What happens if a "State Supported" route becomes profitable?

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Siegmund

Lead Service Attendant
Joined
Nov 19, 2018
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470
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northwestern Montana
This question managed to not come up for 45 years... but, at least in some versions of the accounting (and this ISNT a thread about what way to do the accounting) the Virginia service more than covers its own costs.

If that happens - does the "subsidy" become $0 and Amtrak pockets the profit? Does the profit get split? Does the profit belong entirely to the state? Can Amtrak decide it wants to run those trains on its own and refuse to renew whatever deal it has with the state?

There's always been that note in the timetable that state-supported trains "are subject to discontinuance if the state withdraws its support" - but a train that was profitable, it seems, wouldn't be.

Incidentally, re VA, one suspects that the claim that the service is financially viable is at least close to true, in light of the new deal that was announced.
 
For clarification, 403(b) hasn’t been relevant in the context of state-supported Amtrak service in this millennium.
 
403(b) had a different meaning to non-railfans 20 years ago, too :)

Leaving aside the terminology... the question is what happens to what used to be a state-subsidized service when it ceases to require a subsidy.
 
I suspect that the governing contract for the state funded operations would state something about what happens when the income from the service surpasses the contract cost of providing the service. I don;t believe that the contract cost of the service can be willy nilly changed in a way that is not covered by the contract. So Amtrak cannot arbitrarily dump new costs on the contract beyond what the contract allows.
 
I suspect that the governing contract for the state funded operations would state something about what happens when the income from the service surpasses the contract cost of providing the service. I don;t believe that the contract cost of the service can be willy nilly changed in a way that is not covered by the contract. So Amtrak cannot arbitrarily dump new costs on the contract beyond what the contract allows.

You still need the state contracts even if the service doesn’t need an operational subsidy. You could always hit a year when you need a subsidy and as a part of state supported service the states are also supposed to be involved with funding capital improvements. Additionally the contracts spell out what the state wants and what Amtrak is supposed to be providing. Additionally once the existing service pays for itself the state may decide to invest in increasing the service like Virginia will be doing soon. Virginia’s service may no longer break even operationally once they build out to hourly service as they hope but that doesn’t mean that they shouldn’t do it if the goal is to grow ridership and get people off of 95. Other corridors with very frequent service do not break even and cost quite a bit in subsidies (like the surf liners) though Virginia has the unique advantage of not needing its own rolling stock since all the rail cars are shared with the NEC. Another unique benefit the Virginia service has is that it’s schedule is supplemented by several long distance trains that it doesn’t have to pay for.
 
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