Posts Tagged ‘Patrick McKenna’

Debt to Amtrak Could Endanger Missouri Service

January 28, 2020

Missouri is in arrears in paying its bills to Amtrak and that might threaten the of the state-funded Missouri River Runner service between St. Louis and Kansas City.

Speaking at a hearing of the House Budget Committee, Missouri Department of Transportation Director Patrick McKenna said the state owes Amtrak $6.5 million in unpaid bills plus $11.65 million to pay for a contract to run the service this year.

McKenna said that although Amtrak has not yet threatened to stop operating the trains, it has begun charging 12 percent interest on what the state owes.

He said the interest charges are part of the passenger carrier’s efforts to break even or turn a profit.

McKenna said that the legislature has since 2010 appropriated less than what Amtrak’s contract with MoDOT calls for the state to pay.

He described the situation as an embarrassment that eventually will put the River Runners in danger of being discontinued.

Legislators have approved $9.1 million to pay the contract since 2017 and MoDOT is seeking the same amount this year.

However, the contract’s cost has risen along with operating costs and inflation from $10.6 million in 2017 to $12 million.

McKenna said MoDOT payments to Amtrak are currently being applied against unpaid debt with the remainder going toward the current contract.

He said that has been enough to cover three months of service this year.

MoDOT wants lawmakers to approve an additional $12.2 million on top of the core funding of $9.1 million in order to pay off debts to Amtrak and cover the gaps in 2020 and 2021.

MoDOT’s contract with Amtrak calls for twice daily service between St. Louis and Kansas City with eight intermediate stops.

Missouri is also served by the Chicago-Los Angeles Southwest Chief at Kansas City and the Chicago-San Antonio Texas Eagle at St. Louis.

One Missouri legislature has suggested that rather than increase the appropriation to pay Amtrak the state should consider ending paying for the service altogether.

Rep. Dirk Deaton said he recognized the River Runners serve several communities that support them, but instead of the state paying the full cost of the trains those communities should look chipping in funding as well.

Deaton said money the state is paying Amtrak comes from the General Fund, which is also used to pay for schools, roads and bridges.

He described the budget process as the setting of priorities and suggested Amtrak might not be as high a priority to the state.

Deaton noted that Missouri is taking on $300 million in debt by selling bonds to fund bridge repairs, something he said is a critical need.

Reps. Aaron Griesheimer and Deb Lavender, who represent cities served by the trains, said Amtrak service is important for tourism in the area.

Lavender said a cottage industry has arisen around people traveling from Kirkwood to Washington and Hermann to drink wine.

Griesheimer said his constituents have a passion for the service and expressed hope the legislature would approve money to pay off the debt.

If Missouri stops funding Amtrak service it might be on the hook for paying back part of the $50 million in federal funding for station improvements it has received since 2014.

McKenna said the state would have to pay back $36 million, the prorated portion of those funds.

Ridership of the Missouri River Runners was 154,417 in fiscal year 2019, which ended last September.

Although that was a decline of 8.9 percent compared with FY 2018, much of that was due to the service being suspended in May and June 2019 when Union Pacific freight traffic on the line increased due to flooding that shut down UP routes elsewhere in the Midwest.

Deaton pointed out that the state’s per-rider cost of operating the service has increased from $48 in 2014 to $53 this year.

That would increase to $124 if MoDOT pays off its debut in one year and $70 if the state paid its full contract.

He said fares between Kansas City to St. Louis range from $36 to $87 so the state is paying more for each ride than many passengers paid for their tickets.

McKenna acknowledged that Missouri subsidizes the service and that will be a central issue as legislators ponder how much state money to spend on Amtrak.

Although Amtrak sets ticket prices, McKenna said MoDOT has input on it.

He said Amtrak has increased fares in recent years but tries to balance making as much money per ride as possible while not pricing out so many people the service becomes less useful.