Ummm. Do you think it might be possible to provide the OMB link? I am unable to find it. Frankly, it seems to me to be not totally unreasonable to use the amount government documents reports are budgeted for an activity for comparative purposes. I don't think TSA turns back significant amounts of government funds that it has not spent.
Certainly statistics, if they are to be used for comparison purposes, should have a common basis. But when airline statistics which include flights across oceans are included that is simply not a common basis.
We agree on the way country and local roads should be funded and we agree that property tax funding will continue. In fact most roads are local and country roads. As long as we do things in traditional ways there will be large parts of the cost that simply are never counted. But, as you observe, a different way will not fly in this country.
It isn't just that some people have no car. In my own case my wife and I share a car. I have neighbors where there are 4 cars in the family. Our property taxes are very similar in that the value of our homes is similar. You make the point that such taxes are often unfair to some people.
You agree that we need a transportation system and trains should be part of it "where they make sense." Certainly intercity trains make the most sense. The transcontinental trains are the most expensive. But--and I think you will probably agree--we also need to achieve political balance with our transportation system if we are to have Congressional support for it. All airline routes are not equally important, all interstate highways are not equally imports and all rail routes are not equally important. In the end the issue is what kind of country do we want to have.
John WR
As noted in my previous post, the TSA numbers for FY11, which are taken from Office of Management (OMB) data, are the actual FY11 TSA spends. I presume that the OMB numbers are accurate.
Budgets are planning documents or wish lists. What is actually spent is rarely what is found in a budget. This is especially true for government budgets, which tend to be as much about politics as planning documents.
Depending on how one defines it, the total federal subsidy for the nation's airlines, as well as highway users, is less than a penny per passenger or vehicle mile. Moreover, the Amtrak subsidy does not include its exemption from all federal taxes, including fuel taxes, and the fact that most of the stations it serves are exempt from all taxes or that is pays just a nominal rent at most of them.
Comparisons between different modes of transport or other activities should be made on a common unit basis. That is to say, a unit measure that can be found across all modes, i.e. miles, seat miles, passenger miles, vehicle miles, etc. This is how the U.S. Transportation Department does it, as per National Transportation Statistics.
There are, of course, exceptions in every environment. A property owner who does not drive may be paying property taxes and, therefore, is paying for services that she does not use. However, she is in the minority. At the end of December 2011 87 per cent of U. S. residents over 16 had a drivers license. Most of them drove a personal vehicle.
If I were empowered to to so, I would price the cost of county roads and local streets, as well as traffic related support services, into the cost of fuel, with an offset to property taxes. This would solve the non-user issue and send a better signal to motorists regarding the true cost of driving. Unfortunately, it is not likely to fly in this country.
We need a balanced transportation system, and trains should be part of that system where they make sense. They are a solution. But the so-called as well as real subsidies to other modes of transport do nothing to further the goal of improving and/or implementing trains where they can be viable.
The budges for the Department of Homeland Security shows 14 per cent of all DHS expenses go to TSA. This comes out to about $7.8 billion. Here is the link: http://www.dhs.gov/xlibrary/assets/budget_bib_fy2011.pdf
You are comparing total Amtrak subsidy to a part, and a relatively small part, of airline subsidy.
Of course neither cars nor planes are going to go away. It does not follow there there is no place for trains in our transportation system. Most people in the US live in urban areas and in urban areas we are running out of space for highways. We are even running out of air space so we have to ask if we want to use scarce air space for long flights or for relatively short flights.
I don't see that passenger mile comparisons are really valid. Many flights by their nature are very long--New York to Australia, for example. It is impossible to have similarly long train journeys. To compare a New York to Chicago train trip to a New York to Australia flight is apples and oranges.
Roads get many hidden subsidies that there are no statistics for. My neighbor in her 80's who has no car has to pay full property tax which funds local and country roads. Without these roads interstate highways would be useless. For each gallon of gas you buy you pay Federal excise tax without regard to whether you drive on Federal highways, state highways or state and local roads. Automobiles cause almost no damage to interstate highways; the damage is caused by heavy trucks and buses but almost all of the taxes are paid by automobile drivers. So far I cannot find statistics about these enormous road and highway subsidies but we all must pay them. Private railroads pay property tax part of which is passed on to Amtrak through rental agreements. Government has always given advantages to trucks and even automobiles.
For all of that we will not do away with planes and automobiles but we do need a balanced transportation system that included railroads.
John WR A few more statistics. TSA News reports airport security screenings cost $8 billion per year and about $6 billion is paid by taxpayers. (Each screening costs and average of $11.88 and $8.88 is taxpayer subsidy). This comes out to about $44 per taxpaying family. Of course more people fly than ride the train. But this is only one part of the picture. Here is the link:http://tsanewsblog.com/1625/news/is-tsa-just-another-airline-subsidy/
A few more statistics. TSA News reports airport security screenings cost $8 billion per year and about $6 billion is paid by taxpayers. (Each screening costs and average of $11.88 and $8.88 is taxpayer subsidy). This comes out to about $44 per taxpaying family. Of course more people fly than ride the train. But this is only one part of the picture.
Here is the link:http://tsanewsblog.com/1625/news/is-tsa-just-another-airline-subsidy/
According to the OMB, the total TSA spend in FY 11 was 5.384 million. This includes the cost of the airport screening program, of which the public is most familiar, together with cargo screening, i.e. Federal Express, UPS, DHL, etc., general airport security, the air marshal program, and ground transportation facilities, including scrutiny of Amtrak's facilities. The figures shown in the blogs that you reference are proposed budget numbers, appropriations, etc. They are different from authorizations and the amounts that are spent in a given year.
In FY 11, according to the Bureau of Transportation Statistics, approximately 633 million passengers boarded flights in the U.S. At $2.50 per head, the TSA would have collected approximately $1.582 million. It also collects other fees.
Assuming the entire taxpayer funded portion of aviation security is allocable to commercial airline operations, which is not true, the amount would have been approximately .007 cents per passenger mile. This compares to Amtrak’s federal subsidy of 19.11 cents per passenger mile.
Irrespective of who gets what subsidies, people are not going to stop flying and they are not going to stop driving. So the question is where does passenger rail make sense, what should it look like, and how should it be funded?
Operations in the RTA , which is the taxing body for the six county Metro Chicago public transportation, responsible for Metra, Pace and the CTA, are primarily funded by sales tax in the district and fare box. Capital improvements receive federal funds and some state. As is the case elsewhere, low density areas of Illinois receive more from the state (and federal) government than their taxpayers pay in, whether income tax or sales tax. If your county felt the need for public transportation, as some downstate counties have done, they could form a district and have buses, etc. But they have not, apparently.
C&NW, CA&E, MILW, CGW and IC fan
schlimm I think you've got the shoe on the wrong foot, Dwight. Urban and suburban areas subsidize the rural areas through much higher taxes. You should know better than to claim what you falsely said.
I think you've got the shoe on the wrong foot, Dwight. Urban and suburban areas subsidize the rural areas through much higher taxes. You should know better than to claim what you falsely said.
The county I grew up in, Marshall, has no public transportation other than highways. None. So no one is subsidizing our public transportation.
Dragoman Isn't the crux of the discussion exactly this -- how do you measure "the most good"? I'm not sure that it is as simple as deciding between "subsidy per passenger or per passenger mile". How do you factor in some measure of social or public good? A concrete (literally, and non-rail) example: Here in the urban areas of California, adding freeway lanes frequently involves consideration of whether to add regular lanes, or HOV (High-Occupancy Vehicle, or so-called "diamond") lanes. The regular lanes will clearly serve more people, but allowing busses and carpools better/faster access (and thereby indirectly encouraging carpool & transit use) may be a social good that actually may be considered to benefit many more, albeit some indirectly. Are there not comparable considerations in the passenger train discussions?
Isn't the crux of the discussion exactly this -- how do you measure "the most good"? I'm not sure that it is as simple as deciding between "subsidy per passenger or per passenger mile". How do you factor in some measure of social or public good?
A concrete (literally, and non-rail) example: Here in the urban areas of California, adding freeway lanes frequently involves consideration of whether to add regular lanes, or HOV (High-Occupancy Vehicle, or so-called "diamond") lanes. The regular lanes will clearly serve more people, but allowing busses and carpools better/faster access (and thereby indirectly encouraging carpool & transit use) may be a social good that actually may be considered to benefit many more, albeit some indirectly.
Are there not comparable considerations in the passenger train discussions?
Precisely. And the ones arguing that only trains in short-distance, high-density corridors make sense are people who live in [wait for it]..... short-distance, high-density corridors! Those who live in areas with relatively sparse populations though relatively few attractive transportation options think it is unfair that they should subsidize yuppies to go to work with their state income taxes and yet the long distance trains through rural areas (I am thinking about downstate Illinois where I am from) are considered "inefficient."
schlimm ... would you agree that it would be best used where it does the most good, however we agree to measure that (subsidy per passenger or per passenger mile)? ...
... would you agree that it would be best used where it does the most good, however we agree to measure that (subsidy per passenger or per passenger mile)? ...
Paul: That was my hope, but some folks will persist. However, if you want to move forward, you could just ignore the "relative subsidy" issue. So if the issue is not how much subsidy (for operating expenses) but where to place it, would you agree that it would be best used where it does the most good, however we agree to measure that (subsidy per passenger or per passenger mile)? I would think it best to use it in developing existing and new corridors, which hopefully end up like the NEC and show (for Acela) a positive contribution on operations. And a separate, though related issue is whether capital improvements should be government funded or at least funded through tax-exempt, government guaranteed bonds?
ontheBNSF I'm not against air subsidies but we seem to ignore both the direct and indirect subsidies provided to them if we drop Amtrak subsidies shouldn't we in turn drop air subsidies I view we should hold things equal like SAM1 said? An honest question in my opinion. I know more people use air travel than trains but still people use both and people are using the ladder in increasing number so wouldn't it be appropriate to give Amtrak more money?
I'm not against air subsidies but we seem to ignore both the direct and indirect subsidies provided to them if we drop Amtrak subsidies shouldn't we in turn drop air subsidies I view we should hold things equal like SAM1 said? An honest question in my opinion. I know more people use air travel than trains but still people use both and people are using the ladder in increasing number so wouldn't it be appropriate to give Amtrak more money?
There was a call on this thread to stop beating dead horses regarding the "subsidy question."
Amtrak carries about 1 percent of the traffic (in passenger miles) of the commercial air carriers. Amtrak gets something north of 1 billion/year in subsidy.
I don't think you can find 100 billion plus per year in subsidy to commercial airlines, no matter how you slice it and dice it.
Can we lay to rest, "Amtrak gets subsidies but the airlines get them too"? Amtrak gets subsidy, the airlines get subsidy, the airline subsidy may be larger in real dollar terms (although even that is arguable), but the Amtrak subsidy is multiples bigger than any other mode on a dollars per passenger mile standard. Can we stipulate that around here and "move on" or is this point arguable? If it is arguable, I would like to be able to respond and discuss it without some of the words that have been sent my way.
If the matter of how much the other modes are subsidized is arguable and a fair matter for ongoing discussion, do we get to "beat the dead horse" of the Amtrak subsidy whenever it comes up for discussion on this forum?
I have never argued on this forum for the elimination of the Amtrak subsidy or that Amtrak should be held to a go-it-on-your-own no-subsidy standard. But I have argued for considering economic and engineering trades for how Amtrak spends its money, spends your money.
If GM "killed the electric car", what am I doing standing next to an EV-1, a half a block from the WSOR tracks?
Alan F MidlandMike Sam1 Amtrak is the moniker for the National Railroad Passenger Corporation. It is a federally sponsored corporation. The federal government owns the preferred stock of the corporation. The common stock was issued to the private carriers that agreed to contribute their equipment upon start-up of the corporation. They refused a 2002 Amtrak offer to buy back their stock. ... Why did the RRs refuse the Amtrak offer to buy back the common stock. Were they holding out for a higher price, or did they want to have a say in how Amtrak was run (presuming they had common stock voting rights) ? American Premier Underwriters (APU), owner of 55.8% of Amtrak's common stock (from Penn Central) filed a lawsuit seeking $52 million plus 40 years of interest. The federal court granted Amtrak's motion to dismiss the lawsuit in 2011, but APU filed an appeal. Could drag on for years and years. In short, APU wants money. The subject is covered at length in the annual financial report for FY 2011 which is available on Amtrak's website in the Reports & Documents page.
MidlandMike Sam1 Amtrak is the moniker for the National Railroad Passenger Corporation. It is a federally sponsored corporation. The federal government owns the preferred stock of the corporation. The common stock was issued to the private carriers that agreed to contribute their equipment upon start-up of the corporation. They refused a 2002 Amtrak offer to buy back their stock. ... Why did the RRs refuse the Amtrak offer to buy back the common stock. Were they holding out for a higher price, or did they want to have a say in how Amtrak was run (presuming they had common stock voting rights) ?
Sam1 Amtrak is the moniker for the National Railroad Passenger Corporation. It is a federally sponsored corporation. The federal government owns the preferred stock of the corporation. The common stock was issued to the private carriers that agreed to contribute their equipment upon start-up of the corporation. They refused a 2002 Amtrak offer to buy back their stock. ...
Amtrak is the moniker for the National Railroad Passenger Corporation. It is a federally sponsored corporation. The federal government owns the preferred stock of the corporation. The common stock was issued to the private carriers that agreed to contribute their equipment upon start-up of the corporation. They refused a 2002 Amtrak offer to buy back their stock. ...
Why did the RRs refuse the Amtrak offer to buy back the common stock. Were they holding out for a higher price, or did they want to have a say in how Amtrak was run (presuming they had common stock voting rights) ?
American Premier Underwriters (APU), owner of 55.8% of Amtrak's common stock (from Penn Central) filed a lawsuit seeking $52 million plus 40 years of interest. The federal court granted Amtrak's motion to dismiss the lawsuit in 2011, but APU filed an appeal. Could drag on for years and years. In short, APU wants money. The subject is covered at length in the annual financial report for FY 2011 which is available on Amtrak's website in the Reports & Documents page.
APU's law suit is part of the issue. Equally important appears to be the issue of the fair market value or value of the stock. Amtrak offered the holders $0.03 per share. Counsel representing the four holders rejected the offer. Your correct in stating that the issue probably will be tied up in the courts for years. At the end of the day everyone except the lawyers will come out a loser.
schlimm I believe the issue is not subsidy or no subsidy. It's using money wisely. More money for capital improvements makes sense. Since another poster showed that Acela is covering all costs (I'm assuming this includes depreciation), having corridor services that can cover operational expenses plus, within ~10 years of start up seems like the way to spend resources. Spending scarce money on LD trains that serve so few at such a high per passenger subsidy seems foolish.
I believe the issue is not subsidy or no subsidy. It's using money wisely. More money for capital improvements makes sense. Since another poster showed that Acela is covering all costs (I'm assuming this includes depreciation), having corridor services that can cover operational expenses plus, within ~10 years of start up seems like the way to spend resources. Spending scarce money on LD trains that serve so few at such a high per passenger subsidy seems foolish.
The Acela does not cover its fully allocated costs, i.e. depreciation and interest, although it covers its operating costs and contributes to the capital costs. The amount of the contribution depends on how much of the NEC capital improvements are allocatable to the Acela. Amtrak does not provide us with enough information to make the determination.
Alan F Sam1 The Acela does not make money. Neither does the NEC. The Acela, because of its premium fares, covers its operating costs and helps off set the operating loses of the other NEC trains. How much? Actually, we don't know since Amtrak stopped showing the route results, claiming that it is working on a new accounting system. When the capital, interest, and ancillary costs are added to the mix, none of Amtrak's routes make money. A business has to cover all of its costs to be successful. Check the updated September 2011 Monthly Performance Report on Amtrak's website. The revised MPR for the end of FY2011 with final audited financial data for the route financial performance numbers was posted a month or 2 back. The fully allocated contribution/(Loss) columns shows that the Acela and the NE Regionals (for the first time I think) are operating in the black for fully allocated overhead.The total revenue numbers for the state supported and short distance corridors include the state operating subsidies, so actual ticket revenues for the FY shown back on pg 24 of the report should be used to get a measure on the true cost recovery for the corridor service. The total revenue for the trains must include food & beverage sales to add up, but the F&B income is not broken out. The Lynchburg Regional ran at a profit for the year and the DC to Richmond & Newport News Regionals almost broke even.
Sam1 The Acela does not make money. Neither does the NEC. The Acela, because of its premium fares, covers its operating costs and helps off set the operating loses of the other NEC trains. How much? Actually, we don't know since Amtrak stopped showing the route results, claiming that it is working on a new accounting system. When the capital, interest, and ancillary costs are added to the mix, none of Amtrak's routes make money. A business has to cover all of its costs to be successful.
The Acela does not make money. Neither does the NEC. The Acela, because of its premium fares, covers its operating costs and helps off set the operating loses of the other NEC trains. How much? Actually, we don't know since Amtrak stopped showing the route results, claiming that it is working on a new accounting system. When the capital, interest, and ancillary costs are added to the mix, none of Amtrak's routes make money. A business has to cover all of its costs to be successful.
Lion: I was referring to the previous post, about riding from Chicago to Charleston for 33 hours. With a higher speed train, service from DC south to Charleston, or more likely a 2nd connecting corridor from Charlotte to Charleston could be feasible..
schlimm Seriously, who would want to take the train, other than someone who just "likes riding trains"? Running trains on routes longer than 400-500 miles (and that at high speeds) does not provide transporation, just land cruises.
Seriously, who would want to take the train, other than someone who just "likes riding trains"? Running trains on routes longer than 400-500 miles (and that at high speeds) does not provide transporation, just land cruises.
I completely disagree with this sentiment. For instance, if you were to leave DC bound for Charleston SC, it would take you about nine and a half hours on Amtrak. The no traffic drive time is about an hour less. But you're going to lose well over an hour in traffic just at Lorton VA. That's a trip of over 500 miles. I used to make that trip with a girlfriend. Leaving friday afternoon for that week's vacation was an 11 hour drive. We didn't exactly travel light on those trips, which ruled out air.
Railroad to Freedom
Under the The Amtrak Reform and Accountability Act of 1997 (P.L. 105-134), the DOT preferred stock lost its voting rights and liquidation preference against Amtrak assets. The original voting rights of the common shareholders were restored, and the common stock was supposed to be redeemed by Amtrak at its fair market value by October 1, 2002. It has not been redeemed.
I don't know the ins and outs of the issue. I suspect that it has to do with a determination of the fair market value of the stock as well as related control issues. Since there is no market for the stock, determining a fair value for it would be difficult.
Exactly. So nine people rode two trains taking an elapsed 33 hours. If you were to take Amtrak this Monday, 8/20, you will pay $249 to $301 for coach. I can book a ticket right now on US Air for a flight with a change in Charlotte. Elapsed time for the entire flight is 4 hr 46 min. Price? $205 inclusive of tax and fees. Seriously, who would want to take the train, other than someone who just "likes riding trains"? Running trains on routes longer than 400-500 miles (and that at high speeds) does not provide transporation, just land cruises.
cbq9911a Quite true. I took Amtrak from Chicago to Charleston, SC last month and there were around 8 other people who took the train. Most took the train because flights to Charleston from their home town connected through Atlanta and were around $ 500.00. Amtrak coach was $ 200.00.
Quite true. I took Amtrak from Chicago to Charleston, SC last month and there were around 8 other people who took the train. Most took the train because flights to Charleston from their home town connected through Atlanta and were around $ 500.00. Amtrak coach was $ 200.00.
Riddle me this. If the airplane is $500 and Amtrak coach is $200, why isn't Amtrak, say, charging $400, undercutting the airlines by a comfortable margin and requiring proportionately less subsidy? Or is it that Amtrak needs to undercut the airline fare by $300, drawing on its subsidy to do this, to induce those 8 people (8 people!) to take the train.
But if trains are so much more hassle-free and comfortable than the plane, couldn't Amtrak charge $600 and still get takers?
Maybe Amtrak has indeed cranked up the fare, especially in the NEC market where they are perceived to be indeed a better mode of transportation rather than a bus-like inferior mode that needs to be priced at a discount. That the fares are so high on the Acela accounts for the Acela covering its operating costs, which people seem to keep saying over and over and over again that a train can never do. So why can't Amtrak boost fares on the long-distance trains the way they do on the Acela?
Amtrak is the moniker for the National Railroad Passenger Corporation. It is a federally sponsored corporation. The federal government owns the preferred stock. The common stock was issued to the private carriers that agreed to contribute their equipment upon start-up of the corporation. They refused a 2002 Amtrak offer to buy back their stock. Language regarding the formation of the corporation can be found in a number of authoritative sources, including the enabling legislation and the corporation's by-laws. Whether the sponsors intended it to fail appears to be mostly conjecture. Clearly, it was intended to operate as a business.
The federal government runs a number of other businesses that most people are unaware of or don't understand how they operate. The Pension Benefit Guaranty Corporation is in effect an insurance agency designed to insure private pension plans. It collects premiums from the insured and pays benefits if the insured pension plan goes into default. Although the intent is for it to recover all of its costs, it currently has an estimated shortfall of $26.3 billion.
The federal government also runs the Federal Deposit Insurance, which is a government corporation operating under authority of the Glass-Steagall Act of 1933. The FDIC acts as an insurance company that insures most commercial bank deposits up to stated limits. It collects premiums from depositors, although most of them don't know it, and covers depositors accounts in case their depository fails. Historically, the FDIC has been managed well.
The Postal Reorganization Act of 1970 abolished the United States Post Office Department and created the United States Postal Service, a corporation like independent agency with a monopoly on first class mail. It is expected to cover all of its costs.
All of these government functions are expected to operate like a business; i.e. they are expected to re-cover their costs through premiums, fees, etc. It is true that they are not expected to generate a profit for their stakeholders. Amtrak has not generated a profit for its stakeholders; it has not even come close to covering its costs.
Amtrak's federal subsidies are a rounding error in the federal budget. Agreed! It is chump change.
In FY09, Amtrak received federal operating and ARRA subsidies of approximately $3.7 billion. The operating subsidy was in the neighborhood of $1.3 billion. The combined transfers worked out to an average of $45.20 per taxpayer. The operating subsidy, which repeats itself annually, averaged $14.65 per taxpayer.
Each year the Congressional Budget Office publishes a report of potential savings by budget line item for the federal government. Amtrak makes the list each year. So too do hundreds of other items, many of which are relatively small on average per taxpayer. Here are a few other examples (on average) per taxpayer: $28.09 for the highway trust fund transfers; $23.21 for the arts and humanities; $17.10 to change the Social Security COLA; $4.89 to reduce the premium subsidy for crop insurance; and $2.16 for the Essential Air Services Program.
The list goes on for many pages. Every special interest group claims that its perk is just a rounding error in the federal deficit. Unfortunately, when one adds them all up, they come close to $600 billion, which is approximately half of the annual federal deficit.
Amtrak was formed by Congress to relieve private enterprise railroads of the burden of passenger service in view of the fact that Congress's creation, the United States Postal Service, as an entity to replace the United States Post Office, had pursued avenues of operation which took intercity mail and local city and town mail delivery services off the railroads in favor of standing buildings and highway trucks. Without this revenue railroads were stuck with high costs of maintaining passenger train services. Congress thus deemed that the new entity of Amtrak be charged with making a profit, an achievement I believe they knew could not be accomplished and thus it would be abandoned and there would be no passenger trains.
As for being a business...the only for profit business Congress ever really dabbled in was the Consolidated Rail Corporation which it created through the USRA to own and operate bankrupt Northeast railroads which was set up to be sold off to private stockholders at a near future date which did happen successfully. Amtrak and the USPS have not been set up in the same manner so therefore continue to muddle through life by politics and whim rather than sound business, or even sound political, practices.
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