Hotline #937 - July 5, 1996

The Surface Transportation Board approved the UP/SP merger on July 3, with only modest conditions, on a 3-0 vote. The heart of the agreement is BNSF's trackage rights over 4,000 miles of UP. The board ordered that BNSF get to compete for half the traffic on those lines, even if this means letting shippers out of long-term contracts with UP. The board expanded a UP agreement with the Chemical Manufacturers Association that guarantees BNSF full access to all shipping facilities, including those built in the future on the lines over which it has trackage rights. The board also will maintain oversight for five years to be certain that BNSF aggressively competes for traffic and UP lives up to all its promises. Also, Texas Mexican gets enough trackage rights to connect directly with Kansas City Southern.

There was a ceremony at the Providence train station on July 3 to mark the official start of construction of New Haven-Boston overhead wires. Speakers included Transportation Secretary Pena, Senators Lautenberg, Pell, and Chafee, the governor of Rhode Island, the mayor of Providence, and Amtrak President Downs.

Thousands gathered June 27 to greet the Gulf Coast Limited, which began regular service over the weekend. An 18-car, standing-room-only, mostly-Superliner train carried guests from New Orleans to Mobile, with ceremonies at each stop in Mississippi. This daily service is a three-month trial.

Continuation of the Hiawathas beyond September apparently depends on Wisconsin and Amtrak reaching a new agreement, since Illinois is walking out in order to save money for the rest of its trains -- except for the Loop, which recently was discontinued.

Even if Congress kills the 4.3-cent deficit-reduction gasoline tax, repeal likely will be only until January 1. Senator Byrd (D.-W.Va.) has a bill to shift the 4.3-cent tax to the Highway Trust Fund starting that day. There has been talk of giving Amtrak a half cent out of that 4.3 cents, possibly to make Byrd's bill more palatable to Senate Finance Chairman Roth (R.-Del.).

Amtrak's future without that half cent looks bleak indeed. Chances for the Senate increasing the operating funding are not good, at least not until Amtrak makes clear what the Clinton/Wolf operations funding level means in terms of route cuts. So letters to President Clinton urging more for Amtrak operations -- and thanking him for good capital numbers -- are in order.

Nonetheless, it is questionable what would be done because the transportation appropriations subcommittee is scored on outlays -- actual cash likely to be spent in fiscal 1997 -- and Amtrak operations has a 100% first-year spend-out rate, compared with 60% for transit operating grants and only 17% for highway construction projects. In other words, for every dollar added to Amtrak operations, the committee would have to take $6.25 away from highways or $1.66 away from transit operations. The only other transportation account that spends out at 100% the first year is rent for the Office of the Secretary.

Of course, the American people don't want their train system to be trashed the way federal budget policies seem headed, so all of this gobbledegook might be overturned if we get the NARP leaflet into the hands of enough people. It's ready now, so let us know if you need one to copy, or if you want us to ship multiple copies to you. We do request contributions to help pay for the latter.