When Is a Subsidy Not a Subsidy?
We continue to read about how Amtrak’s Northeast Corridor is making money and how the long-distance trains are a money pit. That constantly recurring bit of misinformation is inevitably followed by a ominous prediction about the long term future of passenger rail in the U.S. if Amtrak doesn’t get it’s act together and at least break even. Of course all this badgering comes from the Republicans in Congress, many of whom are philosophically opposed to subsidizing Amtrak at all.
You seldom see or hear anything about all the commuter trains that operate on the Northeast Corridor—trains using Amtrak’s tracks and the Amtrak electricity coming through Amtrak’s catenary. In an article from the current edition of Progressive Railroading, there was this one-sentence which I found quite startling:
“ . . . Amtrak’s Northeast Corridor, where it owns 363 miles of infrastructure, is the nation’s busiest railroad with 2,200 daily high-speed, commuter and freight trains.”
That sentence was forwarded to me this morning by a knowledgable reader. He said he has made a very rough count and of all those 2,200 trains operating up and down the Northeast Corridor every day, only about 100 are Amtrak trains. All the others are trains belonging to commuter railroads serving Washington, Philadelphia, New York City, Boston and the cities in between.
It is true that those commuter railroads pay Amtrak for the use of the Northeast Corridor, but it is universally accepted as fact that those payments don’t come close to being fair shares of what it costs Amtrak to maintain that infrastructure.
And here’s what that means: Amtrak has been getting roughly $1.5 billion a year as a subsidy from the federal government. But the reality is that many millions of those federal dollars should, in fairness, be considered “pass-through subsidies” for the commuter railroads by the federal government. Frankly, I’ve never thought of it in those terms before and it’s a revelation. I wonder if it would make a difference if we could get the Congress to see it that way.
My knowledgable reader concluded his email this way: “If that’s what we as taxpayers (through our representatives) want to do, fine and dandy, but stop blaming the long distance trains for Amtrak’s big subsidy needs.”
Jim, I’m under the impression that the $1.5B Amtrak receives is an “operating subsidy” and is not used for capital improvements or major maintenance on the NE Corridor and therefore would not really be a “pass through” subsidy for the commuter trains. I thought there was a separate budget item for the NE Corridor infrastructure, but I’m not sure. Do you know the ground truth?
Quite right. I suppose my argument is a bit obscure. I guess my point is that the feds are subsidizing Amtrak, and Amtrak is, in effect, subsidizing the commuter railroads by undercharging for their use of the NEC. To my simplistic way of thinking, that means Amtrak’s federal dollars make it possible for Amtrak to undercharge the commuter lines. I dunno . . . maybe it doesn’t make sense to anyone but me.