This article may have some interesting points ??
http://www.bloomberg.com/news/2012-07-31/amtrak-shifts-strategy-from-begging-for-money-to-thinking-big.html
blue streak 1 This article may have some interesting points ?? http://www.bloomberg.com/news/2012-07-31/amtrak-shifts-strategy-from-begging-for-money-to-thinking-big.html
It's about time Amtrak started thinking strategically. Score one for Boardman. However, if they are to have any hope of being taken seriously, they have get their own house in order. They have to show some meaningful progress toward smaller subsidies per passenger mile.
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
They already have a lower subsidy per passenger mile than any commuter authority and one way way below the average. I think they may be lower than VIA's also, and someone can check on this. But of course we hope they will do even better.
The article has some interesting points to be sure. However, many of the numbers have been cherry picked or stated out of context. For example, the article mirrors Amtrak's claim that it covers 76 per cent of its operating costs. This is only true because of the Acela and the Lynchburg trains. The Acela is a premium fare train that covers its operating costs and offsets the operating losses sustained by the NEC regionals and NEC special trains. Moreover, Amtrak does not come close to covering its capital costs, most of which have been incurred in the NEC. Focusing on operating costs without factoring in the capital costs is disingenuous.
In addition to the regular budget allocation of $1.4 billion received by Amtrak in FY12, which was similar to the operating grants received in FY10 and FY11, it received approximately $3.3 billion in ARRA monies in FY09 and FY10. Most of these monies were spent on capital projects. As the cost of the projects is amortized over the expected life of the assets, Amtrak's losses are likely to grow unless it can find additional revenues.
Big dreams without a realistic plan to fund them outside of a raid on the U.S. Treasury only flies in the minds of government bureaucrats. If a competitive business organization had big plans to expand continuing operations, without a realistic plan to fund them, it would not get very far.
The best solution for intercity passenger rail in the United States would be to open the routes to competitive bidding. In doing so, however, other than transitional subsidies, all transport subsidies should be eliminated, thereby allowing each mode to dominate where it has a competitive advantage. If the country adopted this approach, passenger rail might be able to survie in relative short, high density markets where the cost of expanding highways and airways is prohibitive.
I don't think that disassembling Amtrak would be the greatest choice, considering privatizations complete failure in the United Kingdom to improve service.
The government is not a for profit business enterprise. Almost no service provided by the government breaks even or produces a profit. Government operates for the common good of the society.
Dave
Lackawanna Route of the Phoebe Snow
Phoebe Vet The government is not a for profit business enterprise. Almost no service provided by the government breaks even or produces a profit. Government operates for the common good of the society.
Many government activities, e.g. defense, education, law enforcement, regulation, etc. serve the common good. Other government activities, however, serve a very narrow constituency. Amtrak is in this category. Given that less than one per cent of intercity travelers use Amtrak, to argue that it is a common good is a stretch.
The common good is more often than not in the eyes of the beholder, and there are legitimate differences in what constitutes a common good. Jerry Jones, the owner of the Dallas Cowboys, argued that a new football stadium funded largely by the taxpayers is a common good. Not to be outdone, the owners of the Dallas Mavericks and Dallas Stars made the same argument for a new arena in Dallas. And the Dallas Symphony Orchestra, of which I attend regularly, made the same argument. And got taxpayer money from the citizens of Dallas, most of whom have no interest in classical music, to build a concert hall beyond what the patrons were willing to pay for.
You are correct about government. It does not earn a profit. And that is the best argument that I can think of for why it should not be running a commercial enterprise.
Wow, back here again already? To repeat what I have said previously, Amtrak, like all other forms of public transportation (and the highway system is very much a form of public transportation) is a "public good," something which society as a whole needs but which cannot be provided at a profit to a private firm. Here is a good discussion of public goods (in the context of highway spending, but it applies to rail transportation as well) I posted previously, from the US Congressional Budget Office:
The public sector provides most highway infrastructure for several reasons that tend to limit the role of the private sector. First, such infrastructure displays, at least to some degree, important characteristics of “public goods.” Such goods are usually not profitable for the private sector to produce, because once they have been produced, they are available to anyone who wants to use them; as a result,they are often provided by the public sector. Second,because such infrastructure is costly to build, though less expensive to operate and maintain, having competing highway networks is not practical. As a result, such “natural monopolies” are often either provided directly by the government or regulated by it. Third, the benefits of highways—promoting commerce, for instance—may extend beyond the places where they are built and beyond the people who use them directly. All three of those characteristics of highway infrastructure tend to limit the incentives for the private sector to provide it. The private sector, on its own, would provide less of that type of infrastructure than is socially beneficial.
Economists have talked about public goods for centuries. Adam Smith's "third duty of the sovereign" in his The Wealth of Nations, after internal and external security (police and armies) is
the duty of erecting and maintaining certain public works and certain public institutions which it can never be for the interest of any individual, or small number of individuals, to erect and maintain; because the profit could never repay the expense to any individual or small number of individuals, though it may frequently do much more than repay it to a great society.
In sum, public transportation is something that cannot and will not be provided at the initiative of private for-profit firms, for a profit, and so if we want the benefits of mobility we, society as a whole, through our government, must provide it ourselves. But Sam1 does not recognize public goods, in regard to Amtrak she has stated repeatedly that it must be able to completely pay for itself through farebox recovery only (although that hides the subsidies in the form of around $150 Billion per year in highway spending, only about half of which is paid for by fuel taxes).
Finally, Taken on a passenger-by-passenger basis, trains cost taxpayers far less than cars, planes, motorcycles or rickshaws. The big difference, as National Corridor Initiative president and CEO James P. RePass noted in a recent interview, is that "Subsidies for airlines and highways are far less obvious than Amtrak's single line item.
Each generation defines the public good. The views of a long dead personage, irrespective of his or her reputation, are irrelevant. The key question is how the body politic defines the public good for the current population.
Most people would agree, I think, that a robust transportation network is critical for any modern society. The question is whether intercity passenger rail, which is used by a very small percentage of intercity travelers, as per DOT's National Transportation Statistics, serves the public good or whether it serves the interests of a narrow, special interest group.
With the exception of a relatively few high density, short corridors, passenger rail does not serve the public good. And within the corridors, primarily the NEC, first class service, i.e. Acela, business class, etc. does not serve the public good. It serves the elite who can afford to pay the premium fares.
People of good will can disagree on what is the public good. Obviously I differ from your perspective of the public good. You are entitled to your views as I am entitled to mine. We are not likely to change each others views.
According to CBO testimony by Joseph Kile, Assistant Director for Microeconomic Studies, entitled "The Highway Trust Fund and Paying for Highways", before the Committee on Finance, United States Senate, May 17, 2011, the total U.S. spend on roadways is approximately $160 billion per year, with approximately $40 billion coming from the federal government. Most of the spend is recovered through user fees, fuel taxes, investment interest, and property taxes. The property taxes are paid by motorists. The claim that $150 billion of the $160 billion is a subsidy is not substantiated by any numbers that I have reviewed.
My references to comparative subsidies pertains only to the federal subsidies. I have listed the sources for my data in numerous previous posts going back nearly five years. In addition, I have draw reference to a variety of studies performed by DOT and the CBO.
DwightBranch (although that hides the subsidies in the form of around $150 Billion per year in highway spending, only about half of which is paid for by fuel taxes).
(although that hides the subsidies in the form of around $150 Billion per year in highway spending, only about half of which is paid for by fuel taxes).
$150 billion in public money to support about 4 trillion highway passenger miles, last time I checked, with half of this covered by arguably a "user fee" arrangement in terms of the gasoline and Diesel fuel tax, works out to be about, roughly, 2 cents of general revenue payout per automobile passenger mile.
The figure I see for Amtrak is somewhere in the neighborhood of 20 cents of general revenue payout per passenger mile -- roughly a billion+ in direct subsidy for about 5 billion passenger miles; the subsidy may be a little higher with the passenger mile also higher in rough proportion.
20 cents per passenger miles for trains is a factor of 10 greater than 2 cents per passenger mile. Argue that the fuel tax as a fee is a gimmick, so then cars are getting 4 cents per passenger mile or a factor of 5 more efficient with the money than trains.
Bean counting? Were we to convert all auto passenger miles to trains, this would require 750 billion dollars per year in subsidy. Using the 10-year horizons used to quantify major Federal social programs, what is the Patient Protection and Affordable Health Care Act supposed to be, a trillion-dollar program? Under those measures, converting all autos to trains would be a nearly 8 trillion-dollar program? At those rates, I would like to see my tax dollars used to see that people get access to health care than worrying about trains.
Of course we would never do that, we would do what they do in Europe and subsidize passenger trains at a level that they carry 5 percent of all passenger miles, which is about 37 billion dollars per year, which is close to what the E.U. countries indeed spend and about the magnitude of the U.S. Federal Highway program.
Does a public good mean that money is no object, just spend whatever it takes? The F-22 Raptor stealth fighter jet is a public good because many of us value being defended (my WW-II refugee Mom had me read "On Borrowed Time" and "Fall of the Third Republic"), but even national defense, which to many seems to get a blank check has limits, and production of the F-22 was greatly curtailed, leading to a loss of jobs for many hard-working and highly-trained people ranging from the blue collar shop floor to the engineering cubicles, all losst middle-class jobs at a time of a bad economy.
Is there any metric than can be applied to the cost effectiveness of a public good, passenger trains, without being branded a bean counter?
If GM "killed the electric car", what am I doing standing next to an EV-1, a half a block from the WSOR tracks?
Paul Milenkovic DwightBranch: (although that hides the subsidies in the form of around $150 Billion per year in highway spending, only about half of which is paid for by fuel taxes). $150 billion in public money to support about 4 trillion highway passenger miles, last time I checked, with half of this covered by arguably a "user fee" arrangement in terms of the gasoline and Diesel fuel tax, works out to be about, roughly, 2 cents of general revenue payout per automobile passenger mile. The figure I see for Amtrak is somewhere in the neighborhood of 20 cents of general revenue payout per passenger mile -- roughly a billion+ in direct subsidy for about 5 billion passenger miles; the subsidy may be a little higher with the passenger mile also higher in rough proportion. 20 cents per passenger miles for trains is a factor of 10 greater than 2 cents per passenger mile. Argue that the fuel tax as a fee is a gimmick, so then cars are getting 4 cents per passenger mile or a factor of 5 more efficient with the money than trains. Bean counting? Were we to convert all auto passenger miles to trains, this would require 750 billion dollars per year in subsidy. Using the 10-year horizons used to quantify major Federal social programs, what is the Patient Protection and Affordable Health Care Act supposed to be, a trillion-dollar program? Under those measures, converting all autos to trains would be a nearly 8 trillion-dollar program? At those rates, I would like to see my tax dollars used to see that people get access to health care than worrying about trains. Of course we would never do that, we would do what they do in Europe and subsidize passenger trains at a level that they carry 5 percent of all passenger miles, which is about 37 billion dollars per year, which is close to what the E.U. countries indeed spend and about the magnitude of the U.S. Federal Highway program. Does a public good mean that money is no object, just spend whatever it takes? The F-22 Raptor stealth fighter jet is a public good because many of us value being defended (my WW-II refugee Mom had me read "On Borrowed Time" and "Fall of the Third Republic"), but even national defense, which to many seems to get a blank check has limits, and production of the F-22 was greatly curtailed, leading to a loss of jobs for many hard-working and highly-trained people ranging from the blue collar shop floor to the engineering cubicles, all losst middle-class jobs at a time of a bad economy. Is there any metric than can be applied to the cost effectiveness of a public good, passenger trains, without being branded a bean counter?
DwightBranch: (although that hides the subsidies in the form of around $150 Billion per year in highway spending, only about half of which is paid for by fuel taxes).
Your argument is like saying about the Titanic (which we know was not equipped with enough lifeboats for all its passengers) "Well, look, we spent money on lifeboats and most of the passengers still died, lifeboats are clearly a waste of money." Amtrak has been inadequately funded its entire existence, around $70 billion in forty plus years, a fraction of what we spend on highways in a single year. Its inadequate funding allows little more than a skeletal system, passengers cannot count on boarding a train at all times of day (as with our enormously subsidized airports and highways) or of making connections because so few trains operate on may routes, or none at all (try going from Florida to Chicago, St Louis or Denver on Amtrak).
DwightBranch Your argument is like saying about the Titanic (which we know was not equipped with enough lifeboats for all its passengers) "Well, look, we spent money on lifeboats and most of the passengers still died, lifeboats are clearly a waste of money." Amtrak has been inadequately funded its entire existence, around $70 billion in forty plus years, a fraction of what we spend on highways in a single year.
Your argument is like saying about the Titanic (which we know was not equipped with enough lifeboats for all its passengers) "Well, look, we spent money on lifeboats and most of the passengers still died, lifeboats are clearly a waste of money." Amtrak has been inadequately funded its entire existence, around $70 billion in forty plus years, a fraction of what we spend on highways in a single year.
My argument is like saying the Costa Concordia (what they had in Europe) is multiples the size and oppulence of Titanic, it had the benefits of microwave collision avoidance radar, depth sounders, GPS, modern charts, other navigation aids, and some showboating captain managed to sink that one too. And fail to deploy the life boats effectively as well.
The argument that Amtrak has been inadequately funded does not hold up to the evidence. Are the European trains "adequately funded"? If so, you will find that they are subsidized, on average, at about the same high rate as Amtrak. There does not appear to be any economy of scale. Before a person directs four-letter words at my evidentiary sources, my source is none other than the Appendices to the Vision Report recommending a 10-fold expansion of Amtrak by, yes, giving Amtrak about 10-times more money, and they base their cost figures on European experience.
Amtrak is effectively a demonstration project (.1 percent of total passenger miles). It needs to demonstrate some measure of effectiveness to merit higher levels of funding. It works that way at the University too with government grants. One has to prove oneself effective according to some metric when receiving a small government grant in order to merit renewed funding or funding on a larger scale. One doesn't get to say "Professor X is getting 20 times my meager funding of one graduate student so why are people questioning my research output? Don't people know that my work is a public good?"
DwightBranch Paul Milenkovic: DwightBranch: (although that hides the subsidies in the form of around $150 Billion per year in highway spending, only about half of which is paid for by fuel taxes). $150 billion in public money to support about 4 trillion highway passenger miles, last time I checked, with half of this covered by arguably a "user fee" arrangement in terms of the gasoline and Diesel fuel tax, works out to be about, roughly, 2 cents of general revenue payout per automobile passenger mile. The figure I see for Amtrak is somewhere in the neighborhood of 20 cents of general revenue payout per passenger mile -- roughly a billion+ in direct subsidy for about 5 billion passenger miles; the subsidy may be a little higher with the passenger mile also higher in rough proportion. 20 cents per passenger miles for trains is a factor of 10 greater than 2 cents per passenger mile. Argue that the fuel tax as a fee is a gimmick, so then cars are getting 4 cents per passenger mile or a factor of 5 more efficient with the money than trains. Bean counting? Were we to convert all auto passenger miles to trains, this would require 750 billion dollars per year in subsidy. Using the 10-year horizons used to quantify major Federal social programs, what is the Patient Protection and Affordable Health Care Act supposed to be, a trillion-dollar program? Under those measures, converting all autos to trains would be a nearly 8 trillion-dollar program? At those rates, I would like to see my tax dollars used to see that people get access to health care than worrying about trains. Of course we would never do that, we would do what they do in Europe and subsidize passenger trains at a level that they carry 5 percent of all passenger miles, which is about 37 billion dollars per year, which is close to what the E.U. countries indeed spend and about the magnitude of the U.S. Federal Highway program. Does a public good mean that money is no object, just spend whatever it takes? The F-22 Raptor stealth fighter jet is a public good because many of us value being defended (my WW-II refugee Mom had me read "On Borrowed Time" and "Fall of the Third Republic"), but even national defense, which to many seems to get a blank check has limits, and production of the F-22 was greatly curtailed, leading to a loss of jobs for many hard-working and highly-trained people ranging from the blue collar shop floor to the engineering cubicles, all losst middle-class jobs at a time of a bad economy. Is there any metric than can be applied to the cost effectiveness of a public good, passenger trains, without being branded a bean counter? Your argument is like saying about the Titanic (which we know was not equipped with enough lifeboats for all its passengers) "Well, look, we spent money on lifeboats and most of the passengers still died, lifeboats are clearly a waste of money." Amtrak has been inadequately funded its entire existence, around $70 billion in forty plus years, a fraction of what we spend on highways in a single year. Its inadequate funding allows little more than a skeletal system, passengers cannot count on boarding a train at all times of day (as with our enormously subsidized airports and highways) or of making connections because so few trains operate on may routes, or none at all (try going from Florida to Chicago, St Louis or Denver on Amtrak).
Paul Milenkovic: DwightBranch: (although that hides the subsidies in the form of around $150 Billion per year in highway spending, only about half of which is paid for by fuel taxes). $150 billion in public money to support about 4 trillion highway passenger miles, last time I checked, with half of this covered by arguably a "user fee" arrangement in terms of the gasoline and Diesel fuel tax, works out to be about, roughly, 2 cents of general revenue payout per automobile passenger mile. The figure I see for Amtrak is somewhere in the neighborhood of 20 cents of general revenue payout per passenger mile -- roughly a billion+ in direct subsidy for about 5 billion passenger miles; the subsidy may be a little higher with the passenger mile also higher in rough proportion. 20 cents per passenger miles for trains is a factor of 10 greater than 2 cents per passenger mile. Argue that the fuel tax as a fee is a gimmick, so then cars are getting 4 cents per passenger mile or a factor of 5 more efficient with the money than trains. Bean counting? Were we to convert all auto passenger miles to trains, this would require 750 billion dollars per year in subsidy. Using the 10-year horizons used to quantify major Federal social programs, what is the Patient Protection and Affordable Health Care Act supposed to be, a trillion-dollar program? Under those measures, converting all autos to trains would be a nearly 8 trillion-dollar program? At those rates, I would like to see my tax dollars used to see that people get access to health care than worrying about trains. Of course we would never do that, we would do what they do in Europe and subsidize passenger trains at a level that they carry 5 percent of all passenger miles, which is about 37 billion dollars per year, which is close to what the E.U. countries indeed spend and about the magnitude of the U.S. Federal Highway program. Does a public good mean that money is no object, just spend whatever it takes? The F-22 Raptor stealth fighter jet is a public good because many of us value being defended (my WW-II refugee Mom had me read "On Borrowed Time" and "Fall of the Third Republic"), but even national defense, which to many seems to get a blank check has limits, and production of the F-22 was greatly curtailed, leading to a loss of jobs for many hard-working and highly-trained people ranging from the blue collar shop floor to the engineering cubicles, all losst middle-class jobs at a time of a bad economy. Is there any metric than can be applied to the cost effectiveness of a public good, passenger trains, without being branded a bean counter?
Your argument is one of the scalability of Amtrak. That is, if we up the subsidy by 5X, we should get out 10X (or some other multiple >5X) of output. If only that were generally true....
There is little evidence that existing Amtrak service scales. Increases in train frequency on existing routes DO NOT result in much, if any, reduction in cost per passenger mile. Look at Amtrak monthly reports on the Piedmonts, Harrisburg service and Illinois trains for proof of this.
The Lynchburg train and upcoming Norfolk train do show that targeted investment can produce additional service as near zero increase in operating subsidy. These are the kinds of things that need to be pursued.
There have been studies that show that if you pour in huge amounts of capital, you can create service with lower subsidy rates. These studies are generally along the corridors of the FRA "high speed" map.
Florida to Denver by train? Didn't we just have a thread about how we take the train because of how nice, slow and relaxing it is? Silver Service to Capitol Ltd. to Cal Zephyr...aaaah! If you want to get there fast and cheap, just fly.
As Jim McClellan says, long distance trains are "irrelevant" and "will remain irrelevant"
http://www.transportation.northwestern.edu/docs/2008/2008.11.18.McClellan.Presentation.pdf
slides 39&40
Interesting reading. Check it out.
The Titanic lifeboat metaphor is an apt and a powerful one.
One of the criticisms of Captain Smith was his utilization of the lifeboats at hand.
Maybe he wouldn't have saved every passenger. But he did have time to evacuate the ship. And there was some measure of discipline among crew and passengers.
The seas were glass smooth. Rescue by other ships on that busy travel lane was no longer than an Amtrak long-distance passenger train delay away. He could have overloaded those life boats, carefully stuffing them with as many people as he could pack in, and a good seaman would have understood how to do this. This was not done.
Any breath of a suggestion of how Amtrak could be improved in cost effectiveness is met with a chorus of "bean counter", "passenger-train hater", and the usual, "you don't understand the constraints Amtrak is operating under." There are more seats to be filled in the lifeboats on hand. As passenger train advocates and metaphorically speaking, let's work to fill them.
oltmannd Florida to Denver by train? Didn't we just have a thread about how we take the train because of how nice, slow and relaxing it is? Silver Service to Capitol Ltd. to Cal Zephyr...aaaah! If you want to get there fast and cheap, just fly. As Jim McClellan says, long distance trains are "irrelevant" and "will remain irrelevant"
There are those who ride trains for fun, just as there are homeless people who ride buses to stay warm, the fact that they are being used that way does not change their usefulness as a form of public transportation. Further, in the same "cruise train" discussion it was pointed out that airports are neither cheap nor handy for someone not living near one, in the end one ends up putting out someone on either end to drop them off (a four to six hour round trip for people near Princeton IL to go to O'Hare)/ pick them up, the cost of gas etc. And people outside of the urban areas pay taxes like everyone else.
Jim McClellan knows RoadRailer, he is not the final authority on our system of national transportation, any more than I am because I once drove a semi truck..
Paul Milenkovic The Titanic lifeboat metaphor is an apt and a powerful one. One of the criticisms of Captain Smith was his utilization of the lifeboats at hand. Maybe he wouldn't have saved every passenger. But he did have time to evacuate the ship. And there was some measure of discipline among crew and passengers. The seas were glass smooth. Rescue by other ships on that busy travel lane was no longer than an Amtrak long-distance passenger train delay away. He could have overloaded those life boats, carefully stuffing them with as many people as he could pack in, and a good seaman would have understood how to do this. This was not done. Any breath of a suggestion of how Amtrak could be improved in cost effectiveness is met with a chorus of "bean counter", "passenger-train hater", and the usual, "you don't understand the constraints Amtrak is operating under." There are more seats to be filled in the lifeboats on hand. As passenger train advocates and metaphorically speaking, let's work to fill them.
Smith botched things, but had he not most of the people would still have died, you cannot fit 2,200 people in lifeboats capable of carrying 1,100, no matter your organizational skill or "imaginativeness". In the same way it is disingenuous to criticize Amtrak managers for not being able to fund a reliable national system of transportation, in a country 3k miles across and over 1k miles wide with $1.5 B per year.
These discussions are largely and endless go a rounds, fruitless and look increasingly silly because of the continuing dichotomous, all-or-nothing viewpoints, as well as some blurring as to what the mission of Amtrak or some other rail passenger service ought to be within the confines of what realistically will be available funding levels. metaphoric analogies are given that have little relevance: mass transit buses provide the homeless shelter as LD trains provide land cruises. Both are missing the mark. As do the Titantic and lifeboat references. And the heavy reliance of the Vision Report's questionable understanding of European rail along with the selective citation of Amtrak's system-wide (including LD) operating loss per passenger mile as though that had any bearing on corridor services takes us away from a realistic view the future, if any, of US passenger rail.
I believe we need to start with some shared assumptions.
1. Financial resources will be limited and comparisons with highway and air subsidies take us nowhere.
2. The purpose of passenger rail service, as it is understood elsewhere, is to provide competitive transportation between cities and towns as a viable alternative to highway and air over limited distances.
3. Others?
C&NW, CA&E, MILW, CGW and IC fan
schlimm These discussions are largely and endless go a rounds, fruitless and look increasingly silly because of the continuing dichotomous, all-or-nothing viewpoints, as well as some blurring as to what the mission of Amtrak or some other rail passenger service ought to be within the confines of what realistically will be available funding levels. metaphoric analogies are given that have little relevance: mass transit buses provide the homeless shelter as LD trains provide land cruises. Both are missing the mark. As do the Titantic and lifeboat references. And the heavy reliance of the Vision Report's questionable understanding of European rail along with the selective citation of Amtrak's system-wide (including LD) operating loss per passenger mile as though that had any bearing on corridor services takes us away from a realistic view the future, if any, of US passenger rail. I believe we need to start with some shared assumptions. 1. Financial resources will be limited and comparisons with highway and air subsidies take us nowhere. 2. The purpose of passenger rail service, as it is understood elsewhere, is to provide competitive transportation between cities and towns as a viable alternative to highway and air over limited distances. 3. Others?
4. All intercity routes should be open to competitive bidding.
5. All intercity routes should be required to cover their operating costs within five years of hand-off from the government or another operator. Routes that cannot cover their operating costs should be discontinued.
6. The per passenger mile subsidy for intercity passenger rail should be no greater than the corresponding per passenger mile subsidy for competitive modes of transport and/or vehicle miles traveled.
7. Ideally all transport subsidies should be removed over a reasonable period of time; however, it is not likely to happen, so subsidies for intercity passenger rail should be continued but at no greater unit rate than those funneled to competitive modes of transport.
According to testimony entitled "The Highway Trust Fund and Paying for Highways, delivered by CBO staffer Joseph Kile, Assistant Director for Microeconomic Studies, before the Committee on Finance, United States Senate, May 17, 2011, the total annual spend on highways (federal, state, county, and local) is approximately $160 billion. The federal spend is approximately $40 billion.
As per Table 1-35, National Transportation Statistics, the estimated vehicle miles traveled in 2010 was 2,966,494 million. As per Table 1-40, National Transportation Statistics, the estimated passenger miles in 2010 was 4,244,157 million.
An Amtrak passenger receives an indirect subsidy from the federal government. The same is true for a commercial airline passenger and a commercial bus rider. But in the case of a vehicle, theoretically at least, the subsidy flows to the owner of the vehicle and not the passengers. Accordingly, for my analysis, I have used passenger miles for rail, air, and bus subsidies, but vehicle miles for highway subsidies. This is following the conservative principle associated with normally accepted accounting procedures.
In the spreadsheet that I have compiled for each of the last five years, the average federal subsidy per passenger mile for Amtrak was calculated on the basis of the federal operating subsidies received by it. The calculation is straight forward. For the commercial air and highway subsidies considerably more work is involved.
I don't believe anyone is really interested in plowing through the complete accounting exercise. It is time consuming, and it involves a substantial number of allocations. To get an idea of the allocations process, outlined below is how I derived part of the federal subsidy for FAA operations.
Historically the FAA has covered approximately 86 per cent of its operating costs through a variety of fees (includes fuel taxes) collected directly or indirectly from airline passengers, pilots, FBOs, etc. The difference or shortfall is covered by a transfer from the general fund. Some folks, including NARP, assume that the entire transfer flows to the commercial airlines. This is incorrect. Only a portion of it supports commercial airline passengers, but the FAA does not make this information public. So how should it be allocated?
I have based my calculation on the percentage of air traffic control operations devoted to controlling commercial air flights as opposed to general aviation operations and military operations in civilian air space. Drawing from the information presented in the FAA's annual performance report, as well as FAA statistics, over the past five years approximately 32 per cent of the flights controlled by the FAA (tower, enroute control centers, etc.) are commercial airline flights. The remainder are general aviation, which includes business airplanes, and military flights in civilian air space. Thus, I multiplied the transfer for FAA operations by 32 per cent to come up with the amount of the federal operating subsidy flowing to airline passengers. From here it is relatively easy to calculate the average amount per passenger and per passenger mile, although this is not the only federal subsidy received by the airlines. I offer this at the risk of being tedious to point out that most of the notions about federal subsidies, not to mention state and local subsidies, have been over simplified and are not correct.
Based on my analysis, which is supported by similar data found in the Federal Transportation Statistics, in FY10 the federal subsidy for Amtrak was 19.12 cents per passenger mile, down from 21.44 cents in FY09. The corresponding average FY10 subsidies for commercial air and highway were .36 cents per passenger mile and .99 cents per vehicle mile traveled. This is the basis that I used to claim that the federal subsidy for Amtrak is nearly 20 times the subsidy for commercial air and vehicles. I am not addressing other subsidies, and I have only dealt with direct cash transfers. I have not, for example, attempted to calculate the value of the tax exemptions received by Amtrak and the other modes of transport. To determine them one would have to go through every tax jurisdiction where Amtrak could attract a tax liability, if it were not exempt from paying all taxes, to determine the value of the exemptions.
DwightBranch Jim McClellan knows RoadRailer, he is not the final authority on our system of national transportation, any more than I am because I once drove a semi truck..
No. Jim IS an authority on our national rail system. One of the best there is.
He's also a pretty fine railfan and a former Amtrak employee to boot.
You must have him confused with someone else. You can read about him and his career in Rush Loving's book, "The Men Who Loved Trains" if you are unfamiliar.
Apparently you decided to ignore point #1 and continue with the comparisons you have been speaking of for a long time. It seems fairly clear that the whole point is to get services established and that will require higher start up costs and expenses for probably more than five years if the goal is to give it a chance to succeed. If not, why even bother? #2 is a point we generally agree on, namely, that routes longer than the short corridors are not viable as transportation services. If some land cruise operator wants to run them or the equivalent of a Megabus operator, let them do so, no bid needed.
schlimm Apparently you decided to ignore point #1 and continue with the comparisons you have been speaking of for a long time. It seems fairly clear that the whole point is to get services established and that will require higher start up costs and expenses for probably more than five years if the goal is to give it a chance to succeed. If not, why even bother? #2 is a point we generally agree on, namely, that routes longer than the short corridors are not viable as transportation services. If some land cruise operator wants to run them or the equivalent of a Megabus operator, let them do so, no bid needed.
I am not ignoring any points. Financial resources are always limited. The key point is that if there is a viable demand for passenger rail service, the market will make the financial resources available. If passenger rail is not a viable market proposition, the market will not support it. Most people posting to these forums apparently believe that if there is no self-sustaining market for passenger rail, the government should continue to offer it, which is the most likely outcome.
I made no comparison with the subsidies for other modes of transport, other than to say if they continue to be subsidized, then passenger rail should be subsidized to the same but no greater extent. Unfortunately, subsidies are not likely to go away.
The most likely outcome is that Amtrak will continue to muddle along until the U.S. hits a financial wall. The NEC, as well as several other corridors, will be expanded. And the long distance trains, with hopefully some improvements, will continue to run.
Let me try a different question that perhaps takes us off the treadmill discussions that have been on here for years. Airlines use passenger load percentage (not sure if that is the precise term) as a way of evaluating their various routes. Is there such a statistic for the various Amtrak routes? Could it be derived or are the data inadequate?
Load percentages may be difficult to calculate for Amtrak since not all passengers travel from endpoint to endpoint. How one factors short-haul passengers is something that needs to be determined.
I was told that I am a "bean counter" who would have further shortchanged the lifeboats on the Titanic because they didn't save enough people. In response I said
to which I was told
As a person to whom it was suggested that I need to go elsewhere because I am not agreeing with all of the standard passenger train advocacy positions, I feel this is a case of "free speech for me but not for me." If someone uses weakly formed Titanic metaphor to criticize my point of view, that constitutes free expression. If defend myself by elaborating on that metaphor, that constitutes bickering or dichotomies or some manner of treadmill.
The Titanic and its lifeboats is particularly apt -- its transportation, isn't it? I suggested (what I heard from somewhere else) that Smith could have overloaded the lifeboats, and I am called out for spreading misinformation, that a lifeboat has only so many seats and that I don't know what I am talking about.
First of all, part of the scandal of the Titanic disaster is that survivor accounts claim that many lifeboats were launched only partially full. That is part of the historical record. As to the suggestion of overloading the boats, that is not my idea, that came from a "Titanic Historical Society" Web site.
The thing about boats is that their capacity is limited by weight, that the waves don't lap up over the sides and founder the boat. The claim is that the accident happened under calm seas, where the lifeboats could have been overloaded, maybe not saving all 2000 people, but saving more than the 1000 people. These lifeboats have open benches, and children could have sit on laps. This is not like an airplane where every person needs to be seat belted into their own seat "before we can close the doors."
In other words, the lifeboats could have been launched with "crush loads." This is done with passenger trains. All the time. The commuter trains in Japan. Where they hire white-gloved "pushers" to shove the overload of passengers onboard the train so the conductor can close the doors. Or in India, where at least in times past they had people sitting on the roof of the coaches.
With respect to an Amtrak analogy, consider the capacity constraints on the Milwaukee-Chicago Talgo, and how even if the new Talgo is put into service, that is not meeting the burgeoning demand on that route. The peak loads, however, are only during the morning commute as many are finding that train convenient to commute to Chicago. If not California Cars or Bombardier bi-levels or gallery cars, why not put 5-across seating on that train and on somewhat shorter seat pirch? The people riding during peak times will have not more dense a seating arrangement as on a DC-9 jet, or the original Shinkansen train, and off peak, the conductors could seat "singles" in the double seats, people travelling with a companion in the triples?
But the mere suggestion, the mere breath of any reform, changes, modifications, or improvements to Amtrak operating practices, or even the suggestion as to who as a professional manager would be better qualified to run Amtrak, such is met with a chorus of "you don't understand railroading, the passenger train market" and "that won't work", any deficiency that such changes are meant to address are the fault "of Amtrak is woefully underfunded and Congress just doesn't understand." And any defense offered of any reform, changes, modifications, or improvements is "bickering" or a "treadmill we need to get off."
What is refreshing about this Forum is that a diverse set of iconoclastic opinions are expressed here, just as the David P. Morgan Trains magazine of old, which also did its share of offending and infuriating people. These seemingly endless arguments need to be made here because it seems they are not being expressed anywhere else, and what we have been doing for the past 40 years since the inception of Amtrak in the advocacy community is not working, and we need to try something new. Discussing, arguing these different points of view is part of that process.
Paul Milenkovic I was told that I am a "bean counter" who would have further shortchanged the lifeboats on the Titanic because they didn't save enough people. In response I said The seas were glass smooth. Rescue by other ships on that busy travel lane was no longer than an Amtrak long-distance passenger train delay away. He could have overloaded those life boats, carefully stuffing them with as many people as he could pack in, and a good seaman would have understood how to do this. This was not done. to which I was told Smith botched things, but had he not most of the people would still have died, you cannot fit 2,200 people in lifeboats capable of carrying 1,100, no matter your organizational skill or "imaginativeness". In the same way it is disingenuous to criticize Amtrak managers for not being able to fund a reliable national system of transportation, in a country 3k miles across and over 1k miles wide with $1.5 B per year. As a person to whom it was suggested that I need to go elsewhere because I am not agreeing with all of the standard passenger train advocacy positions, I feel this is a case of "free speech for me but not for me." If someone uses weakly formed Titanic metaphor to criticize my point of view, that constitutes free expression. If defend myself by elaborating on that metaphor, that constitutes bickering or dichotomies or some manner of treadmill. The Titanic and its lifeboats is particularly apt -- its transportation, isn't it? I suggested (what I heard from somewhere else) that Smith could have overloaded the lifeboats, and I am called out for spreading misinformation, that a lifeboat has only so many seats and that I don't know what I am talking about. First of all, part of the scandal of the Titanic disaster is that survivor accounts claim that many lifeboats were launched only partially full. That is part of the historical record. As to the suggestion of overloading the boats, that is not my idea, that came from a "Titanic Historical Society" Web site. The thing about boats is that their capacity is limited by weight, that the waves don't lap up over the sides and founder the boat. The claim is that the accident happened under calm seas, where the lifeboats could have been overloaded, maybe not saving all 2000 people, but saving more than the 1000 people. These lifeboats have open benches, and children could have sit on laps. This is not like an airplane where every person needs to be seat belted into their own seat "before we can close the doors." In other words, the lifeboats could have been launched with "crush loads." This is done with passenger trains. All the time. The commuter trains in Japan. Where they hire white-gloved "pushers" to shove the overload of passengers onboard the train so the conductor can close the doors. Or in India, where at least in times past they had people sitting on the roof of the coaches. With respect to an Amtrak analogy, consider the capacity constraints on the Milwaukee-Chicago Talgo, and how even if the new Talgo is put into service, that is not meeting the burgeoning demand on that route. The peak loads, however, are only during the morning commute as many are finding that train convenient to commute to Chicago. If not California Cars or Bombardier bi-levels or gallery cars, why not put 5-across seating on that train and on somewhat shorter seat pirch? The people riding during peak times will have not more dense a seating arrangement as on a DC-9 jet, or the original Shinkansen train, and off peak, the conductors could seat "singles" in the double seats, people travelling with a companion in the triples? But the mere suggestion, the mere breath of any reform, changes, modifications, or improvements to Amtrak operating practices, or even the suggestion as to who as a professional manager would be better qualified to run Amtrak, such is met with a chorus of "you don't understand railroading, the passenger train market" and "that won't work", any deficiency that such changes are meant to address are the fault "of Amtrak is woefully underfunded and Congress just doesn't understand." And any defense offered of any reform, changes, modifications, or improvements is "bickering" or a "treadmill we need to get off." What is refreshing about this Forum is that a diverse set of iconoclastic opinions are expressed here, just as the David P. Morgan Trains magazine of old, which also did its share of offending and infuriating people. These seemingly endless arguments need to be made here because it seems they are not being expressed anywhere else, and what we have been doing for the past 40 years since the inception of Amtrak in the advocacy community is not working, and we need to try something new. Discussing, arguing these different points of view is part of that process.
Over the years I have found your viewpoints to be amongst some of the most robust expressed in Trains forums. I may not always agree with your point of view, but they have always been presented logically and thoroughly. Like you I believe the forums should promote diversity. Not restrict it to an orthodox view.
schlimm Let me try a different question that perhaps takes us off the treadmill discussions that have been on here for years. Airlines use passenger load percentage (not sure if that is the precise term) as a way of evaluating their various routes. Is there such a statistic for the various Amtrak routes? Could it be derived or are the data inadequate?
Prior to FY11 the load factor for each route could be calculated from the information contained in the Route Performance Report section of Amtrak's monthly performance reports. Moreover, totals could be determined for each product line (my definition), i.e. NEC, state supported and other short distance corridor trains, and long distance trains. However, the information was not granular enough to determine the load factor for each segment of a route, i.e. Atlanta to Charlotte or Philadelphia to Washington. Amtrak undoubtedly has the information to determine station pair load factors, but getting it as per below may not be worth the challenge.
Unfortunately beginning in FY11 Amtrak discontinued the route report section, claiming that it was developing a new accounting system that would correct the deficiencies in the old system. It did not have an acceptable methodology to allocate depreciation, interest, and other overheads to the routes.
Amtrak has been working on its accounting system upgrades for nearly two years. I cannot fathom the mind of a management team that would discontinue a reasonable accounting system, albeit one that needed to be improved, without have a viable alternative ready to go.
There is probably a way to get the current information. One can file a request for the information under the Freedom of Information Act (FOIA), 5 U.S.C. 552. I have used the Texas Open Records Act procedures to obtain information regarding the Dallas Symphony Orchestra's finances. It is not an easy procedure, but one can have a go at it.
CSS and sam1: Thanks for the very specific responses on load factors. Even if we only had info on end to end, it would be useful in arriving at rational decisions about which LD and corridor routes should be trimmed and which to possibly augment/expand.
Paul M: "we need to try something new." Which was actually what my reference to the "treadmill" was about, not you in particular. So, why not do so? For example. your idea about 3-2 seating (on near-capacity trains, I assume) is one of those ideas worthy of exploration as a way of improving service with lower capital costs. Given your background, I imagine you have many more, as do many others here. But endless replays of the same discussions is rather unproductive after awhile.
Sam1 Over the years I have found your viewpoints to be amongst some of the most robust expressed in Trains forums. I may not always agree with your point of view, but they have always been presented logically and thoroughly. Like you I believe the forums should promote diversity. Not restrict it to an orthodox view.
You obviously do not understand the difference between "robust" and "verbose". One key to discussion is being able to reduce one's argument to the key points; you two on the other hand run on and on for paragraph after paragraph, the sort of position represented by the old aphorism "If you can't dazzle them with brilliance then baffle them...." etc. It is particularly galling because you two are pushing an agenda completely at odds with the stated purpose of the board, rail passenger transportation.
Amtrak's average load factors by product line for FY10, which is the latest publicly available information, are presented below. The numbers have been rounded.
The average end point to end point load factor on the NEC was 50%. It was 60% for the Acela trains, 44% for the Northeast Regionals, and 32% for the special trains.
The average for the State Supported and Other Short Distance Corridor Trains was 42%. The highest load factors were found on the Carolinian at 80%, followed by the Adirondack at 73% and the Pennsylvanian at 69%. The Pacific Surfliner trains had the lowest average load factor at 31%, with the Empire Service being the next lowest at 33%.
The average for the long distance trains was 61%. Topping the list was the Texas Eagle at 69%, followed by the Auto Train at 66% and the Silver Service trains (Star and Meteor) at 63% and 64%. At 47% the Sunset Limited had the lowest load factor.
These are average end point to end point load factors. Over certain segments, e.g. Atlanta to Charlotte, the load factors may be higher or lower. For example, on the Texas Eagle, which I have ridden at least four or five times a year for the past five years, the load factor between San Antonio and Fort Worth has been considerably higher than the load factor between Fort Worth and St. Louis. North of St. Louis the load factor picks-up significantly. Southbound on the Eagle the load factor is relatively high from Chicago to St. Louis, but falls off dramatically south of St. Louis until the train gets to Dallas. Between Dallas and Austin the load factor picks-up significantly.
Load factors, however, don't tell us very much about the financial viability of a route. It is just one element in the financial equation.
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