April 29, 2003 Committee on Commerce, Science and Transportation

The National Association of Railroad Passengers 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.

We strongly support Amtrak's request for $1.812 billion in fiscal 2004. While we appreciate that the Bush Administration's request for $900 million is 73% higher than its $521 million request for FY03, $900 million would be a 14% cut from what Amtrak received in FY03, is only half Amtrak's request for FY04, and is less than the $1.1 billion in annual federal funding which Amtrak averaged during FY 1997-2002. Looked at another way, $900 million is 40% below the inflation-adjusted average for 1982-1984.

More importantly, we understand that even the fiscal 2003 level of $1.05 billion would be a "shutdown" level if repeated in fiscal 2004.

Amtrak's 2004 request of $1.812 billion is meant to start to make up for funding shortfalls from the early 1990s -- and, most immediately, to prevent serious deterioration of Northeast Corridor speeds, reliability and economic performance.

In light of constraints placed on the appropriators' ability to fund all transportation needs while dealing both with tight budget caps and firewalls protecting most non-rail spending, it is important for the authorizing committees to advance legislation that provides funding outside normal appropriations.

I. Specific concerns regarding Amtrak's financial and operational status.

Continual questions over Amtrak's near-term survival hurt its public image and in some cases ability to sell tickets. We hope a period of stable funding and of David Gunn's management will overcome that. It is also important that the impending expiration of the terms of existing Amtrak board members not trigger yet another crisis.

Eliminating routes offers no savings the first few years, and only limited savings thereafter. While arbitrated labor protection provisions make it hard to eliminate service and to close entire shops and terminals, those provisions do not interfere with ongoing operations. Indeed, most Amtrak employees are entitled to just five days' notice -- and no severance. That is true for the New Orleans signal tower employees whose jobs are to be abolished because switches are remotely controlled from Chicago.

Like most observers, we are impressed with Mr. Gunn’s work to date. For specific examples, see section VII.

Amtrak needs all the freight railroads, not just some of them, to handle its trains expeditiously. Amtrak pays incentives for good on-time performance. At BNSF's operations center in Fort Worth, it seems clear that BNSF places value on earning those incentives. In the huge control room, one of several huge screens displaying company data is devoted to various measures of BNSF's on-time performance for Amtrak.

Some of Amtrak's greatest difficulties are with Union Pacific. This partly results from UP efforts to address deferred maintenance on former Southern Pacific lines, which are largely single track. There is hope. Union Pacific Chairman and CEO Dick Davidson, Railway Age magazine's "Railroader of the Year," is quoted in their January issue saying, "We do want to be a good partner with Amtrak, and we're doing our best to get our railroad upgraded on the Amtrak routes and work with them to improve performance."

Years of underinvestment played a major role in creating today's financial and operational status. We welcome an emphasis on getting today's system to a state of good repair, but still more time is slipping by without meaningful expansion of service in this country. Capital funding for passenger-rail infrastructure will be needed whether it passes through Amtrak or not.

Even expansion ideas that should be relatively simple appear stalled right now, including service to Florida's East Coast and on the Los Angeles-Las Vegas route. Relatively minor capacity constraints -- such as single track between Albany and Schenectady and east of the Cleveland station; and no place to store a train in Cleveland -- cause big headaches for Amtrak scheduling and preclude consideration of some simple expansion ideas like Buffalo-Erie-Cleveland extension of an Empire Corridor train. Rerouting Amtrak's Texas Eagle onto Trinity Railway Express tracks between Dallas and Fort Worth would speed up the schedule, eliminate back-up moves and reduce Amtrak’s contribution to congestion at the major freight junction just south of Fort Worth station, and let Amtrak stop at Centreport/DFW Airport station.

All trains that serve Chicago would provide faster, more reliable service if track investment projects there are implemented.

Some service changes are positive -- dining car menus and restoration of checked baggage service in many places (see section VII).  But Amtrak also faces a shortage of sleeping and dining cars. Checked baggage service is gone from much of the Northeast (including Providence and New Haven, effective April 28) and Amtrak’s unboxed bicycle service has been reduced. Even if an entire baggage car cannot be justified, a way ought to be found to provide some form of this service for travelers who need it.

II. Capital investments needed to return the Amtrak system to a "state of good repair"

It is important to get Amtrak back to a "state of good repair," and support what we have seen of Amtrak's capital plans. Moreover, Amtrak is not unique in the need for capital; this is true for large and small freight railroads, commuter, grade crossing safety, and security needs. A possible funding source for railroad capital investment is described in the next section. Congress has a responsibility to address the lack of balance in a transportation policy that provides assistance to highways and aviation but not intercity passenger rail.

Amtrak-owned rolling stock and facilities should be renewed and maintained to a particular standard.  Investment should go beyond "good repair" to "improvement," such as catenary renewal that allows better running times Washington-New York, and perhaps expedited Metro North catenary work to get New York-Boston running times closer to three hours.

We support intermodal links that complement the rail network. There are opportunities for airport stations on today's network that are not yet fulfilled, such as Milwaukee, Oakland and Providence. BWI's plans for a needed fixed-guideway link between the Amtrak station and the air terminal -- much publicized a few years ago -- appear to have been shoved to the backburner. Overall, intermodal links are progressing, but too slowly in part because -- for all the verbal attention that has been paid intermodalism -- getting federal funding remains a challenge.

III. Long-term viability of the existing Amtrak business model

One's perspective on the long-term viability of the existing Amtrak business model depends on whether one agrees with DOT Deputy Secretary Michael Jackson's recent testimony that "the Federal government must work with our state colleagues to configure and then transition to a system ... whereby the Federal government provides specific capital investment in passenger rail infrastructure, while states assume any needed operational subsidy obligations. Again, we recognize that this cannot happen overnight."

It appears inconsistent to argue simultaneously that the federal government should end operating grants (albeit at some undetermined future time) while stating that "passenger rail is an important component of our nation's transportation infrastructure."

We think increased state funding of operating grants for short-distance trains generally is unlikely until after (a) the federal government has created a genuine investment partnership with states which gives them an incentive to make substantial capital investments in the tracks such trains use; and (b) realization of at least some operating efficiencies as a result of such partnerships. Even this may depend on states recovering from what an April 21 New York Times report called "their worst financial crisis since World War II." The story said just 14 states and Washington, D.C., "have balanced budgets, while five states face budget gaps that are more than 9% of their total budgets. Four states face gaps of more than $1 billion." Alan Abelson, in his Barron's column for April 28, wrote. "According to Stephanie Pomboy, who puts out the feisty and provocative economic newsletter MacroMavens ..., the states are facing their worst budget crisis in history ... As Stephanie observes, a conservative estimate is that the collective state budgetary shortfall this year will run $70 billion ..."

We agree with Amtrak that the operating grants for the national network (a.k.a. long-distance) trains should remain a federal responsibility. However, those trains will benefit from corridor investments, since national network trains either use corridor tracks or connect with corridor trains.

One could shut down the entire national network, and the Northeast Corridor would still require in excess of one billion dollars a year. At that point, however, there would not be adequate political support to secure that funding.

What is needed is a new funding source for rail capital investment.

We have no problem with ownership of the Northeast Corridor passing to the U.S. Secretary of Transportation, though we favor Amtrak retaining control of dispatching to the same extent that is true today. Also, we think -- in the event of conveyance to DOT -- Amtrak and its engineering people must have strong representation in the capital programming needs and the Amtrak operations people must have strong representation in the construction/renewal program to protect train operations and ensure a safe environment for the work to be done.

We oppose conveyance to private ownership, an approach that proved disastrous in Britain. We thought conveyance to states unworkable even before fiscal crises enveloped them.

The only important basis for our conditional support of conveyance of the Northeast Corridor to DOT is the possibility that it would be easier to address the Corridor's significant capital investment needs if the Secretary was accountable for funding the maintenance and improvements to the Corridor to ensure that it is safe and reliable for high-speed train operations.

An ownership change might also help reduce Amtrak's own, arguably unfair image as a "black hole" for money. For example, the New York City tunnels need $1 billion in safety improvement work, yet about 90% of the passengers using those tunnels are New Jersey Transit or Long Island Rail Road commuters. With the present ownership, however, that billion dollars becomes a major contributing factor to Amtrak’s black hole image.

With the highway and aviation systems under considerable stress, and with appropriators complaining that the new subcommittee structure has further reduced their ability to support "non-firewalled" programs like Amtrak, it is perhaps naive to think that changing ownership of the Northeast Corridor will solve its funding problems. We need a source for increased investment in rail infrastructure.

We commend to the committee the concept of a Railroad Finance and Development Corporation, which the Railway Supply Institute has endorsed. This Corporation would address capital needs relating to high-speed rail in general, as well as to needs of freight short lines, and specific projects of importance to Class One railroads such as in Chicago. The corporation would sell bonds, eliminating fears many have about having Amtrak sell bonds, and the reluctance of some states to sell bonds. Of course, labor issues still would need to be addressed. But, as a matter of good tax policy, the bond approach would result in real construction projects in the railroad industry that will have many potential stimulative aspects that will improve the economy (such as by alleviating congestion in other modes and -- as in Chicago -- on the railroads themselves), create jobs, and have a ripple effect in the supply industry and those industries that provide component parts.

In addition, for budget purposes, it scores better than anything else Congress can do in this area. Every $100 in bonds sold results in only a $30 budgetary cost to the government (tax revenue loss).

The Corporation is envisioned as a private, non-profit, federally chartered entity authorized to issue tax-credit bonds for capital investment in rail-related infrastructure not generally eligible for transportation trust fund expenditures under TEA 21. As endorsed by the Railway Supply Institute, the corporation would provide financial support for capital projects that:

• Develop higher speed intercity rail passenger services, including infrastructure and equipment;
• Meet the backlog of capital needs on the Northeast Corridor infrastructure;
• Provide efficient rail access to ports;
• Support development of intermodal terminals, transloading facilities and rail access thereto;
• Facilitate high frequency rail access to airport terminals;
• Enhance capacity on the nation’s rail freight network designed to enhance security, reduce congestion, improve air quality and improve efficiency;
• Support the capital needs of short line and regional railroads for infrastructure improvements to serve rural and smaller communities and accommodate 286,000-pound freight cars;
• Support relocation and/or consolidation of rail lines and facilities in urban areas.

Financing: Modeled on existing federally chartered entities such as Fannie Mae, RFDC would be authorized to issue up to $50 billion in federal tax credit bonds to states and public/private partnerships to finance eligible rail-related capital projects. Specific criteria to be included in the RFDC's authorizing legislation would govern project eligibility, selection, financing and repayment obligations.

RFDC would establish a principal sinking fund to secure payment of the principal at maturity.  A 20 percent non-federal match, contributed by state, localities. or other project participants, would form the primary basis of the sinking fund for each bond issuance, supplemented by additional federal contributions as may be required.

Governance: The corporation would be governed by a Board of Directors appointed by the President.  RFDC’s function and authority would be subject to the oversight of the Congressional committees of jurisdiction.

The authorizing committees already have a long list of rail needs that they have been unable to fund through the authorization process because no matter how much is authorized there is no room in transportation appropriations to fund these needs out of the 30 percent of funds left over after guaranteed spending programs are addressed.

IV. Impact of Amtrak on commuter rail operations

We are glad that the Administration "determined that the best means to ensure that Amtrak continues to provide [commuter] services is to see that Amtrak has sufficient funds to operate through the end of the fiscal year." We fear that a literal reading of the Omnibus Appropriations Act could lead to an immediate Amtrak shutdown if Amtrak were forced to "firewall" in advance enough funds to guarantee commuter rail operation.

Just as highways derive much of their economic effectiveness from the fact that they serve many different users, so also is common use of many tracks and facilities by Amtrak and commuter rail a source of economic effectiveness. An Amtrak shutdown would undo this economic effectiveness, with diverted traffic adding to highway and road system congestion, and depriving commuter rail and transit systems of revenues from connecting Amtrak passengers.

The best way to protect commuter rail reliability -- and indeed to protect the significant contribution that Amtrak makes to the economy -- is to "see that Amtrak has sufficient funds to operate" next fiscal year and the year after that.

V. Public Wants More Travel Choices, Not Fewer

Although public support for passenger rail was well established before September 11, 2001, as reflected in polls discussed near the end of this statement, the 9/11 catastrophe focused and energized public interest in having more transportation choices, not fewer, and thus in retaining and improving our national passenger rail network.

Because of the combined impacts of the "airport hassle" factor and fear of flying, people who formerly flew to avoid four-hour ground trips now accept ground trips of about eight hours in order to avoid flying. Ironically, the majority of those trips are by car, even though plane travel remains far safer than driving.

Where good train service is offered in such markets, business is thriving even in the face of a weak travel and tourism industry. The public -- by its purchase of tickets -- has shown that it will ride conventional-speed services in large numbers in many markets. Such trains need not come anywhere near the speed of a TGV; they need only be reasonably fast and reasonably frequent to be attractive to many travelers.

During the first seven months of Fiscal 2003 (October-April), the following services posted travel increases in the face of extraordinary weakness in the travel and tourism markets. The percentages shown are increases in passenger-miles compared with the year-earlier period. (The passenger-mile -- one passenger carried one mile -- is the standard measure of intercity travel.)

• Chicago-Grand Rapids +30.7%
• New York-Pittsburgh Pennsylvanian +21.1%*
• Boston-Portland Downeaster service +12.5%
• Pacific Surfliner (Primarily San Diego-Los Angeles-Santa Barbara) +10.6%
• Chicago-New Orleans City of New Orleans +9.7%
• San Joaquin Valley Service +7.6%
• New York-Charlotte Carolinian +7.2%
• Chicago-Carbondale Illini +7.1%
• Chicago-Quincy Illinois Zephyr +6.7%
• Sacramento Area-Bay Area-San Jose +6.5%
• Chicago-Seattle/Portland Empire Builder +5.9%
• Chicago-St. Louis +5.8%

[* Primarily the result of restructuring the train to run at "passenger-friendly" rather than "freight-friendly" times.]

Reflecting the relationship between an aging population and interest in alternatives to driving, the American Association of Retired Persons in its new "Public Policies 2003" states, "Congress should support nationwide passenger rail service that is integrated and coordinated with regional, state and local passenger rail [and should] establish a dependable funding mechanism that insures continuing passenger rail service."

VI. Analyzing Route Financial Performance

DOT Inspector General Kenneth Mead, in February 27, 2002, testimony before the House Appropriations Subcommittee on Transportation, called operating grants needed for long-distance trains (what we call national network trains) "chump change" compared with "the annual capital subsidy required to continue operating" Northeast Corridor trains. He said national network operating losses are only about 30% of NEC capital requirements.

We offer the following comments about methods of measurement:

First, the passenger mile -- one passenger traveling one mile -- is the standard measure of intercity travel. Trip lengths vary widely and use of the passenger-mile reflects that. Consequently, "loss" per passenger-mile (or, preferably, the relationship between revenues and costs) are more meaningful ways to measure the relative efficiency of Amtrak's routes. To illustrate how results can differ, the FY01 numbers in the Amtrak Reform Council report showed that the Southwest Chief had the fifth best operating ratio but the fifth worst subsidy per passenger.

Second, the absolute numbers that have been widely quoted, though they exclude depreciation, are based on fully allocated costs (including, for example, a share of the Amtrak CEO's expenses) and thus exceed savings that might be realized by discontinuing a specific route.

Third, the Sunset Limited in particular has been hampered by exceedingly poor on-time performance on Union Pacific tracks, as discussed in Section I.

Finally, our Association strongly believes that the existing network is a skeletal foundation, from which the system should grow. Thus, the only purpose for ranking routes would be to identify where special actions might be needed to improve performance, not to identify routes for discontinuance.

We question the relevance of the planning process used to restructure the Northeast rail freight network in the 1970s. That network was very dense and arguably overbuilt, so that it was easy to take out countless miles of track without harming major markets. The Amtrak network by contrast is skeletal. The ability to take out individual routes without collapsing the system is severely limited because of the interrelationships among the routes in terms of shared revenues (connecting passengers) and shared costs (common facilities).

VII. Examples of Improved Efficiency at "Gunn's Amtrak"

David Gunn and his key people have impressive knowledge specific to railroading and to budget discipline, which appears to be paying off already.

Some changes are visible to passengers, including the now-consistent, dining-car requirement that sleeping-car passengers sign their names and room numbers. Meals are included in the sleeping-car charge, but not in coach fares. Reinstitution of the signature process -- and  an audit (comparing dining car checks with passenger manifests) -- aims to determine more accurately food/beverage revenues and costs and to help eliminate abuse (e.g., coach passengers getting free meals).

The on-board snack bars are getting the ability to issue printed receipts to passengers which show just what was purchased and for how much. This improvement -- long taken for granted by managers at most food outlets "on the ground" -- enhances Amtrak's ability to monitor inventories and to make sure that the company gets all the money due to it.

A new frequency -- the 10th Acela Express on the New York-Boston run -- was added January 27 without increasing crew costs. The New Haven-Springfield got more frequent service April 28, thanks to more efficient use of crews and equipment.  On the same basis, Amtrak added a Chicago-Milwaukee frequency last October.

Amtrak on February 10 transformed the Pennsylvanian, formerly a secondary, coach-only Chicago-Philadelphia train with an "express-friendly/passenger-unfriendly" schedule serving both endpoints at bad times. The train now runs New York-Pittsburgh on a passenger-friendly schedule. March and April financial results showed dramatic improvement from year earlier figures.

Amtrak restored seven-day-a-week staffing and checked baggage service at about 20 stations on April 28, most of which lost it a year ago. We believe this reflects a recognition that last year’s action was done in haste and needed rethinking. Among the affected stations: Salinas and San Bernardino, Cal.; Champaign, Ill.; Meridian, Miss.; Columbus and La Crosse, Wis.; Greenville, S.C.; Houston, Tex.; and Pasco, Wash. Little Rock was added to this list effective May 23.

Amtrak is fixing, scrapping or selling equipment that has been out of use, realizing that there is a cost to the indefinite storage of such equipment. Elderly, costly-to-maintain coaches have been kept in service (especially on the New York-Philadelphia Clockers) while modern equipment that needed only minor repairs was sidelined; Amtrak is undertaking those minor repairs.

Amtrak is making good use of sizable inventories left over from previous projects cut short by funding problems. For example, Amtrak has found orange upholstery to use when overhauling coaches with worn upholstery of the same color. The end result may not be the color one would have chosen for the new century, but it is clean and new -- and did not require any new purchase.

Amtrak is covering a lot of old carpeting with plastic, which is easier to clean and doesn’t hold dirt, odor, or splashed coffee.

Amtrak's organizational structure has been flattened by elimination of the Eastern and Western general manager positions, so that the seven divisional general superintendents now report directly to the vice president of operations.

Amtrak announced January 24 that it would close its Chicago call center, the smallest of its three centers, at the end of December. Even if the number of agents added at empty desks in Riverside and Philadelphia equals the number of agent positions eliminated in Chicago, Amtrak expects to save $3 million a year in management, facility and technology costs. Any net reduction of agents -- such as might be possible because of the continuing migration of business to the internet -- would increase the savings. Chicago reservation bureau employees have the right to "follow their work," but employees who reject this option are not entitled to severance (labor protection) payments.

Appendix I. Polls Indicate Public Support for Passenger Rail

Polls over the years have consistently shown public support for faster, more frequent, and reliable passenger trains, including two national polls last summer. A poll conducted by CNN/Gallup/USA Today near the height of Amtrak's June, 2002, cash crisis (June 21-23) found that 70% of the public support continued Federal funding for Amtrak. Similarly, The Washington Post found that 71% of Americans support continued or increased federal funding for Amtrak (August 5, 2002, article reporting on July 26-30 poll).

An October 27, 1997, nationwide Gallup Poll sponsored by CNN and USA Today asked whether "the federal government should continue to provide funding for the cost of running Amtrak, in order to ensure that the U.S. has a national train service, or the federal government should stop funding Amtrak, even if that means the train service could go out of business if it doesn't operate profitably on their own." Favoring continued funding were 69% of respondents, with 26% against (and 6% other responses). State-specific polls also have been positive.

Wisconsin: A poll by Chamberlain Research Consultants of Madison, released by the Wisconsin Association of Railroad Passengers in June, 2002, indicated that

• 77% of Wisconsin residents "support a nationwide system of passenger trains with increased routes, frequencies, and shorter travel time."
• 76.6% said they would use the trains if the planned nine-state Midwest Regional Rail network becomes available to them.
• 54.3% responded positively to this question: "If federal funding is available for improving intercity passenger rail services, Wisconsin may try to attract these rail improvement funds by pledging to pay for a portion of the project with state money as we do now with highway and airport projects. Is this something you favor, oppose, or neither favor nor oppose as a way to raise money to develop passenger rail services in Wisconsin?"

The survey, which was conducted over a week-and-a-half ending in mid-February, took place as the future of Amtrak and the need for a nationwide rail passenger service was being debated by Congress, and as Wisconsin state government wrestled with its most serious financial crisis ever.

Ohio: The Ohio State University Center for Survey Research (OSU-CSR) released a poll ("Tracking Ohio") on March 8, 2001, which found that 80% of Ohioans want the state to develop passenger rail service.  The following question produced a 74% positive response: "If Ohio had a modern, convenient and efficient passenger rail network, do you think it would improve the quality of life in Ohio or would it have no effect?

About two-thirds (65%) of respondents said state money should be used to attract federal passenger-rail funding to Ohio, if such federal funding were available. More than half (53%) said the best way to relieve road traffic congestion is to "improve all forms of transportation including mass transit and high-speed rail." The statewide poll was conducted by telephone January 2-31, 2001, as part of the OSU-CSR's monthly Buckeye State Poll.  The margin of sampling error was no more than +/-4.3%.

New York: In 1998, the Marist College Institute for Public Opinion (Poughkeepsie) released results of a poll it conducted of New York State registered voters regarding state investment in intercity rail passenger service (trips longer than 75 miles one way). Findings: 82% believed that having modernized intercity passenger train service is at least as important as having good highways and airports (of this figure, 12% felt rail service was even more important); 87% favored an increase in government spending for intercity passenger train service. The poll was based on approximately 600 responses with a margin of error of  no more than +/-4%. It was commissioned by the Empire State Passengers Association and the Empire Corridor Rail Task Force.

Appendix II. Benefits of Amtrak and Passenger Trains

In crowded corridors, passenger trains represent vital people-moving capacity and help relieve air and road congestion. This benefit will grow over time as travel demand continues to grow while airport and highway construction face more intense local opposition and ever-tighter limits on funding and sheer availability of land

Amtrak is far safer than auto travel

During inclement weather, Amtrak is safer and usually more reliable than airplanes and buses. Amtrak was the only thing going in the Northeast in this year's President's Day storm

In most cities, Amtrak helps mass transit, downtown areas and transit-dependent people by serving -- and increasing the visibility and economic viability of -- transit-accessible downtown locations. Amtrak feeds connecting passengers to transit. Amtrak shares costs with transit at joint-use terminals and on joint-use tracks. Positive impacts have been observed even in small cities with minimal Amtrak service. Mayor John Robert Smith of Meridian, Miss., on Amtrak's New York-Atlanta-New Orleans run (one train per day in each direction), says property values have tripled in recent years around the railroad station, site of a relatively new intermodal terminal

By contrast, new airports intensify energy-inefficient suburban sprawl and stimulate auto-dependent development. This leads to the social costs of getting transit-dependent people to work, or the need to address the consequences of their not working

Amtrak is important to those who cannot fly due to temporary or permanent medical problems, and to those for whom physical and financial considerations rule out driving long distances, for example, seniors and students. (The editor of Frequent Flier, forced by doctor's orders to take the train to Florida, wrote a favorable column about the trip.) Indeed, some of those medical problems have come about as a result of flying

Amtrak serves many communities where alternative transportation either does not exist, is not affordable or only serves different destinations. Trains can make intermediate stops at smaller cities at minimum cost in energy and time. This is apparent in corridors -- where benefits go to such cities as Jefferson City, Lancaster, Trenton, Kalamazoo, Wilmington, Bloomington / Normal and Tacoma. It also means, for example, that the Empire Builder can stop at eight small cities in Washington (plus Seattle and Spokane); ten in Montana plus, depending on the season, East Glacier Park or Browning; and seven in North Dakota without compromising the train's appeal to those riding between Chicago or Minneapolis and Seattle or Portland. Similarly, the California Zephyr serves five Colorado points (plus Denver) and five points each in Iowa and Nebraska.  (The Southwest Chief serves yet another Iowa point, Fort Madison.) Also, Amtrak serves 16 North Carolina points.

[Here is an example of long-distance travel that I encountered on the Southwest Chief: a mother and her 14-month-old child rode from Garden City, Kans., to Barstow, Cal. The family was moving to California; the husband was driving the U-Haul; the wife and child were on the train "so the move would not be so traumatic" for the child. They did not consider the plane because they felt it would be too cramped for the child. Also, airfare out of Garden City was prohibitive.

Amtrak is part carrier (like United and Greyhound) and part infrastructure. Thus Amtrak provides important passenger-moving capacity, unlike airlines and bus companies. In much of the Northeast Corridor and a few other places, Amtrak is the rail equivalent of the air traffic control system, airport authorities and airlines. (Among the "other places": the Chicago terminal, part of the Chicago-Detroit line and the track between Albany, N.Y., and the Massachusetts state line.) Elsewhere, Amtrak is the only carrier with legal access to freight railroads' tracks -- a quid pro quo for relieving the railroads of their passenger-train obligations in 1971

Amtrak's national network trains are transportation "melting pots." Intercity travelers by all modes had an average annual income of $70,000. The comparable figure for travelers on Amtrak’s national network trains is $51,000. [This is 1999 data inflated to 2002 and thus probably good for 2003 as well.] However, the majority of passengers on these trains ride coach. Surveys available to us six years ago indicated that, for 30% of coach passengers traveling over 12 hours, average income was less than $20,000 (for 11%, it is less than $10,000). Obviously, most standard- and deluxe-room sleeping car passengers have considerably higher incomes and pay much higher fares. Nonetheless, anyone who characterizes these trains as land versions of cruise ships should try walking the coaches, especially at night.

Trains, especially on longer trips, offer a form of social contact almost lost in this country today -- the opportunity to meet and relax with total strangers that one may or may not ever see again

Amtrak over much of its network enables one to enjoy gorgeous scenery in total comfort. Some examples: the Connecticut and California coastlines, the Hudson River in New York, the Colorado Rockies, the mountains of Vermont and northern New Mexico, Glacier Park in Montana and West Virginia's New River Gorge

Amtrak uses only 79% of the energy airlines use to move a passenger a mile, and only 22% of the energy general aviation uses (to do the same). This statement is based on the following 2000 data from the Oak Ridge National Laboratory's annual Transportation Energy Data Book (Edition 22, published September 2002) and available on-line: Amtrak 2,902 British thermal units per passenger-mile; Airlines 3,666; General aviation 12,975. Amtrak is much less polluting than airplanes. (Energy efficiency is a good proxy for air pollution.

Thanks to a growing array of connecting buses available with train travel in a single ticket transaction, Amtrak puts people on intercity buses who would not otherwise have considered using them. "Thruway" is Amtrak's copyrighted name for connecting buses that can be booked and ticketed through Amtrak’s reservation system. Thruways first developed in a big way in California, where the state underwrites an impressive network of dedicated, feeder buses. Elsewhere, depending on the situation, Amtrak or the private bus companies themselves bears the financial risks for many Thruway runs

Appendix III. Subsidies

Mr. Jackson's April 10 statement notes that "highways, transit and aviation are, unlike rail, funded by true user fees and also by state investments. Even the most ardent rail supporters evince little interest in a new Federal passenger rail ticket tax."

This statement requires two important modifications -- recognition of the huge amount of "non-user" public funds (and related policies) that support highways and aviation, and of the support inherent in how the user fees are handled.

General Fund

A total of $34 billion in 2001 highway spending came from non-user sources in all levels of government (while $10 billion in highway user payments went to "nonhighway purposes" Table HF-10, Highway Statistics 2001).

In FY 2003, general-fund support for FAA Operations jumped by $2.2 billion (from $1.1 billion to $3.2 billion) and thus supported 46% of the total cost of $7.0 billion. At the same time, the trust fund (user payment) contribution likewise fell by $2.2 billion (from $6.0 billion to $3.8 billion).

Federal Matching Funds -- Nothing for Intercity Passenger Rail

It is generally acknowledged that an effective capital investment program fosters operating efficiency. Federal policy, however, encourages states and local governments to invest in highways and aviation, where federal funds cover 50-80% of project costs, and not on railroads, where federal funding generally is zero. Completely irrespective of the merits of any given project, it is difficult for states to devote scarce resources to rail projects that generate no federal support, particularly when that means passing up federal funds for road and aviation projects.

User Fees and Tax Policies

We recognize that, if only for symbolic purposes, a ticket tax is a possible component of a rail funding program. However, at least in the early stages, it would be no "silver bullet". If Amtrak is successfully setting fares to maximize revenue, an additional surcharge could cause revenues to fall. Alternatively, if the ticket tax payment is removed from Amtrak’s income, then the operating loss grows by a like amount and must be made up from some other federal payment, with no net gain (and more work for accountants).

A mode-specific trust fund system insures massive continued investment in the modes that are already dominant, regardless of whether they are the best solution for tomorrow’s transportation problems, and regardless of the needs of the users paying those taxes. A large proportion of them are soon-to-be senior citizens who will place greater value on non-automobile travel choices.

User fees clearly do not cover environmental and other external costs associated with highways and aviation.

The savings associated with financing an airport project with tax exempt, government-backed bonds rather than with commercial loans sought directly by the airlines is substantial.  The various sources available to fund airports, like the mode-specific trust fund system, help reinforce the dominance of modes that are already dominant whether or not they offer the best solution for today’s transportation problems.