Amtrak Is More Expensive Than You Think

While the Antiplanner was preparing to take Amtrak trains from Portland to Washington, DC, Amtrak was suffering from a spate of derailments, one near Chicago Union Station on March 26 and two in New York’s Penn Station on March 24 and April 3. Moreover, Amtrak now admits that it knew about the defective track that led to the Penn Station derailments, and didn’t fix it because it didn’t realize how serious the problem was.

Tracks are held in place by ties that were once all made of wood but that lately have been made of concrete. The Penn Station tracks still had wood ties, and an assessment before the accident found that some of the ties were partly rotted away. Replacing ties is difficult on heavily used rail lines, so Amtrak didn’t replace them right away, a mistake that led Amtrak’s CEO to make a public apology.

The accidents led New Jersey Governor Chris Christie to withhold state funds that New Jersey Transit pays to Amtrak to run its trains on Amtrak’s tracks. I suppose if I were paying money for a service, I would withhold funds if the service turned out to be unsafe. But Amtrak needs money to replace ties, so withholding funds might be the wrong solution in the long run.

New York Senator Chuck Schumer argues that the problem is a lack of investment and called on Congress to give Amtrak more money. It’s true that Amtrak has a growing maintenance backlog in the Northeast Corridor. But that doesn’t mean the only solution is to give Amtrak more money.

The real problem is that Amtrak doesn’t always admit just how expensive passenger trains really are. As the Antiplanner has mentioned before, last November the company put out a press release claiming that fares covered 94 percent of operating costs, which was supposed to be “the lowest operating loss ever.” That would be good news except for the fact that passenger revenues really only covered a bit more than half the costs of operating the trains.

Amtrak admits to having an $8.8 billion maintenance backlog in the Northeast Corridor (see p. ES-7). If that were funded, it says, it would also need another $9 billion over the next 20 years to keep the backlog from growing again. It also wants $2 billion to replace the 142-year-old tunnel in Baltimore, nearly a billion to replace the Susquehanna River bridge, many billions to replace the tunnels under the Hudson River–the list goes on forever. Though some of these things might help increase the corridor’s capacity, none of them will make trains go faster. Yet you wouldn’t know about all these unfunded needs if you believed Amtrak’s claim that the Northeast Corridor makes money.

Maintenance and capital replacement are necessary for operations, yet Amtrak pretends these aren’t operating costs and hints to fiscally conservative members of Congress that it is just a hair’s breadth away from being profitable. Legislators don’t like to fund maintenance anyway, because it doesn’t make headlines like new projects, and when accidents take place they can always blame someone else.

I found a 2009 report from Amtrak that claims the company should be spending $370 million a year on maintenance of the Northeast Corridor. That’s more than $400 million a year in today’s dollars. But no Amtrak report reveals how much it actually does spend. Instead, its financial reports conflate maintenance with depreciation, the amount of which is a calculation based on the age of Amtrak assets, and not a record of actual spending.

People love passenger trains, but they are a lot more expensive than rail supporters care to admit. After all, adding up the real cost might lead Congress to reconsider funding it at all. When Congress looked like it was eager to fund infrastructure in the late 1990s, Amtrak produced all kinds of reports on how it could spend money on infrastructure. But in its annual reports to Congress, it barely mentions the backlog.

This chart assumes occupancies of 1.67 people per car. But intercity travel is supposed to average 2.2 people per car or more, making Amtrak’s share of the total even smaller.

Highways carry something close to 2 trillion passenger miles a year in intercity travel; airlines 600 billion; and buses 17 billion. Amtrak is 6.5 billion, barely a quarter percent of intercity passenger miles. Instead of throwing money at Amtrak, like Schumer wants to do, we need to reevaluate whether this country really needs to subsidize passenger trains that the average American rides only about 20 miles a year.

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5 thoughts on “Amtrak Is More Expensive Than You Think

  1. Henry Porter

    There is no rational reason for why taxpayers should support Amtrak. The cost of keeping it alive is mutiples of the value its users place on it. 99.75 percent of Americans do not owe a tourist train to the other 0.25 percent.

  2. LazyReader

    Over the years various attempts have been propsed to privtize amtrak….not that it’s a terrible idea, it’s simply that if it was only the Northeast Corridor would survive.

  3. the highwayman

    Yet, streets, sidewalks, trails, parks, etc are not expected to be profitable to survive. It’s a loaded political deck that’s anti-rail. :$

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