Daily Archives: October 6, 2017

Ready for More Subsidies

Amtrak has kicked off a “ready-to-build” campaign, making it clear that the money-losing company faces close to $30 billion in major infrastructure projects in the Northeast Corridor on top of the corridor’s $11 billion “basic infrastructure backlog,” meaning tracks, signals, and power facilities. In addition to the $20 billion Hudson River tunnels project, Amtrak wants to spend $5 billion on a new tunnel under Baltimore, $1.7 billion on a new Susquehanna River bridge, $1.5 billion on another new bridge in New Jersey, and unspecified billions more for building or rebuilding train stations in New York (which alone is costing more than $2 billion), Philadelphia, Baltimore, and Washington.

In short, taxpayers are looking at a bill of well over $40 billion just to keep the supposedly profitable Northeast Corridor running. Amtrak must believe that “ready to build” sounds like a more positive message than “we need at least $40 billion just to keep the wheels turning.” No doubt Amtrak is relying on the image it has create that its Northeast Corridor trains make money, when in fact they merely cover operating costs, not the costs of maintenance or depreciation. Adding maintenance and depreciation not only eliminates profits, it brings subsidies to at least 10 cents per passenger mile–and that’s before counting the $40 billion or so needed to bring the corridor up to a state of good repair.

Amtrak divides its operations into three categories: the Northeast Corridor, state-supported day trains, and overnight long-distance trains. In addition to claiming that the Northeast Corridor makes money, Amtrak strongly implies that subsidies to the day trains are entirely covered by the states, leaving only the long-distance trains requiring federal subsidies. In fact, before adding depreciation and maintenance, federal taxpayers fund more than 20 percent of the subsidies to the day trains, and after depreciation and maintenance, it is more than half. Continue reading