1.5 billion for Amtrak in stimulus with daily service mandate (Passed in Congress)

[jis]

You bet. First, who runs air traffic control?

Last time I looked something like 15% of the cost of ATC that can be attributed to commercial air traffic use is funded out of general funds. The rest is funded through fees paid by users. The exact number might have changed since then but it is a relatively small percentage of the cost.

Second, who funds nearly all airports?

It is quite a mix, but the same is true of train stations too. For example Amtrak did not spend much at all (like almost nothing) for the Moynihan Train Hall in New York.

Finally, government bailouts for airlines in last year's COvid relief act.

I don't recall how much of it was grant and how much loan. As I seem to recall it was a mix.

I also seem to remember about some sort of government airline bailout after 9/11 when ridership breifly tanked, though it has been twenty years, so my memory is a little fuzzy.

It was again a mix of grant and loan that was duly paid back. The government actually made out well on that one.

Actually I think government funding to bridge over force majeure difficulties is the right thing to do, and if it can be pulled off by loans rather than grants, it works out better for the tax payer at the end of the day.

From a rail passenger's perspective, at least as far as I am concerned, I think it is a fool's errand to spend endless time nitpicking about these "subsidies". It is better to accept that all modes are "subsidized" in various ways. Remove the negative connotation associated with such subsidies, and then focus on what transportation policies are good for the nation and its people, and figure out efficient ways of funding them through partnerships between government and private sources.

 

[MARC Rider]

Americans have always had a love affair with their cars.

Unfortunately, our communities are now designed with car travel in mind. We are just too spread out for that to change.

Sure we can change. We were more spread out 100 years ago when a larger percentage of people lived in rural areas. Now, most of us live in urban areas, and we live a "spread-out" lifestyle enabled by publicly funded roads. There's no reason why we can't redesign our cities and towns to allow for a more pedestrian-oriented lifestyle where people don't need cars, and relying on public transportation can be more convenient than having $20-40,000 of your personal capital sunk into a depreciating asset and having to have a second, unpaid job as a self-chauffeur in order to have mobility.

 

[Cal]

We are officially, off topic.

 

[Exvalley]

You bet. First, who runs air traffic control?

The FAA runs air traffic control.
Air traffic control is paid for by the Airport and Airway Trust Fund. The Trust Fund is funded principally from a variety of excise taxes paid by users of the national airspace system. The excise taxes are imposed on domestic passenger tickets, domestic flight segments, and international passenger arrivals and departures, and on purchases of air travel miles for frequent flyer and similar programs.

Second, who funds nearly all airports?

Passengers through Passenger Facility Charges and airlines through landing fees.

 

[Exvalley]

Sure we can change. We were more spread out 100 years ago when a larger percentage of people lived in rural areas.

Except that the bulk of the growth has come in the form of never ending suburbs that have not been designed with public transportation in mind.

You want to see rail expand? Get people on zoning boards!

 

[Devil's Advocate]

Second, who funds nearly all airports?

Passengers through Passenger Facility Charges and airlines through landing fees.

At my hometown airport PFC's and landing fees alone are nowhere near enough to cover all expenses.

 

[Chris I]

The FAA runs air traffic control.
Air traffic control is paid for by the Airport and Airway Trust Fund. The Trust Fund is funded principally from a variety of excise taxes paid by users of the national airspace system. The excise taxes are imposed on domestic passenger tickets, domestic flight segments, and international passenger arrivals and departures, and on purchases of air travel miles for frequent flyer and similar programs.


Passengers through Passenger Facility Charges and airlines through landing fees.

https://liveandletsfly.com/10-ways-taxpayers-subsidize-u-s-airlines/
And as far as highways go, remember that all of the land the interstates are built on is not taxed, while railroads are taxed on the land their tracks occupy. Given that many interstates run directly through cities on valuable real estate, that means we're looking at trillions of dollars in land value that is given to highways. Ever wonder why truly private highways are basically non-existent in the US, and even when they do exist, they often have a history of bankrupcy and public funding?

https://taxfoundation.org/states-road-funding-2019/

 

[Exvalley]

At my hometown airport PFC's and landing fees alone are nowhere near enough to cover all expenses.

Which airport is that?

Keep in mind that there are numerous other sources of revenue, such as parking, concessions, rental car surcharges, selling advertising space, etc.

 

[Cal]

This video explains how airports make money very well. This channel is great. Has three video on American trains as well

And it also states that about 2/3 of airports LOSe money.

 

[Devil's Advocate]

At my hometown airport PFC's and landing fees alone are nowhere near enough to cover all expenses.

Which airport is that?

I believe every major airport in Texas meets this definition.

Airports are generally profitable. At least in normal times. This chart shows you just how profitable they can be: https://www.bizjournals.com/charlot...-profitability-by-operating-revenue/175/table

What is the source for this data and how was it normalized? How is a claim of profitability derived from raw income?

 

[Exvalley]

I believe every major airport in Texas meets this definition.

Well... we have to start looking somewhere. Which is your local airport that you were referring to?

Regardless, the pertinent point is that the federal "subsidies" that airports get are primarily funded through excise taxes paid by users of the national airspace system. Please take the time to familiarize yourself with the Airport & Airway Trust Fund and its primary income sources: Airport & Airway Trust Fund (AATF)

The federal subsidies that benefit Amtrak, on the other hand, are not primarily funded through excise taxes paid by users of the Amtrak system.

Trust me. This is not the hill you want to die on.

 

[IndyLions]

...I think it is a fool's errand to spend endless time nitpicking about these "subsidies". It is better to accept that all modes are "subsidized" in various ways. Remove the negative connotation associated with such subsidies, and then focus on what transportation policies are good for the nation and its people, and figure out efficient ways of funding them through partnerships between government and private sources.

I couldn't agree more with this.

Why shouldn't we have the choice to drive / fly / train / sail / walk / bike, etc ? While all these forms of transportation are subsidized - they all cover a reasonable percentage of their costs and offer a unique experience.

 

[Exvalley]

I couldn't agree more with this.

Why shouldn't we have the choice to drive / fly / train / sail / walk / bike, etc ? While all these forms of transportation are subsidized - they all cover a reasonable percentage of their costs and offer a unique experience.

Exactly!!!!!!! My entire point has been that we need to stop being so competitive and playing into the zero sum game fallacy.

 

[Devil's Advocate]

Well... we have to start looking somewhere. Which is your local airport that you were referring to?

What I know about my local airport is unfortunately considered privileged information but I'd welcome data that legitimately shows commercial airports break even on PFC's and landing fees because those details are hard to get.

 

[Exvalley]

What I know about my local airport is unfortunately considered privileged information but I'd welcome data that legitimately shows commercial airports break even on PFC's and landing fees because those details are hard to get.

No problem. I was going to do my own research. Which airport is it?

Also, everyone knows that airports rely on other revenue streams as well. Heck, I mentioned some above. While I could have listed all of those revenue streams in my initial response, I assumed that most people would have been comfortable with my listing the primary streams and that they would not engage in a distracting, pedantic and otiose game of “gotcha.”

As I said earlier, the pertinent point is that the federal "subsidies" that airports get are primarily funded through excise taxes paid by users of the national airspace system. The federal subsidies that benefit Amtrak, on the other hand, are not primarily funded through excise taxes paid by users of the Amtrak system.

If you disagree with that please let me know.

 

[user 6862]

@Exvalley

'otiose' Never come across that word before, thank you.

 

[Devil's Advocate]

No problem. I was going to do my own research. Which airport is it? Also, everyone knows that airports rely on other revenue streams as well. Heck, I mentioned some above. While I could have listed all of those revenue streams in my initial response, I assumed that most people would have been comfortable with my listing the primary streams and that they would not engage in a distracting, pedantic and otiose game of “gotcha.” As I said earlier, the pertinent point is that the federal "subsidies" that airports get are primarily funded through excise taxes paid by users of the national airspace system. The federal subsidies that benefit Amtrak, on the other hand, are not primarily funded through excise taxes paid by users of the Amtrak system.If you disagree with that please let me know.

Asking me to name this airport after I explained my situation paints me into a corner where defending my position will likely require me to release private information I am not authorized to divulge. I see no reason to play your own "gotcha" game. You can believe or disbelieve me as you please. Since you made the initial claim you are free to name whichever airports you have determined cover all their costs through airline and passenger fees without my assistance.

 

[Qapla]

Regardless of where the subsidy comes from - the fact still remains that this subsidy comparison still falls in the "apple to oranges" area. Amtrak is OWNED by the Gov't while the other businesses are not.

That is where the term "mandate" should be a little more prominent when it comes to the funding for Amtrak. Instead of comparing the money provided to Amtrak with the money given to other forms of transport - why not compare it to the amount of money given to other Gov't operations.

What if the revenue provided for Congress (the House and the Senate) were based on the money they make and they would be required to "make a profit"? If their food budget were reduced so they only had "flex dining" provided for their meals. What if they were not allowed to redecorate or buy new furniture for their offices. What if their computer systems were still 50 years old?

Amtrak should be given the same level of budgetary consideration as any other Gov't service (and the Post Office should also receive this type of funding) instead of being treated like they are a commercial enterprise owned and operated by the "private sector" who needs "bailing out".

 

[Devil's Advocate]

I think the core problem is that Amtrak was probably never intended to "save" passenger rail so much as prevent it from dying too quickly. I believe the initial goal was to keep it just healthy enough to die on someone else's watch. On the surface Amtrak seems to have everything it needs to succeed. Hardware, trained staff, route access, maintenance facilities, priority scheduling, and sufficient funding. It's only when you realize that the budgets can't be depended upon or borrowed against, the priority status is virtually unenforceable, and the staff are perpetually demoralized that you start to realize why Amtrak struggles so hard just to reach some sort of sustained relevance to the average consumer.

 

[Exvalley]

Asking me to name this airport after I explained my situation paints me into a corner where defending my position will likely require me to release private information I am not authorized to divulge.

Permit a very simple question. Do you agree or disagree with my earlier statement?

The federal "subsidies" that airports get are primarily funded through excise taxes paid by users of the national airspace system. The federal subsidies that benefit Amtrak, on the other hand, are not primarily funded through excise taxes paid by users of the Amtrak system.

 

[Devil's Advocate]

Permit a very simple question. Do you agree or disagree with my earlier statement?

The federal "subsidies" that airports get are primarily funded through excise taxes paid by users of the national airspace system. The federal subsidies that benefit Amtrak, on the other hand, are not primarily funded through excise taxes paid by users of the Amtrak system.

I think it's mostly true but I also think it ignores the fact that Amtrak is a disowned stepchild that is essentially mandated to run inefficiently, with weaker tools to resolve disputes, fewer options for expansion, and clumsier cost controls. The really maddening aspect is that Amtrak should probably be a modest success on paper. The devil is in the details.

 

[Exvalley]

I think it's mostly true but I also think it ignores the fact that Amtrak is a disowned stepchild that is essentially mandated to run inefficiently, with weaker tools to resolve disputes, fewer options for expansion, and clumsier cost controls. The really maddening aspect is that Amtrak should probably be a modest success on paper. The devil is in the details.

Fair enough. We can move on.

 

[fdaley]

The federal "subsidies" that airports get are primarily funded through excise taxes paid by users of the national airspace system. The federal subsidies that benefit Amtrak, on the other hand, are not primarily funded through excise taxes paid by users of the Amtrak system.

This is largely true (in the case of Amtrak, entirely true), but again it ignores the huge difference in the economies of scale of the two systems. The differential is even more enormous when we compare Amtrak funding with the "user fees" that sustain a large part of the highway system's costs. A comparatively modest tax on a very large pool of users can generate gobs of money, but a tax on Amtrak's comparatively tiny pool of customers would have to be astronomically high to generate the kind of revenue needed to sustain the national rail system.

Defenders of the status quo like to use the "user fee" system to suggest that there's some sort of market choice going on in which nearly all travelers are choosing to use highways and planes -- and declining to use trains. In reality, under the current system, the train isn't even an option for the vast majority of trips. Lots of people might like to go by train, but for the trip they're taking, the train hasn't been a option for the past 60 or 70 years.

I take many, many trips by car when the train isn't a practical option, and all of the gas tax money I pay for those trips gets put into a pot to be spent to keep the roads paved -- and to build more and wider roads to keep me trapped behind the wheel on all my future trips. Where is the market choice in that? Definitely I'd like to see a chunk of my "user fees" from these other systems put to use developing more and better rail service, and I'm sure lots of other users feel the same way.

 

[jpakala]

Railroads got going before government (federal, state, local) began funding all other modes (including dredging rivers and providing ports & their maintenance). Railroads also suffered from old patterns of advancement based on seniority, which moved people competent in operating equipment to positions for which they lacked competence, especially as the world was changing and doing so ever more rapidly. Airlines and highways cost much more than rail both in harm to the environment and construction/operation/safety plus maintenance.

 

[brianpmcdonnell17]

Bringing the thread back on topic, how is this stimulus going to impact state-supported service? I know it was discussed early in the thread that it would allow the states to bill the federal government for their portion of the cost, but is this likely to result in increased service or just lower the cost to the states? Although the most important service restoration IMO is daily LD service, lower-frequency corridors aren't far behind, especially in the Midwest and Pacific Northwest on routes which have been reduced to once daily.