Bush Budget to Scrap Subsidy for Amtrak

[Anonymous]

QUOTE: Originally posted by oltmannd

So, since the fed gas tax is collected on each gallon and then redistributed to the states to use for projects, it is even less a "user fee" than I thought.

States like NJ with many gallons of gas purchased, but with few federally funded highway projects are subsidizing states like Kansas, with fewer gallons purchased but massive Interstate reconstruction going on. Those NJ "users" are paying for those Kansas "consumers".

Also, down here in GA, the state gas tax only covers about 50% of the annual state highway budget - the rest comes from income & sales tax revenue - hardly a "user fee".

If a gas tax is an efficient way to fund and maintain roads, then so be it. But there is nothing sacred, true or even fair about money collected from one mode only being used for that mode. If the use is a true "public good" then the funding source should be irrelevant. Revenue source and expenditures can be completely uncoupled. The only issues would be the "fairness" of contribution and "public good" of the spending.

oltmannd, I don't follow your logic. You say that a tax collected from one mode and returned for use for that mode is not "fair". You are certainly entitled to your opinion, but you'r completely off base when analyzing the attributes of fairness. User fees are the fairest form of taxation there is because the payer is also the primaray beneficiary. "Progressive" income taxation is the most unfair, because it forces one segment of society to pay most of the benefits of another segment with little guarantee of a beneficial return. Most general taxes (flat taxes, sales taxes, property taxes) lie somewhere in between, with each payer recieving at least a portion of a benefit in return.

If our nation ever takes an active course in tax reform, the first thing to do would be to identify those sectors in which a user fee can be implemented. The "pay as you go" system is the most accountable form for determining if people are willing to pay for things such as passenger rail services.

[oltmannd]

So, since the fed gas tax is collected on each gallon and then redistributed to the states to use for projects, it is even less a "user fee" than I thought.

States like NJ with many gallons of gas purchased, but with few federally funded highway projects are subsidizing states like Kansas, with fewer gallons purchased but massive Interstate reconstruction going on. Those NJ "users" are paying for those Kansas "consumers".

Also, down here in GA, the state gas tax only covers about 50% of the annual state highway budget - the rest comes from income & sales tax revenue - hardly a "user fee".

If a gas tax is an efficient way to fund and maintain roads, then so be it. But there is nothing sacred, true or even fair about money collected from one mode only being used for that mode. If the use is a true "public good" then the funding source should be irrelevant. Revenue source and expenditures can be completely uncoupled. The only issues would be the "fairness" of contribution and "public good" of the spending.

[DSchmitt]

QUOTE: Originally posted by oltmannd

QUOTE: Originally posted by DSchmitt

QUOTE: Originally posted by conrailman

To: Osogrande.
Amtrak Carried 25 Million People last Year, Amtrak is not Dead at all. If Congress gave Amtrak money like the Highway and Airlines 35 Billion for Highways and 15 Billion for Airlines this Year 2005. Amtrak would be in Great Shape. [:)][:D]

Congress does not "give" 35 billion to highways. The Federal government takes money from highway users and redistributes it. The federal highway budget is 100% user fee financed. Most of the highway user fees are spent on highways but some goes to other modes including rail.

However, a subsidy for one mode does not justify a subsidy for another mode. If it did perhaps we should subsidize roller skates.[:o)]

If something is user fee supported, shouldn't it be able to make it as a free enterprise?

What of all the fed gas tax collected on gas that is not burned on fed highways? Is that truly a "user fee"?

Isn't the gas tax just a tax like my property tax?

Should there be a relationship of some sort between where tax is collected and where it's spent?

WWI was paid for with an income tax - what's the relationship?

Where I live, a sales tax is used to build new schools. A property tax is used to pay teachers. A lottery is used to pay for colleges. I don't see any relationship between source and sink in any of these.

I just want to get the most for what I pay in taxes. Which hand Uncle Sam uses to collect it and which pocket he stores it in matter not a bit to me.

There are no Federal owned highways in the public highway system. The highways, roads and streets are owned by the states and local government. The Federal government collects federal user fees and re-distributes the money to the states to be used for highway, road and street projects.

A small amount of the revenue does come from equipment not used on the highway system (highways, streets, and roads) but fuel used in off-road equipment ( farm tractors, contractors equipment, railroad locomotives, etc) is exempt from the highway user fees.

A small amount of the revenue also comes from fuel burned while on on private roads, but there are very few vehicle users who never use a public highway.

There actually are some Federally owned roads. They are in national parks, national forests, national monuments, and military bases. Although owned buy the govermment, they are technically private roads not public highways. They are usually not funded from the budget of the owning agency, not highway taxes.

The Federal Highway taxes are not just another tax they are user fees specifically designated for transportation funding.

"What Is the Highway Trust Fund?
The Highway Trust Fund (HTF) was created by the Highway Revenue Act of 1956 (Pub. L. 84-627), primarily to ensure a dependable source of financing for the National System of Interstate and Defense Highways and also as the source of funding for the remainder of the Federal-aid Highway Program. Prior to the creation of the HTF, federal financial assistance to support highway programs came from the General Fund of the U.S. Treasury. While federal motor fuel and motor vehicle taxes did exist before the creation of the HTF, the receipts were directed to the General Fund, and there was no relationship between the receipts from these taxes and federal funding for highways. The Highway Revenue Act authorized that revenues from certain highway-user taxes could be credited to the HTF to finance a greatly expanded highway program enacted in the Federal-Aid Highway Act of 1956. In the original Highway Revenue Act of 1956, the crediting of user taxes to the HTF was set to expire at the end of fiscal year 1972, but since then, legislation has been passed to extend the imposition of the taxes and their transfer to the HTF through September 30, 2005.
Like other federal trust funds, the HTF is a financing mechanism established by law to account for tax receipts that are collected by the federal government and are dedicated or "earmarked" for expenditure on special purposes. Originally, the HTF focused solely on highways, but later Congress determined that a portion of the revenues from highway-user taxes dedicated to the HTF should be used to fund transit needs, resulting in a 5 cent increase in the gas tax (to 9 cents), of which 1 cent would go towards transit, to help fund the new account. As a result, the Mass Transit Account was created within the HTF effective April 1, 1983. Although never formally described and named, the portion of the Highway Trust Fund outside the Mass Transit Account has come to be called the Highway Account and receives all HTF receipts not specifically designated for the Mass Transit Account.
How is the HTF funded?
Tax revenues directed to the HTF are derived from excise taxes on highway motor fuel and truck-related taxes on truck tires, sales of trucks and trailers, and heavy vehicle use. The Mass Transit Account receives a portion of the motor fuel taxes, usually 2.86 cents per gallon, as does the Leaking Underground Storage Tank Trust Fund, usually 0.1 cent per gallon. The General Fund receives 2.5 cents per gallon of the tax on gasohol and some other alcohol fuels plus an additional 0.6 cent per gallon for fuels that are at least 10 percent ethanol. The Highway Account receives the remaining portion of the fuel tax proceeds.
How are the Taxes Collected?
Most excise taxes credited to the trust fund are not collected directly by the federal government from the consumer. They are, instead, paid to the Internal Revenue Service by the producer or importer of the taxable product (except for the tax on trucks and trailers, which is paid by the retailer, and for the heavy vehicle use tax, which is paid by the heavy vehicle owner.). Hence, the 18.3-cent federal gasoline tax and the 24.3-cent diesel tax included in the price at the pump are, in effect, a reimbursement to the producers and distributors for taxes they have already paid. "

This is the link to the Federal site where more up to date info may be found.

http://www.fhwa.dot.gov/

[oltmannd]

QUOTE: Originally posted by DSchmitt

QUOTE: Originally posted by conrailman

To: Osogrande.
Amtrak Carried 25 Million People last Year, Amtrak is not Dead at all. If Congress gave Amtrak money like the Highway and Airlines 35 Billion for Highways and 15 Billion for Airlines this Year 2005. Amtrak would be in Great Shape. [:)][:D]

Congress does not "give" 35 billion to highways. The Federal government takes money from highway users and redistributes it. The federal highway budget is 100% user fee financed. Most of the highway user fees are spent on highways but some goes to other modes including rail.

However, a subsidy for one mode does not justify a subsidy for another mode. If it did perhaps we should subsidize roller skates.[:o)]

If something is user fee supported, shouldn't it be able to make it as a free enterprise?

What of all the fed gas tax collected on gas that is not burned on fed highways? Is that truly a "user fee"?

Isn't the gas tax just a tax like my property tax?

Should there be a relationship of some sort between where tax is collected and where it's spent?

WWI was paid for with an income tax - what's the relationship?

Where I live, a sales tax is used to build new schools. A property tax is used to pay teachers. A lottery is used to pay for colleges. I don't see any relationship between source and sink in any of these.

I just want to get the most for what I pay in taxes. Which hand Uncle Sam uses to collect it and which pocket he stores it in matter not a bit to me.

[oltmannd]

QUOTE: Originally posted by DSchmitt

QUOTE: Originally posted by conrailman

To: Osogrande.
Amtrak Carried 25 Million People last Year, Amtrak is not Dead at all. If Congress gave Amtrak money like the Highway and Airlines 35 Billion for Highways and 15 Billion for Airlines this Year 2005. Amtrak would be in Great Shape. [:)][:D]

Congress does not "give" 35 billion to highways. The Federal government takes money from highway users and redistributes it. The federal highway budget is 100% user fee financed. Most of the highway user fees are spent on highways but some goes to other modes including rail.

However, a subsidy for one mode does not justify a subsidy for another mode. If it did perhaps we should subsidize roller skates.[:o)]

No, but you might be able to make a case for bike and cart paths......

[oltmannd]

QUOTE: Originally posted by DSchmitt

QUOTE: Originally posted by conrailman

US Congress should take 5 cent out of the Federal Gas Tax to help amtrak out, I think the federal tax is 24 or 25 cent Now or give amtrak 10 or 20 cent of the gas taxes?[8D]

Over 15% (FIFTEEN) of the Federal Gas Tax (user fee) is allocated to the Mass Transit portion of the Highway Trust Fund. Because there are other user fee that go into the Trust Fund, overall the Mass Transit account gets about 5% of the money paid by motorists (5.1% in 1995 for instance) While the Mass Transit Account is not limied to rail, a substantial portion of it is allocated to rail.

In my opinion, this is good policy. Building mass transit is often more cost effective than building additional urban interstate lanes. It still is a mystery to me why urban interstates get an 80% Federal match while transit only gets 50% match.

[Anonymous]

It's the same stupid decision taken by menem in Argentina during the 1990's: the consequences were the massive closing of nearby all the industries related with the railways and the shops of passenger equipment, lost of the job for thousands of specialized workers, de-population of small towns who relyed heavily in railways for communication with the rest of the country.
Province-owned passenger trains were underfinancied, so their services were slow, scarce and unpleasant, not competence for the bus.
Today, the Argentine Goverment wants to run again interprovince trains, but hasn't the money and the once proud railway industry not longer exists, so as today the few intercity trains that runs are very, very few, and for the near future the Goverment is searching for second-hand passenger materiel around the world!
I hope this didn't happen to you.
From Buenos Aires, The Greekest

[Modelcar]

....Don't forget cuts in education.

[Anonymous]

Well, we've seen our gov't. asking for another $68 Billion for Iraq and Afgahanistan (<--- spell check please). Anyways, that would have been about 68 years of funding for Amtrak. Never a hesitation to find funds to go elsewhere, but, inside of our home country, we see: program cuts, social security questions, health care, and so on and so on.

[RudyRockvilleMD]

QUOTE: Originally posted by conrailman

To: Osogrande.
Amtrak Carried 25 Million People last Year, Amtrak is not Dead at all. If Congress gave Amtrak money like the Highway and Airlines 35 Billion for Highways and 15 Billion for Airlines this Year 2005. Amtrak would be in Great Shape. [:)][:D]

Perhaps Amtrak would be in great shape if it carried as many passengers (or passenger miles) as the airlines, busses, or cars on highways.

[Junctionfan]

QUOTE: Originally posted by osogrande

If Amtrak carried 250 million passengers a year, it would still loose MONEY. The railroads that Amtrak has rights over, the Transportation Unions and the Bureaucrats would see to it. Well run companies don't loose money and when they do, they cut off loosing operations. How many times have you ridden Amtrak and how far? Don't let your "love" for trains cloud the facts! Amtrak (and light rail and commuter systems) is a looser and will always be one!

Union trainmen get $22,000 plus in benefits and start at roughly $45,000 an year. Simply mutiply number of employees times labor cost, add equipement, fuel and "rights" cost, etc.; then subtract fares paid and you get losses.

Fares will never cover the costs!

Operation costs are normal. There are alot of businesses with high paying jobs and yet they still manage to turn up a giant profit. Amtrak in theory should have been able to start to reduce the need of its own government funding if the government wasn't their sole investor. I like government own enterprises; I don't like butt-backwards irresponsible government own ones. CN and Ontario Hydro are examples of governments not doing their job right and screwing it up for its employees and the public (or customers) it serves.

[DSchmitt]

QUOTE: Originally posted by conrailman

To: Osogrande.
Amtrak Carried 25 Million People last Year, Amtrak is not Dead at all. If Congress gave Amtrak money like the Highway and Airlines 35 Billion for Highways and 15 Billion for Airlines this Year 2005. Amtrak would be in Great Shape. [:)][:D]

Congress does not "give" 35 billion to highways. The Federal government takes money from highway users and redistributes it. The federal highway budget is 100% user fee financed. Most of the highway user fees are spent on highways but some goes to other modes including rail.

However, a subsidy for one mode does not justify a subsidy for another mode. If it did perhaps we should subsidize roller skates.[:o)]

[Anonymous]

If Amtrak carried 250 million passengers a year, it would still loose MONEY. The railroads that Amtrak has rights over, the Transportation Unions and the Bureaucrats would see to it. Well run companies don't loose money and when they do, they cut off loosing operations. How many times have you ridden Amtrak and how far? Don't let your "love" for trains cloud the facts! Amtrak (and light rail and commuter systems) is a looser and will always be one!

Union trainmen get $22,000 plus in benefits and start at roughly $45,000 an year. Simply mutiply number of employees times labor cost, add equipement, fuel and "rights" cost, etc.; then subtract fares paid and you get losses.

Fares will never cover the costs!

[conrailman]

To: Osogrande.
Amtrak Carried 25 Million People last Year, Amtrak is not Dead at all. If Congress gave Amtrak money like the Highway and Airlines 35 Billion for Highways and 15 Billion for Airlines this Year 2005. Amtrak would be in Great Shape. [:)][:D]

[Anonymous]

Let AMTRAK die! The American people voted out passenger service in this country in the 1920's. When the car became affordable to the average family, they started leaving the trains. The American people also rejected trains for planes when fares became "cheap" and time of travel time became "important". Passenger trains survived only by carrying the U.S. Mail. When mail went to planes and trucks, the trains died.

If AMTRAK was free, the majority would still not ride it. AMTRAK's first class service is too expensive for most people and coach class service is poor at best. AMTRAK is a welfare program for railroads and railroaders whom can not do anything else. If passenger trains could make money, there would be a rush of companies to get into the business.

Now, all of that said, I believe we should treat ALL forms of transportation equally. Lets take taxpayers money out of airlines (they get it in terminals, FAA services, etc.), highways (everyone knows this one) and water transportation (locks, dams, dredging, etc.). Why water transportation? Move bulk freight back to railroads and let those profits be used to offset passenger losses, if railroads ever chose to run passenger trains again. None of these things will ever happen, as long as politicians play trainmen. Ask any of them when the last rode a train that was not for a photo op?

Lets scrap AMTRAk and let the local taxpayer fund local light rail (until they figure out its real cost). The days of long-haul passenger trains are dead, may they rest in peace or in the pages of Trains.

[BNSFGP38]

You guys crack me up. Here your are talking about goverment subsidies and Amtrak fiscal funding on Valentines day. Go romance your wives instead of the keyboard!


And yes I realize the irony of me posting this today, gotta do something when she is in the shower.[:D]

[Anonymous]

We need to truly come together to support our railroads. If we all began to "use" Amtrak as our first or second mode of transportation we would then be able to demand, through our increased usage, a better quality product. If it is welded rails and improved beds, or easier access to the product, we need to urge many people to use the product. And, of course, write [in mass numbers] our Congressmen/Reperesentatives and demand immediate help to this cause. Imagine being able to drive to a train station, walk a few feet from the parking garage to the train, and be at another major city [within 500 miles] in the time it took just to wait to board an airplane. Sell the ability to walk around, the view, the fact you can load your car, and take it with you and have transpotation once you get there instead of havng to rent a car or be picked up....
We need support for our freight handlers. Express to the American public the joy of the train for freight handling, it would relieve our major interstates of the overwhelming truck traffic. The ATA [truck lobby] sells the convenience of the trucker and his freight, when in actuality, for the long haul you cannot compare it to the amount of freight the train can handle. How many trucks would it take to move a large amount of freight from Miami to the Northwest? Talk in terms of fuel costs and consumption. There are many ways we can win this battle to get a better AMTRAK. One thing that comes to mind, is to return to privatize it, or allow competition against it to raise the bar/quality of the service. Someone made a point earlier that was a great point, if we need to move mass, and for some reason a 9-11 type event occurs and theplanes are grounded,then what. we're screwed!

[Anonymous]

QUOTE: Originally posted by motor

QUOTE: Now, I don't know about potential stops in between Allentown and Philly, but is about sixty miles distance so we'll say it takes an hour to get to Philly.

You need to borrow Mr. Peabody's Waybac machine to do this. [:D] SEPTA trains come no closer to Allentown than Lansdale, which is about halfway between Allentown and Philly, per http://www.septa.org/maps/click_map.html . Service north of Lansdale was discontinued in the summer of 1981. It actually had gone up to Bethlehem which is next to Allentown.

Conrail had extended the service to Allentown in the late 70s but it only lasted a few years.

[Anonymous]

I am sure the A-380 will be an engineering tour de force and all possible energy will be brought forward to achieve nearly perfect reliability. But near-perfect is not perfect. The risk that is being taken by the manufacturer and purchasers of these very large aircraft seems like a reverse-lottery -- while the chances of disaster are very small, the penalty would be very high. It will be interesting to see how the public reacts if one of these with a full passenger load falls from the sky. Who knows -- the public might just shrug. But if they don't, a sizeable investment could be wiped out. That's not a risk I'd undertake with equanimity. Considering that the net profit of the entire airline business to date is $0.00, I guess either the A-380 buyers fatalistically think they have nothing more to lose, or else we're getting more insight into why the profit to date is $0.00.

What was the source for the airport expenditures to accommodate the A-380? I'd be interested in reading the full discussion.

OS

[CG9602]

The amount of misinformation regardinging Amtrak, in this thread, from certain Elected Representatives, and from the media, is amazing. What people choose to believe or ignore is also mind boggling as well. A few points need reitieration:

1. Passenger rail is a money LOSER everywhere. If it weren't, UP, CSX, etc. would still be in the business. I.e. we cannot have intercity passenger rail without some source of external financing to cover these losses.

2. Long distance passenger trains through rural areas are not lightly patronized. They are significant generators of passenger miles and passenger revenue. Many outperform short-haul corridor services. As a matter of fact, trains generate business BECAUSE of the stops along each route. Trains stop along each route to embark and disembark passengers. This is different than aircraft, because aircraft and air routes are designed with the end of each route being the sole generator of business. This is a crucial factor.

3. One can espouse preference for reliance upon free enterprises as opposed to state-owned operations. However, one cannot advocate this for transportation without acknowledge government's - and government policy's - role in establishing modal preferences. In other words, both highway and air transportation benefit from public subsidies. No airline has built any airports and no trucker has built its own highways.

Railroads, which own their right-of-way are at a competitive disadvantage, as a result. Not only must they maintain their track, but they must oay taxes on it. The high costs drove them out of the passenger business and the weakened state of their infrastructure creates additional costs for Amtrak.

4. There may be better ways to organize the U.S. intercity passenger system. Creating a separate entity to manage and maintain the NEC might make sense if it means Amtrak can concentrate on train operations. Competition could bring benefits in terms of service innovations and managing operations - i.e. a better or more efficient product.

No matter what happens, we have to have some sort of long term dedicated funding. That's right, something like a Trust Fund - or some other source of funding. The current set-up is poor, and allows for all of the shenanigans like what we are expereinceing right now.

[Modelcar]

...Very well stated...Did anyone see the hour long program on the design and building of the A-380 Air Bus plane Sunday evening...It was presented on the Discovery channel. What a bulk of an airplane and If I heard it correctly in one configuration it would have a capacity of 800 and some passengers...! Seems to be a questionable risk to put that many passengers in the air in one machine...and the money involved in all aspects of it are mind bogging...

[passengerfan]

Reading an article in the local paper this AM as to the costs to bring U.S. airports up to standards for the new A-380 Airbus that is due to begin operating next year. The planes 261 foot wingspan alone precludes it from all but three or four airports in the US and its weight of 1.2 million pounds eliminates operation from many other airports. Only San Francisco International is equipped to handle the new plane, and it has the new terminal building for it. But when landing or taking off the airport can only use one runway at a time and some of the taxiways will have to be shut down for the new planes to get to and fropm the runway. At the very most maybe six A-380 planes a day will use SFO and the costs associated with the new planes are estimated at 6 Billion just to bring a few Airports up to standards to accomodate the new 555 passenger planes. Those Airports are Chicago O'Hare, New Yorks JFK, Atlanta's Hartsfield, Miami International, SFO and Los Angeles International. For those airports that will be designated emergency fields for the new plane and their are few interested the costs will never be justified. And who is going to pay for maybe twelve planes a day to land in the US the hard pressed American taxpayer. If the total passenger load in and out per day is only going to be 13, 320 then where is the justification for the new airport expansions. Now if the taxpayers want to get their monies worth put 6 billion into capital improvements for Amtrak and watch the return on investment. Amtrak certainly carries more than 13, 320 passengers daily and the money would be far better spent in turning passengers away from the beloved Interstate that in many places is fast becoming a paved parking lot with daily gridlock for miles in almost every direction around many American cities.

[Modelcar]

....So I wonder why it continues to be so difficult to fund our system each time of the year when budget time rolls around. Several Presidents tried to stop it and now especially this current one thinks he is actually going to get it done this time....

[Anonymous]

Polizi: Yes, including dozens of them in the U.S. They are mostly categorized as tourist railroads; short lines looking for cash flow; companies that do not expect the passenger train to contribute to its share of track costs, capital costs, and overhead; and companies where the passenger train serves something such as a public-relations purpose or another purpose where the benefits are something other than pure contribution to profit.

But a large system that totally sits on its own without any significant government subsidy in any form? No. They all get one, in some form or another, and it's usually immense. Most people in most countries don't care -- I include the U.S. in that -- because they perceive the value they receive to outweigh the demand on their tax bill it creates.

OS

[Anonymous]

Thanks OS I needed some clarity on that, But here is another question is there any Railroad offering passenger service in the world that makes money and is not using government subsidies?

[Anonymous]

Polizi:

In the simplest possible terms: NO.

The railroads "not wanting" to run passenger trains was because the losses were inevitably driving them into bankruptcy. Amtrak was formed to keep the railroads from going bankrupt and ending all service, passenger AND freight. The legal requirements a railroad had to operate passenger trains ended for most railroads on May 1, 1971. For four others it ended by 1983 or earlier. For commuter trains it ended in the 1970s for all roads. If Amtrak was shut down tomorrow the requirement would not revert. If the government were to try to force the issue anyway, it would essentially mean tearing up the U.S. Constitution.

OS

[Anonymous]

Ok correct me if I am wrong here but, was not Amtrak basicly formed because the Railroads didnt want to perform passenger service any longer. I believe the government made this happen for them. So is it not possible that if the government allows Amtrak to (worse case) go under wouldnt that old agreement mean that the Railroads would have to pick up passenger service again? I do not think with the political clout that the Railroad has they would let this happen. Do you?

[PNWRMNM]

Junction,

You are confusing me. I thought you were a socialist. That being true you should desire outrageous government expenditures for any purpose, especially American Govt which you do not have to pay for but I do. What is happening to you??

Mac

[Junctionfan]

Personally I think the government should go out of business and the properties be liquidated. Government is becoming a financial joke at taxpayer's expense. The government hasn't made any smart financial growth or investment as of late. For business owners out there, don't you wish you could be just as financially irresponsible and get away with it as they do?