole thing is going to collapse into a Marxian nightmare...

 

You did scroll too fast...ROFL

 

POLK building.

President James K. Polk was from Pineville, a suburb of Charlotte.  A replica of the house in which he grew up, and a small museum are located on Polk Street in Pineville.

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Posted by Deggesty on Thursday, June 11, 2009 9:27 PM

Phoebe Vet

President James K. Polk was from Pineville, a suburb of Charlotte.  A replica of the house in which he grew up, and a small museum are located on Polk Street in Pineville.

That's more than there was in Pineville when I passed through there innumerable times until I finished my schooling, between home and Charlotte. I do not remember if the house had already been built when I went by there in '71 and '72. The only notice of his birthplace was a small rock pyramid and a sign beside US 521, saying that he had been born at that spot. Incidentally, back then, the spot was not in town, but south of Pineville--just as there was, then, open country along the highway (US 21) between Charlotte and Pineville.

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Posted by Maglev on Thursday, June 11, 2009 11:01 PM

Well, what will President Obama's legacy be?  Perhaps a building constructed of recycled gas-guzzling cars?

I support his hopes of revitalizing our nation, but I haven't seen any dramatic action as far as transportation is concerned.  All this talk about funding "shovel ready" projects really means that we are finally going to do what needed to be done long ago, and has been in the planning stage for a long time.

How will health care be reformed?  Another Amtrak, which lets an ancient system whither from lack of innovation and bold investment?   Eventually, our hospitals would resemble the Northeast Corridor--so much of a dinosaur that NOBODY dares to believe it could be fixed.

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Posted by oltmannd on Friday, June 12, 2009 7:32 AM

henry6

But the arguement can be made that the public did not vote on Amtrak, that is was a political maneuver by the Federal government to take the passenger service from the private railroads who did not want to provide the service any longer.  That was so private enterprise could save face by not being the bad guys who eliminated the passenger train.  There are charges that Richard Nixon operated under the assumption that Amtrak would be gone within a short period of time and the railroads(and the nation) would be without passenger services.  In other words, it was actually shoved down the public's throat with a sugar coating saying it was the answer when it was only the beginning of many questions about its survivability, its function, its funding, its total existance!

An interesting paper:

 https://www.policyarchive.org/bitstream/handle/10207/1446/RL31473_20020626.pdf?sequence=1

Here and exerpt:

In a speech in December 1970, Secretary of Transportation Volpe, asserted that

Amtrak would be profitable.3 In February of 1971, he elaborated on that assertion,

saying that Amtrak would break even within three years and be profitable thereafter.4

However, this expectation was based on two assumptions: (1) that Amtrak would

provide better service; and (2) that it would operate a reduced number of routes.

Volpe claimed that “fast, clean, economical and safe trains” could attract enough

riders to make a profit5; at the same time, he was drawing up a route system for

Amtrak that was a great reduction from the extent of service being provided by

railroad companies. But when he declared that Amtrak’s profitability would depend

in part on a reduced number of routes, he did not mean simply Amtrak’s original

route network; he said that, after Amtrak had been in operation for a few years, the

unprofitable routes would be cut back to the point that their losses could be covered

by the money earned on the profitable routes.

And this:

Critics of Amtrak’s performance assert that Amtrak was intended by Congress

to be a profit-making enterprise, and therefore its need for Federal assistance each

year is evidence of its failure to meet the expectations Congress had of it. But there

is little evidence to support that contention in the legislative history of Amtrak’s

creation. Expectations of Amtrak profitability, such as they were, appear to have

been premised on significant Federal support for the development of faster trains and

cutbacks in the route mileage served. Since neither of those conditions were met,

Amtrak supporters argue that Amtrak’s lack of profitability is no surprise.

-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/

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Posted by clarkfork on Tuesday, June 30, 2009 10:34 PM

I am confused.  You wrote:  "The nation's commercial airlines account for approximately 30 per cent of FAA operations.  They pay fuel taxes, licensing fees, etc. to cover their share of the FAA's costs.  They also pay landing fees, gate fees, and TSA assessments.  They pay federal income taxes, state and local income taxes, inventory taxes and property taxes.  In 2008 these taxes and fees did not cover all of the FAA's costs driven by airline operations, thereby necessitating an average federal subsidy of .43 cents per passenger mile.  This compares to an average Amtrak subsidy of 22.61 cents per passenger mile.  The notion that the airlines do not pay their share of the cost of the federal airways is wrong." 

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

 

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Posted by Paul Milenkovic on Wednesday, July 1, 2009 10:58 AM

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?

There is a baseline assumption in the passenger train advocacy community that trains are intrinsically good.  We may have come to that assumption because we are railfans or because we are personally dissatisfied with the inconveniences of other transportation modes.  Since we are advocating trains, specifically advocating government subsidies for trains, we start with our baseline assumption and work outward in marshalling reasons why others should also support trains, a requirement for public funding in a democracy.

One of our long-time NARP-sanctioned talking points is that yes, trains receive subsidy, but everything else seems to receive subsidy, and airlines and auto travel, in our view, receives much more subsidy in absolute dollar terms.

There are other people who don't particularly care for trains and especially the subsidy for trains.  These people may be Libertarians who are critical of other government interventions in the economy, they may be people who simply like cars and airplanes and believe in the inherent goodness of those conveyances much as many of us like trains, or they may be people beholden to economic interests involved in the construction of cars and planes, the building of highways, and related activities.  These "rail critics" or "Amtrak critics" do not share our views, and we are often critical of them on account of that.

Perhaps the strongest talking point of the Amtrak critics, whatever motivates them for not supporting something that we want very much, is that while the Amtrak subsidy is low in absolute dollar terms, it is very high in amount of subsidy per passenger mile.  The subsidy to sleeping car passengers is also very high -- in the hundreds of dollars -- per passenger boarding.  Of all the arguments pro and con on Amtrak, the high rate of subsidy is the elephant in the room that won't leave quietly.  This thread is titled "Envelope Please", regarding a boost in funding for Amtrak and whether this funding could be used effectively to perhaps remedy this situation.

Depending on how you do the accounting, the subsidy rate for Amtrak is between about a 10-fold and a 100-fold increase over the other modes.  There is a strong desire in the advocacy community to say, "Oh, that cannot be right, the various 'hidden subsidies' and 'social costs' of planes and autos are not being properly taken into account."  Could be, but the large subsidy rate of Amtrak remains, and it remains difficult to justify simply on the argument of fuel efficiency, especially since Amtrak is only marginally more fuel efficient than cars or planes on average, or on congestion relief, where a better use of the money may be commuter trains if not short corridors such as the Surfliners and the Hiawathas that serve as commuter trains to many people.  Then one is left with intangibles -- that strangers meeting in Amtrak lounge cars helps American society.

The advocacy community needs to come to terms with the high subsidy rate of Amtrak and especially the high direct cost subsidy to long distance trains.  We have spent the last 40 years not coming to terms with it, falling back on the NARP line on subsidies, believing somehow that air and highway travel was getting a better deal as it were.  There is a limited amount of capital money coming our way (8 billion in ARRA "stimulus" money), and were we to spend it wisely, we could do much to improve the long-term outlook for Amtrak, but were we to revert to business-as-usual, the long term picture for Amtrak looks bleak to me.

It is not just "those representatives from the Mountain West who want to spread Amtrak too thin."  One of those representatives is Senator McCain, who doesn't particularly care for the Sunset and we demonize him for that.  The people who are going to influence opinion as to where the 8 billion, and if we are lucky follow-on money, goes are us.

If GM "killed the electric car", what am I doing standing next to an EV-1, a half a block from the WSOR tracks?

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Posted by oltmannd on Wednesday, July 1, 2009 2:38 PM

Paul Milenkovic
-- that strangers meeting in Amtrak lounge cars helps American society.

 

Oh! I like it!

Very good summation....[

-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/

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Posted by henry6 on Wednesday, July 1, 2009 3:46 PM

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

RIDEWITHMEHENRY is the name for our almost monthly day of riding trains and transit in either the NYCity or Philadelphia areas including all commuter lines, Amtrak, subways, light rail and trolleys, bus and ferries when warranted. No fees, just let us know you want to join the ride and pay your fares. Ask to be on our email list or find us on FB as RIDEWITHMEHENRY (all caps) to get descriptions of each outing.

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Posted by schlimm on Wednesday, July 1, 2009 8:11 PM

According to the FAA in 2005, the Chicago O'Hare 20 year modernization plan is expected to total $13.3 Bil., second only to Boston's "Big Dig."   And that is just ONE airport, although the #1 or #2 in volume.  So air has a lot of funding, and they are not certainly paying for it all or they would be out of business.

I also ran into an interesting article (updated 2009)  by a Texas guy which suggests huge efficiency differences for different transport representatives.  Not sure how accurate his numbers really are, but they appear to be good stats (which of course can be very misleading).

 

http://strickland.ca/efficiency.html

C&NW, CA&E, MILW, CGW and IC fan

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Posted by schlimm on Wednesday, July 1, 2009 8:16 PM

 BTW, I concur on Paul's memo.  More of the same old Amtrak is a huge waste.  Better a to fund a few corridors (not the NEC) that can demonstrate how what real rail travel can do compared to air, bus and road.  dropping the long distance cruise trains and converting the Superliners to high-capacity corridor coaches might help as well.

C&NW, CA&E, MILW, CGW and IC fan

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