Senators Propose Reducing Amtrak Subsidies

[Amtrak Flyer]

Good or bad?

The Associated Press

WASHINGTON Jul 27, 2005 — Amtrak's operating subsidies would be cut but the railroad would receive more money for improvements to tracks and equipment, under a bipartisan proposal to be considered by a Senate committee Thursday.

The bill calls for reducing Amtrak's operating subsidy by 40 percent, leaving the railroad $3.3 billion in subsidies over six years. Those cuts would be absorbed through cost cutting, restructuring and reform.

The railroad, however, would receive $4.9 billion over six years for capital grants, and the bill would create a grant program giving states $1.4 billion for intercity passenger rail service.

Amtrak received a $1.2 billion subsidy for the current year. Another Senate measure would give Amtrak a $1.4 billion subsidy next year.

But the Bush administration and some lawmakers have pushed to eliminate Amtrak subsidies. An attempt by the House Appropriations Committee to cut the railroad's budget by more than half and cut off subsidies for every cross-country route was reversed by the full House in June.

The bipartisan bill sponsored by Sens. Trent Lott, R-Miss.; Ted Stevens, R-Alaska; Frank Lautenberg, D-N.J.; and Daniel Inouye, D-Hawaii was scheduled for consideration by the Commerce Committee, where Stevens is chairman, on Thursday.

"Amtrak as an organization must change culturally to think and run more like a business," said Lott, chairman of the Commerce surface transportation subcommittee. "That is why our bill requires Amtrak to develop much better financial systems and be held accountable for its use of federal funding."

Lautenberg said the bill provides needed funding to national passenger rail service, which he called a necessity, not a luxury.

Amtrak President David Gunn called the measure a positive first step. But Transportation Secretary Norman Y. Mineta said he was concerned that the bill does not "provide the fundamental changes Amtrak needs if it is to survive."

 

[MrFSS]

I wonder if there is anyway to find out how many, if any, Senators and Congressman, have ever, or recently, riden an Amtrak train?

 

[Trogdor]

The headline is a bit misleading (I saw it on Yahoo and was a bit nervous until I read the article). The reduction in "Amtrak subsidies" is actually a reduction in *operating* subsidies (i.e. paying for the losses of running trains), but this bill would greatly increase capital subsidies (equipment and infrastructure).

The reduction in operating subsidies is actually something that David Gunn has proposed in his five-year plans. The idea is that eventually the equipment and infrastructure will be rehabbed/replaced, improving reliability, and thus reducing costs (and therefore, operating subsidies).

The bill calls for $1.9 billion per year in total (operating + capital) over six years, or over $11 billion total. It also calls for Amtrak to present strategies for improving its weakest long-distance routes, and these improvements could include increasing service (i.e. making the Sunset and Cardinal daily; upgrading on-board service, etc.). It would also give Amtrak the necessary funding to bring the NEC to its goal of "state of good repair."

Here's a summary I took from another list:

*Summary of Passenger Rail Investment and Improvement Act*
*Overview*

       The Passenger Rail Investment and Improvement Act (PRIIA) is a

six year reauthorization bill (FY 2006-2011) - the same time frame as

the Amtrak Board's strategic plan.  The bill authorizes funding for

Amtrak's capital and operating needs to maintain current operations,

upgrade equipment, and return the Northeast Corridor (NEC) to a state of

good repair.  Over the life of the bill, Amtrak's operating subsidy is

reduced by 40% through cost cutting, restructuring, and reform while

capital funding is increased.  The bill creates an intercity passenger

rail capital grant program for the States.

FUNDING SUMMARY:

Amtrak Operating Subsidy     $3.3 billion     $556 million    

Amtrak Capital Grants     $4.9 billion     $818 million    

State Grants     $1.4 billion     $340 million    

Existing Amtrak Debt     $1.7 billion     $287 million    

Total     $11.4 billion     $1.9 billion

***_Amtrak Reforms_*

*/Management Improvement:/* The bill requires a financial accounting

system for Amtrak operations and a five year financial plan.  The system

is monitored by the Department of Transportation Inspector General.

*/Debt:/* The bill directs the Secretary of the Treasury, in

consultation with the Secretary of Transportation and Amtrak, to

negotiate the restructuring of Amtrak's debt within one year.  If a

restructuring results in significant savings, the Secretary of Treasury

assumes the restructured debt, with the full faith and credit backing of

the Treasury.  

If no restructuring is possible, Amtrak must pay the debt. Such debt is

solely the responsibility of Amtrak, without any implied federal guarantee.

*/Corporate Governance:/* This bill adds the Amtrak President to the

Amtrak Board, bringing the total number of members on the board to nine.

Members are required to have either rail, transportation, or a business

background.

*/Metrics and Standards:/*  In consultation with the Surface

Transportation Board (STB) and the operating freight railroads, the

Federal Railroad Administration (FRA) and Amtrak shall jointly develop

metrics and standards for measuring the performance and service quality

of intercity train operations. Such metrics and standards shall include

cost-recovery, on-time performance, ridership per train mile, on-board

and station services, and the connectivity of routes. The Federal

Railroad Administration shall publish a quarterly report on train

performance and service quality.

*/Route Methodology:/*  The FRA must retain a consultant to develop and

recommend objective methodologies for route and service decisions.  The

methodologies shall give consideration to cost recovery and on-time

performance of existing routes, connections with other routes,

transportation needs of communities not served by other public

transportation, and the methodologies used by rail service providers in

other countries.  Amtrak shall consider adoption of the methodologies

recommended by the consultant.

*/Access to Amtrak Equipment and Services:  /*States wishing to use

operators other than Amtrak for the provision of state-supported

services shall have access to Amtrak facilities for the purpose of

operating that particular route.

*_Northeast Corridor and Short-Distance Routes_*

*/Northeast Corridor:/* Amtrak must develop a capital spending plan to

return the NEC to a state of good repair by the end of 2011.  The

capital funds authorized in the bill are used to carry out the plan at a

100 percent Federal share.  This bill establishes an advisory commission

to provide advice and oversight of the NEC's operations and

infrastructure.  The commission members represent Amtrak, the FRA, and

each State in the NEC.  The commission must develop a proposal for

determining the proper costs and access fees for NEC passenger and

commuter trains.   If Amtrak and the States fail to implement the

proposal, the STB is authorized to impose restructured fees for the

users of the NEC.

*/State-Supported Routes:/* Amtrak must develop, after consulting the

States and the FRA, a uniform cost allocation methodology to assign

costs and determine compensation for State-supported services.

Currently, States pay different rates depending on when their contracts

with Amtrak were negotiated.  If Amtrak and the States don't implement

the proposal developed by the commission, the STB is authorized to

impose restructured compensation rates.

*_Long Distance Trains_*

*/Service Improvements:/*  The FRA, in consultation with Amtrak, must

develop system-wide performance metrics for all Amtrak services in 2006

to evaluate the financial and on-time performance, and customer

satisfaction of each train.  These metrics will be collected and

published on a quarterly basis.  In 2007, Amtrak is required to

establish performance improvement plans for 5 long distance routes (1/3

of the 15 intercity passenger trains) with the worst performance.  As

Amtrak develops these plans, it must consider restructuring the route,

improving on-board service, changing amenities such as sleeper car

service and food service, and changing the frequency of the trains.  In

2008, Amtrak must implement the plans.  In future years, the remaining

long distance routes will undergo the same restructuring process.

*/Competitive Bid Program/*/: /The bill establishes a competitive bid

program allowing freight railroads to bid for long distance trains.  FRA

administers the bid process.  Any employees adversely affected by the

cessation of the operation of a route will either be relocated to other

positions within Amtrak, provided financial incentives in exchange for

the voluntarily termination of their employment, or paid termination

payments guaranteed under existing collective bargaining agreements.  

*_Other Provisions_*

*/Service Improvements:/* The bill requires the STB to issue a quarterly

on-time service report.  If a train's on-time performance record falls

below 80% for two consecutive quarters or fails to meet other

requirements set by the FRA, the STB must investigate the cause.  The

STB then recommends to Amtrak or a freight railroad how to fix the

problems that cause the service delay.  If the STB determines that

delays to passenger trains are the result of freight railroads not

providing priority access to Amtrak, as required under law, the Board

may take appropriate action to enforce priority access.

*/Capital Grants/*/:/ The bill creates a new State Capital Grant program

for intercity passenger rail capital projects.  The program makes grants

to a State, or a group of States, to pay for the capital costs of

facilities and equipment necessary to provide new or improved intercity

passenger rail.  The federal match is 80 percent.  Projects are selected

by the Secretary of Transportation based on economic feasability,

expected ridership and other factors.

.

*/State Rail Plans/*: The bill establishes a State rail planning

process.  New projects funded by the grant program must be on the plan.

*/Security/*: The bill includes the Amtrak and passenger rail security

and tunnel life/safety provisions from the Rail Security Act of 2004

that passed the Senate.

*/Bond Financing:/* Contains a sense of the Congress in support of

multi-year, predictable funding for inter-city passenger rail.  Reserves

sections for provision in the Finance Committee's jurisdiction.

 

[Guest_Amtrak_flyer]

It looks to be pretty well thought out. Just hope common sense prevails. One of the big keys restructuring the debt requires Mineta to actually do something....the only thing I see him doing is sabotaging anything of use. After reading the whole plan I like it.

Do you think the entire Senate will go for it? Or the House?

 

[EmpireBuilderFan]

Of all the bill, this looks really good:

*/Service Improvements:/* The bill requires the STB to issue a quarterly on-time service report.  If a train's on-time performance record falls

below 80% for two consecutive quarters or fails to meet other

requirements set by the FRA, the STB must investigate the cause.  The

STB then recommends to Amtrak or a freight railroad how to fix the

problems that cause the service delay.  If the STB determines that

delays to passenger trains are the result of freight railroads not

providing priority access to Amtrak, as required under law, the Board

may take appropriate action to enforce priority access.

Oh, I hope this bill passes just because of this part. Anyone else want to see UP get smacked around with this action?

 

[AlanB]

Of all the bill, this looks really good:

*/Service Improvements:/* The bill requires the STB to issue a quarterly on-time service report.  If a train's on-time performance record falls

below 80% for two consecutive quarters or fails to meet other

requirements set by the FRA, the STB must investigate the cause.  The

STB then recommends to Amtrak or a freight railroad how to fix the

problems that cause the service delay.  If the STB determines that

delays to passenger trains are the result of freight railroads not

providing priority access to Amtrak, as required under law, the Board

may take appropriate action to enforce priority access.

Oh, I hope this bill passes just because of this part. Anyone else want to see UP get smacked around with this action?

Yeah, I saw that provision too and it does look good. On the other hand, I have to wonder what kind of teeth the STB actually has to enforce this. If they can't extract real penalties, read big fines, then it won't matter.

 

[AmtrakWPK]

Yeah, fine the freight RRs enough to fund Amtrak. I like it. And the debt restructuring has a nice carrot and stick for lenders. If they do a lenient job restructuring the debt, then the debt becomes guaranteed by the gov't. If not, they have to take their chances on Amtrak paying it or bankrupting, and the lender getting little or nothing... This could get Amtrak out from under a lot of debt.

 

[capltd29]

So...

The verdict?

Good or Bad?

Jon

 

[capltd29]

Full Text

I havent had a chance to read it all, but i think it is good.

Does anyone know anything about adding routes?

Jon

 

[Trogdor]

Does anyone know anything about adding routes?

Yes. It requires equipment, money, staff, and track capacity (and a willing host).

 

[Jester]

Delays:

On my recent trip from Cle to Glenwood Springs via Lakeshore Limited & California Zephyr virtually all delays were the result of frieght train traffic. There was a slight delay while we "covered" a faulty crossing gate by going very slowly until the gate was fixed and the draw bridge on the Mississippi River was open for barge traffic... but all other in route delays were due to freight traffic being given priority by the RR. This was true on the Union RR tracks west of Denver and on the BNSF tracks east of Denver. I don't know who controls the tracks from Chicago east but we sat or crawled several times between Chi and Cle both legs of the trip.

Smiling Faces:

The other notable thing about the long distance routes the past two summers is the staff who are either really helpful or really put out if you request aid. This trip on the Zephyr I encountered someone who never got out of their seat for a passenger, never responded to the "call buttons" and who only got up when the other Amtrak staff required it.

Other staffers were smiling, eager and had extra comments or stories that made the experience that much better.

So in addition to the financial issues, the equipment issues and the politics of Amtrak, there appears to be a real training issue ahead to enhance the onboard staff.

-Jester

 

[jccollins]

Is it time to pull the pin on this thread yet AlanB? :huh:

 

[Guest_Amtrak_flyer]

The whole Senate still could vote to slash Amtrak funding. Especially the way some of them think, with the expense of the hurricane and all. Things are looking better then 6 months ago, but it aint over til its over. Call them this week!