Amtrak and Internet

[WICT106]

Some additional comments to AlanB's remarks: The article mentioned talks about $$$ per passenger. The correct measurement unit is passenger-MILE, i.e., one passenger being carried one mile. By this unit of measurement, certain trains only lose $0.10 per passenger-mile. Note that I didn't write "per passenger," as that figure tells people nothing, and is good for only slanting the figures against passenger rail service. Aslo, AlanB brings up a very good, salient point about how the Airlines and highways have government-funded Trust Funds (which add up to more money in one year than Amtrak has received over its entire history), while the passenger rail service provider gets scraps and crumbs. Airlines get their traffic control and much of their physical plant & infrastructure bought and paid for by the government, while passenger rail gets . . . .well, next to nothing.

 

[PRR 60]

Aslo, AlanB brings up a very godd, salient point about how the Airlines and highways have government-funded Trust Funds (which add up to more money in one year than Amtrak has received over its entire history), while the passenger rail service provider gets scraps and crumbs.  Airlines get their traffic control and much of their structures bought and paid for by the governemtn, while passenger rail gets . . . .wel,, next to nothing.  

Nonsense!

Those "government funded" trust funds are funded solely by the people who use the mode and no one else.

As my prior post stated, the airline trust fund gets ALL of its money from taxes and fees on airline tickets and aviation fuel. The "government" does not provide one cent for the airline trust fund. This year those airline ticket taxes and fees will total $12.5 billion dollars. That money is set aside to pay for improvements for aviation and nothing else. That is what makes a "trust" fund a trust fund. All the airline "structures" are paid for from this trust fund. None are paid from the general tax funds.

The portion of the FAA budget that really comes from the government, general fund that is, is about $2.5 billion. That is twice Amtrak's funding. Unfair? The airlines carry 50 times the number passengers carried by Amtrak, and record nearly 100 times the number of passenger-miles. By that standard, the $1.2 billion received by Amtrak is pretty generous.

So, why can't Amtrak have a trust fund too? If you can figure a way that 24 million Amtrak passengers can generate $12.5 billion in trust fund deposits each year (roughly $500 in taxes and fees per passenger), then Amtrak can have a trust fund too. Or look at it another way. Funding a modest $2.4 billion dollar fund for Amtrak would bump-up the cost of the average Amtrak ticket $100. Exactly how many of those 24 million passengers would be left if the average ticket was taxed $100?

Amtrak's only feasible route is general fund subsidy, and all things considered, the $1.2 billion they got last year and now this year is not bad considering everything. It is definitely not "scraps and crumbs".

 

[AlanB]

Since 1970, one year prior to Amtrak, these ticket taxes and fees have paid every cent of the federal capital grants for airports, and have even paid for ancillary facilities such as the Newark Airport rail station. Not one cent of general federal tax revenue has gone to airports in over 33 years. The use of the AATF has even been expanded to cover a large part of the day-to-day operating cost of the FAA including air traffic control. In 2002, the general tax subsidy of FAA operations (the portion that comes from all taxpayers, not just airline ticket taxes), including the cost of air traffic control, is about $2.5 billion. This compares to the $1.2 billion subsidy of Amtrak, and commercial air serves 50 times the number of passengers as Amtrak. Since Amtrak tickets are not taxed, and there is no pool of user tax money for rail, every cent of federal support for Amtrak comes from general taxpayers.
I have often heard Amtrak bemoan how poorly they are treated as compared to aviation. I suggest that someday someone should call their bluff. They should be offered the same “subsidy” as commercial aviation. I suggest Amtrak and its supporters would be in for a rude awakening.

Just to be clear here, there was a special ticket fee levied at Newark Airport to pay for the monorail. It was not part of the normal fees that are tacked onto every airline ticket in this country. I'm not sure if that's what you were saying or not.

The same is also true for the new Airtrain opening later this month at JFK.

However at Newark now that they can no longer collect those fees, since the system is paid for, it is now the rail-air passengers who are helping to pay for the operation of the monorail. Anyone on the airport grounds rides for free, but anyone transferring from a train gets to pay $5 bucks for the privilege. Seven bucks if you are coming out of NY.

The same will also be true for the JFK Airtrain, anyone coming from a train will have to pay $5 to ride. I see this as a way to discourage airplane passengers from transferring to trains for short haul runs. They'd rather you use another plane.

However those airport fees only paid for the monorail itself, NJT, Amtrak and the State of NJ helped to pay for the actual rail station plus the needed track work. There may have also been some Federal funds used too.

Note: Someone taking the bus to the airport does not pay an extra fee. Yet most of those people will also ride the monorail to get from the drop-off point to their terminal.

Next, while I can't speak to every airport in the country, it should be noted that the States of NY & NJ do contribute funding every year to the Port Authority of NY & NJ. Just how much varies and I don't have any specific numbers on just what portion may have gone to the airports vs. the PA's other ventures. But public money is indeed in the mix here. Not to mention that until this past year, the PA was paying the City of NY a pittance for rent on the land used here in NYC by the airports.

That may not have been a direct subsidy, but it still is a subsidy. It still tilts the profit margins for the airlines in their favor. If landing fees go up to pay for the correct amount of taxes, then either profits have to go down or prices must go up. Either would put Amtrak in a much better position to compete fairly.

Finally one must consider that for years, even before 1970 the Government did do things and spend money to make air travel the preferred mode of travel. Had things been fairly balanced, like they are in Europe, then Amtrak's subsidy would be in better balance with the airlines. Let's also not forget that the Government drives research into airplanes for the military, such that corporate dollars don't have to pay for that research. That would drive the cost of a plane up even higher.

Last but not least, at least a quarter of all airline pilots got their training in the Military, so there's another expense that the airlines have been spared.

So IMHO, no matter how one looks at things, passenger trains have been getting the short stick for years. It's those years of neglect that have caused ridership to diminish and allow critics to come up with those wonderful distorted percentages that make things sound bad.

 

[PRR 60]

Alan, not to be a pain, but you are not correct on two counts.

First, the entire Newark Airport station rail project, monorail, station, trackwork, everything, was funded by the entirely by the Port Authority through the PFC fund and through internal airport revenue. Amtrak and NJT contributed nothing. Every cent of their work on that job was reimbursed by the PA. And believe me, if I know Amtrak (and I do), they got every cent and then some.

This particular project raised the ire of the airlines who argued that the rail-side improvements were not appropriate projects for PFC funding. They objected to their ticket fees being used for a train station (as they also did in San Francisco with BART and at JFK with AirTrain). They lost that argument. However, by virtue of the PFC funding, the station cannot be used by NJT or Amtrak as a regular stop. No parking lots; no street access; no NJT bus access. It must be for exclusive use of the airport and that is why there is no public access to the station other than through the airport using the monorail. The monorail was also built with exclusively with PA funds (PFC and internal airport cash). The charge levied by the PA for use of the monorail is solely for operating costs.

And second, and I cannot emphasize this strongly enough, absolutely NO local, state, or federal tax money goes to the operation of the four Port Authority airports. None. Zero. Nada. If any local or state tax money is received by the PA, it for other purposes. By federal law, the PA cannot co-mingle airport revenues and cash balances with other PA operations. All of the airport revenue of the PA comes from airline gate leases, landing fees, concession leases and fees, that beloved monorail fee, and a real big hitter, parking. In 2002, a really bad year for commercial aviation, here is how the four airports did:

(all figures in thousands)

Gross revenue from operations: $1,519,859

Less operating expenses (both direct and allocated): $1,017,025

Less depreciation and amortization: $220,393

Net income from operations: $282,441

Less Interest and other expenses: $105,683

Plus PFC revenue and grants: $43,947

Net income, airport terminals in 2002: $220,705 ($336,398 in 2001)

Now, whether the PA pays rent for use of the city land or not is a business decision between the PA and the city, but suffice it to say that Amtrak pays nothing to any city where it occupies land, pays no local real estate taxes, and pays no vehicle license fees for its trucks and cars. I can assure you that the city of New York receives far more revenue from the two city PA airports than it receives from Penn Station or Sunnyside Yard.

Now, if you want to argue that 30, 40, 50 years ago rail got shafted, then I might agree with you. That could well be a good reason that Amtrak deserves more funding today. But today’s statistics are not distorted or manipulated. They are what they are. Looking at today only, Amtrak is being treated royally.

That’s it. I’m done.