2016 Transportation Funding

[Andrew]

How is the new transportation bill different from the FAST Act?

 

[afigg]

To be clear, presumably you are asking about the FY2016 appropriations which has been rolled up into one very large omnibus bill. Which has not yet been passed by the House or Senate as final jockeying to line up the votes is underway.

NARP has posted its initial analysis: 2016 BUDGET: CONGRESS' PARTING GIFT FOR PASSENGERS IS PART NAUGHTY, PART NICE. However, it is a 2,000+ page bill, so it often take days to find all the pieces in the bill. It appears that Amtrak funding will. as was reported several weeks ago, remain at the same level as FY2015. To summarize the NARP initial analysis:

Amtrak will get $1.39 billion total, $288 million for operating subsidy, $1.1 billion net for capital, debt service, etc. An increase would have been nice, but this is better than another cut.

TIGER is now called replaced by the National Infrastructure Investment grant program which gets $500 million (same as FY2015). Whether the FY2016 grant program will differ from TIGER in the details, don't know.

Interesting new funding of $350 million for railway-highway grade separation projects. If states match this 50-50 or even 80-20, this should lead to a bunch of grade separation projects, some of them on Amtrak routes. With all the grade crossing collisions recently, an annual federal grant program to separate grade crossings can help over time to close many of the most dangerous and/or busy crossings.

$2.18 billion for the New Starts grant program which is an increase over FY2015, so this is a boost for local transit projects.

Edit: checked the omnibus bill summary, it refers to TIGER under "NATIONAL INFRASTRUCTURE INVESTMENTS", so the $500 million is still really for the TIGER program.

 

[afigg]

Looked at the transportation section of the actual Omnibus bill. It recognizes that the appropriations structure is not in line with the PRRIA 2015 act (and the FAST act), appears that they intend to apply the new funding structure in FY2017. Of course, next year will be an election year, so the appropriations process will be subject to even more political games.

Some excerpts from the omnibus bill on the House website (which has some handwritten corrections).

THE NATIONAL RAILROAD PASSENGER CORPORATION (AMTRAK)
The agreement provides a total of appropriation of $1,390,000,000 for Amtrak in the traditional account structure: operating grants and capital and debt service grants. This is the structure authorized prior to enactment of the Passenger Rail Reform and Investment Act (PRRIA) of 2015. PRRIA 2015 restructures Amtrak into two new accounts: Northeast Corridor grants and the national network. The agreement directs Amtrak and FRA to submit a detailed congressional budget justification consistent with the new structure to the House and Senate Committees on Appropriations for fiscal year 2017.

The agreement directs Amtrak to provide a report on the status of state contracts and payments related to section 209 of the Passenger Rail Improvement and Investment Act of 2008 no later than March 1, 2016.

OPERATING GRANTS TO THE NATIONAL RAILROAD PASSENGER CORPORATION

The agreement provides $288,500,000 in quarterly operating grants to Amtrak, based on the Secretary's assessment of Amtrak's seasonal cash flow requirements, and provides that funds remain available until expended. Before approving funding to cover operating losses, the agreement requires the Secretary to review a grant request for each specific train route. The agreement prohibits Amtrak from discounting tickets at more than 50 percent off the normal peak fare, unless the operating loss due to the discounted fare is covered by a state and the state participates in the setting of the fares.

Still has the stupid 50% discount fare restriction. If it wasn't for this, Amtrak could offer serious off-off-peak discounts on the NEC.

CAPITAL AND DEBT SERVICE GRANTS TO THE NATIONAL RAILROAD PASSENGER CORPORATION

The agreement provides $1,101,500,000 for capital and debt service grants to Amtrak, to remain available until expended. Within the funds provided, the agreement includes up to $160,200,000 for Amtrak's debt service payments, and not less than $50,000,000 for investments to comply with the Americans with Disabilities Act. In addition, the agreement provides for an initial distribution of $200,000,000 for a working capital account, allows the Secretary to use up to $50,000,000 for operating subsidy grants to Amtrak should its operating losses in fiscal year 2016 exceed amounts provided under the previous heading, and conditions the Secretary's approval of grants for capital expenditures upon the receipt and review of a grant request for each specific capital project justifying the Federal support to the Secretary's satisfaction.

.....

Looks like Amtrak will get $19.2 million for the NEC from left over funds from a paragraph later on in the bill.

Section 153 rescinds $19,163,385 in unobligated funds and makes these funds available to the Secretary for grants to Amtrak for shared use infrastructure on the Northeast Corridor identified in the Northeast Corridor Operations Advisory Commission's 5 year capital plan. Grants shall not exceed 50 percent of the total project cost, and matching funds shall be consistent with the Commission's cost allocation policy.

 

[Andrew]

So Amtrak will NOT be able to reinvest NEC surplus revenues back onto the Northeast Corridor in 2016, or is this not the case?

I ask because the PB Transportation Update stated that the three rail discretionary grants were not included for the 2016 appropriations, but I didn't know what they were referring to.

 

[jis]

So Amtrak will NOT be able to reinvest NEC surplus revenues back onto the Northeast Corridor in 2016, or is this not the case?

That is the case as I have been saying all along will be the case. When you see an operating subsidy item of around $700 million or more, instead of just $250 to $300 million you will know that the reinvestment thing is happening, again as I have mentioned twice before. What we need to analyze now is what remains of the $1 billion or so Capital and other items after you take out the amounts for the "other items", and also remove the small amount needed for non-NEC capital. What remains is what will be invested in the NEC in addition to the payments received from the various Commuter Agencies and freight railroads that use the NEC.

I ask because the PB Transportation Update stated that the three rail discretionary grants were not included for the 2016 appropriations, but I didn't know what they were referring to.

I have no idea what they are referring to as the "discretionary grants". The entire Amtrak funding is discretionary.

 

[Andrew]

So Amtrak will NOT be able to reinvest NEC surplus revenues back onto the Northeast Corridor in 2016, or is this not the case?

That is the case as I have been saying all along will be the case. When you see an operating subsidy item of around $700 million or more, instead of just $250 to $300 million you will know that the reinvestment thing is happening, again as I have mentioned twice before. What we need to analyze now is what remains of the $1 billion or so Capital and other items after you take out the amounts for the "other items", and also remove the small amount needed for non-NEC capital. What remains is what will be invested in the NEC in addition to the payments received from the various Commuter Agencies and freight railroads that use the NEC.

I ask because the PB Transportation Update stated that the three rail discretionary grants were not included for the 2016 appropriations, but I didn't know what they were referring to.

I have no idea what they are referring to as the "discretionary grants". The entire Amtrak funding is discretionary.

Thanks.

Do you think it's likely that Congress will never allow Amtrak to reinvest surplus NEC revenues back onto the NEC?

Also, if Amtrak can't reinvest their surplus revenues in 2016, then how will they plan for the B&P Tunnel replacement, as well as Gateway?

 

[Lonestar648]

I read some where that the bill was requiring Amtrak to offer several LD routes to Private Operation for a period of 4 years. Any additional information on this and did this actually make the bill?

 

[afigg]

Do you think it's likely that Congress will never allow Amtrak to reinvest surplus NEC revenues back onto the NEC?

Also, if Amtrak can't reinvest their surplus revenues in 2016, then how will they plan for the B&P Tunnel replacement, as well as Gateway?

For Amtrak to reinvest the bulk of NEC operating surplus back into the NEC, Congress will have to increase the operating subsidy, while not cutting the total capital & debt service funding by the same amount. For Amtrak, this is a kick the can down the road funding level and I expect FY2017 will be the same. Going to have to wait until after the 2016 elections to see what happens for the prospects of significant federal funding for the NEC giga-projects (NEC Gateway. B&P tunnel replacement, and the north Portal Bridge which should be funded next).

But, you need to relax on these projects. NEC Gateway and the B&P Tunnel replacement are going through the EIS and engineering study phases. They are both years away from needing to get the major funding in place to proceed with actual construction. In 2017, Senator Schumer (D-NYC) is very likely to be either the Senate Minority or Majority leader, succeeding Senator Reid who is retiring. Whether he is Majority or Minority leader, that will put Schumer into a position of considerable power to get much of the needed federal funding for Gateway by working with the Democratic Senators of the NEC states.

 

[afigg]

I read some where that the bill was requiring Amtrak to offer several LD routes to Private Operation for a period of 4 years. Any additional information on this and did this actually make the bill?

That provision was in the FAST transportation re-authorization act which was passed and signed over a week ago. So it is law. I don't think it requires Amtrak to "offer" an LD route to private operators, but it instead allows private operators to bid for the LD train service provided they can show that they can operate it as a lower loss than Amtrak. Given the logistics challenge of starting up an LD train service along with having the rolling stock available, doubtful that anyone will put in a successful bid.

What Congress just passed today (December 18) was the Fiscal Year 2016 appropriations which funded Amtrak at the same levels as FY2015 (and FY2014).

 

[Lonestar648]

Thanks for the clarification. I agree, based on your post, it is seems unlikely a company will want to enter such a risky venture.

 

[Andrew]

Do you think it's likely that Congress will never allow Amtrak to reinvest surplus NEC revenues back onto the NEC?

Also, if Amtrak can't reinvest their surplus revenues in 2016, then how will they plan for the B&P Tunnel replacement, as well as Gateway?

For Amtrak to reinvest the bulk of NEC operating surplus back into the NEC, Congress will have to increase the operating subsidy, while not cutting the total capital & debt service funding by the same amount. For Amtrak, this is a kick the can down the road funding level and I expect FY2017 will be the same. Going to have to wait until after the 2016 elections to see what happens for the prospects of significant federal funding for the NEC giga-projects (NEC Gateway. B&P tunnel replacement, and the north Portal Bridge which should be funded next).

But, you need to relax on these projects. NEC Gateway and the B&P Tunnel replacement are going through the EIS and engineering study phases. They are both years away from needing to get the major funding in place to proceed with actual construction. In 2017, Senator Schumer (D-NYC) is very likely to be either the Senate Minority or Majority leader, succeeding Senator Reid who is retiring. Whether he is Majority or Minority leader, that will put Schumer into a position of considerable power to get much of the needed federal funding for Gateway by working with the Democratic Senators of the NEC states.

Thanks.

I thought that Gateway would get funded through NEC profits, New Starts Funding, and RRIF Loans, etc. from: http://www.schumer.senate.gov/newsroom/press-releases/schumer-booker-amtrak-chair-announce_breakthroughs-achieved-in-just-passed-transpo-bill-that-provides-clear-path-to-federal-funding-for-gateway-tunnel-new-law-puts-gateway-on-track-for-billions-of-much-needed-additional-federal-dollars

CHUMER, BOOKER, AMTRAK CHAIR ANNOUNCE BREAKTHROUGHS ACHIEVED IN JUST-PASSED TRANSPO BILL THAT PROVIDES CLEAR PATH TO FEDERAL FUNDING FOR GATEWAY TUNNEL; NEW LAW PUTS GATEWAY ON TRACK FOR BILLIONS OF MUCH-NEEDED, ADDITIONAL FEDERAL DOLLARS

[SIZE=large]In Trifecta Victory, Bill Allows: 1) Profits on Northeast Amtrak Line To Be Used for Tunnel, Approximately $200-$300M A Year; 2) New Federal Railroad Rehabilitation and Improvement Financing (RRIF) Rules Making Federal Low-Interest Loans More Accessible To Development Corp. Structure & Improving Repayment Structure‎; and 3)Expansion Of “New Starts” Transit Program That Will Allow Gateway To Secure Even More Federal Funds[/SIZE]​

Remember, the B&P Tunnel replacement will get a Record of Decision in 2017, and the Hudson Tunnel Project should get a ROD in 2018. With the Port Authority just recently creating the Gateway Development Corporation, certainly a lot of NEPA/engineering and federal grant seeking will occur over the next 2 or 3 years.

PA Gateway Development Corporation PDF: http://www.panynj.gov/corporate-information/pdf/12-10-15-Board-Gateway-Project.pdf

How likely is it that Congress NEVER reauthorizes Amtrak? Also, since the House and Senate introduced their Amtrak reauthorization bills earlier this year, would they have to reintroduce them in 2016, since they were not voted into law in 2015? I thought they were going to be part of the FAST Act.

 

[jis]

My understanding, which of course may be wrong, and subject to refutation, is that Amtrak was authorized as part of the FAST Act and therefore do not require a separate authorization bill. Amtrak supporters have been trying tog et Amtrak authorized as part of a general transportation (so called Highway) bill for a long time. This is the first time they succeeded.

But again, authorization does not mean the money is available. It is sort of like setting a five year plan which Congress may or may not actually fund. They just showed that they are not funding the authorization as planned for 2016, and I think it is a safe bet that they will not for 2017 either.

The problem with New Start for Gateway will be two fold. One is that there is very little in Gateway that is actually New Start by any stretch of the definition and the second is that of finding a portion of Gateway that has genuine independent utility, and can meet the New Start threshold for the amount of funds needed for said utility to be met, something that dogged the ARC funding and why NJT had to come up with schemes for even adding the Northern Branch, which is now getting LRT, as a Commuter Rail that would use ARC. They simply could not find enough users to meet the threshold for New Start beyond $3 billion. But we'll as usual see, how things unfold.

Rail advocates should be campaigning for getting 80/20 grants like highways do and not just loans which will result in fares that are even higher than the already astronomical fares on the NEC. This is not your little HO project in your basement. This is critical national infrastructure, and it should be treated accordingly. Besides, there is need to keep enough wiggle room to be able to fund the cost overruns which will inevitably happen too, and perhaps loans should be kept as a place to fall back on at that point instead of blowing all of it up front.

 

[Andrew]

My understanding, which of course may be wrong, and subject to refutation, is that Amtrak was authorized as part of the FAST Act and therefore do not require a separate authorization bill. Amtrak supporters have been trying tog et Amtrak authorized as part of a general transportation (so called Highway) bill for a long time. This is the first time they succeeded.

But again, authorization does not mean the money is available. It is sort of like setting a five year plan which Congress may or may not actually fund. They just showed that they are not funding the authorization as planned for 2016, and I think it is a safe bet that they will not for 2017 either.

The problem with New Start for Gateway will be two fold. One is that there is very little in Gateway that is actually New Start by any stretch of the definition and the second is that of finding a portion of Gateway that has genuine independent utility, and can meet the New Start threshold for the amount of funds needed for said utility to be met, something that dogged the ARC funding and why NJT had to come up with schemes for even adding the Northern Branch, which is now getting LRT, as a Commuter Rail that would use ARC. They simply could not find enough users to meet the threshold for New Start beyond $3 billion. But we'll as usual see, how things unfold.

Rail advocates should be campaigning for getting 80/20 grants like highways do and not just loans which will result in fares that are even higher than the already astronomical fares on the NEC. This is not your little HO project in your basement. This is critical national infrastructure, and it should be treated accordingly. Besides, there is need to keep enough wiggle room to be able to fund the cost overruns which will inevitably happen too, and perhaps loans should be kept as a place to fall back on at that point instead of blowing all of it up front.

I understand that the Gateway Project is expensive--but it has to get done! The FAST Act enables projects that serve both passenger rail projects as well as transit projects to receive a higher rating and thus more funding--and Gateway is certainly now a top candidate for New Starts funding.

I would also hope (and expect) CMAQ funds to contribute as well to Gateway.

So I guess we can all agree that Amtrak NEC profits will not get reinvested into the NEC in 2016, but if Congress never reauthorizes Amtrak, then how will Amtrak be able to do this? I bet that Amtrak has considered using NEC profits for the Baltimore Tunnels, and for loans to pay for Gateway as well as Amfleet replacement--with the loans beginning 5 years after these projects get completed.

Are you saying that Amtrak is going to have a really tough time to get funding for Gateway?

What do you think is a bigger (and more important) priority for Amtrak: The Hudson Tunnel Project or the B&P Tunnels?

 

[PRR 60]

Just as a clarification, how is the NEC "above the rail" surplus a "profit?" Isn't everyday maintenance of the rail and everything below it also an operating expense? Should highway profits only be "above the pavement?" Should airline profits only be "above the runway?"

If Amtrak maintains the NEC signal system, or surfaces rail, or cleans a drainage culvert, that does not count as an expense against the so-called operating profit of the NEC. Only Amtrak could make that slight of hand and seemingly get away with it.

 

[fulham]

How much of the $1.1 billion in capital goes towards upkeep of the NEC? Or is this the great unknown? The operating subsidy is relatively small but what are we getting for the billion of capital dollars?

 

[neroden]

Still has the stupid 50% discount fare restriction. If it wasn't for this, Amtrak could offer serious off-off-peak discounts on the NEC.

I really want to know which Congressman keeps inserting this bit of idiocy, and why. Is there anyone with the right contacts on the Hill who could find out?
Getting rid of this would also allow for much better revenue management on the long-distance services, which could do with discounting in February and higher prices in June.

 

[neroden]

What we need to analyze now is what remains of the $1 billion or so Capital and other items after you take out the amounts for the "other items", and also remove the small amount needed for non-NEC capital.

It's not small, though it is less than half. There's probably at least a hundred million going to Information Technology upgrades under various accounting entries (still), tens of millions to ADA compliance, and probably a fairly large bundle to Chicago Union Station, plus various amounts for capitalized rolling stock repairs, Beech Grove upgrades, etc. All very worthwhile and probably pays for itself in a couple of years, of course.
I think "Other" also includes debt service, which is still substantial for a couple of years until the Penn Station mortgage is paid off and the leaseback transactions are unwound.

 

[Andrew]

Does the Amtrak 2016 funding include $1.4 billion for the rest of the fiscal year or for the total of FY 2016?

 

[jis]

Total for FY 2016 AFAICT. Otherwise the entire NARP community would be shouting Huzzahs, if it was for three quarters of FY16.

 

[Andrew]

Total for FY 2016 AFAICT. Otherwise the entire NARP community would be shouting Huzzahs, if it was for three quarters of FY16.

Lolz,

but then, it could potentially be several more years until Amtrak is allowed to reinvest their NEC profits back into Gateway. If they are not allowed to do this, then how would Amtrak contribute to Gateway? Also, could CMAQ funds contribute to Gateway (in addition to the New Starts funding)?

 

[Andrew]

Looked at the transportation section of the actual Omnibus bill. It recognizes that the appropriations structure is not in line with the PRRIA 2015 act (and the FAST act), appears that they intend to apply the new funding structure in FY2017. Of course, next year will be an election year, so the appropriations process will be subject to even more political games.

Some excerpts from the omnibus bill on the House website (which has some handwritten corrections).

THE NATIONAL RAILROAD PASSENGER CORPORATION (AMTRAK)

The agreement provides a total of appropriation of $1,390,000,000 for Amtrak in the traditional account structure: operating grants and capital and debt service grants. This is the structure authorized prior to enactment of the Passenger Rail Reform and Investment Act (PRRIA) of 2015. PRRIA 2015 restructures Amtrak into two new accounts: Northeast Corridor grants and the national network. The agreement directs Amtrak and FRA to submit a detailed congressional budget justification consistent with the new structure to the House and Senate Committees on Appropriations for fiscal year 2017.

The agreement directs Amtrak to provide a report on the status of state contracts and payments related to section 209 of the Passenger Rail Improvement and Investment Act of 2008 no later than March 1, 2016.

OPERATING GRANTS TO THE NATIONAL RAILROAD PASSENGER CORPORATION

The agreement provides $288,500,000 in quarterly operating grants to Amtrak, based on the Secretary's assessment of Amtrak's seasonal cash flow requirements, and provides that funds remain available until expended. Before approving funding to cover operating losses, the agreement requires the Secretary to review a grant request for each specific train route. The agreement prohibits Amtrak from discounting tickets at more than 50 percent off the normal peak fare, unless the operating loss due to the discounted fare is covered by a state and the state participates in the setting of the fares.

Still has the stupid 50% discount fare restriction. If it wasn't for this, Amtrak could offer serious off-off-peak discounts on the NEC.

CAPITAL AND DEBT SERVICE GRANTS TO THE NATIONAL RAILROAD PASSENGER CORPORATION

The agreement provides $1,101,500,000 for capital and debt service grants to Amtrak, to remain available until expended. Within the funds provided, the agreement includes up to $160,200,000 for Amtrak's debt service payments, and not less than $50,000,000 for investments to comply with the Americans with Disabilities Act. In addition, the agreement provides for an initial distribution of $200,000,000 for a working capital account, allows the Secretary to use up to $50,000,000 for operating subsidy grants to Amtrak should its operating losses in fiscal year 2016 exceed amounts provided under the previous heading, and conditions the Secretary's approval of grants for capital expenditures upon the receipt and review of a grant request for each specific capital project justifying the Federal support to the Secretary's satisfaction.

.....

Looks like Amtrak will get $19.2 million for the NEC from left over funds from a paragraph later on in the bill.

Section 153 rescinds $19,163,385 in unobligated funds and makes these funds available to the Secretary for grants to Amtrak for shared use infrastructure on the Northeast Corridor identified in the Northeast Corridor Operations Advisory Commission's 5 year capital plan. Grants shall not exceed 50 percent of the total project cost, and matching funds shall be consistent with the Commission's cost allocation policy.

But remember, the last time Amtrak had a new reauthorization signed into law was in October 2008, and 2008 was an election year, just like 2016 will be.