Friday, November 22, 2013

Without a permanent trust fund, Amtrak could go to the dogs

Written by  Frank N. Wilner, Contributing Editor
Amtrak’s Sisyphean travails could sober a smashed sot.

Ever present is former House Transportation & Infrastructure Committee Chairman John Mica (R-Fla.)—now just a T&I Committee member—whose shtick is an enduring impersonation of an annoying hemorrhoid, as he perpetually interrupts Amtrak officers from running the railroad to absorb his screeches over the profit margin of a ham sandwich and glass of wine aboard Amtrak.

More recently, and rivaling a scene from a Marx Brothers comedy, comes Rail Subcommittee Chairman Jeff Denham (R-Calif.) introducing H.R. 2066, requiring that Amtrak devise a policy allowing passengers to bring aboard on trains traveling fewer than 750 miles their pet dogs and cats. Call it the Fido and Fluffy bill, and one can only wonder if pot belly pigs will be added as an amendment. Surely the United Transportation Union will seek an amendment exempting conductors from cleaning up the mess and from quieting the barks, growls, and meows. (Editor’s note: The animals, not Mica and Denham. Just wanted to make that clear.)

Lost on lawmakers—as was the universal ache imposed by the government shutdown—is widespread public clamor that Congress sustain a national intercity rail passenger network. Contrary to nattering nabobs in Congress resolved to zero-out federal subsidies for Amtrak, a majority of Americans associate an improved quality of life with a well-funded and efficient public transportation network. As illuminated by an October public opinion poll, even voters in the nation’s most conservative congressional districts support retention of federal funding for Amtrak.

Even the good news contains a caveat. State lawmakers, pursuant to a congressional directive—and heeding constituent wishes—signed agreements transferring responsibility from the federal treasury to state budgets much of the subsidy required to retain 28 intrastate and corridor trains (excluding the Northeast Corridor) operating on fewer than 750 mile routes. Sadly, it could be short lived, as many of the states agreeing to absorb subsidies for intrastate and corridor trains did so wary of their financial ability to support them long-term, and limited the obligation to just one year.

Worse, being whispered more loudly every day on Capitol Hill is a scheme to transfer to states the subsidy cost of Amtrak’s long-distance interstate trains. Indeed, Denham himself suggested federal spending on Amtrak could be reduced by shifting some of the costs to states. With congressional budget hawks and tax slashers in an ever-bullying mood, and virulent partisanship threatening another government shutdown over the level of federal spending, Amtrak just can’t dodge a starring role in the Perils of Pauline.

There are significant reasons why state funding of long distance trains is not feasible if a national intercity rail passenger network is to survive. Among them is existing widespread state financial distress expected to become worse as increased costs of social programs, such as Medicare and Medicaid, are shifted to states.

Case in chief against shifting the cost of long-distance trains to states is the concern that some states may not agree, or subsequently close their checkbooks. Should one state along a route refuse to pay to retain a long-distance train, other states along the route could balk at picking up the cost. Would Amtrak then be expected to abandon stops in non-participating states, or beg remaining states to pay more? Additionally, transferring to states the obligation to fund long-distance trains would require Amtrak to negotiate with dozens of states annually in difficult and delicate multi-party talks.

There is another option—creation of a multimodal transportation trust fund to encompass Amtrak, commercial aviation, highways, and transit. It was Republicans almost a decade ago who combined oversight of the various modes into a single new Transportation & Infrastructure Committee chaired by now retired Rep. Bud Shuster (R-Pa.), whose son Bill is now committee chairman. Not accomplished was ending treatment of those modes as individual stovepipes. While Denham says he is open to the notion of a dedicated Amtrak trust fund—“I’m certainly open to setting up some form of trust fund [for Amtrak], but where does the money come from?”—neither he nor Bill Shuster have yet to embrace the idea of a multimodal trust fund financed by user charges.

Consider that a penny increase in the federal fuels tax—the long sought Ampenny—would raise some $1 billion annually, which is equivalent to Amtrak’s current annual federal subsidy. In its defense, Amtrak reduces highway congestion and pavement wear-and-tear. Parallel creation of a ticket tax for Amtrak, transit, and airline passengers—user fees—would further increase the multimodal trust fund and reduce general treasury spending to the delight of budget hawks.

Granted, new taxes—even in the form of user fees—are not popular, and such taxing authority would have to be approved by the separate Ways & Means Committee. (In the Senate, highways remain the domain of the Environment & Public Works Committee, while Amtrak, aviation, and transit report to the Senate Commerce Committee, and Senate Finance Committee approval also would be required. But the T&I Committee is one powerful force in the House, and often T&I Committee initiatives influence Senate direction.)

Reality is that Amtrak is a child of the state (as is all public transit), and states, including the United States, are cash poor these days. Yet short of Jonathan Swift’s “modest proposal” (in an 18th century satirical essay) that the children be eaten by the poor, somebody must pay if Amtrak is to survive—and we know where the taxpaying public stands on Amtrak’s survival.

And maybe therein lies the answer to Mica’s fulminations over Amtrak’s pricing of ham sandwiches and Denham’s sudden affection for cats and dogs. There are many methods of hiding behind a tree—even when the buck stops at Congress’ doorstep. It’s time for members of Congress to come out from behind the tree and create a reliable and consistent source of funding for America’s passenger railroad—Amtrak.

(Editor’s note: Call it a salve for an annoying hemorrhoid.)