WASHINGTON — Each year following the President’s State of the Union address, Amtrak issues a report card to Congress that explains how the company has performed over the previous year, while transmitting its “wish list” for.
The 2020 version of this document, quietly released over Valentine’s Day weekend as part of a “General and Legislative Annual Report and Fiscal Year 2021 Grant Request,” contains the usual justifications for Amtrak’s annual operating and capital grants. The company seeks funding similar to current levels for existing Northeast Corridor and National Network (state-supported and long distance) service, despite an executive-branch budget which proposes drastically slashing those amounts (see table).
But this year’s document also suggests a new funding mechanism which, Amtrak argues, would encourage states to invest in “high-frequency rail corridors between major population centers” that would “modernize” its national network. The plan seeks to have the federal government pay for early capital and operating investments.
Characterizing Amtrak’s current route structure as having “limited utility” because there are many “fast-growing regions and corridors throughout the country that are underserved — or not served at all,” management is asking Congress for an additional $300 million specifically to develop “high-potential corridors.”
Amtrak’s proposed Corridor Development Program would evaluate implementation plans for new short-distance routes based in part on capacity improvement requirements; access and cooperation from host railroads; ridership and revenue projections compared with estimated capital and operating costs; and the viability of long-term state commitments to continue funding after federal grants expire.
If a corridor is selected and “a memorandum of agreement is in place between Amtrak and a state entity,” the company “may pay” up to 100% of capital costs necessary to initiate new or additional service; “fully-allocated operating losses and capital costs” for the first two years;” then 90%, 80%, and 50% of those expenses, respectively, for the next three years.
The idea to give states incentive to develop a passenger rail corridor by substantially defraying startup costs. Amtrak boasts in its proposal to Congress that it “takes a systemwide lens to these investments to ensure efficiencies in operations, procurement, and supporting services.”
The opaqueness of Amtrak’s lens, however, is only one of the congenital weaknesses in management’s latest scheme to re-orient business into short corridors fully paid for by states as an alternative to its current interconnected national network. There are at least three other significant problems:
— Amtrak still would determine costs: States must pay whatever costs Amtrak charges, based on a uniform allocation formula required under Section 209 of the Passenger Rail Investment and Improvement Act’s Section 209, coupled with company claims that its data is proprietary. Operating authorities have challenged this arrangement for years, and have recently become openly critical of their inability to manage or control costs [see “Is Amtrak the only state option?” “Passenger,” April Trains].
— Host railroads still control access: In its legislative request, Amtrak asks that the Surface Transportation Board “conduct an independent assessment … to determine what capital improvements funded by or on behalf of Amtrak are necessary to mitigate unreasonable impairment” of freight trains. Capital-improvement demands by host railroads have been a frequent barrier to adding or increasing service, as illustrated by the passenger railroad’s experience along the Gulf Coast. Despite generous federal funding and active local support, efforts to reestablish two round trips along the former route of the Sunset Limited and three now-discontinued New Orleans-Mobile, Ala., state-supported trains has been thwarted by years of billon-dollar demands by CSX Transportation that Federal Railroad Administration analysts have questioned. The latest “study” is expected in June.
Amtrak senior officials have yet to acknowledge that their vaunted multi-frequency corridor playbook requires host railroads to grant access without inflated capacity improvement requirements. In the meantime, the company has, since the failed mail-and-express initiative of the late 1990s, made no effort to increase frequencies on its existing network. These could add revenue against fixed route costs it already incurs.
— State support may be fleeting: Developments on the Gulf Coast also show the difficulty in getting every contributing entity to sign on. Alabama Gov. Kay Ivey has refused to endorse the New Orleans-Mobile rail venture even though any state commitment would not kick in until three years after service began, if at all. In the last decade, her counterparts in Ohio, Wisconsin, and Florida killed state funding on federal corridor projects that had been spearheaded by previous administrations of the opposite political party.
Among other suggestions in Amtrak’s legislative request are that Congress establish a Passenger Rail Trust Fund to pay for big-ticket infrastructure investments. It also urges passage of a tax credit that would allow host carriers to deduct costs for capacity or speed-enhancing investments against federal tax liabilities. This is similar to the track maintenance credit now utilized by Class II and Class III short lines.
But the request also signals other management intentions by advocating establishment of a “Long Distance Intercity Passenger Rail Working Group.” It would recommend how states and communities might improve and seek grants to financially support intercity trains passing through their region, or instigate “station development and host programs.” What Amtrak would do with the working group’s conclusions, or how it change the company’s obligations, isn’t clear.
