Conference committee sets Amtrak budget

[Golden grrl]

According to a blog at the Washington Post, a conference committee has negotiated the 2012 Amtrak budget for the mini-bus spending bill. This is the bill that keeps most agencies funded just through mid-December. However, it does set the 2012 funding for such departments as agriculture and transportation.

Specifically, for Amtrak, the blog reports that Amtrak gets $1.4 billion, but adds some limitations. Two noted controls are limits on overtime, and disallowing federal funding on routes offering discounts of over half the normal, peak fare.

see http://www.washingtonpost.com/blogs...ckage/2011/11/14/gIQARXvtMN_blog.html?hpid=z2

WaPo: Negotiators approve...

The bill awaits final reapproval by House and Senate. It likely will be considered this week, since the gov't runs out of spending authorization on Friday.

If passed, how will these limitations affect Amtrak operations?

 

[afigg]

I saw the news and dug up the details from house.gov. The text of the proposed conference agreement bill can be found at House Committee. The PDF copy of the Congressional Record may be the easiest to read with the Amtrak section starting on Page 29 of the PDF file.

My quick summary of the FY12 funding bill as I interpret it:

- Micro-management time baby on discount fares limits, overtime restrictions and in documents for Amtrak to submit.

- $466 million for operating grant subsidy. However, Amtrak will be required to submit documents, detailed financial analysis, revenue projections for EACH specific train route to the Secretary of Transportation for the Secretary to approve the grant request for each train route. Amtrak has 60 days after passage of the act to submit to the House and Senate Committees 5 year financial plans for the NEC and each corridor and LD train route. The accounting, financial, and operating departments will be very busy in the next several months.

- $952 million for capital and debt service grants in total. $271 million for debt service, not less than $50 million for ADA compliance. The Secretary of Transportation has to approve the expenditures via grant requests for EACH specific capital project. I do not see any reference to separate funding for engineering for the Gateway project. Amtrak may have to cover it out of what is left from the $952 million.

- Zero funding for high speed and intercity passenger rail projects. The $100 million the Senate had in there is gone. No GAO HSIPR report either. Will have to wait until post 2012 elections to see what the prospects for HSR going forward are. Meanwhile, there is $10.1 billion to be spent on HSIPR projects which will have to be enough to establish some momentum in the long run.

- $500 million for TIGER grants. Some of grants in prior years have gone to intermodal stations along with commuter and freight rail projects which benefit Amtrak which is why I mention it.

Bottom line is that the most serious threats to Amtrak are off the table. The question is whether Amtrak will continue to run all 15 LD trains with $466 million in subsidies. The actual operating loss for FY11 as reported in the September monthly report was $457.5 million, so if Amtrak can keep costs down and continue to increase revenue, they should be able to do so. Puts the pressure on Amtrak to improve Cost Recovery for the LD trains and get more subsidy funding from the states this year and not wait until FY13.

 

[Exiled in Express]

The discount provision boggles me. The only sale I have seen that would possibly run into violation of it is the sporadic $29 PHL-NYP 3 day sales. Everything else is a small percentage or free/diso****ed companion.

The overtime could get draconian, I see a lot of cancelled long distane trains that would have otherwise run delayed.

 

[Bob Dylan]

Good news /Bad news :angry2: !!Looks like the micro-managers in Congress are at it again when it comes to Amtrak! Too bad they dont get this concerned with all the waste in the Defense Department and Overseas so called "Wars" and in all the Contracting that goes on in WAS!

If passed the way its currently worded ,I look for Higher fares :angry2: , more delayed Trains due to crews not willing to work for "Free'(this is really silly, they are worried about $35,000??? :wacko: ) As was said, it gives Amtrak even more incentive to push for more funding of State sponsored Trains even sooner! (those who doubt if these work look at VA./Illinois/Missouri,California and the Cascades! )

I agree that "the Suits" @ 60 Mass will be burning the Midnight oil for the next few months,Im going to be optimistic enough to think that Joe Boardman has been around long enough to already have plans ready, then it will just involve inserting numbers that will satisfy the micro-managers on the comittees! Hopefully we wont see any more talk about the LD Trains eating up the money and causing the Beloved NEC to look bad!

Do think that the bargain and discount fares, especially on the NEC, will disappear! (No more buy one/get one free, $49 NEC fares etc.)All things considered it could be much worse! I think that behind the scenes that Joe Biden and the Obama Administration did some good work, even if the Repubs would never admit they "Cut a deal" which is the way Washington really works, no matter what the t-party idiots think!

 

[afigg]

The discount provision boggles me. The only sale I have seen that would possibly run into violation of it is the sporadic $29 PHL-NYP 3 day sales. Everything else is a small percentage or free/diso****ed companion.

The overtime could get draconian, I see a lot of cancelled long distane trains that would have otherwise run delayed.

I gather there are large discounts offered by some state supported corridor services for seniors, disabled. The language of the bill however allows more than 50% discounts if the loss is covered by the state subsidy. So the only place the limit applies will be the NEC and LD trains and Amtrak is not offering those kinds of discounts. Waste of time to have this in the bill.

As for the limits on overtime, this has to be someone putting it in because they have read stories about abuse of OT at local transit agencies. More silly micro-management on their part. The actual language reads (warning, warning Sausage making in progress):

"SEC. 153. None of the funds provided to the National Railroad Passenger Corporation may be used to fund any overtime costs in excess of $35,000 for any individual employee: Provided, That the president of Amtrak may waive the cap set in the previous proviso for specific employees when the president of Amtrak determines such a cap poses a risk to the safety and operational efficiency of the system: Provided further, That Amtrak shall notify House and Senate Committees on Appropriations within 30 days of waiving such cap and delineate the reasons for such waiver."

How much time and money will Amtrak managers and staff have to spend to comply with stuff like this?

 

[cirdan]

How much time and money will Amtrak managers and staff have to spend to comply with stuff like this?

Isn't it strange that the very same people who complain that government is inefficient are the ones supporting such requirements.

 

[The Davy Crockett]

"SEC. 153. ...Provided, That the president of Amtrak may waive the cap set in the previous proviso for specific employees when the president of Amtrak determines such a cap poses a risk to the safety and operational efficiency of the system: Provided further, That Amtrak shall notify House and Senate Committees on Appropriations within 30 days of waiving such cap and delineate the reasons for such waiver."

Is it me, or could the loophole in this clause be about big enough to run a train through? :unsure:

 

[amamba]

The discount provision boggles me. The only sale I have seen that would possibly run into violation of it is the sporadic $29 PHL-NYP 3 day sales. Everything else is a small percentage or free/diso****ed companion.

Actually I am really concerned about that provision over discounts. Does this mean an increase in prices for those of with monthly passes (for commuting)? The price already jumped this month to $360 from $342 BOS - PVD. If it gets much higher we will probably have to switch back to the MBTA, which frankly, sucks.

 

[Trogdor]

How much time and money will Amtrak managers and staff have to spend to comply with stuff like this?

Isn't it strange that the very same people who complain that government is inefficient are the ones supporting such requirements.

This is an example of what I ranted about in this post. Make no mistake, folks, much of what is done in the name of "making government more efficient" has the absolute opposite effect. Those in elected office that like to grandstand about how they want to "cut government waste" are incompetent or liars when they put forth requirements like this.

This is typical political BS by elected officials who have no clue exactly what they're supposed to do, so rather than defining the outcome, they define the process.

If they want to cut Amtrak funding, or cut Amtrak service, then they should just come right out and say so. If they want a certain service to run, they should say so. But this passive-aggressive crap about how you can't have overtime (but we want all the trains to run), or how they're going to legislate fares and discounts (but they want Amtrak to "operate like a business" and "minimize its subsidy requirement") really pisses me off more than the John McCains of the world who flat-out want to kill Amtrak. At least you know where you stand with him. But these spineless clowns in congress who don't want to fund Amtrak, but want to put some micromanaging strings on all the funding (which have nothing specifically to do with either the service levels or the ultimate funding requierments of the system) all should be thrown out of office a year from now.

 

[jis]

It is an unfortunate fact that everyone hates Congress as a whole but love their own representative enough so as to ensure that among the open democracies US has one of the lowest turnover rate in their legislature at election time. What the Soviets enforced by law we almost attain voluntarily unfortunately

Anyway, leaving that aside, there are additional monies in the continuing appropriation resolution that could find its way into rail infrastructure that might help Amtrak. For example, there is:

The conference agreement provides$500,000,000 for capital investments in surface

transportation infrastructure, instead of

$550,000,000 as proposed by the Senate. The

House did not propose funding for this account.

The conferees direct the Secretary to

focus on road, transit, rail and port projects.

It is conceivable that something like 7 to Secaucus or even Portal could be funded out of this account.

The conferees encourage Amtrak to carry$200,000,000 in reserves within their Operating

account, and encourage use of any favorable

ticket revenue to get to this amount

before using this favorable ticket revenue on

Capital expenses unless such Capital expenses

are necessary to ensure the safe operation

and maintenance of the passenger rail

system.

This could have an interesting effect on using ticket revenue surplus for capital acquisition or loan payments at least until the reserve is safely in place.

and here are some odious things that got dropped....

The conference agreement does not include

a requirement for the Amtrak IG to report

quarterly on Amtrak operational efficiencies

and overhead expenses as proposed by the

House as Section 207 of the Passenger Rail

Investment and Improvement Act requires

similar reporting requirements by the Federal

Railroad Administration.

 

The conference agreement does not require

Amtrak to report on plans to improve food

and beverage service and first class service

as proposed by the House

Here is what is in the Capital and Debt Service account:

The conference agreement provides

$952,000,000 for capital and debt service payment

grants to Amtrak, instead of

$890,954,000 as proposed by the House, and

$936,778,000 as proposed by the Senate. Within

the funds provided, the conference agreement

includes $271,000,000 for Amtrak’s debt

service payment as proposed by the House

and the Senate, and $15,000,000 shall be for

Northeast Corridor Gateway projects as proposed

by the Senate. The agreement adopts

the Senate bill requirement that grants

made after the first $200,000,000 be provided

only on a reimbursable basis.

Notice that there is $15 million for Gateway.

Here are the Grants that are part of the FTA new start projects that are in the appropriation:

NY Long Island Rail Road

East Side Access ............. $203,424,000

NY Second Avenue Subway 186,566,000

TX Dallas Northwest/

Southeast ....................... 81,606,000

UT Salt Lake City Mid

Jordan LRT .................... 78,889,510

UT Salt Lake City Weber

County ............................ 52,047,490

VA Northern VA Dulles ..... 90,832,000

WA Seattle University

Link LRT ....................... 104,078,000

MN Central Corridor LRT 93,144,000

FL Orlando Central Florida

.................................. 47,308,000

CO Denver Eagle ................ 140,920,000

TX Houston North Corridor

............................... 94,616,000

TX Houston Southeast

Corridor .......................... 94,616,000

UT Salt Lake City Draper 100,468,000

More as I find more stuff combing through the document....

 

[Devil's Advocate]

It is an unfortunate fact that everyone hates Congress as a whole but love their own representative enough so as to ensure that among the open democracies US has one of the lowest turnover rate in their legislature at election time. What the Soviets enforced by law we almost attain voluntarily unfortunately.

I agree that the voters do bear some of the responsibility, but certainly not all of it. There's also our partisan gerrymandering, arbitrary debate eligibility, and permanently unrestricted soft money contributions mandated by our Supreme Court. Remember, America started with a voting system that only listened to white male landowners. Over time many voting restrictions were removed and voting access was vastly improved and simplified. Thanks to those courageous changes the melting pot we see today was made possible.

However, we're now seeing partisan money pour in at levels that are truly unprecedented and many establishment politicians are now lobbying for a return to the days of more restricted voting options. Multiple jurisdictions are looking to slash early voting and after-hours access while also reducing the total number of polling locations in the name of budget cuts. They're also working to enact a whole slew of new requirements and prerequisites in the name of fraud prevention.

These changes may sound harmless or even positive at first glance, but they disproportionately impact the working class by forcing people to take time off and stand in long lines instead of voting early with more flexible hours like they could in the past. They also heavily impact students and poor people who must find time, money, and transport to obtain or renew the necessary paperwork and identifications to comply with our return to Jim Crow style restrictions.

I'm not against fighting fraud at all, but the way we're going about it here in America doesn't appear to have much if anything to do with preventing actual criminal activity and instead seems to have everything to do with trying to impact the outcome.

 

[Green Maned Lion]

Iirc the discount limitation has been in place fOr over a decade already.

 

[afigg]

Anyway, leaving that aside, there are additional monies in the continuing appropriation resolution that could find its way into rail infrastructure that might help Amtrak. For example, there is:

The conference agreement provides$500,000,000 for capital investments in surface

transportation infrastructure, instead of

$550,000,000 as proposed by the Senate. The

House did not propose funding for this account.

The conferees direct the Secretary to

focus on road, transit, rail and port projects.

It is conceivable that something like 7 to Secaucus or even Portal could be funded out of this account.

This is what was called the TIGER program. Which was funded for $527 million in FY11 and just received $14.1 billion in applications according to the US DOT. Don't know if the language describing the program differs from the past 2 years in terms of passenger rail projects. I see that $120 million of the funds has to go to rural areas, so perhaps VT and ME can get some of the FY12 funds if their Tiger III applications this year for western VT tracks and Downeaster route don't get selected. Whether part of the Portal Bridge replacement could realistically be funded from this, don't know. Some of this is likely to go to another CREATE project, if CREATE can apply. The reference on passenger rail projects could provide an opening for LaHood and the administration to provide some funding for intercity passenger rail projects to make up for the loss of the HSIPR funds.

The conferees encourage Amtrak to carry$200,000,000 in reserves within their Operating

account, and encourage use of any favorable

ticket revenue to get to this amount

before using this favorable ticket revenue on

Capital expenses unless such Capital expenses

are necessary to ensure the safe operation

and maintenance of the passenger rail

system.

This could have an interesting effect on using ticket revenue surplus for capital acquisition or loan payments at least until the reserve is safely in place.

How much reserve does Amtrak normally carry in their Operating Account? This is more micro-management.

The conference agreement provides

$952,000,000 for capital and debt service payment

grants to Amtrak, instead of

$890,954,000 as proposed by the House, and

$936,778,000 as proposed by the Senate. Within

the funds provided, the conference agreement

includes $271,000,000 for Amtrak’s debt

service payment as proposed by the House

and the Senate, and $15,000,000 shall be for

Northeast Corridor Gateway projects as proposed

by the Senate. The agreement adopts

the Senate bill requirement that grants

made after the first $200,000,000 be provided

only on a reimbursable basis.

Notice that there is $15 million for Gateway.

I see that. Good news in that it shows there is support to at least get started on engineering for the project. Getting the billions needed in several years will be the hard part.

My math on the $952 million:

$952 million - $271 million debt service - $50 million station ADA compliance - $15 million for Gateway = $616 million for capital projects. Down from $636 million Amtrak got in FY11 after the cuts. However, Amtrak is getting $420 million in direct transfers from the Treasury over the next 2 years to exercise Early Buyout Options on equipment leases which will cut debt service payments, so they may not need to spend all $271 million. Or perhaps use it to cover taking out FRA RIFF loans at lower interest rates to buy new equipment.

 

[sitzplatz17]

How much time and money will Amtrak managers and staff have to spend to comply with stuff like this?

Isn't it strange that the very same people who complain that government is inefficient are the ones supporting such requirements.

"Welcome to the Department of Redundancy Reduction Department, Welcome!"

 

[afigg]

NARP's Blog take on the FY12 budget numbers. The post is correct that the $466 million for operating is very lean, possibly too lean, if Amtrak runs into any revenue shortfalls or unexpected cost increases. As I wrote earlier, puts a serious squeeze on Amtrak to improve cost recovery. The pattern is now established. Amtrak capital grants are mostly safe, even if they are kept lower than what Amtrak needs for the NEC and to buy rolling stock. But Amtrak can't count on increases in the operating grant subsidy and should be prepared in future years for $300 to $400 million max, once the states are all funding their corridor services. Time to implement those PRIIA PIP plans for the LD trains!

What we don't know is what Boardman and Amtrak's executive board is thinking when they look at these funding numbers. The threat of a wholesale shutdown of the LD trains is pass for this year, but the executive board acting to cut an LD service is still a possibility. The Sunset Limited has to be at the greatest risk. In part because of UP blocking daily service and two, because of the Superliner equipment issues. The next year will be interesting times in Amtrakland.

 

[henryj]

The unaudited FY2011 Performance Report is out now and looking at page A 1.2 Amtrak's operating loss requirement was 457.5 million and they received from the Feds 561.9 million. So they had a surplus of 104.4 million for the year. What did they do with it? According to NARP they will get 466 million for 2012 which should be plenty to keep Amtrak running just like it is. The NARP people are notorious for beeing alarmists. For FY2010 Amtrak's requirement was 437 million and they received from the Feds 563 million for a surplus of 125 million. What did they do with that?

I am pro-Amtrak just like the rest of you, but this is a clear victory vs the zero budget proposed initially. Amtrak provides passenger service at bargain rates. Greyhound level rates in coach. Passenger rail is a premium service vs a bus and should be priced as such. So Amtrak has plenty of wiggle room to make it next year. It's just a matter of good management. If they cut service or drop trains then shame on them. If Boardman can't live within this budget then he should be replaced.

jf

 

[amamba]

Iirc the discount limitation has been in place fOr over a decade already.

Well that would be great because that means the prices won't go up any more than they already regularly creep up.

 

[jacorbett70]

A limit on discounts based on a percentage of the highest fare could limit Amtrak's ability to raise the highest fares, if the loss of revenue based on empty seats at off-peak times would be greater than the additional income at peak times.

 

[Anderson]

The unaudited FY2011 Performance Report is out now and looking at page A 1.2 Amtrak's operating loss requirement was 457.5 million and they received from the Feds 561.9 million. So they had a surplus of 104.4 million for the year. What did they do with it? According to NARP they will get 466 million for 2012 which should be plenty to keep Amtrak running just like it is. The NARP people are notorious for beeing alarmists. For FY2010 Amtrak's requirement was 437 million and they received from the Feds 563 million for a surplus of 125 million. What did they do with that?

I am pro-Amtrak just like the rest of you, but this is a clear victory vs the zero budget proposed initially. Amtrak provides passenger service at bargain rates. Greyhound level rates in coach. Passenger rail is a premium service vs a bus and should be priced as such. So Amtrak has plenty of wiggle room to make it next year. It's just a matter of good management. If they cut service or drop trains then shame on them. If Boardman can't live within this budget then he should be replaced.

jf

Ok, I've got to ask...is this the September, 2011 report or a new one?

 

[jis]

I am pro-Amtrak just like the rest of you, but this is a clear victory vs the zero budget proposed initially. Amtrak provides passenger service at bargain rates.

What zero budget are you talking of. Even the worst of the House budgets was way more than zero. The bargain rates are seen only on LD and state subsidized trains. NEC is no bargain rates by any measure, and that is the only one that runs above rail surpluses. The LD trains are in deep hole above the rail notwithstanding all the huffing and puffing of URPA on that matter.

 

[RRUserious]

I guess the real question, perhaps that won't get answered by the news, is "how much subsidy exists for all forms of transportation, and are they passing out the pain in every direction?" The freaking out over the deficit and debt could have been more justly started in 2001 when the big tax cut occurred. The living on plastic phenomenon isn't new at all. So if the deficit is more than just a convenient political issue, let them shrink subsidies across the board.

On the other hand, some things have to be investments. Living from budget to budget will simply give us a nation with a shrinking GDP as the infrastructure necessary to produce goods and services wears out. No business is run that way unless it is in a dying industry. If we are to "run it like a business", then we have to make our budget decisions with the 20 year or 50 year view, not just till the next election is past.

 

[afigg]

The unaudited FY2011 Performance Report is out now and looking at page A 1.2 Amtrak's operating loss requirement was 457.5 million and they received from the Feds 561.9 million. So they had a surplus of 104.4 million for the year. What did they do with it? According to NARP they will get 466 million for 2012 which should be plenty to keep Amtrak running just like it is. The NARP people are notorious for beeing alarmists. For FY2010 Amtrak's requirement was 437 million and they received from the Feds 563 million for a surplus of 125 million. What did they do with that?

Don't know what the regulatory and statutory restrictions are on what Amtrak can do with the annual operating grant subsidy, but I expect they spent the surplus on other things. The net book loss for Amtrak in FY11 (preliminary numbers) was $1,344 million which was adjusted down to $457.5 million actual operating loss. Amtrak may have used the surplus to cover salaries & wages, cost overruns, advertising, overhead. Amtrak is not flush with money so it would make sense for them to use it all.

The cut to $466 million in FY12 will mean that the surplus is gone, so Amtrak won't have the extra operating grant funds to use.

 

[AlanB]

I guess the real question, perhaps that won't get answered by the news, is "how much subsidy exists for all forms of transportation, and are they passing out the pain in every direction?" The freaking out over the deficit and debt could have been more justly started in 2001 when the big tax cut occurred. The living on plastic phenomenon isn't new at all. So if the deficit is more than just a convenient political issue, let them shrink subsidies across the board.

Not sure about planes, but according to Subsidyscope we drivers only cover 51% of the Federal outlays for the Interstate Highways via the Federal fuel tax. Amtrak on the other hand between fares, state fees, contract services, rents, interest, etc. covered 69% of it's 2010 budget; leaving 31% for the Fed to pick up.

Just in the last 3 years $62 Billion has been transferred from the General Fund into the Highway Trust Fund. Amtrak in 40 years has just topped $40 Billion in subsidies from the Fed.

And of course most local streets are paved with property taxes, not fuel taxes.

Finally, seeing as how the Federal fuel tax was never intended to pay for highways (it was enacted in 1932 to help pay down the National debt), it could be argued that everything to the highways is a subsidy. That would mean that the Interstate Highways are probably responsible for at least $2 Trillion of the national debt. As an aside, even though Congress "borrowed", "redirected", "stole" pick your favorite word the fuel for the highways, the 1956 Highway Act called for the fuel taxes to revert back to paying on the debt in 1972. Congress however has never seen fit to actually do that.

 

[Anderson]

Alan,

I know I'm about the fourth person to ask this, but at least last year, Amtrak's operating loss less accounting tricks (i.e. depreciation in Amtrak's case) was far less than its subsidy. What happened to that money? Did Amtrak just never get the cash on hand, or did it get to put it in an account somewhere?

 

[henryj]

Ok, I've got to ask...is this the September, 2011 report or a new one?

Anderson, the performance reports are on the Amtrak web site under the News & Media link located at the bottom. From that screen choose Reports & Documents located on the left. Monthly Performance reports are at the bottom. And yes it's the September 2011 report which contains the table for total FY 2011.