"Rail doesn't pay its fare share"

[jeaton]

Dave

Something in the range of your 60-25-15 suggestion would seems fair to me.

[Anonymous]

What I am trying to get accross is that before one can use equivolencies to compare various transportation services, we need to first come up with a way to compare right of access costs. We absolutely should not compare Amtrak with highways and airports, instead we should compare Amtrak with bus lines, airlines, cruiselines. We know that only Amtrak is a government sponsored passenger service. All the bus lines, airlines, and cruiselines are privately operated. Somehow, most of these private entities manage to make somewhat of a profit in their operations after they have paid out their user fees.

Even if 10% to 15% of infrastructure funding comes from the U.S. general fund, not from user fees or state/local support, what is the comparison to the current rail passenger situation? Does Amtrak pay it's fully allocated costs for accessing the Class I rail grid, including costs of delays to freight trains? If so, is this money from the general fund or from ticket sales? Since ticket sales is the only comparison to a user fee, is there an equal comparitive scenario to highway and airport user fees?

If we yanked Amtrak's direct subsidy, and instead only allow them to cover 10% to 15% of the break even costs out of the general fund, can Amtrak (or a private rail passenger entity) make it with 60% user fees and the rest state and local funding e.g. the closest parallel to current highway and airport funding?

If it's true that automobiles and buses pay a disporportionately larger share of their allocated highway maintenance costs than trucks, for the sake of equivolency should we also make Amtrak pay a disporportionately larger share of it's track maintenance costs than the freight trains?

The point is, if the playing field were truly level, with each operating company (bus, airline, passenger rail) regardless of transport mode paying the same percentages of cost allocations e.g. 60% user fees, 25% state and local support (outside of user fees), and 15% out of the General Fund, could rail passenger entities compete with airlines and bus lines? Remember, airlines have the advantage of raw speed, bus lines the advantage of ultimate route and station stop flexibility, while passenger rail is kind of in no man's land with neither the speed of air nor the flexibility of bus, thus is limited to the niche markets we've discussed elsewhere e.g. 300 to 500 mile corridors between large markets, long distance tourist type trains.

From now on, we need to reframe the discussion away from the Amtrak vs Highways/Airports to Passenger Rail vs Bus Lines/Airlines (I know, wishful thinking given that politicians, pop media, and pro passenger rail enthusiasts are stuck in the "Amtrak vs HIghways" mentality.)

[Anonymous]

QUOTE: Originally posted by tomtrain

As I understand it, mathematics will tell you a minority interest doesn't stand a chance against a majority.

Is there a way to take rail (passenger or freight) to a different plane?

Is there a way that intercity passenger trains can become an essential small element of marketers' larger actions?

Even a majority won't quite do it. The Senate has equal representation for each state regardless of population. Why should Senators from places like Montana, Wyoming, Idaho care about the NEC or even a national High Speed Rail system? Would they get re-elected if they did? A more cynical view would be to compare the campaign contributions of the airlines, highway lobby, automakers, freight railroads, etc. vs. the Amtrak proponents.

One approach might be to lump all the public transportation 'infrastructure' spending together but that would be even worse for LD high speed rail IMO. Why bother with 25Kv catenary and billion dollar investments when a couple gas turbine engines combined with aeorodynamic lifting devices can have you traveling over existing ROWs at 600 mph. [;)] I suspect that in most cases people just want transporation from point A to B in the least amount of time and inconvenience and that's how the politicians also think about it.

[Anonymous]

As I understand it, mathematics will tell you a minority interest doesn't stand a chance against a majority.

Is there a way to take rail (passenger or freight) to a different plane?

Is there a way that intercity passenger trains can become an essential small element of marketers' larger actions?

[CG9602]

Some salient information regarding this whole thread: All forms of transport are subsidized. Seeing as how our elected representatives in Congress have budgeted money for a rail trafic service (at the behest of taxpayers), one could argue that there are those who want to see a gov't "investment" in passenger rail. According to "Improving Effieciency and Equity in Transportation Finance," published by the Brookings Institute in April 2003, 41 % of the $133 billion spent on US highways came from sources other than gas taxes, tolls & vehicle registrations. The money came from the general fund, bond issues, investment income, other taxes & fees, and property taxes. Most of these funds were at the state and local level, but the federal gov't encourages this inequity by offering generous matching funds (80% Fed/20%State-local), while there are no matching funds available for rail. There is some limited funding available for Commuter Rail, but this fund is nowhere near the size of the highway fund. So, states and metro areas that choose to "invest" in rail have to come up with their own funds - something which can be a daunting challenge, especially in areas where public transit is seen as something non-essential (you know, those places where "everybody drives here. We don't wqant to pay for something that we don't directly benefit from, or that only poor folks use").

[jeaton]

Futermodal

I agree that you can form a truck line and after paying your "access" fee AND your fuel tax "user fee" you can run your trucks up and down the public highways. Now I assume you would be hauling goods either owned by you or somebody else. You could also run your truck over to the nearest rail ramp and with the payment of a fee have the load of goods (yours or somebody elses) hauled to any point on a railroad that has a ramp. That sounds like pretty open access to me. If you want to, you can also own railcars and do approximately the same thing. Just because the railroad insists that they use there own power and people hardly constitutes a closed system.

Semantics? You started it.

If the well documented fact that the user fees paid by airlines and truck lines don't pay the full cost of public resources used for the business, explain to me how this does NOT benefit the owners of those operating entities. A subsidy is a subsidy. I get one for my business. Four months of the year, I drive 90 miles a day to a second office I run. Not only do my user fees not cover my share of the cost of the highways I use, but I can also deduct 37 cents per mile from my income before I figure the income tax I have to pay.

I agree with you that stopping subsides for highways and the publicly owned facilities used by airplanes would cause economic chaos. In fact, given the level of deferral of highway maintenance and the need for additional capacity, I would actually be agreeable to higher user fees (gas tax, or other items paid directly by me), and subsidies from general tax revenues, to which I also contribute.

I agree the the shut down of Amtrak's service would not cause economic chaos, but it would cause some economic ripples, especially around the NEC, and believe it or not those ripples might reach Wisconsin and the Pacific Northwest. As far as "no one would notice", I think only the thickest skulls among us would not notice.

Speaking of the NEC, the infrastructure on that line has by far the greatest need for cash. Probably at least a couple of billion dollars to bring it up to good condition. If that line is to be kept in operation that cash has to come from someplace in the economy, either tickets, other user fees or tax revenue. From a macro economic standpoint, it doesn't make any difference.
I think it is clear that the public in that area needs more transportation capacity. To me, the issue should be that no matter where the money comes from, it should be spent for the projects that buy the most useful capacity for dollar spent. That could be highways, airports or train tracks, I honestly don't know. However, I do think it is reasonable to assume that a shut down of the NEC would slow the movement of trucks and autos operating in that corridor. Unless you disagree with notion that time is money, there is the start of the economic impact.

A couple of more quick points. By accepted accounting practises, Amtrak does have a 60% fairbox recovery. Call it what you may, but I think insignificant is not correct. Amtrak does pay the cost that private railroads incur for operating Amtrak trains. In some cases the existance of the Amtrak trains may preclude the railroads from hauling more profitable business, but to imply that Amtrak gets a free ride is totally off base.

Obviously I take a very liberal view of what government should or should not do. It seems to me that someone with a liberterian or conservative view should be arguing against any and all government subsidies, or at least those that are not paid for by direct user taxes. Some consistancy in the arguements enhance their credibility.

Jay Eaton

[CG9602]

QUOTE: Originally posted by futuremodal

This is what the pro-Amtrak crowd can't seem to get into their thick skulls. You cannot compare highway and airport spending with Amtrak spending, because they are completely different entities. And you cannot compare highway and airport spending with rail infrastructure spending because the rail lines are privately owned while airports and highways are publicly owned. Why is this so hard to understand? Anyone who continues to play the disparate entities is completely off their rocker, and that includes politicians who spout the same lines.

Funny. The anti-Amtrak crowd frequently draws all kinds of comparisons between Amtrak and the airlines and highways without hesitation when they are presenting arguements for getting rid of Amtrak (its unprofitable while airlines are, its a monopoly, etc, etc.) glad to see that someone else here realizes the comparing Amtrak to airlines is the proverbial apples-to-oranges comparison

QUOTE: AMTRAK IS A PUBLICLY OWNED OPERATING COMPANY THAT JUST HAPPENS TO OWN THE NEC BUT OTHERWISE IS ALLOWED TO INTRUDE ONTO PRIVATE PROPERTY OF THE CLASS I RAILROADS. APPARENTLY, THE PRICE OF TICKETS TO RIDE AMTRAK DOES NOT COVER A SIGNIFICANT PORTION OF IT'S COSTS, OTHERWISE THEY WOULDN'T KEEP BEGGING FOR MORE AND MORE SUBSIDIES. IF AMTRAK CHARGED A TICKET PRICE THAT COVERED IT'S OPERATING COSTS, I GUESS NO ONE COULD AFFORD TO RIDE IT. THAT SHOULD TELL YOU SOMETHING!

So, raise the prices. If they don't cover the costs. You have no indication that raising the prices would eliminate the demand for service. there are those who feel that Amtrak is expensive enough, and that the short-haul commuter runs are the most expensive, lowest revenue-passenger-mile services out there, yet no one is suggesting that we should scrap all commuter service.

I also think that many members of the public don't fully percieve the entire spectrum of costs associated with cars, they think of just the cost of gas, without considering how the need to pay for car insurance may mean the recent college grads will have to work a few years more to have enough money to purchase their first homes. Or, the cost of having to wait in traffic jams for hours upon end

QUOTE: The only way you can begin to compare tax expenditures on rail with those on highways and airports is if the nation's rail infrastructure is separated from the operating companies, ala AT&T or ala RailTrak. Then and only then can you start to have legitimate comparisons of what is spent on what.

Good point, and I agree. However, the anti-Amtrak groups needs to realize this in addition to the pro-Amtrak side. The Anti-amtrak side draws comparisons between highways, the airlines, and Amtrak all of the time, and then make these comparisons the basis for their arguements to disband Amtrak

[Anonymous]

QUOTE: Originally posted by bobwilcox

Railroads got relativly few government subsidies in the last century while other modes of transportation got lots of government. However, railroads and canals got large government grants in the nineteenth centurary. The theory was that transportation is fundamental to goverment goals so new modes of transportation are kick started with government money. This has happened in the US and all of the other developed countries. The question is not if you are going to use tax money but where you are going to spend it. Widening I81 or expanding the NS from Chattanogga to Enola?

If I form a trucking company and want to access the Interstate System from New York to Chattanooga, I can uninhibited as long as I've paid my access fees. The Interstate system is open to the public. If I form a rail company and want to access the rail system from New York to Chattanooga, I am blocked because it is a proprietary line. Why in the world would anyone want to spend tax dollars on something inaccessable to the public? There would be no return on that public investment. Most vehicles on the Interstate are there because there is no alternative. Spending public money on NS would only aid NS and it's stockholders, meanwhile I-81 would still be heavily trafficed, thus not even an indirect benefit to the taxpayers.

This is what the pro-Amtrak crowd can't seem to get into their thick skulls. You cannot compare highway and airport spending with Amtrak spending, because they are completely different entities. And you cannot compare highway and airport spending with rail infrastructure spending because the rail lines are privately owned while airports and highways are publicly owned. Why is this so hard to understand? Anyone who continues to play the disparate entities is completely off their rocker, and that includes politicians who spout the same lines.

AMTRAK IS A PUBLICLY OWNED OPERATING COMPANY THAT JUST HAPPENS TO OWN THE NEC BUT OTHERWISE IS ALLOWED TO INTRUDE ONTO PRIVATE PROPERTY OF THE CLASS I RAILROADS. APPARENTLY, THE PRICE OF TICKETS TO RIDE AMTRAK DOES NOT COVER A SIGNIFICANT PORTION OF IT'S COSTS, OTHERWISE THEY WOULDN'T KEEP BEGGING FOR MORE AND MORE SUBSIDIES. IF AMTRAK CHARGED A TICKET PRICE THAT COVERED IT'S OPERATING COSTS, I GUESS NO ONE COULD AFFORD TO RIDE IT. THAT SHOULD TELL YOU SOMETHING!

The only way you can begin to compare tax expenditures on rail with those on highways and airports is if the nation's rail infrastructure is separated from the operating companies, ala AT&T or ala RailTrak. Then and only then can you start to have legitimate comparisons of what is spent on what.

If spending on highways and airports was discontinued, the nation would plunge into economic chaos. If spending was discontinued for Amtrak, no one outside the NEC would even know about it.

[bobwilcox]

Railroads got relativly few government subsidies in the last century while other modes of transportation got lots of government. However, railroads and canals got large government grants in the nineteenth centurary. The theory was that transportation is fundamental to goverment goals so new modes of transportation are kick started with government money. This has happened in the US and all of the other developed countries. The question is not if you are going to use tax money but where you are going to spend it. Widening I81 or expanding the NS from Chattanogga to Enola?

[daveklepper]

Can someone get to the Montana Senator that wants good Amtrak funding with all this information and also suggest to him the possibility of the National Defense argument? May be he can make a difference!

[Modelcar]

...Congrats for the impressive list of moneys spent by government for transportation other than Amtrak, and the sources from where it {data}, was obtained....

[Junctionfan]

$521 million is a bit low for the costs that Amtrak is supposed to control. They should at least raise it to $1 trillion or lower the taxes on the train stations or both before Congress concludes that Amtrak is a money pit.

If the U.S collects fuel tax, maybe some of that could go to Amtrak if it isn't already.

I don't know how much money the Canadian government gives to VIA but then again Canada doen't have as much population density to warrent that much money to cover a major operation cost like Amtrak has.

[Anonymous]

Since the other thread is getting long, this information shows how much money the feds have given rail's competitors over the years.

The feds haven't only stiffed passenger rail. It's funded and maintained freight rail's competitors.

http://www.trainweb.org/moksrail/advocacy/resources/subsidies/transport.htm

--
Much is made of the $30 billion spent on Amtrak over the last 30 years, but in that same period the federal government spent $1.89 TRILLION on air and highway modes, according to the New York Times and Washington Post.

Since 1946, the federal government has poured billions of dollars into airport development. In 1992, Prof. Stephen Paul Dempsey of the University of Denver estimated that the current replacement value of the U.S. commercial airport system-virtually all of it developed with federal grants and tax-free municipal bonds-at $1 trillion.

Not until 1971 did the federal government begin collecting user fees from airline passengers and freight shippers to recoup this investment. In 1988 the Congressional Budget Office found that in spite of user fees paid into the Airport and Airways Trust Fund, the taxpayers still had to transfer $3 billion in subsidies per year to the FAA to maintain its network of more than 400 control towers, 22 air traffic control centers, 1,000 radar-navigation aids, 250 long-range and terminal radar systems and its staff of 55,000 traffic controllers, technicians and bureaucrats.
- James Coston, member, Amtrak Reform Council, 2001.

The purpose of this paper is to document subsidies highway and air modes of transportation have received over the years.
Much is made of the support Amtrak has gotten since its inception in 1971 by critics who overlook the huge amount of funding provided by all levels of government on behalf of the auto and airplane.

As has been noted by well known conservative Paul Weyrich, of the Free Congress Foundation, the current transportation system, dominated by highway and air transportation is by no means a free market outcome. Rather it is the result of massive and sustained government intervention on behalf of these two modes. Indeed, before government became involved on this massive scale, most transit and intercity rail passenger systems were privately owned for-profit enterprises.

About User Fees... they don't pay the bills
User fees only account for about 60% of highway spending by all levels of government. The rest comes from non-users and in 1990, non-highway users subsidized roads at the rate of $18 billion per year. -Source: Highway Statistics 1990,
Tables HF-10 and SMT, Federal Highway Administration

Air passengers did not pay user fees between 1963 and 1971, ironically the year Amtrak began operation. "Airport and airway development costs incurred prior to the assessment of user charges in 1971 have been treated as sunk costs, none of which will have been or will be paid for by air carriers...these sunk costs total $15.8 billion." -Source: Study of Federal Aid to Rail Transportation, USDOT 1977

Railroad passengers paid for airport construction through special tax!
Between 1942 and 1962 a 10% rail ticket tax was levied on railroads as a war measure to discourage unnecessary travel. This tax generated revenues of over $5 Billion, which went into the general revenue fund and ironically, was used in some
cases to build more airports and highways. In today's dollars, that probably would amount to about $100 billion and one wonders what would have happened if that money had been invested in rail service after the war. By the time, the tax was lifted, the passenger train was already on the ropes. -Source: report by USDOT Secretary William Coleman, 1977

Air passengers also paid a federal passenger tax, also as a war emergency measure, but the government was busily investing in air facilities at five times the rate at which taxes were being collected. -Source: Study of Federal Aid to Rail
Transportation, USDOT, Jan 1977

Airlines don't even pay HALF of FAA cost
Between 1980-1989, total spending by the Federal Aviation Administration (FAA) was $54.9 billion. Of that amount, less that half, 45.1% came from user charges. The rest, 54.9% came from non-users through the general revenue fund. -Source: Office of Management and Budget

Federal support for transit AWOL
Federal support for transit and intercity rail is relatively recent: 1964 for transit and 1971 for intercity rail. By contrast, the federal government has supported road and waterway construction almost from Revolutionary times and air since the 1920's. It was not until 1973 that a portion of the federal gas tax could be used for transit. It still is off-limits for intercity rail. Various sources

U.S. has a Third-World rail transportation system
According to a study by the International Railway Journal, the United States ranks between Bolivia and Turkey in mainline railroad spending per capita at $1.64. The average is $21.85, with a high of $228.29 for Switzerland and a low of $.29 for the Philippines.

Between 1971 and 1994, capital spending for Amtrak has never exceeded $220 million in any year...about the cost of a mile or two of urban freeway. On that, Amtrak is supposed to make the investments to become profitable. -Source: The Amtrak Story, by Frank Wilner

Years ago, transit and intercity railroads were privately operated for-profit enterprises. This changed when all levels of government began subsidizing highway and airport construction, which ultimately led to the demise of all privately run service. The irony is that the government has had to step in to preserve what was left of these services.

The paving of America...
The federal involvement with highways goes back to 1905, when the Bureau of Public Roads was created. In 1916, President Wilson signed the Federal Aid Road Act, which dedicated $5 million to help states build new roads. This marked the beginning of federal revenue sharing with states for road construction. In 1921, the US Congress set a goal of linking every county seat in the nation with smooth surface roads. -Source: The Amtrak Story, Frank Wilner

Between 1958 and 1971, the year of Amtrak's creation, the federal government spent more than $50 billion on highways and at the same time, the government subsidy to intercity bus operators grew to $50 million annually. -Source: USDOT, "Study of
Federal aid to Transportation" and R.L. Banks and Associates, "Is Subsidy Unique to Amtrak?"


There he goes again...
When the Reagan Administration claimed that each rail passenger required a $35 subsidy, Amtrak President Graham Claytor countered that air passengers were subsidized at $42 each, including $9 for the air traffic control system. -Source: US
News and World Report, April 29, 1985

If the airlines had to pay for the cost of the at traffic control system, as Amtrak now pays for the upkeep of the Northeast Corridor, they would soon be out of business. In 1989, it cost the federal government $3 billion to operate the system vs. the combined net profit of $1 billion for the airline industry. -Source: "Supertains: Solutions to America's Transportation Gridlock, Joe Vranich

Feds build airports but tax train stations to death...
Washington's National Airport was built with $36 million in federal funds and between 1941 and 1957 had cost $4 million to operate; the airport paid no taxes.

At the same time, Washington Union Station was valued at $32 million and paid more than $6.9 million in taxes
-Source: Trains Magazine

The Pennsylvania Railroad modernized its Pittsburgh station in the 1950's only to see the taxes increased and the money spent to improve the Greater Pittsburgh International Airport.
In 1955 alone, railroads paid $92 million in taxes on passenger related facilities. -Source: "Supertains: Solutions to America's Transportation Gridlock."

The Essential Air Service Program subsidizes air service to small cities, which would not otherwise be served by air carriers. This amounted to $25 million in 1989 for a small trickle of customers. For example, at Manitowoc, Wisconsin when an average passenger boards a flight, the fare is $89, but the subsidy is $515! This city is only 39 miles from Green Bay, where more service is readily available. -Source: Supertrains