Amtrak Loses A Ton of Money Each Year. So What?
Over at the Washington Post’s Wonkblog on Friday Brad Plumer got some attention for a post titled Amtrak loses a ton of money each year. It doesn’t have to.
That’s technically true. It doesn’t have to lose a ton of money each year. But so what if it does? The point of transportation isn’t to make money, it’s to provide a public service and make it easy for people to get around. All forms of transportation are subsidized, so why should Amtrak be singled out?
But I get ahead of myself. Let’s see what the post actually says:
First, there are Amtrak’s shorter passenger routes that run less than 400 miles and tend to connect major cities. Think of the Acela Express in the Northeast, or the Pacific Surfliner between San Diego and Los Angeles. These 26 routes carry four-fifths of Amtrak’s passengers, or 25.8 million riders per year. And they’re growing rapidly. Taken as a whole, these shorter routes are profitable to operate — mainly because the two big routes in the Northeast Corridor earn enough to cover losses elsewhere.
Then there are Amtrak’s 15 long-haul routes over 750 miles. Many of these were originally put in place to placate members of Congress all over the country, and they span dozens of states. This includes the California Zephyr route, which runs from Chicago to California and gets just 376,000 riders a year. All told, these routes lost $597.3 million in 2012.
Well, the long-distance routes were originally put in place 150 years ago because that was the entire point of transcontinental rail – to get people from one part of the country to another. Amtrak didn’t originate these routes, they just continued operating them after the National Railroad Passenger Corporation was created in 1971.
Those routes have been continued not solely because members of Congress want it, but because it is just smart to have passenger trains connecting America. As the climate crisis continues to worsen, it makes sense to not only maintain long-distance passenger rail service, but to improve it by electrifying the trains, adding more trains on existing routes, and bringing back service on other routes. If America is going to have passenger rail, shouldn’t we have a genuine national network, rather than small disconnected pieces of service everywhere?
One point to be made here is that the long-haul routes don’t have “low ridership,” despite what the post implies. Many of these trains, like the Coast Starlight, routinely have a large percentage of the seats on the trains filled. Ridership would rise if more trains were operated, and with more trains comes more profit. One reason that the short haul routes are more profitable is they have more trains, leading to not just more revenue but also a reduction of operating costs as a portion of an individual fare given economies of scale.
Of course, other forms of long-distance transportation face similar issues. Do the long stretches of often empty interstate freeways pay for themselves? Not likely. But the post continues on with the assumption that something needs to be done about the money-losing but still valuable long-distance routes:
So what can be done? The Brookings report argues that Congress should arrange a deal with the states for these 15 longer money-losing Amtrak routes. If a route is losing money, then the states along its path should negotiate how best to provide financial support and fill the hole. (Under the Brookings plan, they’d be allowed to use federal transportation funds.) If the states can’t or won’t chip in, then the routes get pared back.
As it happens, this sort of arrangement is already in place for Amtrak’s 26 short-haul routes — Congress set it up back in 2008. States have already been supporting these shorter routes, and this fall, they’ll have to increase their share. That’s expected to reduce Amtrak’s operating losses by a further $180 million. The Brookings report essentially argues that Congress should set up a similar deal for longer routes — a complicated but doable task.
Even if you think that the long-distance routes are a financial problem that needs to be addressed, I don’t see how dumping the costs onto the states is any sort of solution. States have less fiscal flexibility than does Congress. It’s been the job of the federal government to provide for interstate travel infrastructure for about the last 200 years, although the turn away from that is further sign of the inherently Jacksonian nature of today’s political opposition to government spending.
A national rail network should be nationally funded. Whether or not that network makes money should be much, much lower on the priority list. It’s OK to say we should continue funding, and expand, long-distance passenger rail service even if it never turns a dime in profit. Transportation infrastructure creates its own value in benefits to communities along the route, in money saved for travelers over driving or flying, and in carbon emission reductions.
Figuring out how to fund additional passenger rail service, from a local streetcar to a national bullet train network, overnight long-distance Amtrak trains, and everything in between, is an important matter. But insisting that passenger rail turn a profit, unlike any other form of transportation in America, or be dumped off onto states with less ability to fund their operations is neither necessary nor sound.