NY Times article on PRIIA Sec 209 subsidies

[jis]

From the New York Times:

Amtrak Subsidy Gone, States Must Pay the Freight to Keep Rail Routes

By RON NIXON
Published: May 2, 2013HUNTINGDON, Pa. — The unmistakable wail of a locomotive horn and screeching steel wheels signal the arrival of the evening Amtrak train in this central Pennsylvania town just over an hour west of Harrisburg, the state capital. The train is one of two that stop here daily, a vital link to Harrisburg, Pittsburgh, Philadelphia and the entire Northeast Corridor.

A freight train in Huntingdon, Pa., whose mayor said Amtrak service was a vital link: “We would be a ghost town without it."

“There is no bus service or airports nearby,” said Dee Dee Brown, the mayor of this town of 7,000, who often rides the train to Philadelphia. “It’s just the train, and, quite frankly, we would be a ghost town without it.”

But after years of financial losses on the route for Amtrak, Pennsylvania was faced with either picking up the tab or losing it altogether by Oct. 1. Under pressure from Congress to reduce its dependence on federal subsidies, Amtrak is looking at either closing 28 short-haul routes or getting 19 states to cover the costs. Most of the states have already agreed to pick up the costs.

You can read the whole article here (may require NY Times subscription)

 

[John Bobinyec]

"The railroad has traditionally subsidized some local routes, while leaving others up to the states to support, but now state governments will have to pay for all local routes of less than 750 miles in a state."

Does that refer to a SINGLE state? Or does it mean any route of less than 750 miles, regardless of where it is? For example, suppose we want to run trains from Raleigh to Atlanta. That's less than 750 miles, but does not exist within ONE state. So would the states have to pay, or does Amtrak - under federal funding?

jb

 

[zephyr17]

750 miles period is my understanding regardless of whether it is one state or more than one. Either one state pays for the others (like Michigan or Pennsylania would do), or they'd have to get a consortium together to pick up the costs.

Only exception is the NEC. The states don't have to kick in for that, even though it is less than 750. Specifically excepted in PRIIA. Of course, that is what Amtrak management thinks Amtrak is.

 

[OldZephyr]

Unfortunately, this article referred to the NEC as Amtrak's "moneymaker". Grrrr.

 

[Paulus]

Unfortunately, this article referred to the NEC as Amtrak's "moneymaker". Grrrr.

As far as operations go it is and even with capital expenses it breaks even.

 

[Anderson]

As long as a good deal of the NEC's capital expenses are being covered by separate subsdies, then it's a moneymaker for Amtrak in a very major way. If that stopped, then it would likely recede to break-even...though if those appropriations stopped, I think NJ and PA would feel it rather acutely.

 

[henryj]

Not everyone is drinking the Amtrak/Boardman koolaid. Here is an example from OK.

This from Evan Stair of Passenger Rail OK as
posted to Railspot and Southwest_Chief groups..

Howard Bingham

=================================
>To: [email protected]
>From: [email protected]
>Date: Fri, 3 May 2013 14:49:01 -0400 (EDT)
>Subject: [southwest_Chief] Politics of Amtrak
>Funding : : Amtrak Increasingly Reliant on State Funds
>
>
>New York Times Story on Amtrak State
>Supplemental Services like the Heartland Flyer:
>
><http://www.nytimes.com/2013/05/03/us/as-amtrak-aid-ends-states-face-decision-on-local-routes.html?pagewanted=1&_r=1&smid=pl-share>
>
>
>Insiders understand, Amtrak's policy makers are
>attempting to move all federal funding to its
>Northeast Corridor Business sector (Washington
>D.C., Boston, Philadelphia, New York City) while
>requiring states to pay more, if not the entire
>cost, for their trains. This is Amtrak's
>pet-business sector. Amtrak's fastest growing
>market is in state supplemental services, such as
>the Heartland Flyer as shown by a
>Brookings Report Study released earlier this year.
>
>What does this mean to travelers in the
>Oklahoma, Texas, Missouri, Kansas and New Mexico Region? Be prepared
>for states to pony up more funding or lose
>Amtrak service. Also expect presently 100%
>federally funded Long Distance trains like the
>Southwest Chief and Texas Eagle to soon require
>state supplemental funding. As all know Amtrak
>is already requesting state funding for portions of the Southwest Chief route.
>
>
>State Supplemental:
>----Heartland Flyer ----
>Oklahoma City ­ Fort Worth
>----Missouri River Runners----
>Kansas City - St. Louis
>
>Long Distance:
>----Southwest Chief ----
>Chicago ­ Kansas City ­ Albuquerque ­ Los Angeles
>les
>----Texas Eagle ----
>Chicago ­ St. Louis ­ Little Rock ­ Dallas, Austin ­ SanAntonio
>----Sunset Limited----
>New Orleans ­ Houston ­ San Antonio ­ El Paso - Los Angeles

 

[jis]

It is of course somewhat disingenuous to say that Southwest Chief requires state funding, when Amtrak is perfectly happy to run it on a route that is provided by the freight railroad to run it on. But why would that stop anyone from claiming whatever they want to claim?

Why would Trexas Eagle require state supplemental funding?

My bet is Southwest Chief will not require state supplental funding. It will run on the BNSF Transcon.

And contrary to popular perception among certain quarters PRIIA Section 209 is not a policy that Amtrak dreamed up for the fun of it. It is a policy that Congress decided upon and was supported by the legislature from most states. It is a fantasy of some that Amtrak is the one that wanted it. The fact is it was a nasty deal to save the LD train funding, which had been zeroed out in the original budget. But oh how soon we forget when we don't like to see the reality of the attack on Amtrak from our favorite legislators. In all of that discussion in Congress, the concept of paying for the NEC was not under attack. So naturally it was not part of the discussion.

State services are growing because they are getting the funding to support their growth. PRIIA 209 in that sense is actually a good thing since without it neither the states nor Amtrak would fund them adequately. And as the experience in the UK shows, once you can get past that logjam and gett services funded sufficiently to grow to meet demand, often the net subsidy required eventually goes down. But before youg et there subsidies have to go up. And in an environment where we are today it is unlikely that federal operating subsidies will substantially go up. Indeed it is more likely than not that it wiill go down for all.

 

[henryj]

Jis, regardless of the facts(why would we let those get in the way?), this is the perception more and more in this part of the world. People in the NEC world see things from a different perspective and to their detriment I think. Here are a few more excerpts and these are not isolated grumpies I might add. I hear more of this all the time.

This is how we will soon see the end of long distance trains and
probably some corridors ops as well.
I would fall over dead if, for example, Emperor Scott of Florida allowed
one dime of state funds to go to any train
that crossed the state line(s). Hard enough to get him to fund
intrastate operations. Airlines, Highways,
okay, rail, nyet.

And he is not the only Emperor that will pull this on us. Should
Emperor Perry of Texas refuse to fund either of
the three Amtrak services in Texas, kiss it goodbye.

JS

If Amtrak devolves into Northeast Corridor, Midwest Corridor services, California and the Pacific Northwest, Amtrak ceases to be a national train system. At that point the states might as well put their trains out to bid to the lowest bidder and if the Northeast wants intercity train service, they can form a Northeastern Transit Authority to pay for running the trains.

I certainly wont support Amtrak if it no longer serves New Mexico. I just worry about Railroad Retirement if Amtrak goes away.

HD


Personally, I somewhat agree with what they are saying. If Amtrak continues to retrench toward an all NEC operation with the states picking up 100% of the tab, what is going to stop the states from just putting their operations up for bid. Aren't we seeing some of that already? The LD trains are the 'glue' that is holding the whole thing together. Once they are gone there is nothing to warrant keeping Amtrak around as it is now. Boardman has in numerous hearings and speeches targeted the LD trains as the root cause of all his money problems. I can see a system coming where all the western LD trains just disappear and you can include most of the eastern ones in that too. The only survivors might be the NY to Florida service and maybe a Crescent that stops in Atlanta. Once that happens you might see some private operators initiate seasonal service on portions of the more scenic routes like the EB, CZ and CS, although the CS might just devolve into a bunch of corridor trains up and down the west coast that don't connect. Same could be said for the LSL route. Where would private operators get their equipment?...........from Amtrak of course. They would not need it any more and would just sell it off at bargain prices. We already have that with the Alaska RR services and the Rocky Mountaineer.
jf

 

[Anderson]

It is of course somewhat disingenuous to say that Southwest Chief requires state funding, when Amtrak is perfectly happy to run it on a route that is provided by the freight railroad to run it on. But why would that stop anyone from claiming whatever they want to claim?
Why would Trexas Eagle require state supplemental funding?

My bet is Southwest Chief will not require state supplental funding. It will run on the BNSF Transcon.

And contrary to popular perception among certain quarters PRIIA Section 209 is not a policy that Amtrak dreamed up for the fun of it. It is a policy that Congress decided upon and was supported by the legislature from most states. It is a fantasy of some that Amtrak is the one that wanted it. The fact is it was a nasty deal to save the LD train funding, which had been zeroed out in the original budget. But oh how soon we forget when we don't like to see the reality of the attack on Amtrak from our favorite legislators. In all of that discussion in Congress, the concept of paying for the NEC was not under attack. So naturally it was not part of the discussion.

State services are growing because they are getting the funding to support their growth. PRIIA 209 in that sense is actually a good thing since without it neither the states nor Amtrak would fund them adequately. And as the experience in the UK shows, once you can get past that logjam and gett services funded sufficiently to grow to meet demand, often the net subsidy required eventually goes down. But before youg et there subsidies have to go up. And in an environment where we are today it is unlikely that federal operating subsidies will substantially go up. Indeed it is more likely than not that it wiill go down for all.

Well, it seems likely to me that the logjam at the moment isn't so much the operating subsidy as it is likely to be the need for more equipment. Of course, a reasonable question is whether Amtrak could use expected PRIIA-required capital charges to partly underwrite a new equipment order for Amfleet IIIs or Viewliner coaches (either for direct use on those routes or to free up equipment for use on state-funded routes).

In theory, there's nothing stopping states from from "shopping out" operating contracts if they own their own equipment. WA/OR could, in theory, bid out the Cascades to someone else (and it seems likely that though Amtrak might make them pay through the nose for it, they'd still rent them some occasional equipment for the "right" price). NC could do much the same with the Piedmont. The main things stopping such deals at the moment are:

(1) The cost of equipment; and

(2) Amtrak's economies of scale, both in terms of through trips and in terms of equipment upkeep.

Tier III will be interesting in this respect, since it is quite possible that one or more states might seriously try to grab now-compliant equipment from overseas...and let's be honest, if Amtrak can buy off-the-shelf HSR sets for the NEC, what's to stop Virginia from trying to buy a dozen used Talgo sets down the line (or, assuming compliance, CA from buying a bunch of unused Rennaisance sleepers from VIA for an overnight coast train)?

 

[jis]

Jis, regardless of the facts(why would we let those get in the way?), this is the perception more and more in this part of the world. People in the NEC world see things from a different perspective and to their detriment I think. Here are a few more excerpts and these are not isolated grumpies I might add. I hear more of this all the time.

This is how we will soon see the end of long distance trains and probably some corridors ops as well.

You're right. The LD trains, specially out in the flyover country, will be toast if folks like you stop supporting them. I have no doubt in my mind about it.

I would fall over dead if, for example, Emperor Scott of Florida allowed one dime of state funds to go to any train that crossed the state line(s). Hard enough to get him to fund intrastate operations. Airlines, Highways, okay, rail, nyet.

However, same Scott has no problem pouring money into commuter and potentially corridor trains, perhaps in partnership with private entitites in his state.

And he is not the only Emperor that will pull this on us. Should Emperor Perry of Texas refuse to fund either of the three Amtrak services in Texas, kiss it goodbye.

Yep. Unless folks continue to support Amtrak for LD trains, there will most likely be no LD trains eventually. And this will mean no intercity trains for states that do not fund such within their states. I suspect some LD trains will survive in heavily traveled corridors where state corridors can be strung together to form an LD corridor, even if a state or two in its path does not participate. Afterall when the Lake Shore limited started it ran through Pennsylvania with doors closed since Pennsylvania did not participate in funding it. Originally the LSL was not an Amtrak system train.
As for NEC, it will bungle along somehow, Amtrak or not. So we don't worry too much about whether Amtrak continues to exist or not, though it certainly would be easier if it did. With the statuatory creation of the NEC Commission, it is quite likely that the first steps have already been taken to hive off the NEC from the rest of Amtrak system (- Amtrak NEC anyone?), should that eventuality come to pass. Already, things like capacity and slot allocations on the NEC, like into Penn Station, will be decided by the NEC Commission and not exclusively by Amtrak.

This is why I tend to support anything that makes it possible to deploy more funds for passenger rail, Amtrak or not. This is why I think in balance PRIIA 209 is not all bad. It certainly is causing more funding to be deployed overall for passenger trains, and especially more durable funds with more grassroots support standing behind it.

 

[afigg]

Personally, I somewhat agree with what they are saying. If Amtrak continues to retrench toward an all NEC operation with the states picking up 100% of the tab, what is going to stop the states from just putting their operations up for bid. Aren't we seeing some of that already?

Where is Amtrak "retrenching" towards to an all NEC operation? The only corridor train that appears to be at risk in not getting state subsidies is th Hoosier State. If it goes away, it won't because Amtrak is willingly canceling the service, but because they have to.
Meanwhile, the odds are pretty good that there will be new or expanded corridor services starting in the next 3-4 years. Virginia extension to Roanoke. Vermonter extended to Montreal. Two new corridor routes in Illinois. Coast Daylight between San Francisco and LA. In the too early to tell whether it will happen this decade: extension to Iowa City, Chicago to Twin Cities, Coachella Valley service in CA, Dallas to Shreveport, Jacksonville to Miami (which could end up with a split a Silver Star running on the FEC, but AAF running the JAX-Miami corridor service).

Some states may look at having other operators for their current Amtrak corridor services. But I have not read about any state seriously looking at it at the present. In the east, it will be difficult for a new operator to run trains on the NEC to NYP and find a location for maintenance. The Midwest and CA are the more likely states to eventually switch to a new contractor, but so long as the trains keep running, I see getting some competition as a good thing.

There may be a lot of noise about subsidizing the LD trains. But the Republican side of the House is so dysfunctional right now that the only way for Boehner to get a budget or continuing resolution passed to keep the government running may be to take Senate bills to the House floor and get a coalition of Democrats and 30-40 more mainstream Republicans to pass it. Transportation bills coming out of the Senate will have subsidies for the LD trains.