Amtrack Subsidies

[Anonymous]

I would take the congress critters' and Mineta's complaints about the size of Amtrack's subsidies a lot more seriously if they were also wanting to cut off all of the direct and indirect subsidies to the airlines, trucking companies, and barge systems in the U.S. Compared to the money spent on highway funding, Amtrack is a drop in the bucket.

I know that I am preaching to the choir, but I just had to vent a little bit.

[Paul Milenkovic]

The problem with Amtrak subsidies is not the size, it is the rate.

Dispute my numbers, but if you do, suggest better numbers. If we believe government figures, and yes, I know the government "lies" about a lot of things, and Amtrak LD train takes in 10 cents a mile in fares and requires 20 cents a passenger mile in subsidy.

The highways gets billions and billions, but assume for sake of argument that half of the highway dollar is gas tax and the rest is matched by general revenues in one form or another. For a 25 MPG car, 50 cents/gallon gas tax, that means that highway travel is subsidized at a rate of 2 cents a mile -- a factor of 10 difference.

URPA (a "think tank") is making the argument that the Amtrak LD trains are subsidized at a much lower rate than 20 cents a passenger mile and may even break even on their direct costs, if we were to get a handle on what they are. They believe that the big money pit is the Northeast Corridor which is cross-subsidizing a lot of commuter operations -- the NEC is big bucks expensive because Amtrak is running its own railroad tracks (and electric wires). URPA argues that NEC costs are passed off on the LD trains in the form of various forms of overhead and cost allocations.

If LD trains are indeed breaking even by some measure of direct costs, I think it is perfectly reasonable to fund the overhead with subsidy and add more trains because you will be getting a good deal to add more trains. If the direct cost subsidy is really 20 cents/mile, we really need to rethink the LD trains big time.

OK, these numbers are off the top of my head, but the Hiawatha trains bring in something like 9 million dollars in fares, they get 4 million from Wisconsin and Illinois, Amtrak is raising that to 5 million where Wisconsin will have to kick in the extra million because Illinois won't kick in anymore, and Amtrak is claiming they are subsidizing it to another 7 million on top of that, which means for every $20 train ticket, someone is kicking in another $26 to pay for the ride.

Does it really, really cost 21 million dollars (a year) to have two sets of a P42, 4 Horizon coaches, and a cab-baggage car shuttling back between Chicago and Milwaukee with one locomotive driver and one or two trainmen? My guess is that the CP is getting at most a million or two for the trackage rights.

Before you put up your Mineta dart board, one of the big problems is that if the states want to fund their own service but have Amtrak run it, they have to take Amtrak's word on the costs. At least if you are building a highway with Federal cost share, you get to have your own local people ripping you off.

California is going their own way by having Amtrak play less of a role an by buying their own train cars and locomotives and paying for their own track improvements. They are claiming about a 50 percent cost recovery, and a subsidy at that rate may be justified if they can avoid building expensive urban freeway lanes. At present, they will have to carry a lot more people to justify the freeway congestion-relief argument, but they are projecting and planning for traffic growth. California also throws out the 50 percent cost recovery number (typical of commuter rail subsidies these days) without giving a breakdown of their direct operating costs and budgeting system for assigning capital costs.

[conrailman]

The Highways are getting 35 Billion this year and the Airlines are getting 15 or 16 Billion and poor old Amtrak maybe getting 1.2 to 1.5 Billion this year. Yes, the Northeast Corridor is biggest Money Pit Amtrak Has. To get Corridor into A shape Again Amtrak needs about 30 Billion Dollars.[2c]

[CG9602]

Paul: you raise some highly salien points regarding the way Amtrak distributes costs. URPA gave me the impression the Amtrak apportions costs on a per route basis, not per train. This makes the per-train cost of the LD western trains appear to lose a lot more money per passenger-mile than the NEC.

Good point.

[daveklepper]

Again, don't forget the giant subsidy to highway transportation from LAND USE!

[PNWRMNM]

Dont forget that the freight railroads are involuntarily subsidizing amtrack with below market access fees and no compenstation for ATK caused freight train delays which are probably hundreds of thousands of dollars per DAY.

Mac