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.
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:
- $1 trillion worth of airports, air traffic control and other foundations of commercial aviation were established before 1971 when the first federal aviation user fee was instituted;
- Subsidies continue with tax-free municipal bonds to finance airport improvements, the amounts for which are almost impossible to measure.
- The Transportation Security Administration spent $5.2 billion more in 2011 on aviation security than it took in from passenger and airline user fees (versus a $5.3 billion subsidy in 2010);
- The nation’s air traffic control system receives more than $3 billion per year from the federal treasury;
- The Essential Air Services subsidy is about $200 million per year;
- Airlines received $15 billion in bailouts after the attacks of 9/11.
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:
- Amtrak has broken ridership records in nine of its last 10 years (including 2012, estimated);
- If Amtrak were an airline, it would be the nation’s fifth-largest by use;
- Amtrak carries 150 percent more riders than Greyhound, the nation’s largest intercity bus company, which relies on a federally subsidized highway system (Amtrak relies on privately owned rails);
- In 2012, Amtrak covered 85 percent of its costs from fares up from 56 percent a decade ago, an inverse trend compared to highways and aviation in the same period.
- Amtrak’s $466 million operating grant in 2012 cost federal taxpayers half as much as it did in Amtrak’s first full year ($845.46 million in 1972, inflation adjusted);
- Meanwhile, Amtrak carried twice as many riders in 2012 (31.2 million est.) as it did in 1972 (15.8 million).
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.