RailPAC Endorses the Laney Plan for Amtrak with a few Reservations   July 4th, 2005

Rail Passenger Association of California Board of Directors, Adopted June 4, 2005.

Early arrivals at the RailPAC meeting on June 4 at JLS in Oakland listen to guest Gene Skoropowski, Managing Director of the Capitol Corridor and a NARP director. Left to right around the table: Bill Lindley, RailPAC director/website designer and Treasurer of the Arizona Rail Passenger Association; Jim Clifton, RailPAC Treasurer; Richard Silver, RailPAC Executive Director; Mr. Skoropowski; Marcia Johnston, RailPAC director; guest Bob Conheim, “Lord Mayor” of the Capitol Corridor Riders group and a NARP director; Jim Salvador, a RailPAC member and NARP director. RailPAC VP James Smith and other directors, including Art Lloyd and Bruce Jenkins, member George Gaekle and others arrived to participate in the discussion and endorsement of the Laney Plan. Photo by Russ Jackson, RailPAC Secretary


  1. ENDORSEMENT

    In the interest of national security and the provision of alternate forms of transportation, RailPAC endorses, with some reservations, the “Amtrak Strategic Reform Initiatives and FY06 Grant Request,” calling for “rebuilding America’s Passenger Rail System,” as submitted to the Congress by the Amtrak Board of Directors, its Chairman David Laney, and President David Gunn in April, 2005.

    By now most every passenger rail advocate knows Amtrak now faces a different type of crisis, and one larger than those that have come before. While “passenger rail” has broad support in the country, “Amtrak” has become a target, and solutions are not limited to just a lack of funding. Amtrak is said to be on the verge of bankruptcy, but it is counterproductive for this idea to be widely circulated. The threat of a shutdown if it does not get its budget request is not helpful to its preservation now.

    RailPAC always favors continuing passenger rail where it is economically viable. We vigorously support the California state rail program. But, for 20 years we have been critical of Amtrak’s financial records that tend to make the long distance trains’ performance look worse than it really is. We support national reforms that will make passenger rail more fiscally viable, that reveal the real costs of running these important long distance trains, and that show the drain on the national system of the costs of running the Northeast Corridor (NEC).

    We have reserved endorsement on the proposed changes to the Railway Labor Act and the placement of new employees under Social Security. Those points must be decided in the negotiation process.

  2. RATIONALE

    Below are listed the ten main points of the Amtrak Reform Plan as submitted by Chairman Laney and President Gunn in April, and RailPAC’s comments follow each.

    1. Adequate funding for Amtrak in FY ’06. Amtrak has requested $1.82 billion for fiscal year ’06, including $787 million for capital infrastructure projects, $560 million to support train operations, $278 million for service on existing debt, $175 million in working capital and $20 million for transition costs for the reforms. Last year Amtrak received $1.2 billion in federal money to spend above the $2 billion in tickets it sold.RailPAC: Of the $787 million, almost all of it goes to infrastructure it owns in the NEC, but that is not pointed out publicly. Both the NEC and the long distance trains deserve fair support for current and future needs.
    2. Establishment of a federal capital grant program for state investment in intercity passenger projects, 80% federal, 20% local match. There is no such program currently.RailPAC: We favor this action. California currently pays far more than the 20% local match, so this new program must not cause California any disadvantage in entry to the program. Interstate highways now receive up to 88 % federal match.
    3. The federal government through Amtrak would be responsible for bringing the NEC up to a state of good repair. It is politically unthinkable that the affected states will do this on their own or in conjunction with each other, or agree to any such concept.RailPAC: We favor this action, but there must be fully transparent accounting of assignment of these costs to NEC and state supported intercity services.
    4. Amtrak would remain a vertically integrated company, i.e., corridor maintenance would not be separated from operations.RailPAC: Maintenance costs not associated with the ownership of the NEC are fine to charge to the trains that run on it, just as are costs associated with running the California corridors. We oppose charging the long distance trains for corridor related infrastructure costs when they are paying the freight railroads access charges. We also support more train level responsibility rather than total centralized control.
    5. Amtrak would retain its five businesses: state corridors, long distance trains, NEC operations, infrastructure and ancillary businesses.RailPAC: We agree, as long as the costs for one are not secretly charged to the others except for common overhead costs. Transparency is vital here, so a total revelation of the $3 billion costs of the Acela program would be highly desirable, for instance, as would be a thorough review of NEC operating practices involving multiple trains serving the same markets too often, resulting in low load factors.
    6. Performance targets would be set for long distance trains, and those requiring more subsidy than these standards would also require additional state or federal subsidy, or be discontinued.RailPAC: We support this concept as long as there is no cancellation of trains that fail to meet the criteria immediately. We do NOT support charging the states for the operation of “national system” long distance trains under any circumstances other than for stations and related items. We support two kinds of criteria: 1) passenger related standards (cleanliness, food service and quality, and on time performance) and 2) fiscal criteria, looking not just at ridership, but at revenue passenger miles (to reflect trip lengths) and revenue, and an honest list of costs of operation. Each federal dollar invested in the long distance markets produces several times more revenue and transportation “output per dollar invested” than any dollar sunk into the short corridor markets. Amtrak must redirect a much larger share of available investment capital towards the long distance markets that have consistently sold-out trains.
    7. Changes to the Railway Labor Act.RailPAC: We RESERVE a blanket endorsement of this element, but we WILL NOT SUPPORT any changes to on board staffing of trains that have the potential to affect the safety of the trains and a high level of service for passengers. We believe there are opportunities for improving both economics and work conditions. Any work rule changes must be thoroughly vetted through the negotiation process and be fair to the affected employees as well as the company.
    8. Place new employees under Social Security rather than Railway Retirement.RailPAC: We RESERVE a blanket endorsement here, too, as it will have a major affect on the future of the Railway Retirement program. This must be fully coordinated with that agency, the affected freight railroads, and railway labor.
    9. The Plan envisions that there would be a growth in competition in the industry for both services and possibly operations. The states would become the purchaser and have the right to select the most efficient operator.RailPAC: We support this concept for corridor operations, but ask, “Can a private operator do it for less and provide more and better service?” The competition factor should be tested first on a new corridor operation and where it has the support of the freight railroads.
    10. Amtrak’s debt of some $3.8 billion would be assumed by the federal government, thereby removing the need for nearly $300 million in annual debt service.RailPAC: We support this idea, as politically challenging as it may be on top of its budget request for next year. Amtrak should never find itself in this kind of debt again.
This entry was posted on Monday, July 4th, 2005 at 3:13 PM and is filed under Issues.