WASHINGTON — According to the Washington Post, President Bush, listening to Transportation Secretary Norman Y. Mineta outline his plan for the future of the passenger train, interrupted to say, “Norm, do you remember the job I had before I came here?”
His point: As governor of Texas, Bush had seen the government dump federal budget responsibilities on states with little consultation, guidance or time to prepare. Mineta remembers Bush observed that states are having a hard time financially, “and you want them to participate in this?”
Bush apparently was persuaded that, if done with full consultation over a long phase-in period, states should have a financial stake in the passenger train. So transferring some of Amtrak’s costs to the states was a key element when Mineta several weeks later laid out basic principles for overhauling Amtrak.
State governments need look no farther than Mineta’s home state of California for an example of how state participation can work. And 11 other states already support Amtrak service to some degree.
But the fact that the president initially raised his eyebrow to what may be the easiest of the proposed Amtrak structural changes to get through Congress shows just how difficult it will be to meaningfully restructure the passenger railroad and lessen the burden on the federal treasury.
Amtrak was saved from bankruptcy and shutdown last week by a $100 million federal loan, keeping it running into August, and Congress returned this week to grapple with how to keep Amtrak operational through the fiscal year that ends Sept. 30. As a condition of the loan, Amtrak agreed to administration requests for “reforms” that were relatively easy to swallow.
The larger battle lies ahead when the administration demands more fundamental changes, such as turning the Northeast Corridor over to a “public partnership” or contracting out one or more routes to see if private enterprise can run trains efficiently.
Any move to franchise out an Amtrak route, even as a pilot project, will be met with strong rail union opposition. Forming a government “partnership” to own the Northeast Corridor is so complicated and already has generated such opposition that even the administration is talking of it as a long-range project. And a plan that even hints of doing away with any long-distance trains on the grounds they are merely creatures of political pork will meet vociferous congressional opposition.
Deputy Transportation Secretary Michael Jackson said he understands the difficulty of the task, but that Amtrak’s current business model is “broken.” The railroad has lost money throughout its 31-year existence, including $1.2 billion last year, and has acknowledged it has no hope of becoming operationally self-sufficient — the five-year goal Congress set in 1997. Amtrak President David L. Gunn said Thursday the railroad will lose at least $1 billion this year.
“We must have some more coherent way of deciding what we can do and should do,” Jackson said.
California’s Commitment
In many ways, the groundwork is already laid for a much greater state role in the future of intercity passenger trains. And the states themselves have led the way.
Led by California, a name synonymous with the freeway, states that grew impatient with Amtrak’s pace of passenger train development elected to use taxpayers’ money to develop service themselves.
Realizing that their state had to begin dealing with congestion, California officials began their push into passenger rail in 1976, contributing $1 million in capital funds to improve train facilities.
Funding gradually increased, and about a decade ago, the state markedly increased its passenger train program, ramping up from $1.4 million in capital spending in fiscal 1987 to $7.7 million in fiscal 1988, and $158.1 million by fiscal 1992. Along the way, State Sen. James Costa pushed through three ballot initiatives for $2 billion in bond issues for rail, and two of them passed. Many counties also have passed options to increase their sales taxes for transportation, just as Northern Virginians are being asked to do in November.
California even bought its own locomotives and big-window double-decker passenger cars with plenty of room for bicycles and wheelchairs, calling them “California cars.” California now has the second-, fourth- and fifth-busiest Amtrak routes — Los Angeles-San Diego, Sacramento-Oakland-San Jose and Oakland-Bakersfield. The Northeast Corridor, covering Washington, New York and Boston, is by far the busiest Amtrak route.
After Gov. Gray Davis (D) entered office, passenger rail capital expenditures more than tripled to $105.6 million in fiscal 1999 from the previous year, and are expected to hit $354.5 million in the current fiscal year. That’s still only a relatively small part of the state transportation budget of more than $10 billion. California pays a portion of operating losses too, but with the growth in passengers, the average state taxpayer operating subsidy per rail passenger in California is only about $9.15, far less than the federal government now pays on many Amtrak services.
“He [Davis] saw the opportunity to make a dramatic change,” said California Transportation Secretary Jeff Morales, who spent years in Washington as a Senate staffer and then went to the Chicago Transit Authority.
California, with about 8 million Amtrak riders in fiscal 2001, is now second only to New York’s 10.4 million. Its intercity trains have become part of a large network that also includes commuter trains, light rail, subways and connecting buses.
“I am trying to give people options,” Davis said in an interview.
Other states also have intercity passenger train programs. Washington state bought its own Talgo tilt trains years ago, and runs a well-patronized service from Portland, Ore., through Seattle to Vancouver, B.C. Other state support is as extensive as Illinois’ funding of several routes out of Chicago or as small as Oklahoma’s funding of a single Oklahoma City-Dallas daily train. Almost all state-supported trains are operated by Amtrak.
Not all states have been as successful as California, Washington and Illinois. For instance, North Carolina continues to support a train from Charlotte to Raleigh although ridership has not lived up to expectations. And Missouri this year almost canceled its funding for St. Louis-Kansas City trains.
Going Slow on Change
Administration officials said state participation, like the other elements in their overhaul plan, will not simply be imposed on the states and is open to discussion.
“I work for a secretary who was a mayor, and he works for a president who was a governor,” Jackson said. “We recognize it can’t happen overnight.”
While he sharply disagrees with several elements of the administration’s plan, Amtrak’s Gunn supports state funding because it imposes budget discipline and is not just another grab for federal funds.
Gunn wants to repeat the California Amtrak experience somewhere else in a smaller way to prove that it can be done. That means working with states to pick one or two routes on which to build higher-speed frequent passenger service — nothing as elaborate as a French TGV (a high-speed train), but a diesel-powered service capable of speeds up to 110 mph with at least hourly service.
“I’d like to see some success that doesn’t cost an arm and a leg,” he said.
But before he can even begin moving on his plan, Gunn seems destined to be embroiled once again in a philosophical battle over Amtrak’s future.
The administration agreed it will not ask for additional “reforms” when Congress considers more emergency funding to get through the rest of this fiscal year. But Jackson said unspecified changes will be requested when lawmakers consider Amtrak’s request for $1.2 billion in fiscal 2003.
“The administration would like to see some substantive down payment on true reform as part of the fiscal 2003 budget,” Jackson said, adding that would be the price for administration agreement to anything larger than the $521 million now in Bush’s budget. Amtrak has contended that amount would not be enough to fund operations for the year.
Then, as part of a new five-year Amtrak authorization bill, which probably won’t come up till next year, Jackson said the administration will want a more comprehensive plan. But he emphasized that such a plan will be worked out only with full consultation with everyone involved including the states, labor unions and Amtrak.
“We’re looking for real reform, and we’re willing to build a plan for reform that is implemented with discipline and accountability, but not overnight,” Jackson said.
Private Operators’ Role
Franchising out routes to private operators is part of the administration plan, but it is unclear what the administration means by that. It’s possible that one popular long-distance route would be picked to determine whether a private operator could run it at an operating profit through efficiencies and labor cost savings.
But would there be a federal contribution to capital expenditures? Would the private operator be included in Amtrak’s reservation system and at what cost? Would the train be considered part of the national passenger rail system, or would it be a luxury cruise train such as the profitable American Orient Express or one devoted to scenery such as the Rocky Mountaineer in Canada?
Also, the new operator would have to be given Amtrak’s operating rights over freight rails — a prospect that makes the freight railroads nervous.
Still, Jackson said, “It’s hard for me to believe we can’t do a pilot test.”
The administration also has raised the possibility of contracting out food and reservations services, among other support functions.
Many in Congress fear that “reform” is just another word for abandoning politically popular long-distance trains, but Jackson and Mineta said that isn’t necessarily so. They said that is why they want at least a demonstration project of private enterprise operation.
And if states are willing to help fund the trains, then they will continue to run, Jackson said.
But unlike California and the other states that now sponsor rail service, a long-distance train would require the agreement of many states. What if several states are willing to pay, but one state won’t?
“Just don’t open the doors,” Mineta said. In other words, let the train pass right through that state with no passenger stops.
That probably wouldn’t be practical. But Mineta said it probably would never come to that.
“They’re going to pony up to the bar,” Mineta said. “I think they’ll see the benefit and will want to be part of the system.”