Posts Tagged ‘Amtrak funding’

Amtrak to Get $2.45B in Spending Bill

December 23, 2022

An omnibus budget bill working its way through Congress contains $106 billion in federal transportation funding for fiscal year 2023, which began on Oct. 1.

The $1.7 trillion spending bill was approved by the Senate on Thursday with House approval expected to come on Friday.

The transportation budget includes increased funding for Amtrak and public transit agencies.

Amtrak is to receive $2.45 billion, which is $121.6 million above what the passenger carrier was granted in fiscal year 2022.

However, it also is short of the $3 billion requested by the Biden Administration and less than the $3.3 billion requested by Amtrak.

The Amtrak funding breaks down to $1.26 billion for the Northeast Corridor and $1.19 billion for the national network.

The legislation says that up to $66 million can be used to support planning, capital costs, and operating assistance for projects included in the Corridor Identification Program.

The latter is a program stemming from the 2021 Infrastructure Investment and Jobs Act.  That money can be used to develop new intercity rail passenger routes and/or to improve service on existing passenger rail routes.

An analysis published on the website of the Rail Passengers Association said that Amtrak may face a squeeze from trying to do too much with the funding provided for the national network.

RPA noted that the passenger carrier is having a difficult time getting all of its pre-pandemic service back in service as well as hiring additional personnel. That might not leave much funding to develop new services.

Congress also banned Amtrak from using its operating grant to discontinue, reduce the frequency of, suspend, or substantially alter the route of any long-distance route except in the case of an emergency or a planned maintenance outage.

The Federal Railroad Administration will receive $1.05 billion. That is broken down to $44 million for railroad research and development; $100 million for the Federal-State Partnership for Intercity Rail grant program; and $560 million for the Consolidated Rail Infrastructure and Safety Improvements grant program.

The legislation specifies that at least $150 million in CRISI grants shall be used for development of new passenger rail corridors.

Other FRA spending earmarks included $25 million for the development and implementation of measures to prevent trespassing; $5 million for maglev; $30.4 million for Congressionally directed spending; and $5 million for workforce development training.

The Federal Transit Administration was allocated $16 billion of which $13.6 billion is to be used for Transit Formula Grants to address transit state of good repair; and $2.6 billion for Capital Investment Grants to create new transit routes nationwide.

The latter is a $387 million increase above fiscal year 2022 funding.

CRISI grants may be used to fund commuter rail projects, authorizing the transfer of funds by the USDOT to the appropriate agencies to be administered under public transportation laws.

Senate Committee Would Up Amtrak Funding

July 31, 2022

A Senate committee last week released a proposed federal fiscal year 2023 appropriations bill for transportation spending, including Amtrak funding.

The passenger carrier would receive $2.6 billion, a $269 million increase over the current fiscal year.

The Senate Appropriations Committee is proposing $2.51 billion for the Federal Transit Administration’s Capital Investment Grants program; $200 million for the Federal-State Partnership for State-of-Good-Repair for the replacement, rehabilitation, and repair of intercity passenger rail infrastructure; and $535 million for the Consolidated Rail Infrastructure and Safety Improvement program.

The Senate proposal provides higher Amtrak funding levels than a recently approved House budget bill but would grant $355 million less than what the House approved for the federal-state partnership program.

Whereas the House approved $882 million for Amtrak’s Northeast Corridor, the Senate bill contains $1,135,000. The House approved $1,463,000 for Amtrak’s network whereas the Senate bill would appropriate $,465,000.

Neither the House budget bill nor the Senate proposal contains any funding for passenger rail restoration and enhancement grants. Both chambers also omitted funding for railroad grade crossing elimination projects.

Both programs received no funding in FY2022 although he grade crossing program was authorized to receive up to $500 million and the restoration and enhancement program was authorized $50 million.

In FY2022, Congress approved $875 million for Amtrak’s Northeast Corridor and $1,457,000 for the national network.

None of the spending bill amounts include money approved in the Infrastructure Investment and Jobs Act, which is allocated separately from annual appropriations.

In a related development, the proposed Inflation Reduction Act of 2022 introduced in the Senate omits funding for high-speed rail programs.

Earlier drafts of the bill contained $10 billion in dedicated funding for electrified high-speed rail.

The Rail Passengers Association noted in a report on its website that much of the focus in the energy bill is funding the transition to electric automobiles, which RPA described as “another in a long line of subsidies for highways.”

House OKs FY2023 Transportation Funding

July 27, 2022

The House has approved an appropriations bill that includes funding for Amtrak and other rail programs.

The bill cleared the House on a 220-207 party line vote. It contains $3.8 billion in discretionary funding for rail programs, which is on top of $13.2 billion in guaranteed rail funds provided by the Infrastructure Investment and Jobs Act.

Known as the Transportation-Housing, and Urban Development budget bill, it contains a 23 percent increase in discretionary investments for public transit and passenger and freight rail.

Amtrak would receive $882 million for the Northeast Corridor and $1.46 billion for the National Network.

It is unclear what will happen to the bill in the Senate. FY2023 begins on Oct. 1, but in recent years Congress has failed to approve budget bills in advance of the next fiscal year and has kept federal funding flowing through a series of continuing resolutions.

Transportation Funding Advances in House

July 6, 2022

Federal fiscal year 2023 appropriations legislation for transportation continued last week to make its way through the House.

The House Committee on Appropriations moved the Transportation, and Housing and Urban Development appropriations bill to the House floor where it is expected to be considered later this month.

The THUD bill as it is known provides a 23 percent increase in discretionary spending for transit and passenger and freight rail.

The appropriations made no major changes in funding levels approved recently by the transportation subcommittee of the appropriations committee.

That committee approved $2.3 billion in Amtrak funding, which fell short of the $3 billion recommended by the Biden administration and the $3.3 billion sought by the passenger carrier.

Once approved by the House the THUD bill will move to the Senate. FY2023 begins on Oct. 1.

In recent years, the Senate has failed to meet the deadline, which has necessitated a series of stopgap spending bills until final action was taken.

Committee OKs Transportation Spending Bill

June 27, 2022

A congressional committee last week approved a bill that provide a 23 percent increase in discretionary spending for public transit, and passenger and freight railroads in federal fiscal year 2023.

The Transportation, and Housing and Urban Development appropriations bill was approved by the transportation subcommittee of the House Appropriations Committee on a voice vote.

The bill is expected to be considered this week by the full Appropriations Committee, which wants to clear spending bills before the July 4th recess.

It would then move to the Senate. The 2023 federal fiscal year begins on Oct. 1.

Much of the appropriations proposed by the bill are above the amounts appropriated for the current fiscal year, but below what was authorized in earlier congressional action.

For example, the bill approves $1.6 billion for Amtrak’s national network. That is an increase over the $1.4 billion appropriated for the current fiscal year but short of the $2.2 billion authorized for FY 2023.

Total Amtrak funding in the bill would be $2.3 billion versus the $3 billion proposed by the Biden administration and $3.3 billion sought by Amtrak.

The passenger carrier had said it needed that level of funding because of “the lingering effects of the COVID-19 pandemic [that] continue to affect revenue and ridership.

Amtrak said “robust FY 2023 grant funding is needed to enable Amtrak to continue operating our long-distance trains.”

The bill approved last week allocates $500 million for the Federal State Partnership for Intercity Passenger Rail program, which funds capital projects to bring facilities and infrastructure to a state of good repair, improve performance, and expand or establish new intercity passenger rail services.

The Consolidated Rail Infrastructure and Safety Improvements program would receive $630 million. This includes a $150 million set-aside to “support the development of new intercity passenger rail service routes including alignments for existing routes.”

The bill contains language that seeks to prevent Amtrak from reducing or eliminating national network service, stating that Amtrak may not “discontinue, reduce the frequency of, suspend, or substantially alter the route of rail service on any portion of such route,” except in an emergency or during maintenance or construction outages.

No funding was appropriated for the Restoration and Enhancement Grants program, which provides operating assistance grants for initiating, restoring, or enhancing intercity passenger rail transportation.

Instead, the bill says Amtrak may use up to 10 percent of its $1.46 billion national network grant for the activities outlined in the service restoration program.

Amtrak Expects to Need $1B in Annual Fed Funding For the Next Decade

May 8, 2022

Back in 2019 when the much reviled Richard Anderson was president of Amtrak, the nation’s passenger railroad talked a lot about how it was on the cusp of breaking even.

A budget estimate that Amtrak sent to Congress in March 2020 even predicted operating profits by 2025. Those profits were expected to grow over the next decade.

But that same month the COVID-19 pandemic took hold and the bottom fell out for Amtrak and other transportation providers.

America’s Railroad, as Amtrak likes to call itself, lost 97 percent of its ridership and Congress responded by providing Amtrak $3.7 billion in emergency funding in federal fiscal years 2020 and 2021 to stave off bankruptcy.

Although COVID-19 and its variants is still around, the pandemic fears have been waning and passengers are returning to the rails.

Amtrak now projects that it will reach pre-COVID ridership and revenue by FY2024, which begins Oct. 1, 2023.

Yet the passenger carrier’s most recent budget estimates submitted to Congress show a shift in the thinking of Amtrak management about its finances.

Gone are the rosy projections of operating profits. Those have been replaced with an acknowledgement that Amtrak will need federal funding of $1 billion a year in the next decade.

The Eno Center for Transportation has published an analysis of Amtrak’s latest budget estimates that provides an overview of how Amtrak now sees its finances playing out in the next several years.

That analysis can be read at https://www.enotrans.org/article/amtrak-concedes-perpetual-1-billion-year-operating-losses/

From my perspective, the most interesting and important points in the analysis written by Jeff Davis are made toward the end because they hint at a coming battle in Congress that some rail passenger advocates may not see coming.

In the past several months Amtrak supporters have been talking up the benefits to intercity rail passenger service of the infusion of money from the Infrastructure Investment and Jobs Act.

The Rail Passengers Association has touted IIJA as an unprecedented if not a once in a lifetime $36 billion investment in passenger rail.

In talking about how transformative this funding will be, RPA has oversold what IIJA is likely to produce. That could be setting up some of its members for future shock.

There is, of course, some truth to the rhetoric being espoused by RPA and other rail passenger advocates. And to his credit RPA head Jim Mathews has hinted that the gains of IIJA could be more fragile than many of his members want to believe.

IIJA has created the potential for expansion of the nation’s rail passenger network. That in turn has led to expectations that have been fed by Amtrak itself proposing an expansive plan known as Amtrak ConnectsUS that would create more than 30 new corridor services.

But expectations are not reality nor do they always become reality.

It is true that the IIJA contains funding that could help launch some of those new services envisioned in Amtrak ConnectsUS.

But what some may not recognize unless they have paid close attention is that IIJA is a capital funding program. It provides not a dime for operating expenses of a single Amtrak train.

Those expenses will be paid for by ticket revenue, public money or both.

Now Amtrak has said that it won’t make enough in ticket revenue to pay the expenses of its trains.

For most rail passengers advocates that is no big deal. They have long acknowledged that passenger trains need public funding and have sought to explain that away by saying that all forms of transportation are funded at some level with public funding.

There is some truth to that if you consider that the infrastructure used by airlines and bus companies is paid for in part with public money.

Airlines and bus companies will counter that they pay their “fair share” through user fees and taxes of the cost of that infrastructure, but that’s a debatable proposition that is at best a half truth.

The public funding of airline and bus operations does not stand out as a line item in a budget as does funding of Amtrak operations.

In his analysis, Davis makes a valid point in writing, “Amtrak can claim with some credibility that Congress, through the IIJA, chose to de-emphasize the issue of operating losses.”

He then makes a side-by-side comparison of what the federal code says about Amtrak operations before and after passage of the IIJA.

At first glance, those changes appear to put to rest the notion that Amtrak is expected to be profitable.

But read the language again. Whereas before IIJA Section  C of 49 U.S.C. §24101 said “Amtrak shall . . . use its best business judgment in acting to minimize United States Government subsidies . . .” the IIJA changed the phrasing to Amtrak shall “maximize the benefits of Federal investments.”

Nothing in the federal code requires Congress to spend money on intercity rail passenger service at all. Likewise, the federal code does not require Congress to spend whatever it takes to maintain the existing Amtrak network forever let alone spend money to expand that network.

That is a significant point because the debate in Congress is not so much about whether Amtrak trains lose money – even if some members try to frame it that way – as it is how much to spend to underwrite those losses.

Since Amtrak’s inception in 1971, some members of Congress have sought to end federal funding of intercity rail passenger service if not put Amtrak out of business.

Those efforts have uniformly failed although at times Congress has reduced its financial support of Amtrak, which in turn led to the discontinuance of some routes and trains.

The last significant shrinkage of routes and services occurred in the early 2000s, the service suspensions that occurred during the COVID-19 pandemic notwithstanding.

It is also noteworthy that those early 2000s service reductions came as a coda to the last time Amtrak proposed major service expansions, many of which never occurred.

In the Eno analysis, Davis notes that when the IIJA was adopted deficit spending was not considered by a majority of members of Congress to be a problem because the nation was still recovering from the fallout of the COVID-19 pandemic.

But now the nation is facing large scale inflation and budget deficits are one factor that drives inflation.

If, as many political pundits predict, Republicans gain control of one or both chambers of Congress in the November elections, Amtrak funding requests may face a more hostile environment.

It may be that federal law doesn’t require Amtrak trains to make a profit, but that means nothing to deficit hawks. It never has and it never will. They have beliefs about what is a legitimate purpose on which to spend public money and what is not. Intercity rail passenger service is among the latter.

And some Republicans have already signaled what they hope to do about Amtrak.

Rep. Rick Crawford (R-Arkansas) introduced the Returning Amtrak to Economic Sustainability Act, which calls for changing the language of 49 USC 24101 to replace  the word “modern in the phrase “intercity passenger and commuter rail passenger transportation” with “economically sustainable.”

The RATES act would also add the phrase “while ensuring route profitability proportional to the Federal share of investment” as well.

It is uncertain if the RATES Act would make it through a GOP-controlled Congress although it likely would receive a more favorable reception than it has in the current Congress controlled by Democrats.

But even if Democrats maintain control of Congress, lawmakers must still deal with the prospect of having to, as Davis put it, “either write the checks for the billion-per-year operating losses over the coming decade, or else use their annual platform to encourage (or require) Amtrak to pay attention to operating losses if they want to avoid writing those checks.”

That could easily lead to environments such as existed in 1979, in the early 1980s and in the late 1990s when Amtrak budget cuts resulted in service reductions.

Rather than enjoying the fruits of a second passenger rail renaissance in which the nation’s passenger train network expands, passenger train advocates will be faced with fighting to save as much existing service as they can if not having to save Amtrak itself.

Amtrak’s budget projections are filled with figures that show how much money long-distance passenger trains lose per passenger.

Those numbers have been used in the past to argue in favor of reducing if not ending federal spending on passenger trains. Don’t be surprised if those arguments surface again.

Richard Anderson is unlikely to return as Amtrak’s president but the political climate could lead to another Amtrak CEO who thinks as Anderson did and behaves as Anderson did in taking aim at long-distance trains for reduction.

Amtrak Seeking $3.3B From Congress

April 14, 2022

Amtrak is asking Congress for $3.3 billion in grant funding for federal fiscal year 2023.

The passenger carrier said in a statement that accompanied its grant request that the funding will enable it to enter a new era with a historic level of federal investment for capital projects.

CEO Stephen Gardner said funding provided by the Infrastructure Investment and Jobs Act provides Amtrak with “a clear plan to transform and grow our business.”

“Our requested FY2023 annual grant will allow Amtrak to continue operating our long-distance trains, which connect communities across the nation; to continue partnering with states to provide short-distance corridor service; and to continue normalized replacement (necessary maintenance and sustainment) of aged assets on the Northeast Corridor, all while facing new levels of uncertainty and disruption from the ongoing COVID-19 pandemic,” Gardner said in the statement.

The grant request includes $1.1 billion for the Northeast Corridor and $2.2 billion for the national network.

The budget request projects that ridership in FY2023 will be 28.8 million. During FY2019 Amtrak handled 32.5 million passengers. It carried 16.8 million in FY2020 and 12.2 million in FY2021. Expected ridership for FY2022 is 23.2 million.

Projected revenue for FY2023 is $1.98 billion in gross ticket revenue; $3.1 billion in total operating revenue; and an adjusted loss of $1 billion.

Biden Wants Increase in Transportation Spending

March 30, 2022

The Biden administration has proposed increasing funding on railroad and public transit programs in federal fiscal year 2023 in a $5.79 trillion budget proposal.

The administration sent its budget recommendations to Congress this week.

Biden proposed spending $105 billion for the U.S. Department of Transportation along with another $37 billion in advance appropriations provided for by the Infrastructure Investment and Jobs Act.

The budget calls for $4.66 billion for the Federal Railroad Administration. The agency received $2.86 billion in the past two fiscal years.

Amtrak would get $3 billion, including $1.8 billion for the national network and $1.2 billion for the Northeast Corridor.

The Federal Transit Administration would receive $16.87 billion, which includes $300 million for rail car replacement.

Some funding in the proposed FTA budget would cover work on the Portal North Bridge replacement project in Amtrak’s Northeast Corridor and $100 for engineering work on the Hudson Tunnels project between New York City and New Jersey.

Other notable transportation funding includes $2.85 billion for Capital Investment Grants, $500 million for the Consolidated Rail Infrastructure and Safety Improvements grants, $555 million for the Federal-State Partnership for Intercity Passenger Rail program, $245 million for the Railroad Crossing Elimination program, and $1.5 billion for Rebuilding American Infrastructure with Sustainability and Equity grants and the new National Infrastructure Project Assistance Grant program,

The figures for those programs do not include funding authorized by the infrastructure act approved last year. All funding proposals are subject to congressional approval.

Amtrak Gets Boost in FY2022 Budget

March 13, 2022

Amtrak will receive an increase in funding after Congress last week approved an appropriations bill for federal fiscal year 2022.

The $1.5 trillion government funding bill also enables federal agencies to begin spending money earmarked for programs in the Infrastructure Investment and Jobs Act.

That includes $7.3 billion for a rail passenger grant program to be administered by the Federal Railroad Administration over the next five years.

The FRA is in the process of creating guidelines for the program which are expected to be released in late spring when state and local agencies will begin applying for grants from the program.

As for FY2022, Amtrak will receive $875 million for the Northeast Corridor and $1.4 billion for the national network. Those figures compared to $700 million and $1.3 billion respectively that was appropriated in FY2021.

The FRA received $241 million, the Federal-State Partnership program received $100 million and $625 was approved for Consolidated Rail Infrastructure and Safety Improvements grants for FY2022

The budget bill also contains a $300,000 earmark to the City of Ypsilanti, Michigan, to construct a rail passenger station.

Located between Ann Arbor and Detroit, Ypsilanti is on Amtrak’s Chicago-Detroit (Pontiac) corridor but no Wolverine Service trains currently stop there.

Select Amtrak trains did stop in Ypsilanti, the home of Eastern Michigan University, between Jan. 20, 1975, and Jan. 13, 1984.

Rail Passenger Funding, Running Amtrak on Time, New NS President Didn’t Impress Some Workers

January 17, 2022

Bit and pieces of insights into the workings of railroad world . . .

I recently received in my email inbox a message quoting Evan Stair of the Friends of the Southwest Chief group in which he suggested that the promise of new and expanded service contained in the Amtrak Connects US plan is largely a mirage.

Stair, whose group has been promoting additional Amtrak service along Colorado’s Front Range and extending the Heartland Flyer north of Oklahoma City to connect with the Chief in Kansas, was commenting on a Bloomberg News story in which Amtrak President Stephen Gardner said the plan to add 39 new routes will require state financial support.

Amtrak has estimated the plan will cost $75 billion to implement.

In his interview, Gardner characterized the federal government as the capital partner but the ongoing operating expenses are the responsibility of the states and Amtrak.

And Amtrak has made clear that it’s responsibility to pay operating expenses will only last at best for five years. After that states will be on the hook to pay operating expenses as is the case now with state-supported corridors on the West Coast, in the Midwest and along the East Coast.

“I frankly believe the Amtrak Connects US program will result in few, if any new routes,” Stair wrote. “States are unlikely to commit to long-term operational dollars without some federal operational matches.”

Stair is probably right about that but could have gone even farther. It may not be realistic to think that states that are not now and/or have never paid Amtrak for corridor service will do so in the future even with a short-term Amtrak funding match for operational expenses.

Yes, I’m talking about you, Ohio.

Speaking of Amtrak, Canadian Pacific CEO Keith Creel told a Midwest shippers conference in Chicago last week that he was “proud” of having reached an agreement with the passenger carrier to allow for the prospect of additional passenger service on routes operated by CP and it merger partner Kansas City Southern.

As reported by Trains magazine, Creel also talked about how CP has become one of Amtrak’s best host railroads in dispatching its trains on time. It wasn’t always that way.

“Five years ago, six years ago, we didn’t lead the industry in Amtrak service,” Creel said.

He went on to say that his 30 years as an operating officer taught him that it’s not easy for a freight railroad to coexist with passenger service.

“I understand the conflicts sometimes and the tradeoffs sometimes when you mix high speed passenger rail with what is, in comparative terms, low-speed freight rail,” Creel said. “I understand the track geometry challenges, I understand the speed challenges. But I also understand that if you prioritize right, and there’s tradeoffs, and balance in a partnership, you can succeed. And that’s the approach we’ve taken at CP.”

Creel’s comments suggest that having the right attitude is key to running passenger trains on time and if CP can do it so could the other Class 1 Amtrak host railroads.

Yet CP doesn’t host as many Amtrak trains as its Class 1 brethren and doesn’t host any long-distance trains over thousands of miles.

Perhaps the best that can be expected is that the host railroads could do better than they do, but dispatching is a balancing act and there will be times when a host railroad puts its own interests ahead of avoiding delaying Amtrak for what the host sees as a relatively short period of time.

Speaking at the same shipper’s conference, new Norfolk Southern President Alan Shaw told a story of how on his first day in his new post he decided to go out into the field and meet and greet NS operating employees in Toledo, which is the largest NS crew change point on the system.

 “I wanted to thank [the employees] for their dedication to Norfolk Southern and our customers, and I wanted to get their input into how we fix service and how we continue to improve our productivity,” Shaw said.

As reported by Trains magazine on its website, Shaw said he approached some workers sitting outside the crew room.

He was wearing khakis, boots and a collared shirt and the workers thought he was an operations supervisor.

 “So I walk up and introduce myself. They told me their names, and one of the guys said, ‘Well, what do you do?’ I said, ‘Well, I’m the president’. And he looks at me, and I’m like, ‘Not Joe Biden president, but president of Norfolk Southern.’ And the other dude pulls out his phone, and he’s like, ‘Oh, yeah, yeah, yeah, I see the announcement. Congratulations!

“So that made me feel good. And then the one guy looks at me and says, ‘What craft did you come from?  . . . Were you mechanical, or engineering, or a conductor, or an engineer?’

“And I was like, ‘No, I started in finance.’ He was really not impressed with that. He goes, ‘Man, at some point, we’re going to have a craft employee running the railroad.’

“It is somewhat humbling when you go out there and talk to them, because they’ve got their own expectations.”

Shaw is right about that, but expectations are not reality. It’s possible that a future railroad president might have worked as a craft employee at an early point in his or her railroad career, but it is not realistic to think that C suite executives will be pulled from the ranks of operating or maintenance employees.

If you want to be a railroad president you need to have spent extensive time in such areas as finance, law or marketing and moved up the ranks in those departments.

Operating employees are not the only railroad stakeholders who have expectations and the expectations of some stakeholders carry more weight than those of others.

Shaw told another story about his first conversation with members of the railroad’s board of directors.

 “Their primary message to me was, ‘Don’t mess up,’” Shaw said. “Now, it was a little more forceful than that. I’ll let you use your imagination what the real verb was that they used.”

I think we can easily figure that one out.