Thursday, April 30, 2015

Whither Amtrak's Long-Haul Routes?

Last month, the House of Representatives passed the Passenger Rail Reform and Investment Act, which provides for a four-year, $7.8 billion authorization of Amtrak. Notably, the bill provides distinct appropriations for Amtrak's northeast regional service (Northeast Corridor) and its service in the rest of the country (National Network) and would - for the first time - prohibit the use of revenues from one service to subsidize the other.

This is important because Amtrak's Northeast Corridor is fairly popular - particularly among lawmakers who use Amtrak to get from DC to their districts around New England - and is in fact the only service Amtrak provides that is actually profitable (not including the cost of much-needed capital improvement projects along the corridor). These profits currently cover losses elsewhere in the system, so by severing the two services, the operating inefficiencies of the National Network will be more ostensibly exposed.

And that's just the point: The Hill points out that the provision is "an effort to force the company to streamline its longer routes," such as the California Zephyr which connects Chicago to California and which sees fewer than 400,000 passengers a year (compared to the Northeast Corridor's 11.4 million).

How would it do so? Through cost-sharing, according to a March 2013 Brookings Institute report. Essentially, states should have to cover some of the cost of operating the little-traveled long-haul routes that pass through their borders, just as states in which short, single-state routes are operated already have to do. With states on the hook for the financial well-being of these longer routes, they will be more inclined to take cost-cutting measures (e.g. cutting service on less popular routes). What's more, Washington could focus federal spending not on covering operating losses, but on the sort of large-scale infrastructure projects that would improve service, particularly in the Northeast Corridor where Amtrak owns its own tracks.

From the perspective of someone who rides the Northeast rails frequently, this seems at first blush to be an exciting proposition. But to someone out West, such a proposal could spell disaster for the National Network. As Senator Dick Durban (D-Ill.) asserts, taxpayer dollars from all over the country have been used in the past to finance the Northeast Corridor, so why should Western routes be left to wither on the vine now?

Ultimately, the debates over where rail should be operated in this country, and by whom, are likely to continue for the foreseeable future. But given the differences in rail ridership across the country and the federal government's need to prioritize spending, it is an important debate to have. If nothing else, this legislation starts that conversation and could signal to state governments that they should start thinking about how valuable their Amtrak service really is to them - do they still want it if they have to pay for it themselves?

The separation of the Northeast Corridor from the National Network is not all that's in the bill, by the way. The bill includes an amendment requiring Amtrak to submit a report on the feasibility of high-speed rail connecting Washington, DC to Boston, as well as amendments to improve safety at grade crossings. It also authorizes $1.2 billion for capital grants to states for new intercity passenger rail. And the United Transportation Union praises its inclusion of Buy America provisions, which ensure infrastructure projects financed by the bill's loan authorizations are built with American-made steel and other goods.

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