On Tuesday, Subsidy Scope, a subsidiary of the Pew Charitable Trust, reported that Amtrak, America's passenger rail company, "lost" an average of $32 per passenger. Citing a new metric for train depreciation, the report suggested that the train line has been less than transparent in its estimation of its own profitability.
While it is interesting that the government spends an average of $32 on each Amtrak passenger, this isn't really news. Over a year ago, in fact, Amtrak president Alex Kummant stated that each passenger on the train line represents a public capital expenditure of approximately $40, and similar figures have been bandied about for years. In fact, the only truly surprising thing is that some conservative think tanks and advocacy organizations continue to criticize the corporation for its failure to turn a profit. The underlying message seems to be that Amtrak is a financial failure, and that if rail travel were privatized, it would somehow be able to make a profit.
The truth is that Amtrak is not designed to make money; rather, it is designed to provide a public service. The same could be said of the rest of America's transportation network: none of the country's transportation systems generate profit or pay for themselves. The airlines, for example, rely on a patchwork of municipal, state, and federal funding to finance the cost of airports. Meanwhile, federal funds pay for airport security and taxes pay for the FAA. Many pilots are trained by the military, and much of the avionics used in private aircraft is developed under military contract. If these costs were transferred to airline passengers, the price of a plane ticket would be prohibitive.
And what about America's roads? The highway trust fund, which is ostensibly funded by gas taxes, still receives money from Congress, while the various agencies that oversee its administration and police its passengers are all funded by taxes. Again, if these costs were transferred to individual travelers, few people could afford to drive.
Taken on a passenger-by-passenger basis, trains cost taxpayers far less than cars, planes, motorcycles or rickshaws. The big difference, as National Corridor Initiative president and CEO James P. RePass noted in a recent interview, is that "Subsidies for airlines and highways are far less obvious than Amtrak's single line item."
The Subsidy Scope study also pointed out that some portions of the Amtrak infrastructure are more profitable than others. For example, the Northeast Corridor's Acela Express makes an average profit of $41 per customer, while the Northeast Regional, which is more heavily traveled, costs $5 per passenger. In Subsidy Scope's estimation, the biggest loser in the land is the Sunset Limited, which runs from New Orleans to Los Angeles at an average cost of $462 per customer.
The Sunset Limited has long been plagued with problems and Amtrak is still working to increase its performance. However, the idea that one can parse a railway system into profitable and unprofitable lines is probably shortsighted. As Kummant noted, "it's an entire network that matters. And if you don't have an entire network, you end up with a ridiculous patchwork of short little lanes of things that make no sense from a national system." To put it another way, while certain portions of an interstate highway may be more popular than others, closing off several less-traveled miles would vastly reduce the overall effectiveness of the system, as some regions would be cut off from the grid and others would face longer, more costly routes.
RePass addressed this point, stating: "The benefit of a transportation system doesn't accrue to the system itself, but rather to the economy and to the cities and citizens it services. Pew, by looking at the cost of tickets, reinforces the notion that transportation systems have to pay for themselves." As policymakers, pundits and politicians assess the value of America's passenger rail, they need to get past the idea that it must pay for itself. The measure of a rail line's profit is the energy and vitality that it brings to an area and the commerce that it supports.
Correction: An earlier version of this article incorrectly stated that Amtrak's per passenger loss was $38. We have corrected the text to reflect the $32 per passenger figure reported in the Pew study.
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