The National Association of Railroad Passengers is outraged at Reuters and New York Times reports that President Bush will propose zero funding for Amtrak for fiscal 2006, which starts October 1, 2005. We understand that the $360 million that has been characterized as for Northeast Corridor capital improvements is actually for continuation of commuter rail operations on the Northeast Corridor.

Any zero budget request would end intercity passenger rail for Americans, notwithstanding Administration claims to the contrary. It would also be a tired reminder of similar, failed efforts by past administrations, which proposed Amtrak zeroes for FY 1986 through FY 1991.

The Administration talks a lot about “Amtrak reform.” However, Amtrak under President and CEO David L. Gunn has experienced more reform in the past two-and-a-half years than probably in the previous thirty. Headcount has dropped by 3,900 (not counting the transfer of Boston area commuter rail to another operator). Meanwhile, the number of daily trains has risen from 265 in 2002 to 300 today. Amtrak has taken on no new debt since June 2002, although costs of servicing previously incurred debt continue to be significant.

Americans want and use the travel choice that Amtrak offers. One indication of this is Amtrak’s 4.3% ridership growth in FY 2004, which Gunn said was “across all our services – corridor trains as well as long-distance trains...The ridership increases are noteworthy because they came during efforts to restore the fleet and bring Amtrak facilities back to a state of good repair.” Record ridership in FY 2004--at 25.1 million--was up more than one million from the previous record--24.0 million in FY 2003.

For fiscal 2005, President Bush requested $900 million. Congress, recognizing that this would force a shutdown, wisely increased that to $1.2 billion. Amtrak’s initial request was $1.8 billion, later revised to $1.5 billion.

Amtrak has said that $1.2 billion for FY 2006 would be unworkable. This is due to deferrals in capital investment and maintenance that would result for both rolling stock and infrastructure. The highest profile issues have been three elderly river bridges in Connecticut. There are concerns that the two bridges which are movable might have to be locked either open (for marine traffic) or closed (for trains). Last month, the Thames River Bridge at New London was locked closed for several days.

Even if Congress ultimately trashes this zero proposal as it has previous ones, the proposal would harm employee morale and perhaps decrease ridership because of public concern about the elimination of Amtrak service. The Administration is out of touch with the public on this issue; we believe Congress ultimately should and will enable intercity passenger rail to continue. 

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The Administration's Fiscal 2006 budget proposal eliminates all funding for Amtrak. The National Association of Railroad Passengers condemns this proposal as radical and irresponsible.

It would end virtually all intercity rail passenger service in the nation, including through service on the Northeast Corridor between Boston, New York and Washington, D.C. This places the burden of funding intercity passenger rail entirely on states that do not have the financial resources to assume such an unfunded mandate.

States with limited resources would place first priority on saving the commuter operations within their borders. The $360 million the Administration proposes is to allow freight and local commuter rail operations over the Northeast Corridor to continue. It is not clear that this would be enough to accomplish these purposes, and not even the Administration claims it would allow continuation of any Amtrak trains.

Past experience suggests that the only way to fund services which cross multiple state lines is at the federal level.

The Bush Administration misleads the public by saying that a "restructuring" based on zero federal support "should lead to the development of short-corridor routes between major population centers." On the contrary, the existing system has provided the framework and infrastructure for the significant corridor development we have seen on the West Coast, the Midwest, and in upstate New York.

Eliminating Amtrak would jeopardize many of those improvements, and would preclude the possibility of improvements elsewhere. It completely disregards the nation's growing need for the rail travel alternative. Even if every short-distance corridor survived, the resulting "network" would be four isolated units serving a total of 21 states. Travel options would be dramatically reduced even in those states.

Administration claims that an Amtrak bankruptcy would eliminate "inefficient operations" and lead to the emergence of a "more rational" passenger rail system that served routes where there is "real ridership demand" and "support from local governments--such as the Northeast Corridor" are false.

Clearly they are targeting Amtrak’s long distance services and misrepresenting crucial facts.

• Far from lacking demand, the long distance routes handle 59% more travel than the Northeast Corridor (NEC). In FY 2004, the long-distance routes accounted for 2.7 billion passenger-miles, the Northeast Corridor for 1.7 billion. (A passenger-mile is one passenger traveling one mile.)
• The per-passenger-mile operating grant required for conventional, Northeast Corridor trains is comparable to that of the long-distance network. It is a common misconception that the long distance trains are "money losers" while the NEC trains are "profitable." None is, including the new high speed Acela Express.
• The amount of federal funding needed to run the entire, nationwide network is only about 20% greater than what would be required to run the Northeast Corridor alone.

The low funding in FY 2000-2001 allowed for no capital investment and helped create today's deferred capital problem.

One indication that the Administration is not serious about intercity passenger rail of any kind is the zeroing out of the Federal Railroad Administration's "next generation high speed rail" programs of research, development, planning, and technology demonstration. This modest program was funded at $39 million in FY04 and $31 million in FY05.

NARP is a non-partisan organization funded by dues and contributions from approximately 16,000 individual members. We have worked since 1967 to support improvement and expansion of passenger rail, particularly intercity passenger rail.

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A bipartisan group of 35 senators signed a pro-Amtrak letter sent Monday (February 14) to Senate Budget Chairman Judd Gregg (R-NH) and the committee’s ranking member, Kent Conrad (D-ND). More senators are expected to sign a follow-up letter.

Organized by Senators Conrad Burns (R-MT) and Frank Lautenberg (D-NJ), the letter was sent Monday because of the need to get on the record quickly. The second letter will give additional senators who support Amtrak the chance to sign.

The letter sent Monday states, in part, “We are writing to express our deep concern regarding the President’s proposed elimination of funding Amtrak in his 2006 Budget proposal...Without [federal funding], Amtrak would quickly enter bankruptcy and shutdown of all Amtrak services [would result], leaving millions of riders and thousands of communities without access to the essential and convenient transportation that Amtrak provides.

“Therefore, we ask that you provide sufficient funding in the Fiscal Year 2006 Budget Resolution to sustain Amtrak’s national network of passenger rail service. Amtrak’s 5-year Strategic Plan, which was approved by Amtrak’s Board of Directors on June 10, 2004, specifies that approximately $1.8 billion will be required for fiscal year 2006 to provide safe and efficient operation of the railroad. In addition, the most recent reauthorization proposal from the Administration would require a funding level of at least $1.5 billion for fiscal year 2006, according to the Department of Transportation Inspector General…

“Amtrak has made real progress reforming itself over the last few years by reducing its operating costs to help fund needed capital improvements. Over the last 30 months, Amtrak CEO and President David Gunn has cut operating costs, reduced the employee headcount...increased the number of trains...and implemetned internal reforms designed to control costs and improve efficiencies. Amtrak’s core operating expenses are now less than they were in 2000.

“There is an enormous amount of work needed on the infrastructure, fleet and equipment Amtrak owns and operates...”

The letter was signed both by senators whose primary concern is short-distance services as well as those primarily concerned about the national network trains. Signers recognize the fallacy in the Administration’s argument that destroying one part of the system will help save another part of it. 

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The National Association of Railroad Passengers (NARP) continues to agree with Secretary of Transportation Norman Y. Mineta that the federal government should provide matching funds for state intercity passenger rail corridor development programs.

But we disagree with the secretary about what is happening to Amtrak. If “...the federal...partnership...with Amtrak...has failed,” primary fault lies with the Federal Government, which has not provided essential funding for passenger rail infrastructure and rolling stock, and thereby limited service expansion and inflated operating costs.

The case for intercity passenger rail funding on the order of $1.7 to $2.0 billion is persuasive. Amtrak needs $1.2 billion for the Northeast Corridor alone. Adding a mere $300 million keeps the rest of the system going—other corridor trains and national network (long-distance) trains. Funding above $1.5 billion could support a federal match for a state-controlled corridor development program. In short, the incremental benefits associated with each funding level above $1.2 billion are substantial.

By contrast, the Administration’s zero budget request, if enacted, would mean the end of all intercity passenger rail.

The national network (long-distance) trains are heavily used, accounting for almost half of Amtrak’s total passenger miles. They carry passenger loads comparable to – or higher than – those on most airline flights as well as on short distance passenger trains, including those in the Northeast. They tie rural and urban America together and provide the foundation on which states can build additional regional services. Without them, the number of city pair markets where rail is a travel choice would fall dramatically.

Services which cross multiple state lines are federal responsibilities--including the Northeast Corridor and the national network trains. This reality reflects the willingness and ability of states to pay, and the difficulty of identifying an appropriate method for allocating costs among states. Running trains “closed door” through states that don’t pay is impractical. Except for a few cases where a route crosses a narrow corner of a state, the economic damage that any route would suffer from running “closed door” through any single state would be severe or devastating.

In poll after poll and ballot initiative after ballot initiative, the American people have demonstrated that they want – and will vote to fund ­- improved and expanded passenger train service.

NARP is a non-partisan, non-profit organization primarily funded by dues and contributions from individual members. Since 1967 NARP has represented the interests of millions of passenger rail and transit users by supporting improvement and expansion of passenger rail, particularly intercity passenger rail. 

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Open discussion of an Amtrak “bankruptcy” in the Administration’s budget request clearly indicates where this Administration is heading. Replacement of funds for Amtrak, and vague comments about as-yet-unrequested funds for states do not constitute responsible policy, as is made clear in the detailed February 16 letter from Sen. Patty Murray (WA), the top Democrat on the relevant appropriations subcommittee (Letter available on Murray’s website).

Without the foundation Amtrak provides, “replacement” funding for states--even should it materialize--would be a far less efficient investment than the federal government’s current Amtrak funding.

Fully one half of Amtrak passengers in North Carolina are riding “basic system” trains; the other half ride the state-funded “Carolinian” and “Piedmont.”

The case for intercity passenger rail funding on the order of $1.7 to $2.0 billion is persuasive. Amtrak needs $1.2 billion for the Northeast Corridor alone. Adding a mere $300 million keeps the rest of the system going—other corridor trains and national network (long-distance) trains. Funding above $1.5 billion could support a federal match for a state-controlled corridor development program. In short, the incremental benefits associated with each funding level above $1.2 billion are substantial.

By contrast, the Administration’s zero budget request, if enacted, would mean the end of all intercity passenger rail.

We disagree with the secretary about what is happening to Amtrak. If “...the federal… partnership...with Amtrak...has failed,” primary fault lies with the Federal Government, which has not provided essential funding for passenger rail infrastructure and rolling stock, and thereby limited service expansion and inflated operating costs.

The national network (long-distance) trains are heavily used, accounting for almost half of Amtrak’s total passenger miles. They carry passenger loads comparable to – or higher than – those on most airline flights as well as on short distance passenger trains, including those in the Northeast. They tie rural and urban America together and provide the foundation on which states can build additional regional services. Without them, the number of city pair markets where rail is a travel choice would fall dramatically.

Services which cross multiple state lines are federal responsibilities--including the Northeast Corridor and the national network trains. This reality reflects the willingness and ability of states to pay, and the difficulty of identifying an appropriate method for allocating costs among states. Running trains “closed door” through states that don’t pay is impractical. Except for a few cases where a route crosses a narrow corner of a state, the economic damage that any route would suffer from running “closed door” through any single state would be severe or devastating.

In poll after poll and ballot initiative after ballot initiative, the American people have demonstrated that they want – and will vote to fund ­- improved and expanded passenger train service.

NARP is a non-partisan, non-profit organization primarily funded by dues and contributions from individual members. Since 1967 NARP has represented the interests of millions of passenger rail and transit users by supporting improvement and expansion of passenger rail, particularly intercity passenger rail. 

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Distributed by hand at Press Conference and to Missouri and Illinois media

Transportation Secretary Norman Y. Mineta visits the St. Louis Amtrak station today, to defend Administration policy. That policy is to remove the federal operating support which currently is provided in varying degrees—through Amtrak—to all trains Amtrak operates.

The federal grant to Amtrak covers overhead costs for all trains. Missouri now pays about $6 million a year for the St. Louis-Kansas City trains, but the federal government covers $3 million in overhead costs, and the Administration wants to eliminate that support. The federal government pays even more for Chicago-St. Louis: overhead costs plus two-thirds of direct operating losses.

A federal/state “partnership” on capital investment is badly needed in addition to—not as a replacement for —federal operating support. Moreover, the Administration proposes to establish this partnership only after Amtrak has been “reformed” in impractical ways. This includes allowing other contractors to compete with Amtrak to run trains, even though the freight railroads that own that tracks strongly oppose this.

The Secretary also criticizes Amtrak for a variety of alleged sins of omission and commission. He denounces continued operation of long distance trains that he claims are little-used, including the Chicago- St. Louis-Texas-California Texas Eagle. Yet, in fiscal 2004, each long-distance train run, on average, carried 364 people (ridership), and had 171 on board at any given time. These trains as a group accounted for 48% of travel on Amtrak measured in passenger-miles (passenger-miles-per-train mile; one passenger traveling one mile).

NARP is a non-partisan, non-profit organization primarily funded by dues and contributions from individual members. Since 1967, NARP has represented the interests of millions of passenger rail and transit users by supporting improvement and expansion of passenger rail, particularly intercity passenger rail.

More information is available through our ”Amtrak Fact Check” and “Amtrak Facts and Myths” documents at our website. 

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The House of Representatives today passed its Fiscal 2006 budget resolution. Transportation funding is “the President’s recommended level, as re-estimated by the Congressional Budget Office, with the following adjustment: the starting level was increased to accommodate for continued funding of passenger rail services.” The resolution assumes $1.2 billion for Amtrak, the same as this year’s funding level.

House leaders added room for Amtrak in the budget resolution after 21 Republican members wrote March 2 to Budget Committee Chairman Jim Nussle (IA), urging him to “provide sufficient funding…to sustain Amtrak’s national network of passenger rail service. The company is moving in the right direction.” The lead signers were Railroads Subcommittee Chairman Steve LaTourette (OH), Mike Castle (DE), Sherwood Boehlert (NY) and Rob Simmons (CT).

During House Budget Committee consideration of the resolution, Rep. Allison Schwartz (D-PA), also a member of the Transportation and Infrastructure Committee, engaged Nussle in a colloquy regarding in which Nussle acknowledged and was hopeful that a portion of the additional funding above the president’s request would be used for Amtrak but left it in the hands of the appropriators. Budget resolutions are advisory and are not enacted into law; appropriations laws set exact funding levels for each program.

Yesterday, the Senate defeated 46-52 an amendment to the Senate’s budget resolution which would have increased Amtrak funding to $1.4 billion, from the zero President Bush requested. Four Republicans voted for Amtrak. Some other Republicans emphasized that their vote against the amendment was based on concern that the amendment was a closet tax increase. Eight Republicans signed a February 10 letter pro-Amtrak letter to Senate Budget Committee Chairman Judd Gregg (R-NH) and Ranking Member Kent Conrad (D-ND).

Just before yesterday’s vote, Sen. Trent Lott (R-MS) said, “While I support the intent of [Sen. Byrd] and I support Amtrak and I am determined to get this job done, we shouldn’t do it in this way at this point.” Noting he is again chairman of the authorizing subcommittee, Lott said, “I am committed to find a way to get a reauthorization and get a reliable stream of funds for Amtrak so its future can be certain and so this does not have to depend on annual appropriations.”

Amtrak is unique in transportation in being responsible for multi-year capital projects but not having any multi-year funding. 

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Washington—The Bush Administration continues work which would kill intercity passenger rail,
while touting impractical “reforms” said to do the opposite. Transportation Secretary Norman Y.
Mineta heads to the Detroit Amtrak station Thursday to further promote this plan. Despite Administration claims that “Amtrak is dying,” ridership on the three Michigan routes was up in fiscal ‘04.

Mineta on March 18 told a House subcommittee, “In the last four years alone, federal subsidies
have more than doubled yet infrastructure is deteriorating…” But fiscal 2000-01 funding levels
were low (far below authorized levels), and funding restoration has supported the very capital
program Mineta wants but whose existence he seems to deny.

FEDERAL FUNDING FOR AMTRAK
(Years are fiscal years; dollars in billions)
1998: $1.67
1999: $1.70
2000: $0.57
2001: $0.52
2002: $0.83
2003: $1.04
2004: $1.22
2005: $1.21

Bush Administration policy would eliminate federal operating support now provided in varying
degrees—through Amtrak—to all Amtrak trains. This includes overhead costs for all Amtrak
trains, including the Chicago-Grand Rapids Pere Marquette and Chicago-Port Huron Blue Water.
For the Chicago-Detroit-Pontiac line, the federal grant also covers direct operating losses.

Ridership growth was strong on all three Michigan routes in fiscal 2004—up 20%, 17% and 12%, respectively. As Rep. John Sweeney (R-NY) told Mineta at a March 18 House subcommittee hearing, “What it looks like back home [regarding Amtrak] is the federal government is doing a dump.” The federal/state “partnership” on capital investment which Mineta is pushing is badly needed, but in addition to—not as a replacement for—federal operating support.

NARP is a non-partisan, non-profit organization primarily funded by dues and contributions from individual members. More information is in our “Fact Check” and “Amtrak Facts and Myths” documents.

# # #

In Fiscal Year 2004, Amtrak:

• Transported 604,721 passengers to and from stations in Michigan
(Ridership at the five Metro Detroit stations was 165,727)

• Employed 133 Michigan residents earning wages totaling over $6.4 million.

• Expended $2.8 million dollars for goods and services in Michigan
Other facts about Amtrak in Michigan:

The Chicago-Niles-Kalamazoo-Battle Creek-Jackson-Ann Arbor-Dearborn-Detroit-Pontiac corridor receives no state operating support and both operational and overhead costs are covered 100% by Amtrak (through its federal grant).

Amtrak paid for and constructed the facilities it uses in Dearborn, Ann Arbor, Port Huron, and the loading platform at Greenfield Village. Amtrak also owns the historical railway depots in Jackson and Niles. Niles has seen extensive renovations in recent years and Jackson—one of the first stations to be renovated (in 1974) after Amtrak took over passenger service—is in the planning process for another renovation.

Amtrak, working closely with the Michigan Department of Transportation, responded to market demand, severe on-time-performance problems, and requests from passengers by rescheduling its Chicago - Port Huron service. The train no longer continues on to Toronto, Canada, rather, it terminates at the border. A more Michigan-friendly schedule is now in place (westbound in the morning, eastbound in the evening). When one compares ridership between January 2004 and January 2005, ridership increased 26%.

NATIONAL AMTRAK RIDERSHIP
(Years are fiscal years; ridership in millions)
1998: 21.09
1999: 21.51
2000: 22.51
2001: 23.49
2002: 23.40
2003: 24.03
2004: 25.05

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Washington—Secretary Mineta’s comments this morning in Detroit largely reiterated what he has said before. He again downplayed the killer impact of eliminating federal operating grants that now support all Amtrak trains. By taking aim at the Empire Builder, one of Amtrak’s strongest longdistance routes, he appeared to underline a commitment to end long-distance services (and thus service in every “red” state).

Asked to back up his previous comment that Amtrak runs routes that “nobody” wants to ride, he said, “the problem is if the Empire Builder is going from Seattle to Chicago and it’s going through lets say Montana, but there are only 53 people a day using that train service, can I really justify pouring that kind of subsidy into the Empire Builder for a segment of that service?”

Fact: In fiscal 2004, the Empire Builder handled 437,200 passengers, an average 1,195 per day (597 per trip, since there is one eastbound and one westbound train per day). This was 5% above the fiscal 2003 level, and 19% above that of fiscal 2002. In fiscal 2004, boardings and alightings within the state of Montana totaled 129,044 or an average of 353 per day. At the same time, about 100,000 passengers (average 275 per day) traveled all the way across Montana en route between Idaho-west and North Dakota-east points.

Mineta also repeated his attack on the concept of having the same organization (Amtrak) own both track and trains, calling Amtrak “one of the last monopolies.”

Fact: “vertical integration” (common ownership of tracks and trains) is standard in the U.S. bothfor freight and many commuter railroads. Separating Amtrak into various ownership and operating entities would create duplicative bureaucracy, and new legal “turf wars”. One example: operating railroads want to maximize track availability; track-owning companies want to give work crews maximum time to maintain the track. Thus, when a single CEO cannot mediate such disagreements—because the responsibility is split between two companies—wasteful litigation can result.

Repeating previously-stated concerns about Amtrak on-time performance, Mineta said that delays to Detroit-Chicago Wolverine service trains were due to “Amtrak continu[ing] to delay desperately needed maintenance of the infrastructure that it already owns.”

Fact: Michigan trains were delayed a total of 218,537 minutes during fiscal 2004. Delays due to
Amtrak infrastructure conditions accounted for 8,369 minutes or 3.8% of these delays. The lion’s share of delays to these services come from freight train interference encountered on tracks owned and operated by Norfolk Southern and Canadian National Railroads.

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PRESS CONFERENCE: NARP and TRAC will be holding a joint press conference at
10:30am, Thursday March 30th, on the north end of the west steps of the Capitol building,
30 minutes before Mr. Mineta’s appearance.

Sacramento—The Bush Administration continues work that would kill intercity passenger rail,
while touting impractical “reforms” said to do the opposite. Transportation Secretary Norman Y.
Mineta heads to the California State Capitol Building in Sacramento Thursday to further promote this plan.

Despite Administration claims that “Amtrak is dying,” ridership on all California routes was up
in fiscal 2004. Mineta on March 18 told a House subcommittee, “In the last four years alone,
federal subsidies have more than doubled yet infrastructure is deteriorating…” But fiscal 2000-
01 funding levels were low (far below authorized levels), and funding restoration has supported
the very capital program Mineta wants but whose existence he seems to deny.

Bush Administration policy would eliminate federal operating support now provided in varying
degrees—through Amtrak—to all Amtrak trains. This includes overhead costs for all Amtrak
trains, including the three California Corridor operations (Capitol Corridor, San Joaquins, and
Pacific Surfliners). For the Surfliners, the Los Angeles-San Diego portion of this route has been
part of Amtrak since the beginning. Therefore, the federal government, again through Amtrak,
covers 30% of the direct operation loses on this service. The administration does not explain how states will pick up these increased costs which exist in every state Amtrak serves.

Last year, over 4.2 million passengers rode Amtrak’s California Corridor services. California depends upon Amtrak’s long distance trains to share costs of major facilities such as
the Oakland Maintenance Base and stations in Los Angeles, Sacramento, Emeryville, and
Oakland (among others). Without long-distance trains and sharing of costs, California would have to cut service or increase subsidies.

California would also lose rail service to the rest of the United States and to dozens of California towns which lie outside of the state corridors. As Representative John Sweeney (R-NY) told Mineta at a March 18 House subcommittee hearing, “What it looks like back home [regarding Amtrak] is the federal government is doing a dump.” The federal/state “partnership” on capital investment which Mineta is pushing is badly needed, but in addition to—not as a replacement for—federal operating support.

NARP is a non-partisan, non-profit organization primarily funded by dues and contributions
from individual members. More information is in our “Fact Check” and “Amtrak Facts and
Myths”.

TRAC, active since 1984, is a non-profit consumer lobby advocating improved passenger train
service in California. Please visit our website.

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The National Association of Railroad Passengers (NARP) has reached out to the Bush Administration in an effort to ensure the survival of America’s only national railroad passenger system. A letter from NARP President George L. Chilson was delivered to Secretary of Transportation Norman Y. Mineta on Monday.

The letter addresses critical questions that NARP has about the Administration’s true motives in touting Amtrak “reform” and, more specifically, advocating bankruptcy as the best way to improve the railroad.

Chilson said, “NARP’s first priority is preservation of existing Amtrak services. While we want to work with, not against, the Administration to improve our nation’s railroad passenger system, statements made thus far by Secretary Mineta and other Administration officials make cooperation difficult.”

NARP is a non-partisan, non-profit organization primarily funded by dues and contributions from individual members. More information is available through our”Amtrak Fact Check” and “Amtrak Facts and Myths” documents at our website. 

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At this morning’s Senate Appropriations subcommittee hearing, senators emphasized the difficulty of funding Amtrak in the current environment without support from the Bush Administration, and while dealing with severe budget cuts the Administration proposed in other popular programs. Chairman Christopher Bond (R-MO) said, “even if I was to agree that $1.8 billion [which Amtrak requested] was justified, I don’t see how we could provide it.”

But DOT Inspector General Ken Mead and Amtrak officials insisted that with $1.2 billion [what Congress provided for this year], Amtrak would not make it through FY06.

Amtrak Chairman David Laney emphasized that all of the increase Amtrak requested is for capital improvements; operating grant needs are basically flat. Mead said Amtrak is spending at a rate of $1.4 billion because Amtrak ended fiscal 2004 with about $200 million in cash. In contrast, President David Gunn said Amtrak might “limp into fiscal 2006 with $20 million” or roughly one week’s cash requirements.

Senator Patty Murray (D-WA) zeroed in on whether “reform” would in fact produce an Administration budget request for Amtrak. She noted that on April 21 OMB Director Josh Bolten testified that the zero budget request already on the table is the only Amtrak request the Administration will submit.

Murray then quoted an NPR interview [aired March 4 on Morning Edition] in which Secretary Mineta seemed to suggest otherwise: “If we get the reform that we are looking for, then we will be asking for the funds to fund a national intercity passenger rail system.” Asked “what is the real figure that the Administration is willing to spend on Amtrak?” Mineta said, “Probably in the area of about $1.5 billion to $2 billion.”

In responding to Murray this morning, DOT General Counsel Jeffrey Rosen said he believed that Mineta in March was talking about Northeast Corridor funding needs, possibly over a multi-year period.

Testimony from DOT Inspector General Ken Mead emphasized that “eliminating long-distance service will not solve the problem,” but would only save about $300 million and those savings “would not be immediate. In fact, in the first year, it may cost Amtrak more to eliminate the service than to operate it because of its labor severance payments (commonly called C-2).”

At this morning’s hearing, Sen. Robert Bennett (R-UT) reported that the California Zephyr handles fewer than 100 passengers a day in Utah, suggesting this means “we do not have a market for transcontinental train riders.”

The California Zephyr overall is well used. The comparable average on+off figure for Colorado is 550 passengers a day, and the Zephyr overall averaged 460 passengers per one-way trip. [These are all Fiscal 2004 statistics.] Thus we disagree with Sen. Bennett’s conclusion.

The transcontinental trains, of course, serve riders getting on and off all along the routes; actual “transcontinental passengers” represent a fairly small proportion of the business, although their revenue contributions are significant.

Salt Lake City is one of the few major metropolitan areas where the only service Amtrak provides is in the middle of the night. This is perhaps a necessary side-effect of scheduling a single frequency at optimum times for the biggest markets (Chicago, Denver, Bay Area), and explains the Utah passenger count that Sen. Bennett noted.

NARP is a non-partisan, non-profit organization primarily funded by dues and contributions from individual members. More information is available through our ”Amtrak Fact Check”and “Amtrak Facts and Myths” documents at our website. 

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Distributed by hand at Mobile Press Conference and to Southeast media

Viewable in PDF format

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Washington--The National Association of Railroad Passengers today sharply criticized Transportation Secretary Norman Y. Mineta for exacerbating Amtrak’s financial problems by twisting language intended to minimize a crisis into justification for creating a crisis. 

NARP Executive Director Ross B. Capon stated, “If Mineta really agrees with most Americans that ‘intercity passenger rail is too important to just stand by and watch it die,’ as he has written, he should not make public statements that drive up Amtrak’s costs. He should not make demands which assume that cutting still more operating expenses can significantly improve Amtrak’s bottom line over the next four months.

“Instead, he should work constructively to help Amtrak manage around the cash problems created by the temporary withdrawal of Acela Express trains.  He should get better acquainted with the facts.” [Many of the items on our Amtrak Fact Check” are responses to his misstatements.]

Late May 25, Mineta wrote to Amtrak President & CEO David L. Gunn, threatening to withhold $60 million in federal money already appropriated to Amtrak for FY ’06. Mineta said “it is irresponsible to project a positive cash balance based on an assumption about reserve funds, when without those dollars, Amtrak’s cash position before September 30th could be as much as $40 million in the red.”

Amtrak’s budget, approved by a board of directors composed entirely of Bush Administration appointees, assumes availability of the $60 million that Mineta calls “reserve funds.” Moreover, the appropriations law requires Mineta to give Amtrak that $60 million “during the end of the fourth quarter of fiscal 2005” except to the extent that, “as of the date of transfer,” funds are “needed by the Surface Transportation Board to pay for any directed service order issued through Sept. 30, 2005.” A directed service order [to maintain commuter rail service on Amtrak facilities] would only be necessary if Amtrak shuts down.

Costs of an actual Amtrak bankruptcy would be horrendous. Gunn, speaking Wednesday to the Transportation Research Forum in Washington, DC, said Amtrak is America’s “Alamo” of high speed rail. He called the knowledge of Amtrak employees “our most precious asset…if we lose that, you can’t look people up in the Yellow Pages to run the railroad.”

Capon noted, “Sadly, Mineta’s letter reinforces the view that there are people in the Bush Administration who want an Amtrak bankruptcy but who do not understand that it would force a shutdown of the railroad, raise serious questions about the ability to get it re-started, and impose huge costs on both the public and private sector.”

A release yesterday from Senator Patty Murray (D-WA) included this: “In response to a question by Murray, Gunn testified that the Bush Administration’s stated goal to put Amtrak into bankruptcy and the failure of a Senate amendment to restore Amtrak’s funding has had a significant negative impact on Amtrak’s cash position.  Gunn testified that, as a result of those events, Amtrak’s bond rating was downgraded, the railroad’s insurance costs and accounting costs increased, and the financial requirements by Amtrak’s suppliers were tightened.”

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Release #05-16

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[Note: NARP Assistant Director David Johnson is in Montana at the town hall meetings, but is inaccessible by cell phone. He will be at the town hall meeting and media events in Glasgow and Whitefish and at the media events in Havre and Shelby. NARP President George Chilson will participate in the town hall meetings at Havre and Whitefish and the media events at Havre, Shelby and Whitefish. If you are unable to speak with Johnson or Chilson, contact NARP Executive Director Ross Capon at 202/408-8362.]

Glasgow, Montana—Transportation Secretary Norman Y. Mineta yesterday attacked Amtrak for not “providing shorter distance, more frequent corridor services in states like Montana.” This despite the fact the ideal role for passenger rail in Montana is exactly the role served by Amtrak’s popular Empire Builder, whose FY 2004 ridership was 437,200, up 5% from the previous year. Montana’s largest city has fewer people than Trenton, New Jersey. Only one non-stop flight a day (with 19 seats) links Montana’s two largest cities, even though they are 340 miles apart. So it is ridiculous to talk about “frequent corridor” trains here. 

American taxpayers across Montana are rallying today at Glasgow, Havre, Shelby, and Whitefish to support the Empire Builder.

Mineta’s statement about running “frequent corridor services” in Montana, and his overstatement of long distance train losses (2nd bullet, below), appear to be part of a willful pattern of misrepresenting the facts to kill the service. Indeed, he appears willing to say just about anything to make Amtrak look bad even though, as an Amtrak board member, he has a fiduciary responsibility to speak to the facts. His repeated failure to do so creates chaos and confusion over an issue that needs a rational and non-pejorative discussion.

NARP agrees that communities like Billings and Missoula should have trains, but it is absurd to attack Amtrak for a decision that Mineta’s own agency made twice—when Amtrak was first established in 1970 and again in 1979. U.S. DOT’s position was that Montana could have only one route, and the northern route deserved priority because it lacked other transportation options.

It is equally absurd for Mineta to say that “the 12 Montana cities with [Amtrak] stops represent just 3½% of Montana’s population,” even though Montanans from other communities—including Great Falls—drive considerable distances to reach the train.

The Administration’s plan—as well as its zero budget request for Amtrak—would eliminate all Amtrak service, not expand it. 

Our “Amtrak Fact Check” site consists largely of responses to previous erroneous statements by Mineta.  He repeated some of those statements yesterday and added new mistakes.

• Total “ons and offs” at Montana stations in FY 2004 were 129,044.  Mineta, however, highlighted the “fewer than 13,000 Montanans” he says “are able to use the train to travel within the state each year,” even though interstate travel is the train’s main purpose.

• Mineta: “Nation-wide Amtrak lost over $908 million last year on its long distance trains.” Fact: DOT Inspector General Kenneth Mead and Amtrak Chairman David Laney (a Bush appointee) testified May 12 that eliminating all long-distance trains would save only $300 million.

• Mineta: The Empire Builder line “was built in the late 1800’s and hasn’t changed much since.” This proves nothing, since the same could be said of many transportation routes, and almost all rail lines.

• Mineta: “The Alaska Railroad runs long distance trains that combine first-class travel cars owned and operated by cruise lines, along with its own cars.” Fact: The Alaska train in question is a daylight-only, 12-hour, 350-mile run, not a long-distance train.  For this reason, and because it traverses some of the planet’s most spectacular scenery, it is of little relevance to Amtrak’s long-distance trains.

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Release #05-17

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Baltimore--“America needs more, not fewer, trains, due to growing congestion in major urban corridors, and growing isolation—including a new round of Greyhound cuts—in rural America,” said Ross B. Capon, executive director of the National Association of Railroad Passengers.

Capon continued, “We also need straight talk on the subject, not the comments we saw from the Government Accountability Office at last Thursday’s hearing, or from Secretary Mineta on many previous occasions.”

Capon spoke at a Baltimore town meeting that included Reps. James Oberstar (D-MN), Corinne Brown (D-FL), and other key Amtrak supporters in the House of Representatives, as well as representatives from Friends of the Earth and rail labor.

At Thursday’s Railroads Subcommittee hearing, Rep. Corinne Brown (D-FL) correctly noted, “Congress should not be micromanaging Amtrak’s day-to-day operations.  This has created problems in the past.  We’re now criticizing [Amtrak] for the very inefficiencies we created.”

JayEtta Hecker of the Government Accountability Office unfortunately created more heat than light, taking Amtrak to task for allegedly paying $3.93 a bottle for Heiniken beer.  She said this even though Amtrak had told her beforehand that this figure was “a single data entry error that was corrected within 40 minutes….For over 200,000 bottles, Amtrak actually paid 83 cents a bottle.”

Subcommittee Chairman Steve LaTourette (R-OH) called this an “attention grabber that I don’t think is fair. I can see the headline now: ‘Beer and Steaks Gone Amok’.” LaTourette began the hearing by noting, “I’m impressed by the Gunn administration [referring to Amtrak President & CEO David L. Gunn] and their attempts to make some changes.”

Later in the hearing, Rep. Richard H. Baker (R-LA) took Amtrak to task for not emulating Chef Mario, who he implied runs the food service on the San Joaquin Valley trains at a profit.  It fell to Capon, a subsequent witness, to make clear that Chef Mario is simply a vendor who supplies certain menu items for that route.  NARP later learned that San Joaquin food service is only “profitable” when labor costs are excluded; by this measure many other Amtrak routes also have “profitable” food service.

The “Fact Check” section of our website contains responses to a litany of misstatements about passenger rail by Amtrak’s critics, primarily Transportation Secretary Norman Y. Mineta.

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Release #05-19

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Washington—-Amtrak would get only $550 million, far below the minimum needed to continue operation, based on the subcommittee’s action this morning.  Moreover, most of the information contained in the subcommittee’s is just plain wrong.  The subcommittee which marked up (wrote) its fiscal 2006 funding bill is the Subcommittee on Transportation, Treasury, and Housing and Urban Development, The Judiciary, the District of Columbia. 

Amtrak is hit with a fatal, 54% cut in funding while aviation and highway spending would rise by 6.4% and 5.4%, respectively, because, as the committee’s release notes, these programs get “unique preferential treatment…not afforded to any other discretionary program including Veterans Medical Care, Homeland Security funding or National Defense programs.”

The committee’s release pretends that $550 million is not a shutdown budget and would “fully support rail service for 4 out of 5 riders or 80% of Amtrak’s ridership [including]” the Northeast Corridor and most other short-distance trains.

In fact, there is no way Amtrak could avoid bankruptcy and a complete shutdown at this funding level. Amtrak has requested $1.8 billion. Amtrak President & CEO David L. Gunn has stated that, even at $1.2 billion, Amtrak would be unable to install already-purchased, long-lead-time items for its capital investment program.

The DOT Inspector General has testified that “intercity passenger rail needs Federal funding between $1.4 billion and $1.5 billion, plus [a continuation of] existing state contributions, in order to maintain the status quo” but even this would not be enough “to move the system to a state-of-good-repair.”

The idea that $550 million could do anything other than send Amtrak into bankruptcy is perhaps more easily understood when one considers that-—although Amtrak has incurred no new debt since mid-2002—-debt service payments still are about $275 million a year.

NARP Executive Director Ross Capon said “The subcommittee’s action is particularly unfortunate when Americans are showing increased interest in more transportation choices, especially rail. The transparently misleading statements in the subcommittee’s release can only serve to further lower public respect for Congress.”

The subcommittee attacks an Orlando-Los Angeles train by citing Orlando-Los Angeles air fares, completely ignoring the fact most passengers on this train are riding between intermediate points, many of which lack attractive air service and that many people do not want to fly or are medically unable to fly. More than 100 Amtrak-served communities have no commercial air service; many more have no access to the discount air services that the committee’s release trumpets.

A number of new items based on the committee’s misleading release will be added to the “fact check” section at http://www.narprail.org later today. Suffice it to say that the 90% discount the subcommittee attacks applies in the Northeast Corridor to the 3rd through 6th members of a small group whose first two members have paid full fare. If Amtrak did not undertake targeted fare reductions like this, critics would accuse Amtrak of lacking entrepreneurial initiative.

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Release #05-19

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Washington--The House Appropriations Committee voted yesterday to ratify its transportation/treasury subcommittee’s decision to kill U.S. intercity passenger rail. “This would deprive Americans of an increasingly important travel choice,” said NARP Executive Director Ross B. Capon. “Amtrak ridership rose in seven of the last eight years, while Amtrak stabilized operating costs the past three years under President and CEO David L. Gunn. Ridership growth did not come from fare cuts, since Amtrak’s yield—average revenue per passenger-mile—also rose (nine of the last ten years), contrary to recent experience of most airlines.”

Knowledgeable observers agree that $550 million is far below the minimum needed to run any trains. Although Amtrak has taken on no new debt since 2002, an estimated $278 million is needed next year just to service old debt. Gunn has said a Northeast Corridor-only system would require about $1.2 billion. Amtrak Chairman David Laney and DOT Inspector General Ken Mead both testified that dropping all long-distance trains would save only $300 million a year, and that only after several years of severance payments.

Even level funding—$1.2 billion—would leave Amtrak unable to install long-lead-time capital items already purchased. Due to the pressing needs of Amtrak’s capital program, Amtrak—which ended Fiscal 2004 with over $200 million in cash—has been spending at a $1.4 billion rate. The Bush-appointed Amtrak board of directors requested a FY06 federal grant of $1.8 billion to continue movement towards a “state of good repair.” DOT Inspector General Ken Mead testified that $1.4-1.5 billion—plus state funding continuing at present levels—is needed just to maintain the status quo.

Nonetheless, House Subcommittee Chairman Joseph Knollenberg (R-MI) claimed that $550 million (55% below current federal funding) would let most short-distance routes continue, saying, “The subcommittee’s Amtrak proposal is an honest one and deserves the committee’s support.”

The committee rejected three Amtrak-related amendments:

• John W. Olver (D-MA), the subcommittee’s top Democrat, proposed to continue $1.2 billion, and increase funding for four unrelated programs, by rolling back tax reductions on Americans reporting income over one million dollars a year.

• Dennis Rehberg (R-MT), saying “Amtrak is not just essential, it is critical” to Montana, proposed language stating that the Empire Builder would continue to run.  (No additional funding was included.)

• Virgil H. Goode (R-VA) proposed to continue $1.2 billion by eliminating earned income tax credits for those in the U.S. on visas.

The same bill that kills intercity passenger rail would:

• Increase federal-aid highway spending to $37 billion—$2.7 billion above the current level and $1.6 billion above President Bush’s request;

• Increase Federal Aviation Administration (FAA) to $14.4 billion—$877 million above the current level and $1.7 billion above President Bush’s request.

Olver expressed concern about the impact of funding levels in the highway bill on other programs, like Amtrak. For FAA Operations, general funds would contribute $3.2 billion—more than 30% of the total—as Rep. Martin Olav Sabo (D-MN) noted. That is up from $2.8 billion this year.

The six legacy airlines lost $7.6 billion (not including government support) in 2004, in effect a subsidy from shareholders. Airports and the air traffic control system do not disappear when an airline goes under, but an Amtrak bankruptcy would trigger loss of an entire mode of transportation.

Although the bill would force a systemwide Amtrak shutdown, and would raise costs of providing commuter rail in many markets, the bill identifies 18 routes for which federal funding could not be used: the long-distance trains plus Chicago-Detroit-Pontiac, Chicago-Indianapolis and New York-Charlotte. Report language claims these trains lose over $30 a passenger. 

“Given the skeletal nature of Amtrak’s route network, we believe any route ranking should be used to see what lessons from best performers could guide improvement of weaker ones. But, no matter how many trains Amtrak eliminates (and two significant ones were dropped in the past eight months), critics will call for more cuts. Thus we are hesitant to say anything about route ranking,” said NARP Executive Director Ross B. Capon. “But the committee’s $30-dollar-a-passenger ‘sledgehammer’ approach cries out for clarification that an economically sound ranking would reflect

(a) loss per passenger-mile;
(b) percentage of costs covered by commercial revenues;
(c) network impact (that is, the impact on other routes of lost revenue from connecting passengers and lost cost-sharing opportunities regarding joint facilities);
(d) (if relevant) important, route-specific factors not reflected in the above.”

Capon said, “We remain optimistic that this process, which still has a long way to go, yet can save passenger rail, but each new step that doesn’t solve the problem is greater cause for alarm.” The bill may go to the Rules Committee Monday, and the House floor later next week. Amtrak’s survival could depend on a successful floor amendment, which in turn seems to depend on finding “offsets” (spending reductions, revenue increases) elsewhere in the bill. The magnitude of that challenge is reflected in the fact that Olver and David Obey (D-WI), the full committee’s top Democrat, yesterday praised Knollenberg for doing the best job possible with the inadequate resources available under the Republican budget resolution.

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Release #05-20

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Washington—The National Association of Railroad Passengers today praised Reps. Steven
LaTourette (R-OH), James Oberstar (D-MN), Corinne Brown (D-FL), Nick Rahall (D-WV) and
Robert Menendez (D-NJ) for their leadership in efforts to prevent the permanent loss of intercity passenger rail service in the U.S.

The House of Representatives this afternoon on voice vote adopted the LaTourette/Oberstar
amendment to increase Amtrak’s FY06 federal grant to nearly $1.2 billion. Steve LaTourette (R-OH) chairs the Railroads Subcommittee and James Oberstar (D-MN) is the top Democrat on the full House Transportation & Infrastructure Committee.

The committee-passed level of $550 million would have assured shutdown, bankruptcy and
chaos. As Amtrak President and CEO David L. Gunn wrote to House members yesterday, “faced with a $550 million appropriation, we would have no choice but to begin an orderly shut down of the railroad.”

NARP Executive Director Ross B. Capon said, “It is unfortunate that Amtrak must continually
operate under the threat of shutdown at the end of the fiscal year. However, we are lucky to have leaders like Reps. LaTourette, Oberstar, Brown, Rahall and Menendez who understand both the importance of keeping Amtrak running and how close we are to losing the entire system.”

The House voted 269-152 for an amendment by Reps. Corinne Brown (D-FL), Nick Rahall (D-WV) and Robert Menendez (D-NJ) to eliminate a committee-passed prohibition against spending federal funds on most of Amtrak’s route miles—all long-distance routes plus Chicago-Detroit, Chicago-Indianapolis and New York-Richmond-Charlotte. Absent the Brown/Rahall/Menendez amendment, the House would have voted against any service in 23 or 25 states (depending on whether one assumes that the Oklahoma City-Fort Worth train, not identified, could operate in isolation after termination of the Texas Eagle). At least 70 Republicans voted for the amendment.

The language this amendment deleted was mischievous for two reasons. First, it would have
ended all passenger rail service in so many states as to undercut Congress’s ability to provide any funding for intercity passenger rail. Second, the language fostered the false notion that the
committee-passed bill would allow some services to operate when that clearly is not the case.

Finally, the House overwhelmingly rejected (59-362) an amendment by Rep. Mark Kennedy (R-MN) to partially undue the LaTourette/Oberstar amendment by transferring $100 million from Amtrak to programs for the homeless. Brown delivered an impassioned speech against the amendment. LaTourette likewise called the amendment a “wolf in sheep’s clothing amendment” intended to hurt Amtrak.

The counterpart Senate bill may get subcommittee and full committee consideration the week of July 11.

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Release #05-21

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Washington--In yet another attempt to obscure the truth about intercity passenger rail, Transportation Secretary Norman Y. Mineta issued a news release (carried on PR Newswire, presumably at government expense) misrepresenting the relevance of the Alaska Railroad to rail passenger service in the lower 48 states. 

The Alaska Railroad, whose primary business is hauling freight, does not run long-distance trains. Its longest passenger run, between Anchorage and Fairbanks, is only 356 miles and 12 hours long, in daytime (8:15 AM to 8:15 PM). For eight months (September 13--May 13), service on this route is one round trip per week. Because “Denali Star Train” (summer) and “Winter Aurora” (rest of the year) traverse some of the world’s most dramatic scenery, the route is “spoon-fed” cruise trip passengers in large numbers. None of this is very relevant to overnight trains in the Lower 48, where runs are much longer and the main business is transportation, not scenic cruises.

Apparently hoping the public will ignore the above, the DOT release says: “Mineta said the Alaskan railroad has demonstrated a willingness to innovate, running long distance trains that combine first-class travel cars owned and operated by cruise lines, while continuing to serve commuters and local residents across the state.”

NARP Executive Director Ross B. Capon commented, “If the Alaska Railroad is a model in the drive to reform Amtrak, reform may mean shrinking Amtrak’s national network to a single, 350-mile-long route.”

Mineta refers to “an average of $214 to subsidize each Amtrak passenger.” It’s not clear how he got that number. Dividing Amtrak’s Fiscal 2004 federal grant ($1.218 billion) by its record 25,053,564 passengers produces $48.62, much less than one quarter of Mineta’s figure.

Moreover, $48.62 overstates the true subsidy for two reasons. First, much of Amtrak’s federal grant supports capital investment for infrastructure shared with commuter railroads. Also, there is widespread agreement that Amtrak’s grant cross-subsidizes commuter railroads in the Northeast Corridor.

Mineta repeats his “Amtrak is dying” mantra. Resounding victories for passenger rail June 29 on the floor of the U.S. House of Representatives suggest that what is “dying” may be Administration understanding of intercity passenger rail, though this still could prove fatal to the business. 

On June 29, the House:

• adopted by voice vote an amendment to raise Amtrak funding from the committee-passed $550 million (a shutdown budget) to $1.176 billion;
• adopted 269-152 (with 73 Republicans voting yes) the Brown (D-FL) amendment to strike language prohibiting the use of federal funds to support 18 Amtrak routes, including the only Amtrak service in 23 states; and
• rejected 352-59 the Kennedy (R-MN) amendment to reduce Amtrak funding by $100 million.

The Senate appropriations subcommittee plans to take up its counterpart bill July 14; the full committee July 19.

Addendum—Suppliment to release #05-21

Here is more information about the Alaska Railroad that is not in the DOT release, but is relevant to Mineta’s claim that the Alaska Railroad is “an example for Amtrak to follow” and NARP’s claim that the analogy is misleading.

(1) The Alaska Railroad received $261.8 million in Fiscal Years 1996-2004 from the Federal Railroad Administration and the Federal Transit Administration (FTA).

(2) Federal appropriations bills for fiscal years 2001-05 specifically earmarked $112 million for the Alaska Railroad’s passenger program--$20 million each in FY 2001-02, growing to $22 million in FY03, and $25 million each in FY04-05. The funds are “to enable the Secretary of Transportation to make grants to the Alaska Railroad, [dollar amount] shall be for capital rehabilitation improvements benefiting its passengers operations, to remain available until expended.”

(3) The Alaska Railroad’s web site lists its projects and their funding sources.  In particular, click on “System Wide Projects” then “Passenger Locomotives and Car Upgrades.” Note 91% FTA funding for 2004-2005 passenger car upgrades. Also, “$6.6 million budgeted (2003-2005) for the purchase of two new bi-level dome coaches. Outfitted with full kitchens, these cars will provide a new first-class service option as part of the Denali Star train, beginning in 2005. Locomotive upgrades and passenger car/coach refurbishment and purchase projects are funded primarily by the FTA, along with matching funds from the Alaska Railroad.”

(4) The state-owned Alaska Railroad is exempt from four federal laws applicable to Amtrak and to freight railroads in the Lower 48: Federal Employers’ Liability Act; Railway Labor Act; Railroad Retirement Act; and Railroad Unemployment Insurance Act. [Prior to state ownership, the laws also did not apply because Alaska Railroad employees were federal employees]

(5) It is disingenuous for the secretary to cite $908 million in losses for Amtrak’s long-distance trains when this includes capital costs (i.e., non-cash expenses like depreciation), while claiming that Alaska Railroad receives no passenger “operating subsidies,” but not reporting Alaska’s federal capital grants. Also, the DOT table with the $908 million shows Amtrak’s Northeast Corridor trains losing $300 million even though DOT General Counsel Jeffrey Rosen testified May 12 that these trains might continue if Amtrak went bankrupt because they break even. Clearly, DOT is selecting numbers carefully (and inconsistently) to cast Amtrak’s national network in the worst possible light.

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Washington--The National Association of Railroad Passengers today said DOT Inspector General Kenneth M. Mead’s report on eliminating sleeper, diner, lounge and checked baggage services is seriously flawed. The IG's report was “released” yesterday by Transportation Weekly.

NARP projects that eliminating sleeping, food and checked baggage services would worsen Amtrak’s bottom line by $50 million, not improve it as the IG claims. An increased loss of any size, coupled with dramatically reduced ridership and revenues, could lead to the system’s demise. Even if the IG’s savings were real, they would come at an unacceptable cost: depriving most Americans of the choice to use existing and potential intercity rail services. Moreover, the wide range of the IG’s estimated net savings underlines the uncertainty of his analysis.

The IG assumes that, since average coach trip length is less than the average sleeping-car trip, coach passengers do not need the targeted services. Accordingly, he incorrectly assigns costs of these services 100% to sleeping-car passengers, and incorrectly assumes these services can be removed with no coach revenue loss.

In fact, coach passengers outnumber sleeping-car passengers for all trip lengths. For trips 800 miles or longer, FY 2004 ridership was 819,870 in coach and 318,378 in sleeper. Also, in ignoring connecting passengers using coach and sleeper on different segments of the same trip, the IG ignores coach revenue that would be at risk with loss of sleepers even if other services remained.

Cash sales account for almost half of on-board food and beverage sales. [Cash is mostly from coach passengers. Meals come with the sleeping-car ticket; on AutoTrain, meals come with both coach and sleeping-car tickets.]

Checked baggage need is a function of length of stay at destination, and one's ability to handle luggage. It is not a function of distance traveled, or of whether one travels in coach or sleeper.

In sum, coach passengers make many long trips and generate much revenue, and the IG is wrong to assume that elimination of food and baggage services would not result in significant loss of coach ridership and revenues.

The IG likewise is wrong to assume that food service of any kind can be provided on a break-even basis, regardless of labor cost assumptions. Food service cannot be profitable when the only buyers are passengers on board one train. As Amtrak testified on June 9, the primary purpose of food and beverage service “is to enhance ticket sales and ridership, not serve as a profit center.”

For example, Maine provides a $210,000 annual food subsidy for the Boston-Portland “Downeaster” trains (116 miles one-way). The menu is limited, satisfactory only for short trips, and sold by non-union workers who spend less time away from home than do Amtrak long-distance on-board workers. But, using the rough measure of food subsidy per passenger-mile, extending even this inadequate service and unrealistic cost assumptions to the long-distance trains implies a food loss of about $27 million.

The IG ignores loss per passenger-mile, which could skyrocket if sleeping-car revenues disappear. A passenger-mile is one passenger traveling one mile. It is the standard measure in the intercity travel business, except when the goal is to attack our national passenger rail network. Clearly, however, loss per passenger-mile is more relevant to economic performance than loss per passenger, which ignores the distance a passenger travels.

It is unfortunate that the IG did not consider positive strategies for improving cost efficiency and fare-box recovery:

• There is general agreement that the Amtrak/GateGourmet contract covering commissaries and provision of food will either be terminated or improved when it expires in September 2006, if not sooner, and Amtrak’s bottom line should benefit.
• The IG does not make clear that dorm cars are gradually accommodating more revenue passengers. Also, the need for overnight crew space is declining as where some diner crew members swing on and off during runs.
• Employee job descriptions could be broadened, perhaps similar to what VIA Rail Canada has done. Transportation Weekly incorrectly cites “labor protection agreements” as a reason why “Amtrak’s costs are so high (and so difficult to cut).” Labor protection provisions indeed make it costly to eliminate routes, and thus have been attacked by those seeking to eliminate the systm or big parts of it, but these provisions do not impact ongoing operating costs.
• Amtrak could consider having sleeping-car passengers pay for meals (as coach passengers always have done and sleeper passengers did until about 15 years ago). Alternatively, Amtrak might consider offering coach passengers the option of higher-priced tickets that include meals. [Sleeping-car riders are 44% of all AutoTrain riders, a higher share than on any other train. This is partly because AutoTrain offers more sleeping-car rooms than any other train.]

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Release #05-23

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Washington--A Senate appropriations subcommittee today approved $1.4 billion for Amtrak as part of the $136.6 billion Fiscal 2006 funding bill that covers the subcommittee’s jurisdiction: Transportation, Treasury, the Judiciary, Housing and Urban Development, and Related Agencies.

Patty Murray (D-WA), the subcommittee’s top Democrat, said DOT Inspector General Kenneth M. Mead has testified that Amtrak needs $1.4 to $1.5 billion to maintain current routes and service. [Amtrak has said that $1.2 billion would severely disrupt Amtrak’s capital program. The railroad’s board of directors, all appointed by President Bush, had requested $1.8 billion. The House has approved only $1.176 billion.]

Chairman Christopher S. Bond (R-MO) said at this afternoon’s mark-up, “I just had a nice call from Secretary Mineta who was pleased to inform me that funding at this level without reform would find him recommending a veto.”

Bond noted that the bill has language enforcing a prohibition on subsidizing food and beverage losses. Murray said “it would be my preference to have reforms considered by the Commerce Committee” [which has authorizing jurisdiction]. She said she understands Commerce will consider an Amtrak bill shortly.

NARP Executive Director Ross B. Capon said, “The subcommittee deserves praise for producing the $1.4 billion figure in the present budgetary environment, even though this amount does not address all of Amtrak’s needs. We share Senator Murray’s hope that legislative language will come from the authorizing committee and will avoid micromanaging Amtrak. We cannot repeat often enough the testimony of Amtrak Senior Vice President William Crosbie that ‘the primary purpose [of food and beverage service] is to enhance ticket sales and ridership, not serve as a profit center.’” [See also our release 05-22, issued last Thursday.]

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Release #05-24

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Washington-—The National Association of Railroad Passengers applauds the efforts of the Senate Appropriations Committee to provide Amtrak with essential funding for fiscal 2006.

The Committee today approved $1.45 billion, an increase of $50 million above what the subcommittee approved Tuesday, and $274 million above the House-passed level. As Sen. Patty Murray (D-WA), the committee’s top Democrat noted, $1.45 billion is in the middle of the $1.4-1.5 billion range DOT Inspector General Kenneth Mead testified Amtrak needed to maintain current services.

NARP Executive Director Ross B. Capon said, “We appreciate the supportive and bipartisan work of the committee, particularly the full committee and subcommittee chairmen and ranking members—-Thad Cochran (R-MS), Robert Byrd (D-WV), Christopher Bond (R-MO) and Patty Murray (D-WA). The House votes on June 29 and Senate committee actions this week show that Congress wants a national passenger rail system.”

Capon expressed concern about language in the Senate bill that threatens Amtrak’s ability to continue providing on-board food service and possibly sleeping cars.

He said, “Reforms and financial improvements are important.  For example, the need for changes to Amtrak’s current food outsourcing contract is widely acknowledged. But Amtrak should be judged on its overall bottom line. Congress should not be dictating Amtrak menus. Amtrak’s experience running ‘bare-bones’ long-distance trains, like the Three Rivers discontinued early this year, has not been good. Creating a network of third-class trains would drive away riders and hurt the bottom line. In any event, matters of this nature should be considered by the authorizing committees.”

Sen. Conrad Burns (R-MT) put it well Tuesday when he said, “Food and beverages, as well as sleeper cars, are essential components of long-distance train travel. I agree that Amtrak needs to be more aggressive in contracting for food and beverage service, but I also believe we need to keep those amenities available.”

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Release #05-25

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Washington--The National Association of Railroad Passengers today strongly criticized the concept of eliminating sleeper, diner, lounge and checked baggage services from Amtrak trains. DOT Inspector General Kenneth M. Mead, in a report released this morning, recommended that Amtrak “implement multiple pilot projects” doing just that on “its worst-performing long-distance routes as well as on others that offer the best potential for savings.”

Because roughly half of long-distance passengers change trains en route, elimination of crucial amenities on “multiple” routes would take revenue away from most others.

It is disheartening that the IG looks at cutting costs only by cutting service, ignoring extensive Capitol Hill testimony this year on ways to cut costs without devastating service and revenues. At a June 9 House Railroads Subcommittee hearing, witnesses agreed that Amtrak could net substantial savings by replacing or renegotiating the contract with GateGourmet, which has supplied on-board food since 1998. At a May 12 hearing of a Senate appropriations subcommittee, Amtrak President & CEO David L. Gunn was asked, “Are labor costs out of line?” He responded that Amtrak had made great progress, and that the “basic problem is work rules; rates of pay are not the problem. I have 700 to 1,000 people on payroll that would not be there if we had control over crew size and crafts.” [At the hearing, Mead added, “I agree wages are not out of line."] It is also unfortunate that the IG’s report does not try to ascertain the needs of Amtrak’s customers.

NARP President George L. Chilson said, “Rather than inform the debate over the future of intercity rail passenger service in this country, its negative tone is more likely to inflame it, increasing the chance of yet more policy errors. We are glad that Congress appears to be taking a broader and more comprehensive view as it contemplates the enormous potential that intercity passenger rail has for addressing some of America’s mobility and transportation problems.”

NARP is also encouraged about Amtrak’s planned August 2005 relaunch of the Chicago-Seattle/Portland Empire Builder, which will allow Amtrak to raise fares by offering enhanced passenger amenities.

The IG’s calculations make the unreasonable assumption that “no coach passengers would abandon Amtrak if they no longer had access to amenities [besides a basic coach seat].” This ignores the fact, noted in our July 14 release, that many coach passengers take very long trips. We said, “For trips 800 miles or longer, FY 2004 ridership was 819,870 in coach and 318,378 in sleeper. Also, in ignoring connecting passengers using coach and sleeper on different segments of the same trip, the IG ignores coach revenue that would be at risk with loss of sleepers even if other services remained.”

Further in this regard, the IG admits, “Our analysis to date has not examined the elasticity of demand for coach service should diner-based food service and other amenities currently offered be eliminated.”

The IG’s analysis does show that eliminating sleeper service would not produce cost savings for the Auto Train, where sleeper passengers account for 44% of ridership. The report also admits that “most of the costs associated with the number of passengers, such as station operations, would be relatively fixed and would not actually decline with a fall in passenger numbers.”

The report acknowledges that Amtrak would have to continue to make payments on its leased equipment if these cars are placed into storage, and that there is “lack of a real secondary market for much of this equipment.” (15) NARP strongly believes that Amtrak should fully utilize available equipment to maximize revenue in the face of fixed costs. If anything, Amtrak’s national network needs a larger equipment pool to meet the traveling public’s demand, given the large number of trains where all sleeping-car rooms are sold out.

The report ignores a fundamental reality, to which Amtrak testified at the June 9 hearing: the primary purpose of food and beverage service “is to enhance ticket sales and ridership, not serve as a profit center.”

In exploring Amtrak food service, the report suggests impractical alternatives like passengers getting meals during station stops.

As Sen. Conrad Burns (R-MT) said last Tuesday, “Food and beverages, as well as sleeper cars, are essential components of long-distance train travel. I agree that Amtrak needs to be more aggressive in contracting for food and beverage service, but I also believe we need to keep those amenities available.”

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Release #05-26

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Washington--The National Association of Railroad Passengers applauds the bipartisanship evident in the Passenger Rail Investment & Improvement Act of 2005, which was unveiled this morning at a news conference in the U.S. Capitol by Senators Ted Stevens (R-AK), Trent Lott (R-MS) and Frank R. Lautenberg (D-NJ). They praised Daniel Inouye (D-HI) for his interest and support.

Stevens chairs the Committee on Commerce, Science and Transportation; Lott chairs its Subcommittee on Surface Transportation and Merchant Marine; Inouye is the ranking member on both; Lautenberg continues his special interest in rail matters.

NARP Executive Director Ross B. Capon said, “We are particularly pleased to see the bill’s endorsement of Amtrak’s national network, and provision of a robust capital investment program--both for infrastructure and rolling stock--to permit more reliable and frequent service, and more capacity. We are gratified that the bill directs the Secretary of the Treasury to negotiate restructuring of Amtrak’s legacy debt, which currently costs about $276 million a year to service.”

The three senators speaking this morning said positive things about Amtrak. Stevens: “Just last weekend, I rode Amtrak to New York City and found a much tighter organization than several years ago.”

Lott: “I’ve always felt that we needed a national passenger rail system...Under [President and CEO David L.] Gunn, Amtrak has made improvements. I’m a fan of Gunn.” Lott also said the bill recognized that if Congress expects Amtrak to be innovative, to provide quality service, and to “change culturally,” Congress has got to provide funding because “this is not something that’s going to be a great, big profit maker. It isn’t profitable anywhere in the world and it won’t be here.”

Lautenberg said, “We have a wonderful leader, I think, in David Gunn.” The Senator lamented the fact that Gunn must spend so much “time fixing things that are worn out, lots of time on repair and rehabilitation to make up for past neglect...As part of a security matrix, I think it’s essential to have a national passenger rail system...With rail service, we’ll improve the quality of our air, and reduce the amount of oil we need for our cars.”

Stevens said of the bill, “There are a great many provisions in this bill that give...options to expand the use of railroads in a creative and innovative way.” Lott said, “Enacting legislation to reform and improve Amtrak is one of my top legislative priorities this session.” He noted that a committee mark-up of the bill was set for tomorrow [scheduled for 10 AM].

The bill also empowers the Surface Transportation Board to address on-time performance problems with the freight railroads, and the Federal Railroad Administration and Amtrak to develop standards for measuring the performance and service quality of train operations. Ideally, we would like to see a new agency charged with planning an improved rail network. However, we are hopeful that, should this provision become law, FRA will work aggressively to improve and expand the national passenger rail network. 

Capon concluded, “Finally, we applaud the requirements that the Surface Transportation Board issue a quarterly on-time service report, make recommendations to Amtrak and freight railroads on how to fix intractable on-time performance problems, and take appropriate action to enforce Amtrak’s legal priority access where the STB finds that a freight railroad has failed to reasonably address delay problems.”

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Release #05-27—July 28, 2005

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Washington--This morning, the Senate Committee on Commerce, Science and Transportation voted 17-4 to report favorably S. 1516, the Passenger Rail Investment and Improvement Act of 2005. Chairman Ted Stevens (R-AK) praised the innovative nature of the bill, which Ranking Member Daniel Inouye (D-HI) called “the most comprehensive bill on Amtrak we’ve ever had.”

NARP Executive Director Ross B. Capon said the 18-4 vote for the bipartisan bill “clearly signals that legislators are hearing, and responding positively to, the public’s call for more and better rail passenger service.”

Trent Lott (R-MS), chairman of the Subcommittee on Surface Transportation and Merchant Marine, said Conrad Burns (R-MT) and John Rockefeller (D-WV) had joined as co-sponsors. Other sponsors are Stevens, Lott, Inouye, Frank Lautenberg (D-NJ) and Kay Bailey Hutchison (R-TX).

Lott said the bill aimed to reform Amtrak but also