Amtrak
Monday, Feb 14, 2005 - Posted by Rich Miller
The Bush administration wants to kill off federal funding for Amtrak, but its logic escapes some in Illinois and the Midwest (from various news reports and one press release).
[Secretary of Transportation Norm Mineta] said that the $1.2 billion the federal government now appropriates for Amtrak would be used for infrastructure projects.
Mr. Mineta said a radical overhaul of Amtrak is necessary, insisting the $29 billion appropriated for the system since its inception has not resulted in an efficient and solvent passenger rail system.
More than 25 million trips were taken on Amtrak in 2004, an increase of more than a million and a record high. More than three million of those trips were taken in Illinois, and 76,633 were from the Champaign station, according to Amtrak’s Web site.
“The system as it stands now is dying and everybody knows it. Some people have portrayed this as an attempt to kill Amtrak. I’ve got news for you, if I wanted to kill Amtrak I wouldn’t have to lift a finger,†[Mineta] said.
Ridership on the trains running through Central Illinois saw record gains last year. According to Amtrak, the Statehouse and the Ann Rutledge, both of which run between Chicago and St. Louis, saw an 8.9 percent boost in riders, to 212,999.
The Texas Eagle, which also runs on the Chicago-St. Louis line, saw a 9.5 percent increase to 234,619.
[Mineta] called the current system “fundamentally irrational.â€
Mr. Mineta said he wants to Amtrak to mirror the funding mechanism currently used for federal roadways and highways. The states are responsible for maintaining and operating the roadways and the federal government provides a portion of the money for the cost.
First, loss-per-passenger is meaning-less when taken out of context because it does not identify value—especially value to the economy, which benefits whenever an individual travels.
Look at all that real-estate development around O’Hare: The airport itself loses money handling airplanes, and the Federal Aviation Administration requires huge subsidies to run the Air Traffic Control system and enforce safety regulations.
But government recovers all of those losses—and earns billions more—in the taxes paid by individuals and businesses that use air transportation to create new wealth. A “money-losing†governmenttransportation activity—an airport or a highway—can be a powerful driver of business growth. In fact, that’s why the government subsidizes its transportation infrastructure. A “money-losing†passen-ger-train network can perform the same economic magic if given the same resources and rules.
- Anonymous - Monday, Feb 14, 05 @ 8:43 pm:
I can see the rationale for subsidizing rail transportation to a certain extent. Metra provides a great service that provides ridership along dense suburban corridors to the urban core of Chicago and also provides limited reverse commuting benefits, with a farebox recovery of 55% or better on its routes. The intrastate Illinois Amtrak routes receive a generous state subsidy but have attracted a stable and growing clientele.
I can also see the rationale for dropping some of the longer routes that require a large per passenger subsidy that could better be served by the airlines and other modes. These pork-barrel routes siphon money from other, more worthy transportation projects (including areas that would be better served by more frequent or faster rail service).
The Northeast Rail Corridor model is the one that should be emulated. Fast, frequent service in a corridor that can support it. The NE Corridor is largely self-supporting. When farebox revenues approach 100% expenses, the benefits of this type of service are self-evident. When the farebox recovers less than 20% of expenses, as in some of Amtrak’s more desolate or non-supported routes, you’ve got to wonder who or what is benefitting.
Likewise, some of the commuter rail proposals out there don’t seem to make much economic sense. The La Salle/Grundy County corridor study envisions a start-up cost of over $100 million, with annual expenses over $10 million, to run a few trains a day to connect to Metra at Joliet and back. An I-80 commuter bus service would be much less expensive, would be much easier and faster to implement, and would amply serve the relatively small number of workers going from the exurbs to Downtown.
- Anonymous - Tuesday, Feb 15, 05 @ 8:33 pm:
One of the things that is often forgotten when talking about long distance travel is that many people can’t fly due to medical reasons. I guess they should just stay home is they can’t fly?
Also, Amtrak offers some very decent child and senior fares—normally 50% off for kids under 15 and 15% off for seniors over 62. Try getting the airlines to match that.
I also would be interested is seeing what the TRUE taxpaper costs of the airlines and the interstates are if the federal dollars used for maintaining and building both airports and highways were figured into the equation. Talk about subsidizing!!!!
- Anonymous - Tuesday, Feb 15, 05 @ 9:40 pm:
“One of the things that is often forgotten when talking about long distance travel is that many people can’t fly due to medical reasons. I guess they should just stay home is they can’t fly?”
How many of those long-distance rail passengers fit that category? There are better ways of serving that niche market.
“Also, Amtrak offers some very decent child and senior fares—normally 50% off for kids under 15 and 15% off for seniors over 62. Try getting the airlines to match that.”
On a transcontinental rail trip, add up all your meals and sleeping car costs and those discounts don’t seem so competitive with airline flight. The discount air carriers can give good deals for families and seniors as well as others, especially if booked in advance. The “romance” or “novelty” of rail travel is usually the reason it is used on long trips, not the money-saving aspect. It sure ain’t the time-saving aspect.
“I also would be interested is seeing what the TRUE taxpaper costs of the airlines and the interstates are if the federal dollars used for maintaining and building both airports and highways were figured into the equation. Talk about subsidizing!!!!”
Highways are pretty much a cost-recovering endeavor at the state level if construction and maintenance costs are subtracted from the state and federal gas tax and license revenues. The IL State Toll Highway Authority certainly is. Locals may use some general funds to supplement the MFT money that is distributed from the state gas tax. It could be argued that highway users are subsidizing the general fund these days in IL, with hundreds of millions being diverted from highway-generated gas taxes.
Air travel is generally paying its way with the airlines paying landing fees, jet fuel taxes, etc., plus the parking fees and concessions that the cities and states make off the airport facilities. Air travel requires probably the least infrastructure investment per passenger of all modes, maybe excepting river transportation. One thing that is keeping the balance as low as it is now is the lack of new government-sponsored airport construction, which would certainly put a strain on state and federal budgets these days.