One kind of transportation spending nobody ever seems to question is spending for space exploration. Yet space exploration boils down to spending for transportation and transportation research and it is completely subsidized by the taxpayers. Here is one article that analyzes it, compares it with other kinds of spending and reports it costs each taxpayer $60 per year
The $60 a year per taxpayer figure jumped out at me because one plank of the Republican platform calls for the abolition of Amtrak which costs a little less than $50 a year per taxpayer. So, if we cannot afford Amtrak how then can we afford space exploration which is even more expensive and which transports only highly paid Federal Government Employees?
Without getting into another argument about the merits of the Amtrak expenditure, lets at least get the numbers straight.
According to the article, the NASA budget for 2010 (the year reported by the article) was $18.7 Billion. I don’t know how they came up with “average taxpayer”, but whatever number they used resulted in the calculation of $60 per year for each taxpayer.
The federal grant to Amtrak is running at something like 10% of the NASA budget, so following the math employed in the article, the annual average cost per taxpayer for Amtrak is SIX DOLLARS PER YEAR.
Two notes. The $50 dollar figure in the Republican Platform is said to be the federal government’s cost per Amtrak passenger. A quick calculation indicates that the $60 number in the linked article is per capita of U.S. population, something a little over 300 million. There is a very significant difference between the number of people living in the US and the number actually paying s
Thank you for correcting my post. After posting I realized I was giving the subsidy per Amtrak passenger rather than per taxpayer. As far as I know there is no way to edit my earlier post.
I don’t really want to be critical of NASA. However, if I could I would direct my own tax dollars to Amtrak rather than NASA.
The author of the article does not support his figures with references to primary source data. Moreover, he or she makes a common mistake. He refers to budgets, which are usually different than what is spent. The key number is the spend.
The IRS publishes complete tax data approximately two years after the close of the tax year. Any tax data published before that is an estimate based on statistical sampling. The latest complete data is for 2009. I download the data to a spreadsheet for grins and analyze it each year.
In 2009 the IRS received 140,494,129 individual income tax returns. Of this number 81,865,179 or 58.3% had a tax liability; that is to say, they paid federal income taxes, which means that 41.7% paid no federal income taxes. The largest group of filers had gross incomes of $50,000 to $75,000 per year, with an average adjusted gross income of $61,464, and paid an average federal income tax of $4,740.
In 2009 the average Amtrak operating burden for individuals paying federal income taxes in 2009 was $15.44 per filer. The average annual burden for the three largest groups filing individu
To edit your posts look at the bottom grey bar, on the right is a blue button marked reply, on the left is a yellow triangle to report the post as abusive, and along side that is a yellow pencil. Click the yellow pencil to edit your post. You only see this for items that are already posted.
Thank you for your additional data and analysis, Sam.
We have discussed the issue of monies budgeted vs. monies actually spent.
If space travel can be considered to be an “optimum transport solution,” and clearly the Federal Government does consider it that because it has been investing in space travel for many years, then it seems to me Amtrak–even long distance Amtrak–falls within the parameter.
John F. Kennedy observed that while some ask why something should be done he would ask why not do it. That analysis may not satisfy econometric equations but it is the way our Government makes policy.
Thanks for digging out more accurate numbers, as mine were more back of the envelope. Your numbers do help make the point that for individual taxpayers, the amount of their share of the federal grant to Amtrak is chicken feed.
By the way, you stated that the average Amtrak burden per filer was $15.44 and that would add up to about $2.2 Billion. Did you mean per filer with a tax burden? That seems more in line with the recent grant levels.
In this and previous topics, you have argued that investment in Amtrak long distance trains service is less than an optimum transport solution. Assuming Amtrak could actually save the government and taxpayers $500 Million or so by eliminating the long distance service, where do you propose the money go?
Your are correct. I should have said filer with a tax burden.
I would redirect the money to the expansion of existing passenger rail corridors or the development of new ones. That is my diplomatic answer. In fact, if I were King, I would spend it on a moderate speed (initially) passenger rail corridor between Dallas/Fort Worth and San Antonio. This is the I-35 corridor, and it is very congested. Of course, I would have a compelling argument on why the train should stop in Georgetown, where I just happen to live.
In FY11 Amtrak’s long distance trains lost $615.4 million before depreciation, interest, and ancillary charges. Add 10 per cent for these items and the number is $676.9 million. If this money were invested at the U.S. Treasury 10 Year Note average interest rate for the last 40 years, it would be worth slightly more than $10 billion in 10 years.
Amtrak says that discontinuance of the long distance trains would result in an annual savings of $300 million. I think that their number is low, if for no other reason than t
While no one really uses NASA spacecraft for transportation, but people regularly use aircraft for transportation. However, no one ever questions the subsidy they get in the form of absolutely free infrastructure in the form of air traffic controllers who are paid government employees, nor do they question the fact that most, if not all, airports are funded and built with government bond issues. These bonds are paid by the taxpayer when they mature, and the airlines only pay a small rent to land their planes.
In reality, you or I could buy a plane, hire a crew and subcontract maintenance, then pay a little for entry into a reservation system, and wallah – have an airline that still is on the verge of bankrupcy! But if I’m big enough, the Feds will bail me out! Everything else is subsidised by the public. I have it made!
I don’t need controlling radar, I don’t need any kind of land based control systems like locator becons, I don’t anything that gets me from A to B. Even when I arrive at B I don’t need gates, I don’t need a waiting room, I don’t need baggage handlers or a baggage handling system – I don’t need any of that because I get a SUBSIDY. But no one calls it that, do they?
If the airlines had to pay for that stuff, no one would fly because it would cost to much. Fifty bucks a head for Amtrak – what’s the head cost for the airlines? I’ll wager it’s more than $50.
Simply speaking, AMTRAK is the past. Space travel is needed to open mankind’s path to the future. If all non-commuter passenger rail service were to go poof and vanish, most of the US population would never notice. If all the satellites currently orbiting Earth die and aren’t replaced, modern communications will die with them. If anyone thinks that undersea cables (very vulnerable to damage) could pull in the slack, they just don’t realize how much electronic traffic moves through space.
I don’t want AMTRAK to go away. In fact, I’d rather see the subsidy raised to something like the per-passenger subsidy of the airlines. What I’d really like to see go away is the simple-solution statements made by flaming-britches political wannabes. Every new president has discovered that simple campaign promises ended up having unexpected complications (and every new veep has discovered that his job is to fill an empty chair at staff meetings…)
For the most part civilian airports in the United States have been built by municipal and regional authorities. They have been funded by the issuance of tax free revenue bonds.
The taxpayers are not on the hook for the bonds. The debt service associated with them is covered by a variety of user fees (taxes), vendor rentals, parking fees, gate fees, etc. In a few rare instances the owner of the airport, i.e. Dallas owns Love Field, may guarantee the bonds. However, this is not the case for Dallas’ airports.
Municipal bonds wear a lower interest rate than fully taxable bonds. However, depending on when they are issued, the spread may be very narrow, and has never been as narrow as many people believe. To determine the impact of municipal financing on all the airports in the United States would be a daunting task.
Dallas Love Field is undergoing a major renovation. The estimated cost is $500 million. Revenue bonds have been or will be issued to cover the cost of the improvements. I don’t know all the details of the financing, but lets see what might be the outcome.
As of today the average interest rate for a 30 year investment grade taxable bond is 3.43 per cent, whereas the average rate for a municipal bond is 2.99 per cent. The difference in the interest cost over 30 years would be approximately $42 million or $1.4 million per year. Based on the Love Field passenger count in FY10, the difference between fully taxable bonds and tax free municipal bonds works out to be 18 cents per passenger.
This is just one of the misconceptions regarding airport financing in the United States, i.e. that airports are paid for by the general taxpayers, and the users don’t cover the cost of the facility.
There is one other important point to keep in mind. How airports are funded has nothing to do with passenger rail.
I don’t see that modern communications requires that we put people on Mars. But honestly this is not my strong point and I would be happy to learn more about it.
China certainly doesn’t believe long distance railroads are “the past.” China has built long distance railroads and I understand China is still building them. If in the United States they are to be relegated to our past it is only because our politicians choose to do that.
You are greatly mistaken on how airports are funded, what airlines pay for, what it takes to start and operate an airline, and just about every other point you tried to make…
Technicalities aside, as I may be wrong about airport funding, the point is that the airlines do not pay for the airport nor any radars or any kind of guidance while in the air. This is provided for them, no matter how the cheese is sliced. Amtrak, on the other hand, funds and maintains it’s track and all associated stations. This is not the case with airlines. If you were to look at Amtrak’s balance sheet, you’d find those assets listed, and if you look on their income statement, you’ll see the associated expenses. these items are totally abscent on any airline’s books, as it is not theirs and they do not foot the bill. Saying that landing fees pay for the airport is ludicrous. The D gates at Vegas were added some years ago and paid for by bonds issued by the city or county, I cannot remember which one. On the other hand, if Amtrak needed a station in Vegas, they’d have to build it themselves.
Sorry, not true. Once outside the NE corridor (and a few other places like Chicago & LA) that argument does not fly. Simple things like snow removal on platforms and the like poke holes in that argument. (freight railroads have come to realize that passenger train operation contract agreements are hardly revenue adequate and have gaping holes in the scope of the agreements) And then there is the mess in New Mexico over Raton & Glorietta passes.
Platform snow removal in San Diego must be a BIG expense when compared to track maintenance. Why is it that no one sees the point that airlines are subsidised to a greater extent than Amtrak? All this knitpicking about these nickel and dime things have no meaning in the greater scheme of things, and THAT is the point I’m trying to make. It seems that some people in this thread just do not get it. Maybe I’m not that good a nitpicker or accountant, or maybe I’m not a good writer either, but I like to see the forest, not one individual tree. When someone talks about snow removal on platforms – that’s like talking about tire valve stem expense on a car. It’s not really an earth-shaking item, is it?
It really depends on the year - some are worse than others. My first winter in the midwest included 3 blizzards which shut the city down, and 4 additional snowstorms which also significantly impacted the city. It was so bad that Omaha used up their whole snow removal budget for the entire winter before December 15th. Last winter we had less than a half dozen days of snow total, and barely anything more than 2 inches at a time. A VERY unusual winter.
It doesn’t matter who issues the bonds. What matters is who provides the revenue stream to pay the interest and retire the bonds.
It’s common practice for this revenue to be generated by charging the airlines landing fees and gate fees. The airlines must get this money from somewhere and that somewhere is in the price they charge their passengers. (There is no other place for the money to come from.) This is all as it should be - the end user pays for the facility based on the amount of use they make of the facility.
The airport facilities will not appear on the airlines’ books, but the airline passengers will pay for the facilities. That is what counts.
Amtrak, on the other hand, gets a subsidy from general tax revenues. And, at least on the long distance routes, there is no rational reason to do that. It’s simply a pointless income transfer from one person to a
According to the Airline Owners and Pilots Association “About one quarter of the costs of our air transportation system come from the general fund.” Here is a link to the source of the information:
The AOPA story is overly simple. In FY10, which is the latest audited numbers, fees and investments from the Aviation Trust Fund covered 71.37 per cent of the FAA’s business lines. In FY11 fees and investment income was projected to cover 74.05% of its activities. These are FAA terms. The data is from the FAA’s Annual Report, which is audited by the appropriate auditors.
The FAA has five lines of business: Air Traffic Organization, Aviation Safety, Airports, Commercial Space Transportation, and Regions and center operations, as well as several minor programs.
In FY10 the transfer from the U.S. Treasury General Fund was approximately $5.5 billion on a total spend of $19.1 billion.
Historically, the FAA has covered approximately 85 per cent of its costs from user fees and investment income. However, beginning in FY09, the transfer from the General Fund was increased substantially as a result of the American Reinvestment and Recovery Act.
Air Traffic Organization is the largest single activity of the FAA. This is the group that controls air traffic, which I suspect is what most people think of when they think of the FAA. It is an earmarked fund, which means that nearly 100 per cent of its costs are covered by user fees. Most of the transfer funds, especially the ARRA funds, have gone to other business lines, with airport shovel ready projects receiving a substantial block of the monies.
To what extent do the commercial airlines and their passengers benefit from this largess? It is hard to say because the FAA does not breakout the distributions in its Annual Report. But it is possible to project a reasonable estimate.