National Association of Railroad Passengers: www.narprail.org

Hotline #395

Yesterday, Amtrak testified in favor of a $1.8 billion federal grant for the railroad in fiscal 2006 was heard in the Subcommittee on Surface Transportation and Merchant Marine of the Committee on Commerce, Science and Transportation. The testimony was given by Chairman David Laney and President/CEO David L. Gunn. Amtrak’s board, which now consists exclusively of Bush appointees, also endorsed Amtrak’s continued ownership of the Northeast Corridor, and creation of a federal-state funding partnership for rail corridor development in which the federal share would be 80%. They stated the need for “some sort of reliable funding source.”

For the long-distance trains, the board endorsed “limited continuing operating and capital funding for agreed upon” long distance services “at levels sufficient to support routes that meet…performance thresholds [which they propose be established]; possible limited infrastructure investment targeted to add capacity that would benefit both passenger and freight rail growth.”

The Amtrak plan, now available at Amtrak’s website, adopts many ideas which Secretary Mineta has been pushing, including a requirement—to be phased in over several years—that states pay for 100% of the cost of corridor services, including overhead costs.

Currently, the federal government through Amtrak funds overhead for all the trains it runs—including so-called “state-supported trains”. For example, Missouri pays about $6 million for St. Louis-Kansas City direct operating losses, while Amtrak funds overhead costs to the tune of another $3 million.

The feds through Amtrak also cover direct operating losses of many corridors—100% for New York State’s Empire Corridor and Chicago-Detroit-Pontiac; 50% for Seattle-Portland; 66% for Chicago-St. Louis and 30% for Pacific Surfliners (southern California).

So the Amtrak plan involves a significant shift in cost burdens onto the states.

The plan also shares Secretary Mineta’s vision of other companies eventually competing with Amtrak for the right to operate state corridors, with a legislative “fix” that puts those other companies on a “level playing field” with Amtrak in terms of rights of access to freight railroad tracks, and the costs of that access. This appears to contradict the freight railroads’ clear position that Amtrak should be the only intercity passenger operator.

The plan would move Amtrak employees out of the Railroad Retirement system into regular Social Security, and it would also eliminate applicability of a key provision of the Railway Labor Act to “Amtrak or other future operators of intercity passenger rail services.” Under the change the board proposes, contracts would expire and the parties free to exercise self help (for management, the ability to impose a new agreement; for workers, to strike); this would replace the lengthy procedures where self help only follows a National Mediation Board determination of an impasse. The board’s top priority, however, seems to be a “level playing field” for Amtrak and potential competing carriers, rather than a particular definition of what the level is.

Chairman Trent Lott (R-MS) opened the Commerce hearing by calling an Amtrak reauthorization this year “one of my top priorities,” and indicated his determination to pass such a bill if it “truly improves the situation…we must be honest with ourselves…if profitability is not going to happen, we must acknowledge that and continue anyway if appropriate. We’re going to get something this year, one way or the other…I want the Administration to be involved…we’re going to have something ready to go to the floor this summer.” Sen. Frank Lautenberg (D-NJ) praised Lott for his energy and determination.

During the Senate Commerce hearing, Senators Byron Dorgan (D-ND), Conrad Burns (R-MT) and Mark Pryor (D-AR) made strong statements in support of long-distance trains. Burns also noted the importance of Amtrak for “freight,” a reference to Amtrak’s continuing and profitable package express program.

Also yesterday, at a hearing of the Senate’s Transportation/Treasury Appropriations subcommittee, Office of Management and Budget Director Joshua Bolten, under relentless questioning from Sen. Patty Murray (D-WA) clearly reaffirmed the administration’s budget request for Amtrak. It remains zero, notwithstanding the Amtrak Board’s action and Secretary Mineta’s carefully worded statement in reaction to what the Board approved.

Mineta, in his statement about Amtrak’s release, “happily” said Amtrak, “after some 34 years and $29 billion of taxpayers’ money…is now acknowledging that its current business model is unsustainable and in need of serious reform.” He also cited Japanese railways as evidence that passenger trains can be profitable. He did not mention Japanese gasoline prices, highway tolls, and population density, nor did he say anything about funding for Amtrak.

As a reminder of the reality we face, USA Today featured a major anti-Amtrak editorial piece on Thursday, rehashing many of the negative sterotypes of Amtrak service. CBS Nightly News also featured a strongly negative piece, with Joseph Vranich featured as an “Amtrak Expert.”

Amtrak says that Acela Express will not return before the summer, and nearly all Acela slots have been back-filled with New York-Washington Metroliners starting April 25. A few Regional trains are being eliminated. Starting a week later (on May 2), there will be two Boston-New York Metroliner round-trips At least for the first several days of the Acela crisis, Amtrak’s Northeast Corridor ridership is actually up, although revenues are not. Metroliner fares are lower, and these trains have more seats than the Acelas.

Last night, NARP Executive Director Ross Capon appeared on The News Hour with Jim Lehrer; the transcript is available on their website. Capon is also scheduled to appear Monday, April 25, at 10 A.M. on “Radio Times” on WHYY, available on the air in the Philadelphia area (91.1 FM) and streamed on-line (the program is also archived).

Efforts to raise the pre-tax deduction that is eligible for mass transit fare purchase have moved forward. Last week, NARP joined several other associations in signing a letter to Senate Finance Committee members requesting an increase. The benefit, currently capped at $105 a month, would be increased to $155. Senator Charles Schumer (D-NY) sponsored an amendment to TEA-21 renewal committee to raise the level and it was approved. It appears that the full senate will take up TEA-21 renewal next week: with a financing showdown set for the floor of the Senate.

Minnesota Governor Tim Pawlenty (R.) signed a bonding bill this week to start construction on the Northstar commuter rail system. Included in the 2005 Capital Investment Bill is $37.5 million earmarked for the Northstar Commuter Rail project. “The Northstar Commuter Rail line is a good project,” Pawlenty told ABC Newspapers. “It is going to provide relief to commuters who are tired of sitting in their cars.”

The NARP Board of Directors is meeting in Bethesda, MD (a suburb of Washington, DC). Last night, the Association held its annual legislative reception at the Rayburn House Office Building. Today, the board considered business of the association, received advocacy training from Stephanie Vance of AdVanced Consulting, heard a keynote luncheon address from David Gunn and an afternoon address from Ed Hamberger of the Association of American Railroads. More details about the meeting will be posted to our website next week.