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Excellent article on Amtrak's Subsidy

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Posted by John WR on Thursday, January 24, 2013 6:28 PM

blue streak 1
The tax institute ( whose political leaning I have no idea ) has issue a statement that AMTRAK receives less subsidity than the auto public. 

The article itself seems a pretty straight forward comparison of costs.  Mainly, it looks at state and local funding of transportation.  Of course property taxes pay a large part of the state and local part and are unrelated to road use.  I did not see any reference to Amtrak.  

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Posted by schlimm on Thursday, January 24, 2013 5:07 PM

I didn't see that in the link, as it only mentions mass transit, not Amtrak.  I did note that even adding in the federal gas  tax, highways nationally are only having ~50% of expenses covered by "user fees" hence the need to raise gasoline taxes. 

The Tax Foundation is a non-partisan tax research group based in Washington, D.C.  As it disputes some findings by a  "left-leaning" group, it's pretty clear it is not a liberal group..

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Posted by blue streak 1 on Thursday, January 24, 2013 3:29 PM

The tax institute ( whose political leaning I have no idea ) has issue a statement that AMTRAK receives less subsidity than the auto public.  I have no way to verify their figures so if anyone can confirm or refute please do so. 

http://taxfoundation.org/article/gasoline-taxes-and-tolls-pay-only-third-state-local-road-spending

 

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Posted by cx500 on Tuesday, January 22, 2013 11:13 PM

The Rocky Mountaineer is run purely as a land cruise.  Fares start at around $1,000 for a one way trip between Calgary/Banff and Vancouver, a distance of roughy 800 miles.  That does include hotel accommodation at Kamloops, where it stops overnight.  You can only book for the whole trip; there is no service to any intermediate towns (not even Kamloops).  And if you miss the train in early October, it will be a long cold wait for the next train in May of the following year.

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Posted by John WR on Tuesday, January 22, 2013 10:47 AM

ontheBNSF
But the private sector is already planning to doing it.

The Vegas X Train is a special purpose operation to connect the Los Angeles area to casinos.  I suspect it is being bankrolled by some of the casinos.  Today the casino industry is a lot more competitive than it was when Las Vegas began and the hope is that this fancy train will lure customers to the gambling tables.  Perhaps it will succeed.  

Atlantic City casinos tried the same idea with ACES, the Atlantic City Casino Express from New York to AC.  The idea failed and ACES no longer runs.  Some say the route was the problem.  ACES ran from New York  to Philadelphia and then to AC.  Critics say it should have gone straight across New Jersey, a shorter route.  

Again, whether the Vegas X Train succeeds or fails I don't see it as having much to do with Amtrak.

  

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Posted by John WR on Tuesday, January 22, 2013 10:34 AM

ontheBNSF
But the private sector is already planning to doing it.

The Rocky Mountaineer is a Canadian train.  I don't see that it has implications for Amtrak.  

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Posted by John WR on Tuesday, January 22, 2013 10:29 AM

ontheBNSF
But the private sector is already planning to doing it.

All Aboard Florida is a private effort within one state to provide service over a 260 mile corridor.  It parallels roadways which are now congested and most likely will become more congested in the future.  At present it seems to be in the planning states.  Certainly it has possibilities but I don't see how it can be compared to Amtrak which is a national system.  

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Posted by oltmannd on Tuesday, January 22, 2013 6:19 AM

ontheBNSF

But the private sector is already planning to doing it. These organizations aren't receiving government so obviously their is a profit to be made.

http://www.allaboardflorida.com/

www.texascentral.com/

www.rockymountaineer.com

http://www.vegasxtrain.com/

 One last point about the subsidies, regulations, and general visible hand government were not in this area there would be more incentive to create profitable and private passenger rail and transit that is what my point is. Cheers

The FEC initiative is the most interesting - since it is corridor service and a source of money.  But, I can't figure out how they can make the number work.  They have to spend $1.5B to get going and will only have total revenue of $150M per year.  If they carried a third of the $150 to the bottom line, that leaves a 30 year simple payback period and no profit.

The Las Vegas train has some funding but will operate in a much narrower niche - sort of like the Reno Fun train.  The Rocky Mountaineer is already operating in the "tour train" niche.  It really isn't general transportation   It is an excursion ride.  The Texas Central is a pipe dream.  They have no money.

One can also make the argument that subsidized transport creates an overall higher level of economic activity than in the unsubsidized case.  That transport is an economic catalyst, if you will.  The downside is the subsidized case may create less efficient construction and/or operation.

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Posted by schlimm on Monday, January 21, 2013 10:10 PM

Texas central says "within 10 years' so maybe 2023?  No details whatever.  Using an existing route?  Totally new is likely given their projected speed.  Financing?   I wouldn't bet on it.  VHSR routes have all been government built and then in some cases, run by a private operator.

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Posted by John WR on Monday, January 21, 2013 10:02 PM

ontheBNSF
But the private sector is already planning to doing it. These organizations aren't receiving government so obviously their is a profit to be made.

If you can show me that I am wrong and we can have a national passenger rail network run by private companies nobody will be happier than I will be.  However, I remain skeptical to say the least.  

I looked up Texas Central Railway.  They hope to be in operation by 2020.  

It is a little late to look at the others.  

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Posted by schlimm on Monday, January 21, 2013 9:26 PM

So there we have the two polar opposites. 1. The idea that we can have a real national passenger rail system called Amtrak II, as opposed to the rather feeble system we have now.  or 2. Leave it all to some private operators.

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Posted by ontheBNSF on Monday, January 21, 2013 9:13 PM

John WR

Schlimm,  

Perhaps we should not have Amtrak at all.  Perhaps we should just let all rail passenger service except, perhaps, for the Northeast Corridor, die out as it is not worth what we spend on it.  I can certainly accept an argument that we should.  

What we should not do is to delude ourselves into believing that if Amtrak stopped somehow the private sector would provide rail passenger service.  The private railroads lost money on passenger service for many, many years and found they were unable to get rid of it.  Why in the world would any sane corporation choose to run that risk again now that they are finally rid of it?  We might possibly get a few short routes but we would never ever get a national system.  

Rationality for a private corporation means making a profit.  But rationality for a government agency, be it military or civilian, means carrying out its mission.  Amtrak's mission is to provide a national passenger rail system.  As long as Amtrak exists we have to expect that it will do that.  

There is an alternative but that alternative is no national passenger rail system at all.  We need to choose one of the other.  

John

But the private sector is already planning to doing it. These organizations aren't receiving government so obviously their is a profit to be made.

http://www.allaboardflorida.com/

www.texascentral.com/

www.rockymountaineer.com

http://www.vegasxtrain.com/

 One last point about the subsidies, regulations, and general visible hand government were not in this area there would be more incentive to create profitable and private passenger rail and transit that is what my point is. Cheers

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Posted by John WR on Monday, January 21, 2013 8:45 PM

Schlimm,  

Perhaps we should not have Amtrak at all.  Perhaps we should just let all rail passenger service except, perhaps, for the Northeast Corridor, die out as it is not worth what we spend on it.  I can certainly accept an argument that we should.  

What we should not do is to delude ourselves into believing that if Amtrak stopped somehow the private sector would provide rail passenger service.  The private railroads lost money on passenger service for many, many years and found they were unable to get rid of it.  Why in the world would any sane corporation choose to run that risk again now that they are finally rid of it?  We might possibly get a few short routes but we would never ever get a national system.  

Rationality for a private corporation means making a profit.  But rationality for a government agency, be it military or civilian, means carrying out its mission.  Amtrak's mission is to provide a national passenger rail system.  As long as Amtrak exists we have to expect that it will do that.  

There is an alternative but that alternative is no national passenger rail system at all.  We need to choose one of the other.  

John

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Posted by CMStPnP on Monday, January 21, 2013 6:33 PM

oltmannd
Works only if you can get the debate off of $15 hamburgers and $200 per person subsidies for passengers on the Sunset.

I had one of those hamburgers on the Texas Eagle.    Have to tell you it was pretty *** good for being microwaved AND it was Black Angus. Big Smile

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Posted by oltmannd on Monday, January 21, 2013 2:19 PM

schlimm

If Amtrak did not have to haggle for funding each year with Congress and engage in "pork" in the form of  "running trains" [I use the term in the pejorative sense the way henry6 does] in the districts and states of key congressmen and senators, maybe it would do more things in a more rational way.  But barring a change in its funding, that won't happen anytime soon.

Using the example of the Sunset, there is a Rep. from NM on the commerce committee with 22 years seniority; another from AZ; another from AZ on the Appropriations committee; from TX three on Commerce, four on  the Appropriations committee,  two on transportation and infrastructure.  And that's not looking at the senate or Louisiana or California.   That is a lot of clout, or conversely, a lot of cuts in the Amtrak budget if toes are stepped on.

There are lots and lots of things Amtrak could be working on to make their overall results better, even if they did have to run a Sunset 3 days a week.

Like Don Phillips said in his last column -what's taking them so long to do a re-org?  (for example)

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Posted by schlimm on Monday, January 21, 2013 1:39 PM

If Amtrak did not have to haggle for funding each year with Congress and engage in "pork" in the form of  "running trains" [I use the term in the pejorative sense the way henry6 does] in the districts and states of key congressmen and senators, maybe it would do more things in a more rational way.  But barring a change in its funding, that won't happen anytime soon.

Using the example of the Sunset, there is a Rep. from NM on the commerce committee with 22 years seniority; another from AZ; another from AZ on the Appropriations committee; from TX three on Commerce, four on  the Appropriations committee,  two on transportation and infrastructure.  And that's not looking at the senate or Louisiana or California.   That is a lot of clout, or conversely, a lot of cuts in the Amtrak budget if toes are stepped on.

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Posted by oltmannd on Monday, January 21, 2013 11:37 AM

schlimm

Paul Milenkovic
So I am just saying that we should advocate for spending the Amtrak dollar where it provides (good) train service for the most people, to over time build up the popularity of trains.

I couldn't agree more.  Endless debates about why trolley lines were torn up, interurban lines built over, who paid for the Interstates or where did the money come from to build an air transport system are fruitless. The question should be what do we need to do now, if anything,  for efficient transportation for the next 50 years?   I also think we need to distinguish between investments in needed infrastructure, whether for roads, rail, waterways or air, versus operating subsidies and judge those by the efficiency of the services subsidized..

Works only if you can get the debate off of $15 hamburgers and $200 per person subsidies for passengers on the Sunset.  There is only one outfit that has control over that - Amtrak.  So, they need to fix their own house up if they want to make their case politically.  Otherwise the only ones pushing for more "Amtrak" will be the "all trains are good" crowd.

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Posted by schlimm on Monday, January 21, 2013 11:08 AM

Paul Milenkovic
So I am just saying that we should advocate for spending the Amtrak dollar where it provides (good) train service for the most people, to over time build up the popularity of trains.

I couldn't agree more.  Endless debates about why trolley lines were torn up, interurban lines built over, who paid for the Interstates or where did the money come from to build an air transport system are fruitless. The question should be what do we need to do now, if anything,  for efficient transportation for the next 50 years?   I also think we need to distinguish between investments in needed infrastructure, whether for roads, rail, waterways or air, versus operating subsidies and judge those by the efficiency of the services subsidized..

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Posted by Paul Milenkovic on Monday, January 21, 2013 9:51 AM

oltmannd

ontheBNSF
Sorry if I caused conflict but I simply wanted to point out the rigged system and how government destroyed rail in the US.

The "rigged system" of auto ownership, highway building and suburban living was wildly popular and pretty much universally acclaimed in the 1950s and 60s. No one but us railfans was yelling, "we was robbed!" It wasn't until the middle 1970s that the unintended consequences of these policies really start to hit home.

There was no great outcry over passenger trains going away or the flight of people to the suburbs or trolley routes converting to bus.  This was "progress" back when progress meant "out with the old, in with the new", a space program, modern architecture, glass and chrome, aluminum Christmas trees and the Jetsons. 

So, if the system was rigged, it was with the full backing of public.  It was very popular!

Maybe my bean-counting emphasis on Amtrak stretching its subsidy dollar is misplaced.  So too are the "wee wuz robbed" discussions of unlevel playing fields, the distortions of subsidies, the hidden subsidies of cars and highways, and how much nicer they have it in Europe and East Asia.

People are willing to dig into their pockets to pay for sports stadiums, mainly to keep the local professional sports team from moving, with the idea that there is an economic multiplier effect of visitors occupying hotel rooms and eating high calorie meals at local restaurants, with the tax money largely helping to build luxury suites for the lofty sports-watching elites, with those elites being alleged captains of industry who do more deal making than game watching in those suites, which has an economic trickle-down effect helping everyone? 

Whether sports stadiums have all of that goodness or if it is all made up, does anyone know?  But they are very popular civic projects.

So planes, trains, or automobiles, there is no Great Anti-train Conspiracy, it all reduces to political popularity.  And advocating for trains is in essence a (political) marketing campaign. 

Consider the milk marketing campaign, which promotes milk drinking for putative health benefits (although PETA vehemently disagrees).  Do the dairy farmers have a Web site like this where dishing on PETA, dumping on the Coca Cola Corporation is the stock-in-trade, and questioning the Dairy Subsidy is considered social bad form?

So I am just saying that we should advocate for spending the Amtrak dollar where it provides (good) train service for the most people, to over time build up the popularity of trains.

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 Monday, January 21, 2013 6:27 AM

ontheBNSF
Sorry if I caused conflict but I simply wanted to point out the rigged system and how government destroyed rail in the US.

The "rigged system" of auto ownership, highway building and suburban living was wildly popular and pretty much universally acclaimed in the 1950s and 60s. No one but us railfans was yelling, "we was robbed!" It wasn't until the middle 1970s that the unintended consequences of these policies really start to hit home.

There was no great outcry over passenger trains going away or the flight of people to the suburbs or trolley routes converting to bus.  This was "progress" back when progress meant "out with the old, in with the new", a space program, modern architecture, glass and chrome, aluminum Christmas trees and the Jetsons. 

So, if the system was rigged, it was with the full backing of public.  It was very popular!

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

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Posted by oltmannd on Monday, January 21, 2013 6:16 AM

Paul Milenkovic

You had better watch it . . . there are strict rules around here that Transit gets discussed only in the Transit Forum.

Oops, I am engaging in thinly veiled sarcasm.  That is not allowed here anymore either.

Seriously, now, your remarks based on your life experience and what you had looked into are well taken.  There are reasoned arguments to be made without demanding that people leave the Forum.

Heretics have to leave the forum, too.  Sorry. Smile  ...unless you end your statements with a smiley. Smile

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

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Posted by ontheBNSF on Monday, January 21, 2013 5:03 AM

daveklepper

The law suite was not about conversion of streetcars to buses.   It was about restricting the NCL and directly owned lines (Chicago Motor Coach, Fifth Avenue Coach, and New York Omnibus) to buying only GM buses, and cutting Ford, White, and Mack out of the business.   And the fin vvgce was trivial.

There was no conspiracy on the conversions.   They were simply soundh in business decisions.   Like the much lamented scrapping of the needed North Shore (not related to GM, but the Susnquhanna investment company).   GM was not in the business to subsidize urban transportation to coax people out of cars.    Everything was done openly and above board.   And it was not just that the transit systems began loosing money, there was also the consent decree that forced power companies to sell anything relatinyg to the transportation a business, a downright stupid decision (in my opinion) by the Justice Department on the basis of anti-monopoly.    This was a sort of conspiracy   -----by the oil companies and highway lobby in general, not just GM by any means.

 

Sorry if I caused conflict but I simply wanted to point out the rigged system and how government destroyed rail in the US. As for monopolies they aren't inherently bad and real monopoly power is difficult to obtain. I don't get how that is a conspiracy theory the streetcar scandal was fueled by government. A conspiracy implies secret but this happened out in the open.  Government regulations do distort the actual cost of something. To deny the visible hand of government in our economy is to deny reality. As for what my ideology is it really doesn't matter too much because labels divide people unnecessarily, people fall too much into the habit of deqling with ideologies rather than issue itself.

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Posted by daveklepper on Sunday, January 20, 2013 10:18 AM

The law suite was not about conversion of streetcars to buses.   It was about restricting the NCL and directly owned lines (Chicago Motor Coach, Fifth Avenue Coach, and New York Omnibus) to buying only GM buses, and cutting Ford, White, and Mack out of the business.   And the fine was trivial.

There was no conspiracy on the conversions.   They were simply sound business decisions.   Like the much lamented scrapping of the needed North Shore (not related to GM, but the Susquhanna investment company).   GM was not in the business to subsidize urban transportation to coax people out of cars.    Everything was done openly and above board.   And it was not just that the transit systems began loosing money, there was also the consent decree that forced power companies to sell anything relating to the transportation a business, a downright stupid decision (in my opinion) by the Justice Department on the basis of anti-monopoly.    This was a sort of conspiracy   -----by the oil companies and highway lobby in general, not just GM by any means.

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Posted by Paul Milenkovic on Sunday, January 20, 2013 10:09 AM

schlimm

Paul M:  This forum is about intercity passenger trains, not transit.  And the poster seems to continually weave politics into almost every post, even though political discussions are supposed to be off limits.  Why is that so difficult for you that you have to resume your thinly-veiled sarcasm again?

CMStPnP

Long ago I worked near the top of General Motors and as a railfan I dug into the issue.    There is no truth to the rumors there was a conspiracy to take out the streetcar lines.   The so called National City Lines Conspiracy.    It's bunk spread by trial lawyers and railfans.    GM settled on a number of the lawsuits because of it's policy to avoid prolonged litigation when the settlement is small enough to end the court cases vs dragging it out for 10-20 years in court and paying more.    It was a simple business decision on GM's part to settle these cases.     Had it been a real admission of guilt you would have seen damages awarded in the multiple Billions vs a paltry few hundred million.

GM's arguing stance at the time was correct.    Most of the transit lines were on the verge of financial collapse, NEW REGULATIONS by the Feds in the area of signaling (very few of the lines had signaling),  converged over time  to force the lines out of business as they did not have the capital to comply with the regulations.      It was a logical choice to replace them with buses.       The Federal requirement for signalling was the death nail in the coffin for the Milwaukee Electric "Speedball" Lines.     It was issued by decree following a deadly TMERL crash near what was then County Stadium (now Miller Park).

You had better watch it . . . there are strict rules around here that Transit gets discussed only in the Transit Forum.

Oops, I am engaging in thinly veiled sarcasm.  That is not allowed here anymore either.

Seriously, now, your remarks based on your life experience and what you had looked into are well taken.  There are reasoned arguments to be made without demanding that people leave the Forum.

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 CMStPnP on Sunday, January 20, 2013 9:37 AM

Long ago I worked near the top of General Motors and as a railfan I dug into the issue.    There is no truth to the rumors there was a conspiracy to take out the streetcar lines.   The so called National City Lines Conspiracy.    It's bunk spread by trial lawyers and railfans.    GM settled on a number of the lawsuits because of it's policy to avoid prolonged litigation when the settlement is small enough to end the court cases vs dragging it out for 10-20 years in court and paying more.    It was a simple business decision on GM's part to settle these cases.     Had it been a real admission of guilt you would have seen damages awarded in the multiple Billions vs a paltry few hundred million.

GM's arguing stance at the time was correct.    Most of the transit lines were on the verge of financial collapse, NEW REGULATIONS by the Feds in the area of signaling (very few of the lines had signaling),  converged over time  to force the lines out of business as they did not have the capital to comply with the regulations.      It was a logical choice to replace them with buses.       The Federal requirement for signalling was the death nail in the coffin for the Milwaukee Electric "Speedball" Lines.     It was issued by decree following a deadly TMERL crash near what was then County Stadium (now Miller Park).

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Posted by oltmannd on Saturday, January 19, 2013 10:45 PM

John WR

oltmannd
The simplest answer is usually correct.  

I agree.  Completely.

Works for 9/11.  Works for buses replacing trolleys, steam replacing diesel.

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Posted by John WR on Saturday, January 19, 2013 11:45 AM

oltmannd
The simplest answer is usually correct.  

I agree.  Completely.

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Posted by schlimm on Saturday, January 19, 2013 8:08 AM

Paul M:  This forum is about intercity passenger trains, not transit.  And the poster seems to continually weave politics into almost every post, even though political discussions are supposed to be off limits.  Why is that so difficult for you that you have to resume your thinly-veiled sarcasm again?

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Posted by oltmannd on Friday, January 18, 2013 10:36 PM

John WR
I am reluctant to believe in conspiracies too.  They rarely happen.  But conspiracies are not impossible.  Did you ever hear of the conspiracy to fly a couple of airplanes into the World Trade Center?

The simplest answer is usually correct.  

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

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