This article may have some interesting points ??
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.
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 whe
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.
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 high
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
$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
[quote user=“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
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&n
[quote user=“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 woul
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.
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…
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.
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Financial resources will be limited and comparisons with highway and air subsidies take us nowhere.
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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.
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Others?
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All intercity routes should be open to competitive bidding.
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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.
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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.
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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 r
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 diffe
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.