If Amtrak carried 4 times the current 30 million peasengers a year and lost 4 times the current losses (say 6-8 billion per year) how would we feel as the American people, as taxpayers etc. There would be no tri-weekly trains, most routes would have two or more trains each way, corridors would have 6-9 trains each way and there would be more corridors, most of the pre 1979 routes would be back plus a few more giving us a system similar to the ilnterstate highway system.
What are your thoughts?
Who says carrying four times the current passenger load would amount to four times the loss? That's ridiculous thinking. Carrying more people actually could reduce the losses, maybe even make a profit. This is a very niave assumption of non facts but either of fear or lack of knowledge of how economics, business, and services work to say the least.
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Henry,
You have no more evidence to support your supposition than the original poster has for his. No need to be so cranky.
Mac
henry6 Who says carrying four times the current passenger load would amount to four times the loss? That's ridiculous thinking. Carrying more people actually could reduce the losses, maybe even make a profit. This is a very niave assumption of non facts but either of fear or lack of knowledge of how economics, business, and services work to say the least.
The Vision Report proposes a plan where carrying 10 times the current passenger-mile volume will require 10 times the current level of government funding.
That figure is correlated with the level of expenditure in Europe in relation to their rail passenger usage.
If GM "killed the electric car", what am I doing standing next to an EV-1, a half a block from the WSOR tracks?
The number of passengers is not the optimum way to look at the issue. A better way is to look at the passenger miles sold vs the available seat miles.
In FY11 Amtrak had 12,530,314,000 seat miles for sale, of which it sold 6,532,250,000 passenger miles for an average load factor of 52.1 per cent. If it had sold 65 per cent of its average capacity, it would have 8,165,312,000 passenger miles. If it had sold 80 per cent of its capacity, which would rival the average load factor for the nation's airlines, it would have had 10,024,251,000 passenger miles.
The average trip in FY11 was 216.4 miles. If the same ratios held up for the aforementioned expanded capacities, it could carry 37.7 million riders at an average load factor of 65 per cent capacity and 46.3 million riders at an average load factor of 80 per cent of capacity.
On average Amtrak has the scalability to increase its load factors without have to make a significant increase in its capacity. It probably could do so with a relatively low marginal increase in costs. Beyond 80 per cent of existing capacity would require a heavy investment in incremental capacity, which would not be a good idea until Amtrak could demonstrate higher utilization of its existing capacity.
Is there a market (aggregate demand) for an expanded intercity passenger rail market? I doubt it, at least for now, although there could be in the future as congestion, pollution, convenience, improved transit, etc. make passenger rail a more desirable choice. Even the highly praised Acela trains had an average load factor of just a bit over 62 per cent during FY11.
In addition to a lack of demand to fill its trains, Amtrak would have a major challenge on its hands if it tried to expand its operations over its partner railroads. Witness the failed attempt to get the UP to hoist the Texas Eagle on a daily basis between San Antonio and Los Angeles.
Since you ask, Dixie:
I do agree with Henry. Railroads are a classic example of a decreasing cost industry. Generally, the more people who ride trains the lower the expenses per rider.
But supposing your assumptions are true and we could have Amtrak 4 times as big as it is with 4 times the subsidy. The costs I am concerned about are the costs of our dependency on automobiles. Some of these costs are easily quantifiable. Some--such as air pollution--have broad implications for our future. And there are the costs of the conflicts in the middle east over petroleum products. And these conflicts have costs in people who are disabled by them and people who loose their lives because of them. I would be willing to fund not only Amtrak but other things that could reduce or eliminate our wars.
Comparing the percentage of seat miles sold is not a fair measure of rail vs air. Most air travel is from point a to point b. That makes it much easier to size the aircraft and thus the number of seats to the route. A train travels a long route with intermediate stops all along the way. The train must have enough seats for the highest volume portion of the route. They cannot then shed seats for the remainder of the trip. They must therefore bear the burden of unneeded seats for part of the trip.
Dave
Lackawanna Route of the Phoebe Snow
PNWRMNM Henry, You have no more evidence to support your supposition than the original poster has for his. No need to be so cranky. Mac
WELL EXCUSSSSSSE MMEEEE! I was not being cranky until you brought it up...go....to.....
Phoebe Vet Comparing the percentage of seat miles sold is not a fair measure of rail vs air. Most air travel is from point a to point b. That makes it much easier to size the aircraft and thus the number of seats to the route. A train travels a long route with intermediate stops all along the way. The train must have enough seats for the highest volume portion of the route. They cannot then shed seats for the remainder of the trip. They must therefore bear the burden of unneeded seats for part of the trip.
The measure is about asset turnover, which is a measure of productivity. Fairness has nothing to do with it.
The Pennsylvanian, as an example, on its run from Pittsburgh to New York, makes 16 stops including the end points. A typical Southwest Airlines bird may go from Dallas to Houston, Harlingen, back to Dallas, Lubbock, Albuquerque, Denver, San Jose, LA, and Phoenix, where it ties up for the night. And it does it all in one day. Same concept as the train, except the airplane is more efficient than the train.
Using sophisticated mathematical models, Southwest deploys enough seats for its high volume periods. No one, as far as I know, takes out seats if the airplane or the train or the bus does not sell out. It is all about anticipated load factors, which are predicated on seat mile yield, which in turn determine the type of airplane to be deployed as well as the frequency of the flights.
The problem for a railway train is unit productivity. It simply cannot match the productivity of an airplane except over relatively short distances with high volumes.
John WR Since you ask, Dixie: I do agree with Henry. Railroads are a classic example of a decreasing cost industry. Generally, the more people who ride trains the lower the expenses per rider. But supposing your assumptions are true and we could have Amtrak 4 times as big as it is with 4 times the subsidy. The costs I am concerned about are the costs of our dependency on automobiles. Some of these costs are easily quantifiable. Some--such as air pollution--have broad implications for our future. And there are the costs of the conflicts in the middle east over petroleum products. And these conflicts have costs in people who are disabled by them and people who loose their lives because of them. I would be willing to fund not only Amtrak but other things that could reduce or eliminate our wars.
The Vision Report proposes spending half a trillion dollars over a 50 year period to increase the passenger miles of Amtrak 10-fold, from .1 percent of total passenger miles to a full 1 percent of passenger miles.
The Vision Report also claims a reduction by 50 percent in the fuel use per passenger mile of trains substituting for cars.
US oil usage is about 20 million barrels per day out of a world consumption of about 85 million barrels per day. About 40 percent of each barrel of oil is turned into gasoline for cars -- I have seen one source claiming as high as 47 percent. There are 42 gallons in a barrel. Hence, 144 billion gallons of gasoline per year, mostly for auto transportation but there is also commercial and ag usage.
Auto (or auto and light truck) passenger miles run about 4 trillion per year. This comes out to about 28 passenger miles per gallon -- the vehicle gas mileage is somewhat lower but the passengers per trip is somewhat bigger than one. Assuming 120,000 BTUs per gallon of gas, this works out to about 4300 BTU/passenger mile. The auto BTU/passenger mile is reported lately at 3800 BTU/passenger mile, light truck around 5300 BTU/passenger miles, this this about works out.
So, spending half a trillion dollars will save one half of one percent of 144 billion gallons of gasoline per year 720 million gallons per year. That seems like a lot of gallons, but that amounts to about 47,000 barrels per day, about 2 tenths of one percent of our annual oil usage.
President Obama announced administrative rules to double auto gas mileage, I believe over a 20 year time horizon. That measure alone would save over 20 percent on oil usage. His political critics claim that such measure would add $3000 to the cost of each automobile. For 14 million automobiles manufactured per year and over 50 years, President Obama's plan would cost consumers 2 trillion dollars.
To save the same amount of fuel through train usage, that would take 100-fold the Vision Plan, costing 50 trillion dollars over that time period. The claims that trains are going to solve the problems of air pollution (new autos are already very tightly emissions regulated whereas plans to do this with locomotives are in progress) or with CO2 emissions (directly relates to fuel use) or with oil imports (relates to the same), such claims need to be evaluated in relation to these numbers.
As to the claim that we will use electric trains, those trains could substitute nuclear or coal power for oil, where coal doesn't need to be imported but it results in CO2 and other emissions. As to claims we will power electric trains with intermittent and variable renewable solar and wind sources, that claim makes better sense of battery-powered or plug-in hybrid powered cars, where the charging of batteries can be adjusted to the availability of wind or sun whereas an electric train needs power on demand to meet its schedule. Also, electric trains will cost more than the largely Diesel trains proposed in the Vision Report.
As to the economies of scale, yes, you can improve the economics of any common carrier mode by filling more seats, something the airlines do quite well in trade for substantial inflexibility in travel times if you want an affordable fare and in trade for very crowded conditions in airports and especially on aircraft. Part of the appeal of the rail mode is travelling in less crowded conditions.
Also with respect to economies of scale, the European countries as a group spend the equivalent of the US Federal highway budget (something many in the advocacy community consider as a benchmark for what passenger rail should receive as its "fair share") in order to serve 5 percent of total passenger miles. Their common carrier share of passenger miles is 20 percent in contrast with 10 percent in the U.S. Most of the 10 percent common carrier share in the U.S. is on airplanes -- the jet is our bus and train. In Europe, the 20 percent common carrier share is about evenly split four ways between trains, buses, airplanes, and yes, boats. River and seaway borne passenger service represents a major share in Europe.
So, were Amtrak to ever play an important role in abating pollution or reducing dependence on oil, it is not that we have to do away with government subsidy, but the subsidy money would need to be used more effectively by multiples of what is taking place now. That there is economy of scale is not a foregone conclusion based on the money required to support the much large scale of passenger trains in Europe.
I agree whole heartedly that oil usage poses problems, not only to the environment, not only to the economy, but also to the need to fight foreign expeditionary wars. It is because of such concerns that I have become skeptical about passenger trains as an obvious solution. A person has to ask, is the goal to reduce oil usage for all of the mentioned reasons, and passenger trains could help, or is the objective to have passenger trains because as enthusiast we like them, and they are our passion and object of our enthusiasm an effective solution?
Dixie Flyer If Amtrak carried 4 times the current 30 million peasengers a year and lost 4 times the current losses (say 6-8 billion per year) how would we feel as the American people, as taxpayers etc.
If Amtrak carried 4 times the current 30 million peasengers a year and lost 4 times the current losses (say 6-8 billion per year) how would we feel as the American people, as taxpayers etc.
Paul,
Certainly the rest of the world uses a lot of petroleum products. However, I think we fight wars because of our own dependency on petroleum. No American soldier was killed or injured by an IED to help China industrialize; many were injured because the US wants that oil.
I found two "Vision Reports" on Amtrak's website. Both have to do with Northeast Corridor Service which uses electric trains mostly.
Certainly electric cars also promise to reduce our dependency on petroleum products. I think we both agree that in years to come they will be increasingly successful. I have lived on the East Coast most of my life and I have seen several reports that say we could generate about once quarter of the electricity we need with wind turbines off our coast.
No doubt automobile technology will continue to improve and rail technology will continue to improve. As far as planes go, it takes far, far more energy to lift human bodies hundreds or thousands of feet above the earth and move them than it does to move them along the earth's surface. Train travel also offers hope of reducing plane travel and dependency on oil.
Our recent wars have been in a part of the world we for many years have exploited for oil. If there is any true meaning to sunk costs those words refer to the costs of war both in dollars and in men and women left with serious injuries and in lives lost. I just don't see increasing numbers of automobiles as a solution to this problem.
John
Oil is a necessity, for now and into the foreseeable future ... a fact of life. Howl against it as you will, changes nothing. The obscenity is the extent to which we must fight foreign wars for supply we could produce for ourselves at home, if it weren't for the nut cases, in-office and otherwise.
It is cheaper to just leave the consist alone than change it out to tailer the supply at the point of greatest demand. I really don't know what total occupancy over the route tells you. The percentage of occupancy at the highest demand point tells you if you could expand.
I don't know if the vision report was really meant to answer the question of incremental cost. My understanding would be about $0.05/pm for a subisdy, everything included.
dakotafred Dixie Flyer If Amtrak carried 4 times the current 30 million peasengers a year and lost 4 times the current losses (say 6-8 billion per year) how would we feel as the American people, as taxpayers etc. I'd say, money well spent, vs. the value we get from most of our $1.5-trillion budget. But, then, my wife and I are just off another superlative Amtrak trip!
V.Payne It is cheaper to just leave the consist alone than change it out to tailer the supply at the point of greatest demand. I really don't know what total occupancy over the route tells you. The percentage of occupancy at the highest demand point tells you if you could expand. I don't know if the vision report was really meant to answer the question of incremental cost. My understanding would be about $0.05/pm for a subisdy, everything included.
The average load factor gives one an idea of how well the assets are being utilized. Clearly, there could be points along the route or times during the year when the capacity is maxed out. But an average load factor of 52.1 per cent suggests that there are route segments or times of the year when there are opportunities to increase the load without increasing capacity.
Amtrak is offering significantly discounted fares from Sacramento to Bakersfield. It is probably doing so because the average load factor on the San Joaquin's was only 40.8 per cent in FY11. Since the fare applies from end point to end point, it tells me that the train's capacity is being under utilized all along the route.
I agree, Fred, that our current culture depends on oil and this is despite our wars. But it does not follow that I must live in a way that I must mindlessly contribute to that dependency.
Edmund Burke observed "No man made a bigger mistake than the one who did nothing because he could only do a little. Certainly riding a train rather than a car or a plane by one person is only a little. But I prefer to do that little.
Wind power can be a significant part of electric generation in the United States as well as other areas of the world. It is an important component of the generation mix for Texas.
There is, however, one important point to keep in mind. For every megawatt of installed wind generation, one needs a megawatt of fossil, nuclear, or hydro generation for those times when the wind stops blowing. Or people would have to agree to do without power in the case of a wind failure. People might agree to do so in theory, but if they have to turn off the TV and shut down their computers because the power is down, they are not likely to be happy.
The wind can stop blowing. In February 2010 the wind suddenly stopped blowing in west Texas. It happened so fast that it nearly brought the grid down. It was a mad scramble to bring the fossil units on line to make up the deficiency in generation.
dakotafred Oil is a necessity, for now and into the foreseeable future ... a fact of life. Howl against it as you will, changes nothing. The obscenity is the extent to which we must fight foreign wars for supply we could produce for ourselves at home, if it weren't for the nut cases, in-office and otherwise.
US oil production last year rose to its highest level in almost a decade, thanks to an increase in the use of “unconventional” extraction techniques .
As a result, analysts believe the US was the largest contributor to the increase in global oil supplies last year over 2009, and is on track to increase domestic production by 25 per cent by the second half of the decade.
Please disregard.
Sam1 dakotafred Dixie Flyer If Amtrak carried 4 times the current 30 million peasengers a year and lost 4 times the current losses (say 6-8 billion per year) how would we feel as the American people, as taxpayers etc. I'd say, money well spent, vs. the value we get from most of our $1.5-trillion budget. But, then, my wife and I are just off another superlative Amtrak trip! The United States federal government has not adopted a budget during the current administration. According to the U.S. Financial Statements for FY11, the federal government spent approximately $3.7 trillion on a variety of government activities. The President's 2012 budget proposed spending $3.8 trillion; however, it was not adopted by the Congress.
Thank you for the correction. I don't know where my head was at on that one. (Whoops, I guess I do.)
Well, there SHOULD be economies of scale...but Amtrak has not shown much of this in their history. Even with record passenger and revenue growth on a fixed network of trains and service, they have had their costs rise at nearly the same rate as revenue.
Based on their history, the fair assumption would be that 4X passengers would = 4X subsidy.
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
Perhaps if Amtrak (or whatever entity runs rail passenger service in the US in the future) did some of the things you and dixie flyer suggested on another thread, such as eliminate the anachronistic LD trains and primarily stick to short corridors, the economies of scale would work. For one thing, running trains at higher average speeds allows for greater utilization of equipment.
C&NW, CA&E, MILW, CGW and IC fan
Certainly there is no one solution to our energy issues and there is no single problem, not even the problem of our middle east wars.
But we do have two new promising technologies: Wind turbines and solar generation. Neither is a constant source of power. However, at least in the east, wind turbines tend to produce more power in the winter and solar generation tends to produce more power in the summer.
Nuclear generation has been around for a while now. I've read many sources that say nuclear generation has to be part of the solution.
Finally, there are the old standbys, fossil fuels.
I am not an expert here but it does seem to me that we really need to look for new ways to produce energy. And, if as a culture, we could also learn new ways of living that use less energy that could help a lot too.
John WR Certainly there is no one solution to our energy issues and there is no single problem, not even the problem of our middle east wars. But we do have two new promising technologies: Wind turbines and solar generation. Neither is a constant source of power. However, at least in the east, wind turbines tend to produce more power in the winter and solar generation tends to produce more power in the summer. Nuclear generation has been around for a while now. I've read many sources that say nuclear generation has to be part of the solution. Finally, there are the old standbys, fossil fuels. I am not an expert here but it does seem to me that we really need to look for new ways to produce energy. And, if as a culture, we could also learn new ways of living that use less energy that could help a lot too.
I really try to refrain from direct personal criticism of other posts, but the above has the lowest information content of recent remarks I have seen. Gee, in "the future" we will get our power from a mix of the newer renewable sources such as wind and solar yet continue to rely on nuclear and fossil fuel sources. Please tell me about something I don't already know.
One of my earlier points was all things being equal, a mix of public (through subsidy) and private (through personal choice) expenditure on storage battery systems for electric or "plug-in" gas-electric hybrid automobiles can make much better use of the intermittent and variable "alternative", "renewable" or "green" energy sources such as wind and solar than can expenditure on passenger railway electrification or passenger rail in general.
The complementary nature of the seasonal or even daily variation in those sources (windy at night, sun during the day) almost has nothing to do with what I am talking about. It clouds over, the wind dies down, and a train needs to pull out of a station and accelerate to meet its schedule. That power needs to come from a fossil backup whereas a signal can go out to electric cars hooked up to battery chargers to stop charging their batteries for the time being. A plug-in hybrid gas-electric car has a built-in backup source of the gasoline engine if the wind stops for a long time, allowing the owner to operate the car where the charging done on an electric "tariff" where they don't get a battery charge when the wind stops.
But all things are not equal. I had presented evidence that under "business as usual" with respect to the subsidy rate of Amtrak, that more fuel-efficient cars after the fuel economy standards set by President Obama's EPA, which even the harshest critics claim will add $3000 dollars to the price of each car, are multiples more cost effective in saving oil consumption than plans to save fuel through the Amtrak subsidy.
As to your friend Edmund Burke's views on patronizing Amtrak to help the environment, wasn't Mr. Burke one of those "neo-conservatives" who wanted to wage a foreign, expeditionary war to turn back extremists engaged in terror http://en.wikipedia.org/wiki/Reflections_on_the_Revolution_in_France? I say this, not in snarky sarcasm or forced irony, but in all seriousness and earnestness. People are all too glib to point at the big, fat Defense budget, claim that it is all or in large measure "waste" or that the cost of Defense should be charged against users of oil, and that should peace break out through more sensible foreign policy, that an enormous peace dividend could be used to fund trains?
In line with that, if one is quoting Edmund Burke about making futile, small gestures in advance of a virtuous cause, a person needs to look at Edmund Burke in his totality of what he was advocating. And for all I know, his quoted remark about doing "small things" had to do with the rest of Parliament not going along with his desire to invade Revolutionary France, and that the small thing was to continue to make speeches against the Revolutionary Committees and the terrible things they were doing. Did Burke say, "I shall not eat French cheese nor drink French wine until the Revolutionary Committees stand down and the Terror ceases?"
Or were the small things "hidden expenditures" in Parliament's budget to fund "Special Forces" such as the fictional Scarlet Pimpernel, who was rescuing the odd nobleman and high-born lady from the Terror?
As "doing if only a small part" by riding Amtrak to save the environment and bring our brave men and women home from overseas, what if that "small part" is not a small part positive towards that goal, but a small part negative, in the wrong direction with respect to that goal. Instead of being a regular Amtrak rider and directing government subsidy towards trains, what if you instead purchased a hybrid car and claimed the government tax credit? What if by riding Amtrak you are redirecting government money that could have gone to hybrid cars, which would have saved more energy and more oil?
Yes, I am aware that money is being spent on Amtrak and money is being spent on the hybrid car tax credit (and yes, a tax credit is an expenditure in the fact that other tax payers may have to pay more to make up the tax credit for someone choosing to purchase a particular kind of car). So John WR occupying a seat on Amtrak is not going to take away a tax credit from John WR buying a Chevy Volt. But the Amtrak subsidy is sufficiently high, and the fuel savings from taking Amtrak sufficiently modest that we are not being true to ourselves saying that subsidizing Amtrak is a good public policy choice.
"VPayne" on another thread comes the closest to making a strong economic and public argument for the Amtrak subsidy, namely the gas tax cross-subsidy to rural highways. Given that there are people who are not enamored with automobiles for whatever reason, given that there are people who would prefer to take Amtrak rather than drive or ride in a car for the between cities portion of their journey, if you sharpen your pencils hard enough, you can make the case that the subsidy required for their rail travel is in very rough round numbers comparable to the cross-subsidy to the rural highways, especially when you draw a broad enough boundary to add accident and police reponse costs. Very rough round numbers, where a factor-of-two higher cost for the train subsidy counts as "roughly the same."
And you can make the case that Amtrak is at least a modest improvement in energy savings, that people choosing the train are not going "backwards" with respect to the goal of saving the planet. That is, you are charging the subsidy to Amtrak towards providing train travel for the admitted minority of people who prefer the train over the car, not as a public policy measure making many usable contribution towards overall national energy policy.
But there are two things that flow from this. One is that it is not a sensible public policy choice to devote large resources, such as an Amtrak subsidy on par with the Federal Highway budget, and to levy larger gasoline taxes to pay for this and to provide strong economic disincentives to auto use as done in Europe. Two, Amtrak can make sense as an accomodation to people who for whatever reason cannot, will not, or prefer not to take a car, but it would be extremely helpful if the subsidy rate of Amtrak were roughly half of what it is right now.
Can Amtrak, would Amtrak achieve "economy of scale", that successive increments in subsidy could carry more passenger miles per dollar? It depends. Are people in the advocacy community willing to embrace a more subsidy-efficient Amtrak as an advocacy goal? Are we in the advocacy community willing to give Amtrak operational flexibility in the way they supply train service? Or are we going to be the first in line e-mailing Congress, "Oh no, please don't let Amtrak discontinue the _____ Limited?"
Subsidies are good for tax accountants, tax lawyers, politicians, etc. Unfortunately, they tend to distort pricing points and cause users to make sub-optimum decisions. Whether they serve the public interest in the long run is debatable.
In an ideal world we would eliminate all transport subsidies and require each mode to stand on its own merits. Had we taken this approach we probably would have had a better balanced transport system. Unfortunately, we don't live in an ideal, rational world. We live in one highly charged with emotion. Accordingly, subsidies probably will not go away, but we should strive to reduce them to as small an amount as possible.
Increasing the subsidies for passenger rail so that they are on a par with the perceived subsidies for highways, airways, waterways, etc., is not a good financial strategy. This is especially true for a country that is staring more than $19.7 trillion of government debt in the face, which is relevant since the subsidies usually come from the taxpayers. It is akin to saying that we need to run up the debt for our household because the neighbors are going broke, and we need to go with them.
Government investment is desirable for start-up projects where there is a reasonable probability that the users will eventually pay for it. This was the rationale for the citizens of Baltimore to buy the city's bonds to help build the B&O railroad. The investors believed that it would be a going concern, and they would get their money back with interest. The same idea underlies most infrastructure investment, i.e. road users will pay for them, air users will pay for the airports, etc. For the most part they do, although sometimes indirectly. But not in all cases thanks largely to politics, which at the end of the day is emotionalism run rampant.
The key questions is where do passenger trains make sense, what should they look like, and how will we pay for them. For me it is in relatively high density, relatively short corridors. Claiming that we will get the money from the Department of Defense or other dark holes to pay for trains is not a working plan.
"Increasing the subsidies for passenger rail so that they are on a par with the perceived subsidies for highways, airways, waterways, etc., is not a good financial strategy."
I guess you don't realize that we will actually be spending more to shore up the Interstate road network in the future than we have in the past. Just a plane jane mill and overlay is going for $1.2 million a route mile every 8-10 years and we can't get out of it as the base will turn to ravel if you keep letting trucks run over it at the current axle loads, leading to even greater rebuilding costs. However, now a lot of structures out there are also needing to be rebuilt, the base is needing a full reconstruction, the geometry doesn't work for the level of usage, where are those urban soundwalls, etc.
Further, most of funding for new construction is being borrowed, on the Federal level I listened just three weeks ago when one of the FHWA financial people said that the $8 Billion a year General Fund bailout of the HTF will continue indefinitely as far as she can see. In my area the counties are now bonding projects for thirty years to build new capacity against the state's future federal funds. In other words, the future financial situation is going to be even worse for the HTF.
"Highway-user charges—including motor-fuel taxes, motor—vehicle taxes and fees, and tolls-were the source of 56.3 percent of the $166.0 billion of total revenues for highways and bridges in 2006. The remaining 43.7 percent of revenues came from a number of sources, including local property taxes and assessments, other dedicated taxes, general funds, bond issues, investment income, and other miscellaneous sources"
Note, this leaves out private costs, such as when a developer installs a neighborhod road, and then the federal tax is applied to it though there was no federal role in developing it. It also leaves out government accident costs, early Social Security payments, Medicare, and the whole host of other programs that take care of you when you are really injured in an automobile accident. The most my auto insurance will write my medical limit to be is $100k. Because they are depending on your medical insurance to take over for that $1/2 million hospital bill, but that isn't paid by the vehicle mile is it?
There is a definte elasticity of automobile use with respect to price as the recent trends have shown.
Now for the coming reconstruction of the interstates some are suggesting to expand the capacity even more, 6 lanes in rural areas instead of 4. Why, if it wasn't even remotely paid for by the users to begin with why should more capacity be added? Further it will just cost even more to overaly that pavement.
So you have to set a financial limit! or you will over spend if you have the "big jar of money" mentality. Once you do, why shouldn't the safest, most fuel efficient mode, that has the potential to atract and serve the travel needs for trips between 200-900 miles be funded at the same level?
Yes, the actual usage might only be 6-8% of all intercity trips, and maybe 20% in the target distance range, but that is a lot more than currently offered service. Will Amtrak be the provider, maybe not, but if you have a metric then you are set up for competition, not for the lowest overall cost, but the lowest cost per unit of output.
V.Payne "Increasing the subsidies for passenger rail so that they are on a par with the perceived subsidies for highways, airways, waterways, etc., is not a good financial strategy." I guess you don't realize that we will actually be spending more to shore up the Interstate road network in the future than we have in the past. Just a plane jane mill and overlay is going for $1.2 million a route mile every 8-10 years and we can't get out of it as the base will turn to ravel if you keep letting trucks run over it at the current axle loads, leading to even greater rebuilding costs. However, now a lot of structures out there are also needing to be rebuilt, the base is needing a full reconstruction, the geometry doesn't work for the level of usage, where are those urban soundwalls, etc. Further, most of funding for new construction is being borrowed, on the Federal level I listened just three weeks ago when one of the FHWA financial people said that the $8 Billion a year General Fund bailout of the HTF will continue indefinitely as far as she can see. In my area the counties are now bonding projects for thirty years to build new capacity against the state's future federal funds. In other words, the future financial situation is going to be even worse for the HTF. "Highway-user charges—including motor-fuel taxes, motor—vehicle taxes and fees, and tolls-were the source of 56.3 percent of the $166.0 billion of total revenues for highways and bridges in 2006. The remaining 43.7 percent of revenues came from a number of sources, including local property taxes and assessments, other dedicated taxes, general funds, bond issues, investment income, and other miscellaneous sources" Note, this leaves out private costs, such as when a developer installs a neighborhod road, and then the federal tax is applied to it though there was no federal role in developing it. It also leaves out government accident costs, early Social Security payments, Medicare, and the whole host of other programs that take care of you when you are really injured in an automobile accident. The most my auto insurance will write my medical limit to be is $100k. Because they are depending on your medical insurance to take over for that $1/2 million hospital bill, but that isn't paid by the vehicle mile is it? There is a definte elasticity of automobile use with respect to price as the recent trends have shown. Now for the coming reconstruction of the interstates some are suggesting to expand the capacity even more, 6 lanes in rural areas instead of 4. Why, if it wasn't even remotely paid for by the users to begin with why should more capacity be added? Further it will just cost even more to overaly that pavement. So you have to set a financial limit! or you will over spend if you have the "big jar of money" mentality. Once you do, why shouldn't the safest, most fuel efficient mode, that has the potential to atract and serve the travel needs for trips between 200-900 miles be funded at the same level? Yes, the actual usage might only be 6-8% of all intercity trips, and maybe 20% in the target distance range, but that is a lot more than currently offered service. Will Amtrak be the provider, maybe not, but if you have a metric then you are set up for competition, not for the lowest overall cost, but the lowest cost per unit of output.
My main point is to eliminate all subsidies or reduce them to the lowest amount possible. The users (highway, airway, waterway, railway) should pay the cost of what they use through the pricing mechanism was my other key point. If they did passenger rail might be self sustaining in relatively short, high density corridors.
In FY11 the transfer from the U.S. General Fund to the Highway Trust Fund (HTF) was $14.7 billion. It was partially offset by the transfer of highway funds from HTF to the Mass Transit Administration and the use of HTF funds for other activities, i.e. Rails to Trails, Administration, etc., leaving the net transfer to HTF of $11.3 billion.
The President's Commission on the Deficit (Simpson/Bowles) recommended raising the federal fuel taxes to eliminate the need for the transfer. Hopefully, after the election, sanity will set in, and the next administration will move forward on Simpson/Bowles.
The local streets in my community were paid for by the developer and baked into the cost of the houses. No state or federal funds were involved. The maintenance of the streets is covered by property taxes. This process, by the way, is the one followed by utilities in Texas. The cost of underground utilities, which are a common feature in new housing developments in Texas, are baked into the cost of the house as the difference between the cost of standard overhead service and the cost of the underground service.
As noted fuel taxes, fees, excise taxes, etc. pay for approximately 55 to 60 per cent of the cost of roadways in the United States. The gap is closed with property taxes, sales taxes, excise taxes, transfers from general funds, etc. We the people pay the taxes that go to the general funds and from which the transfers are made to the various highway funds.
Many of the costs that you associate with motoring are soft and difficult to support. But the losses associated with Amtrak, especially the long distance trains, are crystal clear. Amtrak has had more than 40 years to get it right. It has failed miserably.
Numbers crunchers frequently miss an important point regarding human behavior. In many instances people are willing to pay for a more expensive option, i.e. cars and roads vs. trains and public transit, because of the intrinsic value baked into them. As long as they know what they are paying for, that is a good outcome.
Why should we not fund intercity passenger rail on a par with highways, airways, etc. I can think of two reasons. First, we are broke. Second, it is not what the people, at least in my neck of the woods, want. At least not now! They want I-35 to be expanded, which is what is happening. Whether they would change their minds if the true cost of driving is passed through to them as the pump is unknown, but I don't look for Texans to give up their cars in the near future.
V.Payne "Increasing the subsidies for passenger rail so that they are on a par with the perceived subsidies for highways, airways, waterways, etc., is not a good financial strategy." I guess you don't realize that we will actually be spending more to shore up the Interstate road network in the future than we have in the past. Just a plane jane mill and overlay is going for $1.2 million a route mile every 8-10 years and we can't get out of it as the base will turn to ravel if you keep letting trucks run over it at the current axle loads, leading to even greater rebuilding costs. However, now a lot of structures out there are also needing to be rebuilt, the base is needing a full reconstruction, the geometry doesn't work for the level of usage, where are those urban soundwalls, etc.
Subsidies are meant, in part, to correct for various manners of hidden costs. You end up with something like this LEED "Green Building" business, where every manner of feature is incorporated into a residential or commercial building because it is saving the planet, but then you have this beyond complicated system of scoring green-ness in a building to justify uneconomic features, some uneconomic building features being more virtuous than others.
Use wood, yes, because wood is a renewable resource, but tropical wood, gosh no, it leads to chopping down the rainforest, but wait, using tropical wood "sustainably" is a good thing because people will want to protect the rainforest so they can harvest wood, rather than burning it down to plant ground crops?
I am open to the idea that maybe the costs and government direct and indirect subsidies to highway transportation are understated. But I am highly skeptical of LEED and people doing all manner of uneconomical solar panels and what not to get bragging rights to being greener-than-though. Like people in Florida putting up highly government-subsidized solar panels without first doing measures such as ridge-roof vents and better sealing and insulating their A/C duct runs through their attics. The Florida Solar Energy Research Center has data the these low-tech measures are much more cost effective than solar panels, but I guess they are not kewl like solar panels, and your neighbors can't see what you are doing so they can envy you.
If your goal as an individual is indeed to do the Burkean "small thing" to save the planet, what better guide than costs and prices and markets to make decisions. Let's see, the solar panel system costs $40,000, but I can get someone to put in ridge vents and fix the leaky ductwork in my attic for $10,000 and achieve the same net reduction in "my carbon footprint." Money is money, and money spent on the solar panel is not money available for the low-tech low-cost solution. Besides, money is so much better a way of "scoring" a green project. If it is my sovereign desire as a citizen and a consumer "to be green", I pick the solution that gives the same result but for the least money? What a concept! Much better than LEED certification. But government subsidy to solar panels distorts such decisions.
OK, back to the topic at hand, which is disrespecting the highway system and automobile transport. If it is the trucks that are tearing up the Interstates, shouldn't more of the cost of their upkeep that we are not keeping-up-with be imputed if not in fact charged to truckers? And if truck transport is pounding our roads to gravel, would it not be more cost effective to reduce Amtrak trains and routes, so freight can be carried on the railroads more efficiently and hence divert more Interstate traffic to the rails?
As the rail lines are a limited resource, maybe it would be more cost-wise and environmentally beneficial to do whatever we can to strengthen the position of the rail lines to be the freight carriers of choice instead of throwing passenger trains into their mix of operations?
With respect to 8 billion in General Revenue bailing out the HTF (Highway Trust Fund), keep in mind that Federal Interstates (rural and urban) account for 25 percent of highway passenger miles or about 1 trillion passenger miles. 1.4 billion in Amtrak General Revenue money accounts of 6 billion passenger miles. That 8 billion sounds like a huge number, but you are talking about a 30 times bigger (per passenger mile) subsidy going to Amtrak. There is a lot of ground that the HTF can cover in "falling behind revenue projections" before it gets anywhere near Amtrak.
With respect to the elasticity of automobile use with price (mainly of gasoline), sure, people have cut back a great deal in automobile gasoline use. Hypothetically speaking, suppose we cut back from 4.4 trillion auto passenger miles down to an even 4 trillion passenger mile per year. Are you suggesting that there is a market for the 400 billion passenger miles not taken (over 60 Amtraks), and that there is public support to spend 100 billion per year (some multiple of the Federal highway budget) supporting that. I don't think so. I really don't think that every trip cut out for high gas price represents public demand for a train. I have seen our state rail advocacy group breathlessly report the decline in highway usage with high gas prices as an argument to get trains, now! It just doesn't work that way.
Sam1My main point is to eliminate all subsidies or reduce them to the lowest amount possible. The users (highway, airway, waterway, railway) should pay the cost of what they use through the pricing mechanism
I completely agree with you, Sam. But when it comes to roads that is not remotely what we do. What individuals pay for roads has no relationship to the benefits of roads to individuals.
All vehicle owners pay Federal motor fuel tax that goes toward our Interstate highways but some use the interstates a lot and others use them hardly at all. The same is true for state highways; all must pay the motor fuel state tax without regard to actual use of the highways. And property taxes, which fund local and country roads, have no relationship what so ever to actual road usage. Also, as you point out, when excise taxes are not enough government dips into whatever tax is easiest.
If, as you suggest, "the pricing mechanism" were used to fund roads we would put tolls on all roads. We could do this with current intelligence technology. But we all know that isn't about to happen. We are just not going to charge road users based on their actual use of the roads. Some of us will pay extra and others of us will get an extra benefit.
The vast majority of our roads are for rubber tired vehicles but some of our roads are for flanged steel wheeled vehicles. But doesn't it make sense to treat all roads the same? After all we would never fund concrete roads differently than we would fund tarred roads. So why make a special exception for steel rail roads?
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