Amtrak - Using too much money?

Trains Magazine General Discussion
1

On the Amtrak website I saw that Amtrak is planning to do some " Money Costing things " in the near future. Some of those things include fixing tracks, making their coaches better, getting trains in on time etc. etc. I think that Amtrak should wait for their next " fiscal payment " ( which may not come ) before using more money. If they don’t get their payment because of the money being used fixing their things up they would be farther down in money sooner, which means shutting down sooner. What are your opinions on this subject? I hope this isn’t a silly subject! [:D]

Willy
12 years old [:)]

2

no willy it isn’t a silly subject.whats silly is the way amtrak is run right now.Look at the big cities like New york Chicago L.A. where would they be without the subways and trains to transport all those people.Can Mr.Gunn get it done?Time will tell.
stay safe
joe

3

Willy, the horrible thing is that, if Amtrak goes, so does meaningful rail passenger service in this country.
POP

4

The arguments are by now familiar–at least to those of us concerned with American railroading: all other forms of transportation, either freight or passenger, are heavily subsidized by the government–directly or indirectly. Example: as handy as our highways may be for ordinary car travelers: they still are a vast and continuing subsidy to the trucking industry (especially the Interstates). The Army Corps of Engineers has altered rivers and built canals and locks so as to susidize the barge industry. In numerous ways, the Federal government has continually susidized the always-limping airline industry: direct bailouts, upkeep of the air-traffic control systems, susidizing or building airports, etc. BY COMPARISON, THE MONEY SPENT ON AMTRAK IS A RELATIVE PITTANCE!! And yet certain ignorant and posturing members of Congress continue to keep Amtrak on intravenous feeding, rather than giving it sound and reliable fiscal nutrition. May Gunn prevail over these Congressional obstacles!

5

I keep reading that Most of the fans here say railroads are subsidised and the trucking industry also . exsplain how this is done in trucking and how freight roads are subsidised.

6

Hi Willy,
One of the major reasons the interstate highways was built was to increase commerce, not just so Americans could drive from NY to LA, but so trucks could. It created comptition for railroads, but also created jobs, lots of them, and increased trade between cities, which was what it was designed for in the first place. One of the main reasons railroads were not, and are not now, subsidised by the federal goverment is because that would allow the federal goverments to excerise even more control over our business than they have now. Since the begining, railroads have been run as a for profit business, not a public utility, and because the didnt accept federal money, they didnt have to play by any rules other than their own. During the expansion to the west, the goverment did, in essence, give the railroads the property for their right of way, and several acres on either side of it, but the plan was that, if the railroads went west, so would the people. They did, in huge numbers, and opened up the west, building the cities and towns along the railroad tracks. Giving the railroads this property might be considered a way the railroads were subsidised, but it benifited both the railroads, and the states that gave them the land, in that it increased trade, moved population into those states, and generaly helped out everyone. Outside of the land grants, railroads have been very leery of accepting federal money, beyond the federal safety funds, they didnt want it. The staggers act in the 1980 did away with the fixed rates the goverment forced railroads to charge, and allowed more of a free compition between railroads, and you are seeing the end result now, in that the well managed railroads, those who planed for the future, are making money, improving the physical plant, things like that. Railroads wanted to do away with passenger service way back in the 60s, it never made them a profit, and rarely earned back the cost of running the trains. Count on this, if there was a dollar to be made from it, the rail

7

Very, very well stated Ed…Unfortunately the trucking lobby in congress makes sure that the 5 watt-er’s like the bunch attempting to kill Amtrak by underfunding it and re-build more highway. In addition to the relative free ride, the civil engineers (ASCE & ASHTO) have stated openly that the roads and interstates built before 1985 were seriously under-designed because planners severely underestimated the allowable truck weights and number of trucks turned loose on the nations highways. Nobody says a thing when they allow trucks (highway trucking lobby supported) to keep getting longer and heavier. County and city fathers around here are howling that their roads and arterials are all but shot with no replacement funding in sight (especially for bridges)…

Also used to be railroads built industry side tracks just to see them sit idle. Industry was playing railroads against regulated trucking for the lowest rates and the industry was using that empty sidetrack as a “big stick”. Trucking now is much more deregulated, and so heavilly taxpayer funded (for roads, etc.) that you don’t see industry playing trucks vs. railroads too much.

I would differ from your views on funding only in that shortlines ought to be getting grants to level the playing field for a decade or two. (grants, not loans like what is pushed now where the little rr guy has to sign over the farm to get very little) and that congress ought to fund what they approve for railroad safety upgrades and infrastructure improvement. A lot of rural small towns would still have a rail service option instead of being captive to trucks.

(as stated many times before, they fund bike paths, beautification, etc. under Istea/TEA21/SafeTEA which benefit few and never fund the money for infrastructure that the bills were originally for that would benefit exponentially more…as a side benefit, those mis-directed M&M boys would shut-up and hopefully go away as more crossing protection and grade separations could finally be bui

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A couple of notes on funding:

Weight-Mile and Fuel Taxes recover something like 8%-12% of the cost of repairs that trucks cause. The State of Oregon did a study about 15 yers ago to justify increasing the truckers contribution to highway maintainence and discovered that, except for use of studded tires and/or chains, automibles did zero damage to the highway structure. Trucks did it all. So, depending on your states cost recovery methods, the automible dirver has the priviledge of paying 88%-92% of maintainence and 100% of construction.

Some airports actually do cover their costs and they do this through landing fees, space rent in terminals and land leases for buildings such as warehouses, hotels and so on. Most, however, seldom come close to break-even even though they do charge landing fees and such. They justify this by being able to have air service. Once upon a time, the passenger train served the function, but no more.

Passenger trains once did make money. Starting about 1930 with the rise of the automible and “good highways”, people left all forms of “public” transportation for the auto. The railroads could still fill trains and with revenue head-end traffic, could make ends meet for most runs into the middle 1950’s – until the 707 and DC8. And that was it for the freight railroads with people moving.

Land Grants - This is the single most contentious public issue ever for railroads. There are two good books out on building the transcontinental railroad - the one by Ambrose detailing the UP from inception to about 1890 gives a very accurate but ugly inside view of the corruption that pervaded Western Roads management, the forced bankruptcies designed to have the share holder and supplier fund the building and the owner to never have to pay them. The echo’s of those days loudly reverberate still today in the publics attitude toward railroads and the problems in funding Amtrak.

As for Federal funding of railroad infrastructure, wh

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Passenger trains once did make money. Starting about 1930 with the rise of the automible and “good highways”, people left all forms of “public” transportation for the auto. The railroads could still fill trains and with revenue head-end traffic, could make ends meet for most runs into the middle 1950’s – until the 707 and DC8. And that was it for the freight railroads with people moving.

Land Grants - This is the single most contentious public issue ever for railroads. There are two good books out on building the transcontinental railroad - the one by Ambrose detailing the UP from inception to about 1890 gives a very accurate but ugly inside view of the corruption that pervaded Western Roads management, the forced bankruptcies designed to have the share holder and supplier fund the building and the owner to never have to pay them. The echo’s of those days loudly reverberate still today in the publics attitude toward railroads and the problems in funding Amtrak.

[/quote]

The railroads made most of that money hauling mail and packages (Railway Express), passengers alone rarely allowed the trains to break even on costs

Had the land grants not happened (for which the railroads have paid back to this country in spades), most of this country would never of developed and we very well may have been in the the catagory of a third world country with a lot of empty land between the coasts…

Young master Willy has asked a good fundemental question that many adults cannot seem to fathom.

10

I doubt if Amtrak will shut down, but some cost cutting will be necessary due to budget constraints.I don’t know when the last time passenger rail service ever made money, possibly during World War II? There are some passenger services that are absolutely necessary especially on the East and the West Coasts. But, some long distance trains may have to be cut back because most of them are major money losers.

11

My wife and I have ridden Amtrak quite a bit and really like it. For short to medium-length trips it is faster and a lot more convenient than flying (for us) given the current necessity to be at the airport two-hours before a flight. For the stations we use (we are less than 5 miles away an Amtrak station), you can park at the station for free, even for a two week trip (try that at the airport!!), you park perhaps fifty feet from the tracks, so you’re not trudging the better part of a mile through parking garages and huge airport facilities, dragging your baggage the whole way, and you don’t have to go through security facilities so stringent that they want to take the fillings out of your teeth. Then once you’re on the train, you get into a seat that’s big and comfortable, lots of legroom, you can get up and walk around, go get something to eat, operate your laptop, take a nap, or whatever, and just in general have a very pleasant trip. From what I read, I believe it’s true that basically all passenger service worldwide is subsidized, and for anyone in authority in Washington to try to sell a self-sufficient Amtrak, well I guess that requires smoking some wacky-weed. Also, from what I read, it is not necessarily long distance trains that are a drain on the system. Even if they’re not profitable, though, they do provide a very significant level of service to an awful lot of cities and even small towns that have basically nothing else. Most of our Amtrak travel has been in Florida, but we’ve gone as far as New Orleans and Charleston, S.C. We’ve made a lot of friends on our little trips, and I truly do hope that Amtrak survives. I think it’s a very useful and necessary national resource and public transportation service that needs to continue. In fact, I would hope to see the physical infrastructure be significantly improved. But like everything else we discuss, be it road improvements and repairs, or the rail system, (or Social Security, or pension funds, or Medicare, or -fill in your own blank-),

12

A lot of these writers are correct, the government funds or contributes to all forms of transportation. I think the secret to Amtrak’s success will be to aggressively solicit funds from the one source that can guarantee its financial future… the general public. Amtrak needs to stop pleading its case in congress and start pleading its case in public forums. Also, all of thes so-called railfans who want Amtrak to stay around longer should spend less time waving at Amtrak trains and spend more time riding them instead. In addition I thank all of the kind dispatchers who give Amtrak trains top priority on the rails, and a reminder to those who do not that u r no different from the pilot robbing Amtrak of passengers or the trucker robbing CSX OF FREIGHT REVENUE.

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These are good fundemental awnsers also! It took me a while to get them all straight but once I did I found them very helpful and informative! I hope, like the rest of you, that Amtrak will last for many years to come.

Willy

14

Mudchicken

You are correct about the head-end revenue. The thought has crossed my mind that if Amtrak could contract with FedEx and UPS to operate an REA type service, the return on - especially long distance trains - investment would come much much closer to break-even than now.

Land Grants - I wasn’t going to mention cost recovery by the government, but the Feds have received $9 for every $1 spent between the first land-grants and when the law was repealed after WW2. It depended on the language of each grant, but many roads had to haul all government freight and passengers for free as repayment. Where the government did have to pay, it was usually a very healthy cut in the going rate.

The reason, as you pointed out, for the land grant was to provide economic incentive to populate “the interior”. There were economic reasons, population reasons, military reasons (the Act was passed in the Civil War Era), national security reasons, foreign affairs reasons. AND, at 800%+, not a bad ROI.

Yes, Master Willy asked some very good questions. Here is hoping he keeps on.

15

Maintaining the system will always cost money, more than Amtrak seems to have. Many expenditures are safety related, even when it doesn’t look like it.
As stated earlier, we have seen all the arguments. Mr. Gunn has a tough job trying to make Amtrak work better. We need to support him if we are truely supporters of this mode of transportion - whether or not we like passenger trains. An effort to cut Amtrak is an effort that may expand to the cutting of funding to other things ‘rail’. And yes, it seems to be a quest of one or two members of Congress to get Amtrak while ignoring their own electorate.

I for one admit being biased, I use many types of passenger services, including Amtrak. I don’t drive so I support all ‘public’ transit. I wish more of us did.

Always think safety!

16

Umm, not true. I’m shipping manager for a manufacturing company and have a small fleet of trucks that run the Southeast and along the Eastern Seaboard. My tax burden for each vehicle I operate is $6000 a year in fuel taxes, road use permits, and license fees. I pay 24.4 cents Federal tax on each gallon of diesel I buy plus 7.5 cents + 3% of total sale state tax. If my driver has to use a toll road, I pay a much higher toll than an automobile does. For example, if the toll for a car is $3.00, the toll for my truck is $20-$25. I really don’t see where I’m getting a free ride.

17

Time to bump the gas tax?

In other forums, I’ve seen the need expressed for more money to be spent on transportation infrastructure. There seems to be building pressure to increase funding beyond present levels. They claim that it’s been 20 years or more (since Ron Regan was president) that the fed gas tax went up a nickel to fund all the federal projects needed, plus the need to get people working & spending money. I think it was 10 years ago NARP wanted an Ampenny to get cent for Amtrak capital & give them 1 billion to spend. Now if all this money could be spent to put an overpass at nearly every grade crossing lol [:D] [:p]
be safe use the brakes on your car!

18

I’ve thought a lot about this over the years. I’ve worked in the rail industry, and talked to a lot of good people (one of the CFOs of the SIRR comes to mind), and most of us have seen it simply as a mismatch of priorities.

But why? Is it just politics? Sure, that explains a lot, but it’s been going on for years. Sure, Amtrak was designed to fail, and despite the worst intentions of many politicians, it has succeeded in limping along.

Part of it is that everybody has visions of running trains, being the legacy-builders of a working high-speed interstate railroad, that they see their visions as truth.

Amtrak is in a no-win situation, not because it has failed, but because it has succeeded enough to attract attention of pipe-dreamers who get easily distracted, and beancounters who see the dollars without the impending chaos. Nobody will want Amtrak fiscally or politically.

So if Amtrak shuts down, what’s going to happen? What’s the worst situation? First, there would be schedule chaos to affected regional commuters, then the govt. would quickly create emergency laws to get something running, deferring the inevitable fiscal biting-of-the-bullet.

I know some people probably thought Warrington was an idiot, but if you were a bureaucrat what would you do? Answer: spend money on show projects, increase overhead arbitrarily (either by mistake or design) and decrease expenditures on revenue-resources (shrink your market by driving away certain types of customers while courting influential businessmen), promising fiscal independence while simultaneously (through simple negligence or nefarious planning) push for insolvency.

What’s this do? This forces the government to make a decision if the system totally snaps. Not just a shutdown, but a 30-day gridlock. The so-called “big-business” Republicans pu***he rail system in big-government solution-socialist waters where they can safely abandon it to the Democrats, who make a mess of the uni

19

train210:

If you multiply by 2.5, you would start getting closer towards paying the equitable costs of maintaining the infrastructure that your trucks run on at an acceptable maintenance level. What you have now is still heavilly subsidized. The toll roads tend to mortgage the future against the present and most don’t make it on their estimated rates…

20

Willy-

I think you are getting at is “should Amtrak stop their capital spending in order to keep operating”? Capital spending is money spend for major maintenance or improvments. Examples would be complete rebuilding of a locomotive, electifying from New Haven to Boston, upgrading track for higher speeds and installing a new signal system. Sometimes, Congress specifies that certain money can only be used for certain purposes. Electrifying from NH to Boston was one of these cases. Amtrak was not allowed to spend that money for anything else. Sometimes, Amtrak raises their own money for capital improvments by borrowing money from banks. Most new locomotives and cars are purchased this way.

What you suggest that Amtrak do, using “capital” money for operations, was exactly what they were doing when Geo. Warrington was Pres. They would take something they own, like Penn Station in NY, and mortgage it. Sort of like selling it to a bank and then slowing buying it back from them. This way they got a large lump of money to keep the trains operating today, but would make their costs higher in the future as they had to pay the mortgage. They also stopped repairing any cars that were damaged in wrecks. This is basically what got Geo. Warrington in trouble and led to him leaving and David Gunn taking over.

Amtrak’s problem now is that they owe a lot of banks a lot of money, need a lot of money to rebuild the line from New York to Washington DC, which was last rebuilt 70 years ago, and they have a lot of employees to pay (and they have to keep paying them for years even if they stop running trains because of certain laws protecting those jobs). It seems that this year, Congress will actually give Amtrak enough money to run all of the existing trains/routes as well as start to do some major capital projects. Many people and groups have a bunch of different ideas on how Amtrak could be made more efficient and/or useful but none of these ideas have had enough support from