House Appropriations written record, fiscal 2009 passenger rail funding

Statement of

Ross B. Capon, Executive Director

National Association of Railroad Passengers

Submitted to the

Subcommittee on Transportation, Housing and Urban Development, and Related Agencies

The Honorable John Olver, Chairman

Committee on Appropriations, U.S. House of Representatives

Fiscal 2009 Amtrak Funding
April 16, 2008

The National Association of Railroad Passengers strongly supports $1.785 billion as a minimum appropriation for Amtrak for Fiscal 2009 in the absence of a responsible request by the Bush Administration.  There are two caveats below regarding rolling stock and infrastructure (sections III and IV) which would justify additional funding. Looking forward, we strongly urge the next Congress and Administration to take seriously the $9 billion a year recommendation of intercity passenger train investments contained in the report of the National Surface Transportation Policy and Revenue Study Commission. I. Strong Ridership Growth Americans are turning to trains.  Demand for all types of services is growing rapidly—long distance, corridor, commuter rail and local transit.  At Amtrak, demand for the first six months of fiscal 2008 (October-March) is up 12% compared with the same period of fiscal 2007.  And ridership for all of Fiscal 2007, which Amtrak said marked “the fifth straight year of gains,” was 6.3% higher than in FY 2006. Sold-out trains on Amtrak means we don’t have enough capacity to meet current demand, and certainly not the larger demand that is likely in the future as more people seek alternatives to high and rising gasoline prices and airline fares.  As explained below, from a public policy standpoint, the increased popularity of energy-efficient trains is good.  II. It is Sound Public Policy to Support Trains Fuel efficiency offers the most immediate and biggest potential for reducing CO2 emissions from transportation over the next three decades, partly because we are so far from developing radically advanced, low-carbon technologies to replace oil-based transportation energy.  The emissions reduction policy measure that will have the most immediate impact is the one that will make greater use of the most fuel/carbon efficient forms of transportation. It is in that context that we present the most recent data from the annual Transportation Energy Data Book (Edition 26, released in 2007), published by Oak Ridge National Laboratory, under contract to the U.S. Department of Energy.  The following table shows 2005 data; the five modes shown are listed from most to least energy efficient: British Thermal Units Per Passenger-Mile (lowest = most energy efficient) Amtrak: 2,709 Commuter Railroads:  2,743 Certificated air carriers: 3,254 Automobile: 3,445 Light trucks (2-axle, 4-tire): 7,652 * BTU = British Thermal Unit; passenger-mile = one passenger traveling one mile The aviation figure shown above is straight energy consumption; no multiplier is added although there is evidence that “radiative forcing” increases the negative environmental impacts of high altitude emissions. III. How to Keep Ridership Growing Amtrak has about 100 cars that need repairs before they can be returned to service.  The FY 2008 budget apparently would accomplish very little in this regard.  Similarly, it appears that little could be accomplished within what Amtrak has requested for FY 2009, since they are showing a significant drop in capital spending on both “passenger cars” and “locomotives.”  Passenger cars would drop $40.1 million or 22.5%, from $178.0 million this year to $137.9 million next year.  This issue also is complicated by the fact that, as a result of leaseback deals in the pre-Gunn years, Amtrak does not own many of “its” cars and the law, as we understand it, prohibits Amtrak’s use of capital dollars to repair such cars. With passenger demand already exceeding what Amtrak can supply today, we urge the subcommittee to sort through the above and take the necessary steps to maximize the number of cars Amtrak can operate.  We appreciate that Amtrak is working on developing a program to secure new equipment in cooperation with the states, and is working with them to standardize equipment design as much as possible.  However, we are concerned at the lack of action with regard to equipment for the national network (long-distance) trains, where demand also is strong, and cars also are aging.  It is essential that the federal funds become available to move both of these programs forward, the former in partnership with the states. IV. Service Reliability While there certainly are on-time performance issues which result from problems with railroad operating practices, there also are substantial delays caused by genuine track capacity issues.  One of the biggest problems involves the Norfolk Southern mainline between Porter, Indiana, 26 miles east of the Illinois state line, and Chicago.  This segment handles all of Amtrak’s Michigan trains as well as Amtrak’s two Chicago-Cleveland trains (Lake Shore Limited serving New York State, New York City and Boston; Capitol Limited serving Pittsburgh and Washington). Paralleling this mainline is the abandoned former New York Central right-of-way (and associated drawbridges, still in place).  Putting this back into service would go a long way to improve both passenger and freight operations, addressing the on-time performance concerns that Rep. Kaptur expressed at your February 26 hearing and which have adversely affected many of Rep. Knollenberg’s constituents.  This is one major example of the sorts of projects that could blossom under an adequately funded federal program to jointly fund railroad projects with states. V. Hudson River Tunnels One other geographically specific project demands comment:  the current plan of New Jersey Transit to build two tunnels under the Hudson River which would not connect with existing New York Penn Station and which would lead to a dead-end, deep cavern station so far under 34th Street as to render questionable the ability to extend the top three tracks to Grand Central, while the bottom three tracks clearly could not be extended.  To us it is appalling that $7.6 billion would be spent on new tunnels while leaving existing Penn Station and all intercity service just as dependent on two century-old tunnels in 2017 as now.  As we have testified to New Jersey Transit and written to the governors of New York and New Jersey, it is inconceivable that the continent’s strongest market opportunity for rail to ameliorate aviation congestion could remain one incident away from rail paralysis.  Even without an incident that closes those tunnels for any length of time, basic track maintenance needs are increasingly in conflict with growing demand for weekend service for both intercity and commuter train services. VI. Back Pay Our $1.785 billion request includes both the $1.671 billion that Amtrak formally requested and the additional $114 million to fulfill the new contracts.  Amtrak’s February 20 Grant and Legislative Request handless the $114 million oddly:  “However the 60% (or $114 million) of the ‘back pay’ payment the PEB [Presidential Emergency Board] requested be made in FY 2009 is not included in this 2009 request, nor do we believe it will be covered by increased net revenues.  While Amtrak does not have the means to pay the additional 60%, the PEB made clear its belief that the decision to fund this amount lies with Congress.” The fact that President Bush appointed President Emergency Board 242 underlines the probability that “anti-union” deviations from those recommendations would lead to another, unproductive round of strike threats.  The PEB, in its executive summary discussion of wages, says “the Parties’ proposals were close, without reference to the retroactive issue.”  The $4,500 “signing bonus” that Amtrak proposed (and felt it could afford) is reasonably close to the 40% of back pay the PEB recommended for FY 2008.  On April 3, a union official testified (before your Senate counterparts) that “for the first time in a long time, labor peace is possible—if Amtrak complies on back pay.”  The reference is to the $114 million in delayed back pay due in FY 2009 which, in the circumstances, seems a reasonable price to pay to enable Amtrak and its unions to realize “peace,” to eliminate uncertainty for travelers, and to enable management and labor to focus on growing the system in line with the nation’s needs. The alternative approach of relying on an end-of-year cash balance to cover the $114 million would be unwise because the remaining cash on hand would be inadequate for responsible management of a $3+ billion corporation like Amtrak.  While it is unfortunate that Amtrak did not forthrightly request the $114 million, we agree that the board arguably would be failing in its fiduciary responsibility to recommend “swallowing” the $114 million.  As Alex Kummant testified April 3, “it’s early to project end-of-year cash.  Last year, we came within three weeks of running out of cash by the time we got our first grant in February.”  VII. Work Rules We have supported reasonable efforts to improve productivity, believing that such efforts will facilitate service expansion that provides services travelers need while increasing the number of good jobs on and related to passenger trains.  It is widely known that the PEB “does not recommend any of Amtrak’s requested changes.”  However, rail labor submissions to the PEB noted that Amtrak can increase productivity within the scope of existing contracts.  Also, the new contracts become amendable in just over 19 months which leaves room for hope that all parties, informed by the recent process, can approach the issue more effectively.