May 5, 2004 passenger rail funding

May 5, 2004 passenger rail funding

Thank you for the opportunity to submit this statement. We support the Amtrak request for $1.798 billion. We also support efforts to make the federal government a true funding partner with states to permit development of high speed rail corridors, for which many states already have well-advanced plans. Finally, we strongly favor federal support for the CREATE/Chicago Project to modernize Chicago's railroad infrastructure, and we support continuing efforts to bring to fruition a North Station/South Station Rail Link in Boston.

I. $900 MILLION IS A SHUTDOWN BUDGET FOR AMTRAK

Secretary of Transportation Norman Y. Mineta has made clear his agreement that $900 million would be a shutdown budget. At his interest-group budget briefing on February 2, I asked him about a seeming disconnect between the Administration's budget recommendation and Amtrak President David L. Gunn's statement last fall that $900 million is a shutdown budget that "won't work." Mineta responded, "Gunn is right on the numbers" but we are sending a message about the importance of our reforms. The following table illustrates the problem with $900 million:
 

Notes to table: Amtrak has taken on no new commercial debt since David Gunn's May, 2002, arrival, and has no plans to. The cost of debt service peaks in Fiscal 2005 and declines thereafter. Most of the environmental portion of Amtrak's capital budget involves work that Amtrak is legally obligated to undertake, so could not be set aside in favor of fleet or infrastructure work that otherwise would be considered more vital to the system’s continued, viable operation.

Gunn in February said Amtrak has "a strategy of moving resources from emergency repairs to programmed maintenance." This obviously makes for more reliable service, while maximizing revenues (fewer en-route problems means satisfied customers) and reducing maintenance costs. However, much of the programmed maintenance is considered capital, so a maintenance budget at or close to zero forces either an immediate shutdown or an immediate downward spiral in service quality.

But this means the system would collapse on zero capital, and 2,000 employees would be let go. That's essentially what the administration’s $900 million would require.

II. PASSENGER RAIL SECURITY

We agree that rail security has been underfunded and join with those noting the huge gap between federal spending on aviation security and on railroad security -- $11 billion vs. $115 million, according to one representative at today's House subcommittee hearing. We understand that the Bush Administration's Transportation Security Administration request for fiscal 2005 is $5.3 billion, of which all but $147 million is for air security.

The most obvious needs in rail security relate to infrastructure -- especially bridges, tunnels, stations and yards -- and training for front-line personnel.

Infrastructure: Issues in the Northeast Corridor are well-known. At major stations nationwide, items for consideration include an increased police presence with K-9 units, video surveillance at key points of entry and exit, vapor detectors, coordinated plans for first responders in case of an event.

Attention must also be paid, as Amtrak notes, to "non-public locations, such as loading docks, adjacent yards and buildings."

Consider this recent news item regarding a major commuter railroad -- "Train yards in New Haven and Bridgeport have major security problems two months after federal Homeland Security chief Tom Ridge asked rail operators to be on a heightened state of alert following the Spain train bombings that killed 191 people, WTNH-TV reported Thursday. A reporter and cameraman walked into the New Haven rail facility at 3 a.m. on a recent day and found no security or police guarding the Metro-North trains that carry nearly 40,000 Connecticut commuters into New York each weekday.

"No one stopped the news team, which was able to walk around the rail yard for about two hours, the station reported. The reporter, Alan Cohn, climbed aboard one of the engines ... The television station found a similar lack of security at the Bridgeport rail yard ... It's the job of Metro-North and Metropolitan Transit Authority police to patrol [these] rail yards. Metro-North President Peter Cannito promised that changes would be made."

This report raises the obvious question -- How secure are other rail yards?
 
There is also a federal interest in the security level of the nation's vast, privately owned railroad system which is important both to Amtrak's national network and to freight transportation. For example, loss of major Mississippi River bridges, especially south of Memphis where the number of crossings is small, could wreak havoc with freight commerce.

Personnel: Our understanding is that Israel, the U.K., and Germany are nations where training front line staff has actually deterred bombers and saved lives. This has been a sensitive issue in the U.S. Their approach needs to be studied to see what aspects of this work could usefully be transferred. This does not mean "pre-boarding" interviews; that is not feasible for reasons discussed below. But Amtrak's on-board employees in many cases have several hours or more of intermittent contact with passengers and thus the possibility -- with the right training -- of identifying potential wrongdoers.

What is not realistic: Many Americans begin their thinking about rail passenger security by citing baggage (and shoe!) X-ray procedures they experience at airports but obviously not at train stations. Amtrak (and most commuter railroads) have two extremes -- places like New York's Pennsylvania Station where passenger volumes and proximity to commuter trains would make anything approaching airline-style security both impractical and largely ineffective. Conversely, many small stations have such small passenger volumes as to make any security equipment seem wasteful. As Mesa Airlines CEO Jonathan Ornstein recently noted (in a March 9 Washington Post report about holes in security at small airports), "When there are more TSA people than passengers, you have to ask yourself, does that make sense?"

We note with approval that TSA seems to agree. For example, TSA Undersecretary Asa Hutchinson said that the device that sniffs for explosives and is in a month-long test at New Carrollton, Md., is not permanent but simply to gain knowledge for TSA "so that in the event there is a specific threat or a specific need, we have the knowledge, the capability to put inspections in place in a particular threat environment."

III. THE PUBLIC WANTS THE RAIL CHOICE

Amtrak's ridership reports starting around May show strong increases -- a further sign both that Gunn is succeeding in stabilizing the railroad, and that people want the service. For the first five months of fiscal 2005 (October-February), ridership increases on the long-distance trains ranged from 6% to 34%, with only two routes below 10%. Short-distance route changes ranged from -3% to +22%, with seven of 16 routes showing double-digit percentage increases. (Actually, the New York-Pittsburgh route was up 104% but this is not exactly an apples-to-apples comparison.) Two routes showed slight declines.

In March, systemwide ridership was up 3.2% and revenues were up 5.8% compared to a year ago.

IV. THE NATIONAL NETWORK

We reiterate our strong belief that funding Amtrak's national network is a federal responsibility, and that implementation of any "reform" which requires a multiplicity of states to provide operating grants is tantamount to shutting down the system. The suggestion that a train could run "closed door" through non-paying states is not workable because, almost without exception, revenues lost from skipping any state would far exceed the negligible cost savings. The Empire Builder in crossing the thin northern tip of Idaho might conceivably skip Sandpoint, Idaho, with minimal damage but it's hard to think of any other benign example.

Similarly, we do not believe a "route closing commission" could shed any significant new light. The system is already so skeletal that deletion of any surviving route would mean wholesale elimination of service to major cities and states. Indeed, as we have testified previously, we favor an expansion of the network.

Amtrak's Sunset Limited is often cited by Amtrak's critics as wasteful because it would be cheaper to fly passengers from Orlando to Los Angeles. However, relatively few passengers travel that entire distance.  Other city-pairs the route serves do not have direct flights, or affordable flights, or in some cases any flights. In addition, some passengers are physically unable to fly. And elimination of the Sunset Limited would create a domino effect as the loss of connecting passengers and ability to share facility costs with the Sunset would unravel the economics of the Texas Eagle, City of New Orleans, and Crescent.

The large subsidy-per-passenger figures sometimes cited for given Amtrak long-distance routes include "fully allocated" costs. These are misleading because they often are interpreted to mean that discontinuance of a given route would reduce Amtrak's operating grant requirement by the product of the number of passengers times the fully allocated loss per passenger. Using the Silver Star FY02 figures at page 471 of the subcommittee's April 10, 2003, hearing record, the math would be $189 times 252,240.

The product does not produce an avoidable cost, since many allocated costs will not disappear but simply get re-allocated to surviving routes. Obvious example: a share of the Amtrak president's salary. Also, a high proportion of long-distance-train passengers make connections with other trains, so discontinuing one train negatively impacts revenues on other trains.

This helps explain why "FRA-defined train contribution" figures were developed, by Federal Railroad Administration working with Amtrak when they were implementing the agreements under which DOT approves funds before Amtrak gets them. In the case of the Silver Star, the FRA defined contribution is actually positive: $12 per passenger or 2 cents per passenger-mile. (Measures stated in terms of passenger-mile are normally used in intercity travel statistics because they take into account the dramatic variations in trip lengths.)

Thank you for considering our views. Please let us know if we can provide further information that would be helpful to the committee's work.