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Amtrak Continues to Lie

By | | Transportation
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Amtrak is maintaining the twin fictions that subsidies from state taxpayers are “passenger revenues” and that depreciation isn’t a real cost even though its accountants list it as an operating cost on its consolidated financial statements. Based on these fictions, Amtrak claimed that it was “on track to break even financially for the first time in its history” in 2020.

The pandemic derailed that fantasy, so now Amtrak claims that it lost $801 million in fiscal year 2020 (which for Amtrak ended on September 30). Yet a close look at its unaudited end-of-year report reveals that the actual operating losses were well over $2 billion.

The end-of-year report says that Amtrak received $342 million in state operating subsidies, up $110 million from 2019. It counts these as passenger revenues even though most of the passengers on state-supported trains would never have ridden those trains if they were asked to pay the full fares. Continue reading →

Watching the Sausage Get Made

By | | Transportation
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Amtrak ridership is down by 87 percent, so Amtrak needs a $2.9 billion rescue from Congress, the company’s executive vice president, Stephen Gardner, told a congressional subcommittee yesterday. Transit ridership is down 70 to 90 percent, added American Public Transportation Association president Paul Skoutelas, so the transit industry wants a $32 billion bailout from Congress.

Those are just their short-term demands, as was made clear in the hearing held by the House Subcommittee on Railroads, Pipelines, and Hazardous Materials. Both Amtrak and New York commuter railroads want $20 billion for the Gateway Project, which would replace bridges and tunnels between Newark and New York City. Transit agencies want $106 billion to restore their backlog of poorly maintained rail systems. And even that is only the beginning. Continue reading →

Biden Appoints Congestifiers

By | | Transportation
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Phillip Washington, the transit executive who thinks Los Angeles isn’t congested enough, has been named the leader of Biden’s transition team in charge of the Department of Transportation and Amtrak. Washington is the CEO of Los Angeles Metro, the main transit agency in Los Angeles County.

A year ago, as Los Angeles bus ridership was collapsing due to LA Metro’s insistence on building expensive light rail, Washington blamed the loss of bus riders instead on Los Angeles’ famously uncongested freeways. “It’s too easy to drive in this city,” he told the Wall Street Journal. To restore bus ridership, the city has to “make driving harder.”

“Sometimes you have to tell people what’s good for them,” Washington also told the Journal. He will clearly fit right in to Biden’s top-down view of how the world should work. Washington’s support for obsolete light-rail transit will go hand-in-hand with Biden’s support for obsolete intercity passenger trains. Continue reading →

50th Anniversary of a Mistake

By | | Transportation
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Today is the 50th anniversary of Congressional passage of the Rail Passenger Service Act, which created the National Railroad Passenger Corporation, later known as Amtrak. This law was based on several factual errors, the most important one being a claim that passenger trains could make money if only they were freed from the stodgy railroad executives who supposedly preferred freight over passenger service.

Early Amtrak train to San Francisco from Chicago. It took several years to repaint all of the equipment into Amtrak colors. Photo by Drew Jacksich.

Passenger train ridership had been declining since 1920 and the decline accelerated after World War II. A 1958 report from the Interstate Commerce Commission predicted that intercity passenger trains would disappear by 1970. In response, Congress passed legislation making it easier for the railroads to stop running interstate trains. Continue reading →

Cruise Trains for Amtrak

By | | Transportation
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Amtrak plans to reduce all but one of its overnight trains to three-day-a-week service starting October 1. Doing so, says Amtrak, will save “as much as $150 million” a year. Amtrak doesn’t say so, but three-day-a-week trains offer almost as much political benefit to the agency as daily trains.

I have a better idea. Amtrak should double the routes served by its overnight trains, but run most of them just once a week. Add more lounge space to each train so that passengers have more places to go and the trains become cruise trains, not trains for getting from point A to point B. Amtrak is a slow and expensive way to get from point A to point B, but it is an excellent way to see parts of the country that can’t be seen from an interstate freeway.

Some routes Amtrak could add are the former North Coast Limited route from the Twin Cities to Seattle/Portland; the former City of Portland/Pioneer route from Ogden to Portland; the former City of Los Angeles/Desert Wind route from Salt Lake City to Los Angeles; the Golden State route from Chicago to Los Angeles via El Paso; the Gulf Wind route from New Orleans to Florida, and the Floridian route from Chicago to Florida. Continue reading →

2018 Transport Subsidies and Costs

By | | Transportation
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Last year, I published a policy brief that calculated 2017 transportation subsidies and costs for airlines, Amtrak, highways, and transit. When 2018 data for Amtrak, highways, and transit became available, I included an updated chart in a policy brief on transportation after the pandemic. But that wasn’t exactly prominent — I had a hard time finding it when someone asked me about it recently — and it didn’t have many details so I’m going to expand on it here.

The above chart is useful because it shows the disparities. Amtrak spends almost four times as much to move someone a passenger mile as the airlines. Transit agencies spend almost five times as much to move someone a passenger mile as personal automobiles. Continue reading →

Spending Money We Don’t Have on Projects We Don’t Need

By | | News commentary, Transportation
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House Transportation & Infrastructure Committee Chair Peter DeFazio yesterday released a proposal to spend tens of billions of dollars the federal government doesn’t have on projects we don’t need. Congressional authorization for federal spending on highways and transit expires this year, and DeFazio proposes to renew this with a program that will increase spending by 62 percent without increasing the taxes that support it.

Whereas the previous law spent an average of $61 billion per year over the last five years, DeFazio’s proposal would spend almost $99 billion a year over five years. At one time, federal spending on highways and most transit came out of gas taxes and other highway user fees and Congress didn’t spend more than came in. Since the mid-2000s, however, Congress has ignored actual revenues and spent billions of dollars a year out of general funds. The 2015 law, for example, simply appropriated $51 billion of general funds into the Highway Trust Fund (which despite the name spends money on both highways and transit).

DeFazio’s bill would not only increase this deficit spending, it includes a poison pill for highways while it unleashes spending increases on transit. For highways, the bill would include a “fix it first” provisions that says that states cannot increase highway capacity until they get existing roads in a state of good repair. No similar provision is made for transit even though transit is in a much poorer state of repair. Continue reading →

Amtrak Inspector General Clueless

By | | Transportation
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Amtrak’s inspector general issued a report last week that reveals an utter cluelessness about Amtrak and how it works. The report argues that late trains are costing Amtrak revenues and that, instead of trying to run the trains on time, Amtrak should spend some of its precious resources building a computer model to estimate how many riders it loses for each late train.

The report, titled Better Estimates Needed of the Financial Impacts of Poor On-Time Performance, devotes many of its pages to building such a model itself and concludes that improving on-time performance by 5 percent could increase revenues by $12 million. Since Amtrak’s 2018 operating losses are $171 million, says the report, such an improvement could significantly reduce those losses. Continue reading →

Amtrak’s Real Problem

By | | Transportation
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Amtrak is under fire from a lot of pro-rail groups and experts. “The Amtrak era is over,” declared a recent op-ed in Railway Age magazine by F.K. Plous, who works for Corridor Rail, a “passenger rail development, finance and management company.” Amtrak, continues Plous, has “no goals, no growth strategy and no meaningful success/fail criteria.” However, instead of defunding it, Plous predictably proposes even more subsidies managed by a new agency or company (perhaps Corridor Rail?) that would somehow be better than Amtrak, and of course, backed up by “all the statutory, budgetary and bureaucratic resources needed to take passenger trains into the post-Amtrak world.”

Railway Age is hardly a railfan magazine, but it is not the only passenger train supporter that is critical of Amtrak. A few months ago the Railroad Passenger Association (formerly the National Association of Railroad Passengers) released a study claiming that Amtrak accounting was “fatally flawed” resulting in a “a false framing of Northeast Corridor services as ‘profitable’ and the rest of the system as ‘unprofitable.'” In fact, says RPA, all of Amtrak’s routes are unprofitable, which leads it to the curious conclusion that all should be subsidized even more.

Trains magazine joined the fray with an article in its January 2019 issue that partly relied on the RPA report and partly on its own research arguing that Amtrak’s management has a “no-growth policy” that results from “misplaced priorities.” Much of the article is based on an accounting system that was developed by an outside agency that Amtrak doesn’t trust and doesn’t use. But Trains seems to think that, despite not using it, it has somehow distorted Amtrak’s policies. In any case, the magazine’s conclusion is the same: Amtrak is awful, give it more money. Continue reading →

Amtrak Ridership Declined in 2018

By | | Transportation
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Although Amtrak has posted its October, 2018 performance report, which includes the first month of FY 2019, it still has not released its September report, which would include year-end results for fiscal year 2018. However, data distributed by rail groups indicates that Amtrak passenger ridership was 0.1 percent lower in 2018 than in 2017.

All of the decline was among long-distance trains, which lost 3.9 percent of their riders. Amtrak’s Northeast Corridor saw a 0.8 percent ridership increase while state-subsidized short-distance trains gained 0.4 percent more riders.

Ridership fell for all but two long-distance trains, the exceptions being the Oakland-Chicago California Zephyr and the New York-New Orleans Crescent. The New York-Chicago Lake Shore Limited lost 13.1 percent of its riders, while the Chicago-Seattle Empire Builder lost 5.6 percent of its riders, while still managing to be Amtrak’s number one long-distance train. Continue reading →