Whichever way you look at it, you cannot have a functioning, state-of-the art passenger rail network at no cost to society, same as you cannot have a highway network or a network of airlines and airports. Someone has to pick up the tab for it. Which tab is being picked up and paid is part of the democratic process, hopefully not only based on short-term financial issues, but on long-term necessities also based on environmental perspectives.
With gas prices as low as they still are in the US, I am afraid that decisions are based on near-sighted “economics”, leaving the better part of the bill to be paid by future generations.
"You can find support for my views in the primary source documentation, i.e. DOT budgets and performance reports for the Highway Trust Fund (HTF) and the Federal Aviation Administration (FAA) amongst others. They contain the primary data for my conclusions. Or you can read some of my previous posts on the subject of subsidies. I place little trust in news accounts. They tend to be cobbled together by reporters who simply don’t understand the issue or even where to find the information. "
None of the sources I gave you were news accounts.
“It is true that user fees pay for a shrinking portion of the federal highway system for a variety of reasons. The biggest is the unwillingness of the Congress to raise the federal fuel taxes to compensate for increased highway growth and maintenance requirements. As a result in FY10 the federal government transferred $14.7 billion from the general fund to the HTF. Who pays the money into the general fund. Taxpayers with a federal income tax liability as well as those who buy the goods and services of corporations and businesses with a tax liability.”
So the cost of highways and highways alone is not being repaid by the users.
"In FY10 46 per cent of those filing a federal income tax return paid no federal income tax. In fact, it was entirely possible for a family of four with an adjusted gross income of $50,000 to not only not pay any federal income tax but receive back a small check from the federal government. Accordingly, the taxes were paid for the most part by filers with median incomes of more than $50,000 per year, with more than 75% of the federal income taxes paid by those with adjusted gross incomes of $100,000 or more. You can find this information in the IRS statistical tables. If you know how slice and dice the numbers you will be able to verify my numbers. "
You are right. Nobody is going to bid anything to take over an Amtrak LD route. But, that’s not the beginning and end of privatization.
I think the definition of “privatization” is where we are getting all tangled up. In terms of rail passenger service, a subsidy of some sort is required. It could come from an owning infrastructure company ala Germany or it could come in the form of a “negative bid”. That is, “how much do I have to pay you in order for you to provide this service”. Sort of like a contract operator except the winner gets to set fares, market service and keep the revenue.
While I agree with the point you are making, I think it is important to note that congress could have simply picked up the operating losses the railroads were incurring, and providing capital funds for infrastructure maintenance and improvement rather than create ATK in the form that they did. Had they done this, ATK would have been five guys deciding which routes to operate and approving capital requests.
The question I think is why congress did what they did. I would posit it was for control and power, which is what our government has come to be about. What you are suggesting makes sense and is probably the most realistic “privatization” model that exists. My prediction is no change until congress wakes up about our unsustainable Federal Budget Deficit. To fix that we have to stop doing a lot of stupid stuff and ATK will be part or a long list of real cuts.
The only ATK asset of importance is the NEC and its associated line to Harrisburg. If I were an ATK partisan, I would be worried about how to keep the NEC running without Federal money.
This is essentially how Amtrak operated in the beginning. Amtrak did own the equipment, though, and did consolidate maintenance and overhaul locations. But, the operating crews were still provided by the host road for the first decade or so.
It’s also how most of the commuter agencies started life.
It didn’t work out very well in either case. The RRs felt they were being shortchanged on their total costs and they were rather disinterested in finding and negotiating savings or improving service. They just wanted out altogether.
From what I’ve read, the Nixon admin and Congress did what they did with cross purposes. There were some “true believers”, such as the Sec of Trans Volpe, who thought that the whole thing could be managed to a net benefit (through economies of scale, phasing out most LD trains, and adding in more corridor trains) and those that have been whispered to believe that is would be a convenient way to kill it all in one fell swoop a few years out. Volpe actually got a bill to Congress by smoking it past Nixon’s notable toadies.
In the end, both camps were wrong about how it would play out.
Certainly the railroads provided T&E crews for years, but that is not the same as what you previously proposed, which was that the private operator would control fares and service; ATK controlled fares and service from the begining.
You are correct the railroads never cared about ATK. I would add that they never had any reason to. This simply illustrates the point I was trying to make, which is that congress made a choice to set ATK up the way they did. There is no reason to believe anyone writing the bill much cared, or even had a clue in the economic sense, about the incentive structure they were creating.
You are proposing a different incentive structure. Take credit for that.
You are right. But, lets bid out piece of Amtrak where the winner gets to own and control everything (and keep the revenue). Guy who needs the smallest subsidy wins. Think anybody could underbid Amtrak? They are getting underbid everywhere in the commuter operation contract arena. I suspect the same players partnered up with the right people would do the same.
How about Herzog plus Marriott running all the western LD trains?
I would think there would be a tad bit of difficulty running over sleepers if only because no companies have had much experience with the matter, but I think it would be a very plausible arrangement. I’m thinking the rest of Amtrak could still be a public entity focused on medium speed corridor development. Sort of like the Harrisburg line (except with new electrification).
This is the scheme followed by the Australians with the Great Southern Railway, which is a stockholder company that operates the Indian Pacific, Ghan, and Overland. Winning and keeping the contract was and is predicated on keeping the subsidy at the lowest level reasonable. The level of service on these trains is heads and shoulders above the level of service on Amtrak.
Just think of them as glorified coaches with a few more bathrooms! (and nothing would stop Herzog from hiring the guys with the expertise that would be laid off at Amtrak)
The general fund comes from all those paying taxes to the general government and federal loans. Many but not all of those who pay into the fund are not users. Thus it’s costs are not being borne entirely by its users, but rather entire taxpaying American public.
Thus Amtrak, on the one hand, and highways and roads and streets, on the other are both financed, in part, by various taxpayer sources. Some of them use Amtrak (very few) and some use highways (many to most). So both have a mixture (though differing in percentages) of taxpayer and user financing.
So the consensus of all this back and forth posturing is
Everybody pays for everything and nobody pays for nothing!
If anybody or anything had a viable idea and the resources to pull it off to make rail passenger service in the US a profit producing entity - it would have already been done.
History shows us, that only very few railroads were built with passenger service in mind. Railroads always relied on the revenues from freight services. Even in the days, when railroads had a quasi monopoly, passenger services hardly earned their keep. It is said, that in the 1840´s, the King of Prussia turned down a proposal to build a state-owned line from Berlin to Potsdam with the words “no need to be in Potsdam an hour earlier”. In most European countries, railways since then have been regarded as a necessary public utility for the welfare of the people, and thus have invested substantial amounts of tax money into their systems. Most attempts to privatize railroads were not made to turn railroads into profit-making entities, but to reduce the amount of public funding.
As a research engineer by profession, I take exception to the blanket characterization of my opinions or the opinions of others on this forum as posturing.
I will characterize one line of reasoning in the advocacy community. Passenger rail service has never been a money maker – seems that was the case for a long time and will continue to be the case. Private highway transportation has never been a money maker, also requiring substantial government money, and we can argue about whether the gas tax is a “user fee” for highway users or simply a general tax. Ergo, we should spend whatever quantity of money it takes to keep passenger trains running. QED.
The fallacy with that reasoning is this. Amtrak is subsidized at the rate of 20 cents per passenger mile. Were highway transport to be subsidized at the same rate, we would see somewhere close to a trillion dollars per year being spend on highways and subsidies to other aspects of automotive transport – that amounts to about 6 percent of GNP.
I do not see how a person comes up with a trillion/year in either direct or indirect subsidy to highways taking into account all levels of government. Hence passenger trains have a much higher subsidy rate. Wouldn’t the subsidy rate diminish were it not for the fact that trains are underfunded. Well, no, not if you believe the Vision report advocating for a 10-fold expansion in U.S. passenger rail service over 50 years.
The advocacy community has lost a lot of credibility with a lot of people since they appear to be clinging to a “golden era” represented by the streamliners of the post-WW2 period. They need to realize that the long-distance passenger train no longer serves a useful purpose and re-direct their energies to that which is realistically attainable.
The “golden era” is a fairly apt description for passenger trains in the 1945-55 decade. The new trains were reasonably fast and with air conditioning, arguably more comfortable than pre-streamliner trains. In addition, long distance driving was a bit of a pain in most places before the interstate highways and air travel was uncomfortable (pressurized airliners were uncomon for several years after WW2) and had a high accident rate (design problems with planes, poor air traffic control, unreliable engines, etc).
IMHO, the big mistake with the California passenger rail advocates is concentrating too much on HSR and ignoring the corridors. I would guess that uprated LOSAN corridor would generate more passenger miles than the proposed HSR would generate outside of the LOSSAN area and for less than a tenth of the cost of the proposed HSR. With reference to my first paragraph, airlines would not be competitive with an improved LOSSAN service.