March 31, 1999 Amtrak and High Speed Rail Appropriations for FY 2000

Statement of

 Ross B. Capon, Executive Director

 National Association of Railroad Passengers

 Submitted to the

 Subcommittee on Transportation

Committee on Appropriations

U.S. Senate  

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Amtrak and High Speed Rail Appropriations for FY 2000 Submitted for the Record on March 31, 1999 

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Thank you for the opportunity to file this statement. Our non-partisan Association -- whose members are individuals -- has worked since 1967 towards development of a modern rail passenger network in the U.S.

Summary

• We support the $571 million request President Clinton has submitted for the Amtrak account. This is consistent with Amtrak’s business plan and is what Administrator Molitoris promised in testimony before you a year ago.
• We support full funding of high speed rail authorizations, including a total of $44 million authorized for FY 1998 and 1999 but never appropriated.
• We support giving states the right to use their flexible gasoline-tax funds for intercity passenger rail, consistent with the Senate-passed versions of both ISTEA (1991) and TEA-21 (1998), and with what Vermont alone was given last year (omnibus bill).
• Usage of Amtrak trains is growing for the third straight year and revenues for the fourth straight year.

1. The “Consensus” Amtrak Budget Request: $571 Million

This is $38 million (6%) below the current level. We appreciate that Congress, responding to the Administration’s premature declaration of an end to operating grants,  gave Amtrak the flexibility to spend its “capital” appropriation on maintenance of equipment. We join with the Administration in supporting Amtrak’s request that this flexibility be extended to maintenance of way and continued for maintenance of equipment, both at least through FY 2002, consistent with the allowed use of Federal Transit Administration capital funds.

2. Developing Air-competitive High Speed Corridors

Nationwide corridor improvements improve the economics of Amtrak trains using these corridors, and help Amtrak improve its bottom line.  These improvements increase the abilities of the affected services to:

• expand transportation capacity where parallel road and air facilities are at or approaching capacity;
• give travelers an attractive way to avoid congested road and air facilities;
• realize synergistic benefits by feeding passengers to local transit;
• help revitalize urban downtown areas around stations; and
• provide environmental benefits.

Corridor work also benefits long-distance Amtrak trains by providing them with improved connections as well as -- where these trains use corridor tracks -- speeding up the long-distance trains themselves. Last but by no means least, much corridor work improves safety at railroad/highway grade crossings, in some cases by eliminating the crossing. This improves safety and reliability for trains (including commuter and freight trains) and for motor vehicles. Indeed, as the table below shows, TEA-21 authorized $15 million a year in “non-guaranteed” funds for hazard elimination work on designated high-speed corridors, now including Mobile-New Orleans-Houston and Birmingham-Meridian-New Orleans. The recent Illinois tragedy underlines the importance of fully funding the hazard elimination appropriation.

Amtrak Funds:  Amtrak has earmarked a significant portion of its Taxpayer Relief Act (TRA) capital funds to upgrade air-competitive corridors. Some examples of funds already committed outside the Northeast Corridor are shown below.

On January 28, 1999, Amtrak announced a $25 million commitment to projects aimed at improving speeds and facilities for Midwest corridor trains, including:

• $5 million for a demonstration next year of “modern, premium trains and technology,” involving equipment capable of 110 mph.
• $5 million towards the “Grand Crossing” connection on Chicago’s south side that would significantly improve running-times on links both to Indianapolis-Cincinnati and Champaign-Carbondale-Memphis-Jackson-New Orleans.  [Chicago-Cincinnati and Chicago-Carbondale both are part of the Midwest Regional Rail Initiative; also, Secretary Slater has designated the former as a high speed corridor.]
• $2 million towards the St. Louis intermodal terminal, which also will serve the successful light rail line.  We eagerly await the Amtrak ridership increase that should result from replacement of the isolated, 20+ year-old “temporary” Amtrak station.
• $2 million towards returning Amtrak to the impressive Kansas City Union Station from a present, low-profile facility that Amtrak President Tom Downs said made Amtrak the proverbial “troll under the bridge.”
• $1.5 million for preliminary design and engineering of Chicago-Detroit improvements.
• $1 million towards modernizing the Milwaukee station, which the January 15 Milwaukee Journal Sentinel termed “shabby” and “outdated.”

Earlier, on February 18, 1998, Amtrak announced an order for eight new San Diegan train-sets of five cars each.  This $100-million order is the largest-ever investment by Amtrak in California. The cars will be financed, but Amtrak is avoiding interest costs during construction by temporarily using TRA funds.

Federal “High speed rail” funds: Continued federal high speed rail funding will be vital if we are to fully realize the benefits of Amtrak’s investments in new rolling stock, stations and connections. There are substantial needs for improving tracks, signals and grade-crossings to permit increased track speeds.

The high-speed program has -- or should have -- three parts (see also table below):

1. Planning is authorized at $10 million a year FY 1998-2001.  We favor $30 million for FY 2000 ($10 million each authorized for FY 1998, 1999 and 2000).
2. Hazard elimination, which TEA-21 authorizes at $15 million a year FY 1999-2001. We support $30 million for FY 2000, including $15 million authorized for FY 1999. [This is in addition to $5.25 million a year in “guaranteed” trust fund dollars.]
3. Next Generation (technology improvements) are authorized at $25 million a year FY 1998-2001.  We support $34 million for FY 2000, including a total of $9 million authorized for fiscal 1998 and 1999.

This results in a total request for FY 2000 of $94 million, which includes a total of $44 million in prior-year authorizations as yet not appropriated.

High Speed Program -- Current, Clinton Budget, Our Request

($ millions)  

	FY 1999 Actual	FY 2000 Clinton	NARP Request
Planning	0.000	0.000	30.000
Hazard-Elimination	0.000	15.000 (RABA)	30.000
“Guaranteed”  Hazard-Elimination	5.250	5.250	5.250
Next Generation	24.000	32.000 (RABA, 20.000)	34.000
Total	29.250	52.250	99.250

 

In general, federal funding encourages states to invest in highways and aviation and discourages rail investments. Federal passenger-rail planning money keyed to state matches might be particularly effective in correcting this problem.

We would strongly support any request you receive for funding [not at Amtrak’s expense] to continue work on the North Station-South Station Rail Link in Boston. This link is needed to dramatically improve the efficiency and usefulness of the local commuter-rail network, the planned Boston-New Hampshire-Maine Amtrak service and all Amtrak service to Boston including the forthcoming high-speed trainsets.

3. Excess Gasoline Tax Revenues, a.k.a. Revenue-Aligned Budget Authority (RABA), and the Aviation Investment Reform Act for the 21st Century (AIR-21)

We strongly support the Administration’s proposal to devote a significant proportion of these revenues to rail projects, as well as transit and the Congestion Mitigation/Air Quality Program. Except for $12 million in “Next Generation” work, the Administration’s entire high-speed rail request comes from excess gasoline-tax revenues. We think this is good policy, but we know this is controversial in Congress, even though the hazard-elimination program certainly benefits highways. We also strongly oppose the sharp cut in general funds going to intercity passenger rail (table below).

General Funds for Passenger Rail: Current and Proposed ($ millions)  

	Fiscal 1999	Clinton FY 2000 Budget
Amtrak	609.000	571.000
High Speed Rail	24.000	12.000
Total	633.000	583.000

  [This is an 8% ($50 million) reduction from 1999 to 2000. In both tables, we show the Fiscal 1999 high speed level as $24 million, the number shown in the Administration’s budget. This number actually includes related FRA salaries and $3 million for the Alaska Railroad. The technically correct number thus is lower: $20.494 million]

Particularly in the face of escalating federal investments in highways and aviation, and the DOT Inspector General’s analysis of Amtrak’s capital needs, we think there is strong public support for the investment levels we are requesting. Our belief also rests on public opinion polls commissioned by NARP and others which we have cited in previous years' testimony and which were taken when rail travel seemed to be in less favor than it is now.

We appreciate Chairman Shelby’s initiative in educating colleagues and the public on the budgetary impact of AIR-21, both at the subcommittee’s Amtrak hearing and in amendment #225 to the Senate Budget Resolution. This amendment notes that AIR-21 would result in firewalled transportation spending (aviation, highways, transit) exceeding total function 400 spending called for in the Senate’s resolution.

AIR-21 contemplates increasing airport improvement funding from $2 billion to $5 billion a year and tripling air traffic control funding (to $3 billion a year). Outside the trust fund, AIR-21 contemplates continuation of the practice of funding 30% of the air traffic control system from general revenues. We do not believe AIR-21 serves the cause of balanced transportation. We consistently have argued against mode-specific trust funds, which work to insure that investments continue primarily in the already-dominant modes, and inhibit implementation of any analysis showing that rail could do a job more efficiently.

4. Flexibility for Intercity Passenger Rail

Arguably the most serious flaw in TEA-21 was Congress’s failure once again to include intercity passenger rail as an eligible use for flexible gasoline-tax funds (for any state except Vermont!), even though the Senate voted for and the Administration endorsed this flexibility last year. On February 23, the National Governors Association approved a policy statement endorsing flexibility. We appreciate this subcommittee’s support of flexibility. We urge Congress to fix this serious flaw in U.S. transportation law.

5. Amtrak in the Marketplace

Travel (passenger-miles) on Amtrak was up 2% in Fiscal 1997, 3% in Fiscal 1998 and 1.5% in the first quarter of Fiscal 1999. Passenger revenues have risen more sharply and for a longer time: up 3% in Fiscal 1996; up 7% in FY 1997; up 4% in FY 1998; and up 7% in the First Quarter of Fiscal 1999. [These statistics reflect only the intercity business, not Amtrak’s contract commuter operations.]

There is an interaction between travel volume and revenues. Consistent with Congressional and Administration pressure to achieve "operating self-sufficiency" by the end of Fiscal 2002, sharp fare increases in 1995 and 1996 helped the bottom-line but priced some potential riders out of the market.

In the Amtrak travel declines of FY 1994-96, the passenger did not abandon Amtrak, Amtrak abandoned the passenger -- by reacting to the Administration and Congressional mandate. Some services were withdrawn and others made more confusing, and fares increased sharply.  The fact that these problems are -- for now -- behind us helps explain recent, positive trends. Growth would be even more impressive if there were expansion-minded capital investments not limited by the quest for operating self-sufficiency.
 
Thank you for an excellent Amtrak hearing, and for the opportunity to submit these comments.