Road/air subsidies: huge, growing & safe; Amtrak’s are small, shrinking & attacked

Federal funding for transportation has grown since 1956 for highways & aviation, but not for rail. Rail users now pay 85% of operating costs; highway and aviation users pay only half of their mode's operating costs, according to the Pew Research Center.

Some graphics tell a story better than words. The above graphic from the Northeast Business Alliance does that very well. It shows how tiny our nation’s federal funding support is for rail and how out of control federal spending is for highways and aviation.

Yet rail is constantly under attack by so-called budget hawks who claim we’re spending too much on trains. And this year has seen a renewed assault. Why? For several reasons…

1. Because of how Amtrak is subsidized (its operations) is very different from how its highway/aviation competition is subsidized (their infrastructure), making Amtrak more vulnerable to attack.

2. Because of slight-of-hand misinformation by highway/aviation special interests to keep you focused on the flea instead of the elephant. Every bit of pavement, from “free” parking lots to streets to highways to airport tarmacs and runways is massively subsidized to encourage their utmost use even when trains and transit might carry many trips more effectively and efficiently.

3. Because in this highly partisan era, any public investment (like rail) that one political party supports draws immediate opposition from the other party. Sadly, as recently as 2000, support for more passenger rail investment was a plank in both major parties’ political platforms.

By special interest or ignorance, Amtrak is painted as a huge consumer of subsidies. Yet, not only are the total amounts for the overall rail system much less, but so is the overall subsidy per trip — especially as annual miles-driven by Americans in 2010 (2.97 trillion, the most recent data) have fallen below 2004’s data (3.05 trillion), according to the Federal Highway Administration.

The Pew Research Foundation found that, of each trip taken by highway (cars or buses), users paid only 51 cents on the dollar to use the federal highway system. The federal government provides the remainder. This is a decline from 50 years ago when motorists paid 72 cents of every dollar of cost for using the highway system.

User contributions (gas taxes, etc.) to highway system costs fell to just 51% by 2008, according to the Pew Research Foundation. That preceded at least four years of federal government appropriations totaling $53.3 billion from the general fund of the Treasury to bail out the Highway Trust Fund made insolvent by declining driving since 2004 and addition of more lane-miles.

This also does not include $29 billion in federal stimulus funding for roads, which comes from non-user sources. Nor does it count local streets and roads, the use, maintenance, drainage and emergency response of which is sustained mostly by property and income taxes, not by direct user contributions.

If motorists paid the full costs of their trips when making them, rather than every April 15th, more Americans would likely choose more diverse ways of traveling (which can be privatized with fewer subsidies sustaining their competition) as well as pursue more transit-friendly, walkable lifestyles. Roads constitute one of the biggest tax burdens we face.

Aviation also receives significant taxpayer benefits in many forms:

Even with these subsidies, the airlines are in a nosedive. Between 2000-2009 (the last year for which the Air Transportation Association provided data), the U.S. airline industry lost a combined $55.5 billion!

“If capitalists had been present at Kitty Hawk when the Wright brothers’ plane first took off, they should have shot it down,” said famous investor Warren Buffett.

Meanwhile Amtrak’s financial performance has been on the upswing:

Yet, so-called budget hawks claim to want passenger rail 100 percent privatized — a unique scenario in the operations-infrastructure transportation relationship of today. Only half of this relationship is privatized for aviation, highways and passenger rail. For aviation and highway users, privatization exists above the pavement — the operations. For passenger rail, privatization exists below the wheels — the infrastructure.

When  some members of Congress ask only Amtrak to privatize 100 percent of its operations, it is an unfair double-standard intended only to shut down the railroad. Ironically, it comes at a time when the financial performance of its heavily subsidized competition is dwindling and Amtrak’s is on the ascent. And perhaps that’s why highway and aviation interests, as well as their Congressional mouthpieces are so jealous of Amtrak that they want it dead?

Time for you to speak up. Contact your Congressperson or Senators today and tell them to reward Amtrak for its performance, not dismantle it in the pretense of privatization.


2 Comments to "Road/air subsidies: huge, growing & safe; Amtrak’s are small, shrinking & attacked"

  1. Rimantas Aukstuolis's Gravatar Rimantas Aukstuolis
    September 25, 2012 - 12:07 PM | Permalink

    I confess, I enjoy trains so I am prejudiced. However, as a banker, there is a hard nosed business side to me as well. I travel for business purposes, mostly around the eastern US. Air travel has become less reliable and more expensive as time goes on. So much so that getting in and out of the New York area from Cleveland is to be avoided. My colleagues and the large corporate community in Cincinnati now use a cobbled together air charter service to get to and from Chicago, New York and Charlotte; given that the Cincinnati/Delta Faustean hub relationship is destroying reasonable air service to southwest Ohio. Rube Goldberg air travel routings which add hours, if not days to business trips in order to make them allowable to corporate travel expense policies are commonplace. In spite of all the air subsidies, I’m not sure I would lend money to any airline, given their floundering business models. Something is broke. We don’t necessarily need “high speed rail” but a reliable, clean, all weather train which traveled faster than a car on a highway (say 100mph), would do fine for business on most routes under 400 miles. Otherwise we will strangle on an overburdened air transport system which is trying to do more than it’s supposed to and wasting gobs of money and our time doing it.

  2. David W. Doll's Gravatar David W. Doll
    September 25, 2012 - 2:05 PM | Permalink

    Great article! But how can the polititions be convinced? Public perception has been swayed by the auto and airline industries. I suggest that all right-of-way be government and all RR cars, etc. be commercial. RR would win the fare war hands-down.

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