Legislation to Provide Permanent Funding for Amtrak

[TinCan782]

Blumenthal & Davis Introduce Bicameral Legislation to Provide Permanent Funding for Amtrak
U.S. Senator Richard Blumenthal (D-CT) and U.S. Representative Danny Davis (D-IL) introduced the Intercity Passenger Rail Trust Fund Act today to provide permanent funding for Amtrak. The bicameral legislation would create a dedicated funding stream to help Amtrak invest in major improvement projects, increase passenger rail’s efficiency, and help provide safer, more reliable service.
https://www.blumenthal.senate.gov/n...ation-to-provide-permanent-funding-for-amtrak

 

[TrackWalker]

Interesting...

(1) 40 percent shall be used for activities associated with the Northeast Corridor; and
(2) 60 percent shall be used for activities associated with the National Network.

 

[Cal]

"The Intercity Passenger Rail Trust Fund Act would establish a new federal Intercity Passenger Rail Trust Fund and provide approximately $5.4 billion to that fund annually in grants. . . "

I certainly like the sound of this. How much does Amtrak typically get annually pre-COVID?

 

[Josh M]

How much does Amtrak typically get annually pre-COVID?

I think FY 2020 (so, last appropriation before COVID started) was about $2 billion. So, $5.4 billion going into the fund annually would be huge for Amtrak.

 

[Cal]

I think FY 2020 (so, last appropriation before COVID started) was about $2 billion. So, $5.4 billion going into the fund annually would be huge for Amtrak.

I hope this passes. However, I really don't think it will.

 

[Josh M]

I hope this passes. However, I really don't think it will.

As a standalone bill, it's probably not going anywhere anytime soon. I could see them introducing the bill as a statement, though, and then finding a way to get the idea included in an annual appropriations bill or in the administration's infrastructure bill. This seems like it's something they can get Biden and Buttigieg on board with, too. So, it's certainly not a done deal, but I wouldn't count it out, either.

 

[TheCrescent]

Amtrak definitely needs the money, and $5B+ per year could do wonders.

Ideally, I'd love for Amtrak to be completely free of dependence on government funds. If it were free of the costs of that dependence--being micromanaged by Congress and a lack of incentive to innovate--I think that it would be better off, as long as it could get funds from somewhere (I'd prefer from the private sector). But I know that private sector support of a nationwide system isn't realistic right now, but hopefully we can move towards that.

 

[jis]

I think FY 2020 (so, last appropriation before COVID started) was about $2 billion. So, $5.4 billion going into the fund annually would be huge for Amtrak.

If one ads up everything that helps Amtrak but is funded through other accounts*, the total amount that benefits Amtrak is closer to $4-$4.5 billion. So $5.4 billion is a good number to shoot for, while cutting back on games that are played to fund intercity rail via FTA CMAQ and what not.

*Just as an example Portal North on the NEC which benefits Amtrak and is a critical part of Gateway is funded through FTA for the federal contribution to it. Going forward, most of the large Capital items on the NEC will most likely not be funded through regular Amtrak appropriations, but through various supplemental instruments.

 

[John Bredin]

Ideally, I'd love for Amtrak to be completely free of dependence on government funds. If it were free of the costs of that dependence--being micromanaged by Congress and a lack of incentive to innovate--I think that it would be better off, as long as it could get funds from somewhere (I'd prefer from the private sector).

I'm more than a bit wary of the language "dependence" on government funding. Should the Army, the courts, highways, or national parks be "free of dependence on government funds"? Amtrak is a public service financed publicly because (as you acknowledge) the private sector didn't want to keep running passenger service in the public interest.

 

[jis]

Amtrak and intercity passenger rail exists at all is because of Congressional intervention. Now to pretend that Congressional intervention is the problem and everything will be fine if passenger rail became financially independent of the government is to be an ultimate example of an Ostrich with head stuck in the sand.

 

[Wolverine72]

Aren’t most most all passenger trains worldwide government funded or subsidized?

 

[jis]

Aren’t most most all passenger trains worldwide government funded or subsidized?

Yes. As are all other modes of passenger transport. Some have their subsidies better hidden/fudged/obfuscated than others.

 

[TheCrescent]

Amtrak and intercity passenger rail exists at all is because of Congressional intervention. Now to pretend that Congressional intervention is the problem and everything will be fine if passenger rail became financially independent of the government is to be an ultimate example of an Ostrich with head stuck in the sand.

That's not my point.

My point is that things would be better if both (1) Amtrak had a source of funds independent of government and (2) Amtrak thus did not need to be tied into government.

Brightline exists without Congressional intervention, and other countries have a much greater role for private enterprise in their passenger rail systems; look at the "socialist" EU, which has plenty of private operators (although I believe most of them do receive government funds). And look at HSR projects around the US, some of which are being done- with a range of success- by the private sector.

My point is that if Amtrak didn't have to look to a bunch of moronic ideologues in Congress for funding and oversight, that would be better. It would take finding other funding sources to do that, which I know is difficult.

I'm more than a bit wary of the language "dependence" on government funding. Should the Army, the courts, highways, or national parks be "free of dependence on government funds"? Amtrak is a public service financed publicly because (as you acknowledge) the private sector didn't want to keep running passenger service in the public interest.

See above. Unlike the Army or national parks, there are private sector sources of funding that have shown interest in passenger rail.

Some highways are privately funded. Same for the legal system (with private arbitration). So 2 of the items you list do reflect private-sector participation. So should Amtrak.

 

[jis]

I should point out that Brightline is yet to run a train (except for a brief period of operation at a tremendous loss). Let us wait until they have operated for a couple of years before singing songs of glory. I am not saying that they are bound to fail or bound to succeed. All that I am saying is that it is premature to believe unequivocally that all these new attempts will actually work out.

Brightline is already receiving considerable government subsidy now for the second service that they are planning around Miami which will also benefit the Orlando service through construction of additional infrastructure. It has also got a subsidized station in Orlando. So it is not like they are completely free of government funding either, even if one counts out the tax free municipal bonds.

I am not saying that any of this is a bad thing. Public Private Partnership is good if managed well and benefits all fairly.

 

[TheCrescent]

I

I should point out that Brightline is yet to run a train (except for a brief period of operation at a tremendous loss). Let us wait until they have operated for a couple of years before singing songs of glory. I am not saying that they are bound to fail or bound to succeed. All that I am saying is that it is premature to believe unequivocally that all these new attempts will actually work out.

Brightline is already receiving considerable government subsidy now for the second service that they are planning around Miami which will also benefit the Orlando service through construction of additional infrastructure. It has also got a subsidized station in Orlando. So it is not like they are completely free of government funding either, even if one counts out the tax free municipal bonds.

I am not saying that any of this is a bad thing. Public Private Partnership is good if managed well and benefits all fairly.

I should point out that Brightline is yet to run a train (except for a brief period of operation at a tremendous loss). Let us wait until they have operated for a couple of years before singing songs of glory. I am not saying that they are bound to fail or bound to succeed. All that I am saying is that it is premature to believe unequivocally that all these new attempts will actually work out.

Brightline is already receiving considerable government subsidy now for the second service that they are planning around Miami which will also benefit the Orlando service through construction of additional infrastructure. It has also got a subsidized station in Orlando. So it is not like they are completely free of government funding either, even if one counts out the tax free municipal bonds.

I am not saying that any of this is a bad thing. Public Private Partnership is good if managed well and benefits all fairly.

I agree with you 100%.

I don't see how Brightline will last in the long term.

But if someone is going to burn cash on something, I'd rather have a private-sector investor do it with the investor's own money than letting a member of Congress do it with my tax dollars.

And for every rail project that fails, there are plenty of other rich guys who love passenger trains who want to throw more money at the industry.

 

[RebelRider]

It will be very interesting to see if Brightline can be profitable once operations resume. From the sound of it, West Palm - Miami won't be returning until the full route to Orlando is up and running. With just three stations, they just didn't have the network density to support the ridership needed on such a short corridor. They've finally recognized that now and are adding stations at Boca Raton and Aventura - with heavy local government support building the new stations. Miami-Dade is kicking in $76 million just for the Aventura station.

Even with Orlando's "long haul" traffic and higher associated fares, I'm still not sure they'll be profitable. Again, they need intermediate stations to draw from a larger population and move people to where they want to go. A stop in Cocoa Beach for cruise traffic is a no brainer, yet they're going to zip right by. You'd have an audience of both passengers flying into MCO and locals who can now easily zip up on the train and not worry about traffic or exorbitant cruise parking. With Mears losing the Disney Magical Express business, they'll have a fleet of buses available to run the 7 mile-ish shuttle service from station to docks.

Since the ill-fated Virgin Trains branding has now been pulled, I'm curious if the planned station at the Miami cruise terminal is still in the works with the planned partnership with Virgin Cruises.

 

[jis]

I


I agree with you 100%.

I don't see how Brightline will last in the long term.

But if someone is going to burn cash on something, I'd rather have a private-sector investor do it with the investor's own money than letting a member of Congress do it with my tax dollars.

And for every rail project that fails, there are plenty of other rich guys who love passenger trains who want to throw more money at the industry.

Actually you don't agree 100% with me, even though you choose to proclaim so.... Or at least I don't agree with you anywhere even remotely close to 100%. All that we agree on apparently is that Brightline could fail. Not much else.

So you really do not believe in Public Private Partnership at least specifically when passenger rail is concerned. OK, at least the position is clear.

 

[joelkfla]

Amtrak definitely needs the money, and $5B+ per year could do wonders.

Ideally, I'd love for Amtrak to be completely free of dependence on government funds. If it were free of the costs of that dependence--being micromanaged by Congress and a lack of incentive to innovate--I think that it would be better off, as long as it could get funds from somewhere (I'd prefer from the private sector). But I know that private sector support of a nationwide system isn't realistic right now, but hopefully we can move towards that.

Innovation like flex meals?

Private sector is usually focused on providing the minimum quality or level of service they can get away with while maximizing their stock price. IMHO, it's not even about profits anymore, except as a means to maximize stock price.

 

[Exvalley]

But if someone is going to burn cash on something, I'd rather have a private-sector investor do it with the investor's own money than letting a member of Congress do it with my tax dollars.

It sounds like you are making an argument in favor of privatization. Haven't we seen how that plays out?

https://www.bloomberg.com/news/arti..., which owned and,trains on the various lines.

 

[MARC Rider]

It will be very interesting to see if Brightline can be profitable ....

[klaxon sounding] Alert! Alert! "Profitability" fallacy off the starboard bow!

Go to wikipedia and read about "Hollywood accounting" or "creative accounting." Also, find a copy of the Mel Brooks film "The Producers" and enjoy watching it.

Return of the Jedi cost 32.5 million to make and earned a total of $475 million at the box office, plus VHS/DVD/streaming revenue and licensing tie-ins. Yet Lucasfilm claimed that the movie never made a profit. This lack of profitability didn't seem to stop Lucasfilm (and now Disney) from making more Star Wars films.

To really evaluate Brightline, you have to follow the money. Who really owns Brightline? The real owners or controllers may have other, larger financial goals than the profitability of the railroad operations. From what I've read, it seems that the owners are basically developing Brightline as an amenity to enhance the value of their real estate holdings along the tracks. They may not care if it isn't "profitable" if they can make more money from developing properties with an enhanced value due to the presence of train service. Conversely, once they make their fortune on the real estate development, they may find continuous operation of Brightline to be a financial drag, so I won't be shocked if one day Amtrak, or the State of Florida, or some regional authority ends up running the service.

Actually, compared to 50-60 years ago, this is a great improvement. In one of the E.EM. Frimbo columns I'm reading, it was pointed out that the management of the Penn Central saw themselves as primarily a real estate company, not a railroad. Why? Because they thought that railroading was on the way to disappearing, yet they owned lots of valuable property in most of the large and small cities of the northeast and midwest. But what was preventing them from developing this property to the fullest extent? Those damn obsolete railroad tracks! Get rid of the tracks, and redevelop the properties. They never quite did that 100%, but the current Penn Station is a result of that kind of thinking, and they also tried to tear down Grand Central as well, and put up an office building. At leas nowadays, even conventional real estate people now see the presence of passenger rail as an amenity that enhances the value of property.

You really can't trust private capital to provide stable, sustainable funding for any kind of enterprise. In the case of rail (like all transportation modes), stable public funding is essential.

 

[jis]

Since the ill-fated Virgin Trains branding has now been pulled, I'm curious if the planned station at the Miami cruise terminal is still in the works with the planned partnership with Virgin Cruises.

Miami Cruise Terminal station is still being built. Actually Brightline is now unshackled from the Virgin contract which prevented them from striking deals with other cruise lines. So there is a greater reason to build the terminal now.

 

[jiml]

From what I've read, it seems that the owners are basically developing Brightline as an amenity to enhance the value of their real estate holdings along the tracks. They may not care if it isn't "profitable" if they can make more money from developing properties with an enhanced value due to the presence of train service.

Brightline seems a lot like McDonald's, who, it could be argued, make money from real estate and sell hamburgers on the side.

 

[crescent-zephyr]

I should point out that Brightline is yet to run a train (except for a brief period of operation at a tremendous loss).

That is an extreme exaggeration. “Yet to run a train” ??? They carried 579,000 people in 2018 and 885,000 in 2019.

That’s 4 times the amount of passengers that Amtrak / NCDOT Piedmont trains carried in 2019 (209,053).

 

[jis]

That is an extreme exaggeration. “Yet to run a train” ??? They carried 579,000 people in 2018 and 885,000 in 2019.

That’s 4 times the amount of passengers that Amtrak / NCDOT Piedmont trains carried in 2019 (209,053).

Actually if you bothered to read the entire thing you quoted it is entirely accurate. But why lose an opportunity to yell?

 

[TrackWalker]

I hope this passes. However, I really don't think it will.

Maybe si, maybe no.

But it shouldn't stop us from writing our representatives and asking them to support it.