The best rail infrastructure in the U.S. is found in the Northeast, and even it still sucks. Despite that, it claims a massive share of trips within the corridor compared to flying, demonstrating the potential benefits of rail investment in other corridors around the country.Read More
There's been a lot of news about the GOP's most recent attacks on Amtrak, and my post is largely motivated by this post at Streetsblog, titled "Reminder: Amtrak Subsidies Pale in Comparison to Highway Subsidies". This is an important point and one that most people are probably unaware of, but the quote that really got me in this article was the following:
Amtrak’s subsidies by and large support the long-distance routes, which Congress mandates as a public service. It can’t very well require Amtrak to run these money-losing (but important) long-distance routes and then cut the money to run them – yet that’s what Mica proposes to do. Outsourcing wouldn’t work because no private company would want to take on routes that are proven to lose money. Maybe that’s why Mica’s privatization plan centers on the lucrative Northeast Corridor – the one place Amtrak does make money.
Read the link in that quote too, it's a good one. What interested me about this was why House Transportation Committee Chair John Mica would want to privatize the one Amtrak operation that is running profitably. If the issue is that Amtrak is being run irresponsibly and costing taxpayers a lot of money, shouldn't we want the private sector to take over the lines that are actually losing money? But, as noted above, these subsidies are required because the long-distance routes were formed by mandate of Congress, not because they were expected to be profitable. I'm happy to have a debate about whether these long-distances lines should be operating at all, but that's not what's happening. Instead we're forcing Amtrak to operate unpopular lines and then blaming their inability to turn a profit on incompetence. It's a despicable practice, especially from someone who knows better like Mica.
I was interested in actually finding out where Amtrak is making and losing it's money and I found this FY2012 budget from their site. If you skip to the very last page you can see everything broken down by individual route, and also grouped into three categories: NEC Spine, State Supported Routes, and Long Distance Routes. I've included an image of part of that page below.
As we can clearly see the NEC Spine earns a profit of approximately $230 million a year with 11.2 million riders, almost all of which is thanks to the $50-per-ticket profit on their Acela line, the only high speed rail line in the country. I can understand why Mica wouldn't want to draw attention to that though, given the GOP's visceral opposition to high speed rail and their assertion that it can't be profitable. Looking at State Supported Routes we see a loss of about $160 million a year with 15.4 million riders, although there are a few bright spots (e.g., Washington-Lynchburg, New York-Newport News) where we see decent profits. Then we get to the Dread Long Distance Routes. 4.7 million riders, operating loss of $530 million, a whopping $111.47 loss per rider. Ouch. The best line here loses $60.72 per rider, and the worst, Sunset Limited, loses an astronomical $373.34. So if we take the NEC Spine away from Amtrak and leave it all the losers, how is the taxpayer better off? Without the NEC, we'd have paid out $690 million instead of $466 million.
If anything, this sounds like a great reason to invest more in the NEC corridor. It's the only transportation mode that's making any money, after all. Not only would it improve the quality of service there, getting people between D.C., New York, Philadelphia, and Boston faster and more comfortably, it'd also attract more riders away from money-losing aviation (government subsidy of $4.28 per ticket), intercity buses ($0.10), and cars (unknown, but certainly subsidized). That sounds like a pretty smart move for anyone who cares about saving taxpayers money, and it has the added benefit of being more environmentally friendly and reducing road and air congestion.
As it stands, Mica seems more interested in privatizing profits and socializing losses than actually improving Amtrak operations.