Hotline #290 - April 11, 2003

The Department of Transportation made its first grant to Amtrak, under the new process created by the fiscal 2003 omnibus appropriations act. Under that act, Amtrak must seek quarterly grants from the DOT for funds already appropriated by Congress. The third-quarter funding was provided on April 9 (the quarter began April 1). Amtrak must make another request for the next quarter, which starts July 1.

Congress' intent was that this channeling of funding through the DOT would increase Amtrak accountability.  Amtrak also must increase the number of reports it provides to DOT and to Congress.

The AARP, for the first time, endorsed passenger rail in its annual policy book. The AARP is the mammoth membership group for those over 50 (which changed its name in 1999 from the American Association of Retired Persons).

Chapter 10 of the 2003 Policy Book (on "Transportation") says, "Congress should ... support nationwide passenger rail service that is integrated and coordinated with regional, state and local passenger rail; and establish a dependable funding mechanism that ensures continuing passenger rail service."

Given the large membership and influence of AARP, this is a very welcome development indeed. Inclusion of passenger rail in the Policy Book culminates a years-long effort by NARP Director Doras Briggs.

The first Amtrak hearing of the new Transportation/Treasury Subcommittee of the House Appropriations Committee, chaired by Ernest Istook (R.-Okla.), was held April 10. Amtrak President David Gunn made the case for Amtrak's $1.812 billion request for fiscal 2004. He pointed out that eliminating one of the biggest political targets in the system, long-distance trains, would only save $70 million in avoidable costs a year (direct costs of operating the trains), and would take five years to save $300 million in "fully allocated" costs -- only 16% of Amtrak's total request. "Focusing on this problem is not going to save Amtrak," he said. "This approach is a red herring."

Deputy Transportation Secretary Michael Jackson, speaking for the Bush Administration, which supports only $900 million for Amtrak -- a 14% cut from 2003 -- said that the Administration is opposed to operating grants (though that's mostly what makes up their figure). He said the Administration would not support anything more than $900 million without an authorization bill from the Congress that defines "what kind of railroad we want and can afford." Gunn called the $900 million a non-starter that would require elimination of Northeast Corridor maintenance and equipment overhauls.

Istook said, "Every dollar for Amtrak is a dollar that doesn't go to roads or other transportation ... We don't have enough money to subsidize Amtrak the way it wants and still fund other transportation ..."  Anne Northup (R.-Ky.) said, "Too many places have service but no one on the train. The Louisville service made me lose faith in all Amtrak services ... The overwhelming majority of Americans have chosen the automobile lifestyle." John Abney Culberson (R.-Tex.) said, "I'm appalled and outraged as a taxpayer at the sheer waste and tax black hole for Amtrak.  It is absolutely unsupportable." Both Culberson and Northup argued for ending labor-protection provisions mandated by Amtrak-labor arbitration in 2001, which in turn resulted from the 1997 reauthorization law.

Ed Pastor (D.-Ariz.) made the point that the Administration figure for 2004 does not work if Amtrak cannot realize any savings from service cuts during that year. Carolyn Kilpatrick (D.-Mich.) pointed out that fiscal 2004 is less than six months off and that decisions about the form of Amtrak should have been made by now. Steven Rothman (D.-N.J.) said, "The $900 million is a joke, considering the capital withheld from Amtrak all these years." Indeed, Amtrak received in appropriations only about half of what the 1997 law authorized.

Efforts by the railroad industry to repeal the 4.3-cent tax on diesel fuel have advanced in both the House and Senate. The House Ways and Means Committee on April 3 approved H.R.1531, the Energy Tax Policy Act, which includes the repeal.  A Senate version, S.597, the Energy Tax Incentives Act, was approved on April 2 by the Finance Committee. It did not originally include the rail fuel tax repeal, but Trent Lott (R.-Miss.) offered such an amendment.

During debate of the Lott amendment, James Jeffords (I.-Vt.) offered a secondary amendment which would have diverted the rail fuel tax to a trust fund for rail infrastructure improvements -- something the rail industry vehemently opposes. The Jeffords secondary amendment was defeated, and the Lott amendment approved.

At nearly the same time (April 3), Rep. William Lipinski (D.-Ill.) and 25 co-sponsors introduced a bill, H.R.1617, the National Rail Infrastructure Program Act, which, like the Jeffords amendment in the Senate, seeks to set up a trust fund. It would be funded by items that include the 4.3-cent rail fuel tax, a 5% tax on locomotives and rolling stock, a 1% tax on freight shipping payments, a 5% tax on commuter-rail tickets, and a 10% tax on intercity and other tickets. That is estimated to raise $3 billion a year. That money would be distributed to states under a formula based on route-miles, car loadings, and grade crossings in a state, with the federal government paying 80% the cost of a project.

The goal of the bill is laudable in terms of providing a vehicle for a federal-state funding partnership, such as that enjoyed by other modes. One funding source in the bill, however, may already be drying up as H.R.1531 would repeal the rail fuel tax (see above). Ticket taxes are not a simple issue, either. If, for example, Amtrak is charging what the market will bear for a ticket, a 10% tax would require Amtrak to reduce its fares by a corresponding amount to keep as much business as possible, and thereby reduce its own revenues and increase its need for operating support from other sources.

Amtrak will run two rebuilt turbotrains in the coming week on the Empire Corridor in revenue service, as a trial. This will be the first revenue service for the trains, which have been rebuilt at state expense. It is not yet known which exact trips will have the new trains next week, but some regular service for the trains is expected to come in early May.

The Oregon Department of Transportation has announced that it will operate a special train service, from May 23 to September 2, between Portland and Astoria, along the scenic Columbia River. The service will be part of the Lewis and Clark Bicentennial festivities, and will run four days a week (Friday-Monday), morning westbound and evening back. The train will be made up of three Budd rail-diesel-cars bought with $442,000 in state funds from British Columbia Rail. Reservations and tickets are available through Amtrak (along with tickets for the existing Thruway bus -- if you want the train, be sure to specify the train).

Several SEPTA rail services are threatened by a proposed budget for fiscal 2004. While the fiscal year starts July 1, service cuts could come in September, if approved. Included are elimination of all service on four commuter routes -- R1 (Airport), R2 (Warminster), R6 (Cynwyd), and R8 (Chestnut Hill West). The Philadelphia airport is one of only 12 in the U.S. with direct rail service. The Ridge Ave. spur of the Broad St. Subway would be eliminated, and all trackless trolley (electric trolley-bus) routes would be converted to bus.  Fares would be raised, too--off-peak fares by 12-17%; monthly fares by 5-6%. SEPTA will hold public hearings on this budget in May; click here for details on the budget, the hearings, and ways to contact SEPTA.

Groundbreaking for the Cross County MetroLink light rail line was April 9, in the St. Louis suburb of Clayton. When complete in 2006, the new segment will run 8 miles from Forest Park to Clayton and Shrewsbury.

The Georgia Rail Passenger Authority would be eliminated under a budget proposal drawn up by leaders of the state senate. In order to fill a $500 million gap, the proposal calls for a number of funding cuts, including the Authority at $556,000.