Amtrak Improves Transparency, Provides Lawmakers a Clear Choice


Amtrak's latest budget request to Congress proposes a new funding structure that would allow lawmakers to better understand the true funding needs of Amtrak, thus providing them with a clear choice in how to support the railroad. In the past, Amtrak has been provided budgets that delineate operational and capital expenses, masking the success and failure of specific routes into an overall net operating loss. Amtrak is now proposing a more transparent funding structure that shows the true costs of Amtrak's various business lines, which illustrates the $300 million profit the Northeast Corridor (NEC) makes, and the loss at which the state-supported (below $100 million) and long-distance (over $600 million) routes operate. The budget request would allow Amtrak to end the subsidization of the money-losing routes with NEC profits and instead invest that money back into NEC capital projects with additional federal capital support. The routes that require federal operating subsidy, the state-supported and long-distance routes, would be funded separately thus giving lawmakers a choice to either continue Amtrak service as it exists today or cut the operation subsidy.

Ultimately, the budget is all about unbundling costs. The net operating loss caused by the federally-mandated long-distance routes should not be used as ammunition by lawmakers to limit or eliminate support for Amtrak. If the federal government wants Amtrak to continue operating the long distance routes, they should help fund the full cost of those routes. The NEC should not suffer because of the funding shortfalls of the less profitable corridors. Instead we should reinvest NEC profits into NEC assets to improve its infrastructure and allow it to continue to expand in the growing Northeast megaregion.

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