Trains and transportation subsidies

In 2008, the Passenger Investment and Improvement Act was passed and signed into law. An unfortunate feature of this law was a provision to sunset Amtrak subsidies for shorter routes (those under 750 miles from endpoint to endpoint), requiring the states (most of which already cover a part of the subsidy) to cover the costs of those routes. This means that federal funding for Amtrak going forward will focus more on subsidies for the less useful, less efficient long distance routes, many of which offer an expensive sort of “train cruise” experience for niche market of wealthy train aficionados*and little use for anyone else. Meanwhile, efficient services with times already competitive with driving between (for example) Chicago/Milwaukee, Portland/Seattle, Sacramento/Bay Area, and Albany/New York will soon cost those states more money to support. The good news is several of these trains have been steadily increasing their farebox recovery rates and as such the needed subsidy has been declining. This is true systemwide, the needed subsidy is as low as its been since 1975. It’s possible that if this law were to go into effect in 5-10 years rather than now, it might not even be necessary for some of these routes, as 100% farebox recovery is not implausible. But as it’s hitting now, in a time of austere state budgets, even the trivial subsidies currently needed might be a touch battle. Some thoughts on Cascades’ future from the always wonderful Seattle Transit Blog.

This law is a very small example of the truism that Republicans claim government doesn’t work, and set out to prove it. It will focus Amtrak’s subsidies on long distance routes like the “Robert Byrd limited,” AKA the Cardinal, a train that meanders three times a week from New York to Chicago in a cool 30 hours, with stops in approximately 437 small towns in West Virginia, while passing through a major population center, Cincinnati, in the dead of night–in other words, the sort of line that’s always going to rely on a hefty government subsidy to exist. This law is designed not so much to save Amtrak money, but to make Amtrak look more like what Republicans claim it looks like.

I was inspired to write this post when I stumbled across this excellent post:

A new report from the Tax Foundation shows 50.7 percent of America’s road spending comes from gas taxes, tolls, and other fees levied on drivers. The other 49.3 percent? Well, that comes from general tax dollars, just like education and health care. The way we spend on roads has nothing to do with the free market, or even how much people use roads.

“Nationwide in 2010, state and local governments raised $37 billion in motor fuel taxes and $12 billion in tolls and non-fuel taxes, but spent $155 billion on highways,” writes the Tax Foundation’s Joseph Henchman. Another $28 billion of that $155 billion comes from revenue from the federal gas tax.

Even more interesting is to compare roads to Amtrak, a favorite target of self-styled fiscal conservatives in Congress. Amtrak recovers about 85 percent of its operating costs from tickets — a relative bargain compared to other modes. Even accounting for capital costs, Amtrak — which operates mostly on privately owned tracks — covers 69 percent of its total costs through ticket prices and other fees to users.

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