COVID Relief Bill: What’s in it for Passenger Rail?Written by David Peter Alan, Contributing Editor
Here’s a closer look at the provisions and what they could mean for agencies, advocates and riders alike.
Everybody who manages, or even rides, Amtrak or transit in this country knows that we have lost much of it since the COVID-19 virus began ravaging the nation and the world. Railway Age and sister publications Railway Track & Structures and International Railway Journal documented this decline as it happened last spring. Ridership and revenue on Amtrak and on transit everywhere have plummeted, and both “America’s Railroad” and America’s transit have suffered.
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) last year gave $24.9 billion to transit and an additional billion to keep Amtrak going. The second relief package from December added another $14 billion for transit and another billion for Amtrak, but these infusions of funds will not last long, and our country’s non-automobile transportation remains in trouble.
Many individuals, families and businesses remain in trouble, too. In response to the continuing situation, Congress and the Biden Administration are calling for broad relief in this year’s federal budget (Fiscal Year 2021, which ends Sept. 30). Railway Age provided a preview of the provisions in “House Transportation & Infrastructure Draft Legislation: $30B in Transit Relief” on Feb. 9; here we will look deeper.
A Look at the Political Process
Because the new relief will be provided as part of the Senate budget reconciliation process, rather than as a “regular” bill, it can be passed with a simple majority. Most Senate bills require 60 votes for passage because members of the minority can filibuster a bill if they choose. Even with only a simple majority required, the best case for Democrats would be for all 50 of them to vote for it—including the fiscally conservative “blue dogs” like U.S. Sens. Krysten Sinema of Arizona, Jon Tester of Montana and Joe Manchin of West Virginia—and Vice President Kamala Harris would break the tie in her capacity as President of the Senate. The House proposed something similar last year in H.R.-2716 (which was not considered in the Senate), and it is in accord with the Biden Administration, so there is some likelihood that it will pass and that a number of amendments designed to defeat its purpose will not go through.
The markup was completed Feb. 10. House T&I Chair Peter DeFazio (D-Ore.) issued a statement that concentrated on the benefits to transit and other employees, saying: “The proposal provides resources to transit systems of all sizes, from major metropolitan areas that have experienced steep ridership declines, to small rural bus systems that serve as a lifeline for senior citizens. It also provides dedicated resources for paratransit providers, tribal transit and intercity buses.” He continued: “Investing in transit doesn’t just help transit workers. It helps 2.7 million front-line workers who rely on public transit to get to their jobs. That includes over 750,000 doctors and nurses, 125,000 grocery store clerks, 50,000 postal and delivery workers, and 110,000 first responders and members of the armed forces.”
DeFazio also mentioned the difficulties that transit providers are facing today: “But transit agencies across the country face a shortfall of nearly $40 billion, driven by ridership declines that averaged between 65 and 80 percent last year. Agencies have exhausted the relief funds provided by Congress in March, and have serious operating cost deficits that far exceed the amounts provided in December.” In that part of the statement, he tacitly acknowledged that the proposed $30 billion infusion of funds to keep transit going would fall $10 billion short of filling in the entire shortfall, but he pointed out the critical need for aid: “Without additional relief, agencies do not have the cash on hand to continue running buses and trains. We risk a ‘death spiral’ for transit—more service cuts, more layoffs and further declines in ridership. Our essential workers can’t afford that. The millions of Americans who depend on public transit can’t afford that. And even if you never step foot on a train or bus, you can’t afford the traffic congestion that would come from millions of additional cars on the road.”
House Ranking Republican member Rep. Sam Graves of Missouri called the bill “the Majority’s Rushed, Partisan Budget Measure.” He said, “The Majority is again choosing politics over prudence, with the Speaker directing committees to pursue a closed process without even a chance for bipartisanship. It’s the same ‘my way or the highway’ approach that we saw last year, and I’m concerned about what it means for the important work before this Committee, including a critical surface transportation reauthorization.” While the procedure to which Graves appeared to object sounds remarkably similar to former Senate Republican Majority Leader Mitch McConnell’s approach during the Obama-Biden Administration, Graves also complained that some of the money appropriated last year has not yet been spent.
As part of the markup process, there were 68 amendments offered; 16 by Republican member Rep. Garret Graves of Louisiana. Some of those amendments proposed gutting the proposed grant program entirely, either by eliminating it, re-directing the money at issue to other purposes, or giving it to the states to use as they see fit with no limitations on purpose. Some amendments would tie transportation relief to such irrelevant policies as opposition to concern about climate change; building roads in forested areas in California instead of spending it on high-speed rail; and opposition to net neutrality.
The Bill and Its Transit Provisions
Now, let’s look at the pertinent portions of the bill itself. The 41-page document includes only the funding provisions for transportation, and nothing unrelated. Despite these efforts to change it, the original proposal is broadly diversified within the transportation field. Subtitle A covers T&I, and includes funds for the Federal Emergency Management Agency (FEMA; $50 billion), Economic Adjustment Assistance through the Commerce Department ($3 billion), Great Lakes St. Lawrence Seaway development ($1.5 million), Amtrak, the Federal Transit Administration (FTA), and Relief for Airports ($8 billion). Subtitle B concerns Aviation Manufacturing Jobs Protection, while Subtitle C concerns Continued Assistance to Rail Workers. It updates benefits for unemployed railroad workers under the Railroad Unemployment Insurance Act. In essence, it extends unemployment compensation for railroad workers by 120 days, along with additional funding for the Railroad Retirement Board.
Section 7006 specifies certain additions to the FTA appropriations under certain established programs. Those programs are codified in chapter 53 of title 49 of the United States Code, under various sections. For example a grant to a transit provider under §5307 would be authorized under 49 U.S.C. §5307 and would be known as a “5307 grant” by managers and others concerned. There are two important features of this proposed legislation. Under §7006(a)(1)(A), grants are available for eligible recipients “to prevent, prepare for, and respond to coronavirus” and subsection (B) of the same provision states that they shall “not be subject to any prior restriction on the total amount of funds available for implementation of execution of programs authorized under sections 5307, 5310, or 5311” of the title. Those three provisions govern urbanized area formula grants; grants for improving mobility for seniors and persons with disabilities; and rural and “small” transit systems, respectively.
In a departure from pre-COVID-era policy, §7006(2) allows the funds in question to be used for operating expenses. Permitted uses include reimbursement for payroll; “operating costs to maintain service due to lost revenue due as a result of the coronavirus public health emergency,” including personal protective equipment (PPE) for employees; and paying administrative leave of employees or contractors due to reductions in service. The funds are available for immediate obligation and can be used for the federal share of grants. They can also go to “private providers of public transportation.”
Almost 87% of the $30 billion that would be distributed under the proposal (the exact number is $26,086,580,227) would be used for grants under §5307, the urban formula grant program. Subsection 7006(b)(1)(B)(i) of the proposed legislation states the distribution rule: “each urbanized area shall receive a apportionment of an amount that, when combined with amounts that were otherwise made available to each urbanized area for similar activities to prevent, prepare for, and respond to coronavirus, is equal to 132 percent of the urbanized area’s 2018 operating costs. . .” and subsequent provisions govern the distribution of any funds left over after the initial round of grants.
This provision represents a continuation of recent policy to allow §5307 funds to be used for operating expenses because of the financial woes that transit providers are facing due to the virus. Larger transit systems, including those with a rail component, fall within its purview. Historically, grants have been limited under §5307(a)(1) to the purposes of capital projects, planning, and Job Access and Reverse Commute (JARC) projects, but the separate provision for JARC (§5316) was repealed. Subsection D allows for operating grants for systems in cities with populations of less than 200,000 and for larger cities under certain circumstances, but “excluding rail fixed guideway,” §5307(a)(2).
In addition to those grants, $25 million is allocated to recipients under §5307 “for the planning of public transportation associated with the restoration of services as the coronavirus public health emergency concludes. . . .” Even though that pot is small, there are limitations attached to those grants.
There are provisions for grants under §5310 (“formula grants for enhanced mobility of seniors and individuals with disabilities”) of $50 million, and under §5311 (“formula grants for rural areas”) of $280.9 million. These grants are not normally used for rail-related projects and comprise tiny fractions of the total proposed funding: 0.167% and 0.937%, respectively.
Another 4.17%, or $1.25 billion, will go toward capital projects under §5309. Of that, $1 billion would go toward grants under subsections (d) and (e); New Starts and Core Capacity Improvement Projects, respectively. The rest would be used for grants under subsection (h) for Small Starts.
There is also a “catchall” provision, §70069(b)(7), for “Recipients and subrecipients requiring additional assistance,” with an allocation of $2.2 billion; 7.63% of the $30 billion total under subsection (a). These grants are subjected to a number of conditions. Applicants must document financial need and provide a spending plan for the money they hope to receive. There is a detailed procedure for evaluating applications, based on 2018 operating costs not replaced by grants under other provisions of the bill. The grants must be used for operating expenses, and states can apply on behalf of eligible recipients or sub-recipients.
What Transit Management, Advocates Say
It is essentially undisputed within the transit community that providers need these grants to keep going. Representing management and transit contractors, the American Public Transportation Association (APTA) issued a statement supporting the bill: “The proposed funding is vital to the industry’s survival and will help prevent massive labor cuts and drastic service reductions. APTA also strongly supports the $1.5 billion of emergency funding provided for Amtrak.” APTA went on to say: “The $30 billion of emergency funding included in the Budget Reconciliation Title is essential to providing the public transportation industry with long-term certainty critical to the nation’s economic recovery. The time is now to invest more in our nation’s public transportation infrastructure to support jobs, reconnect Americans, and build the necessary infrastructure network to provide critical public transit services and economic opportunities for all.”
Still, the statement cited an analysis by EPB USA that warned of a $39.3 billion shortfall; 31% more than the amount that would be offered to the transit industry under the proposed legislation. APTA issued this warning: “While initial rounds of emergency funding provided transit agencies across the nation with relief, public transit funding needs continue to grow due to ongoing losses of ridership, fare revenue, and state and local tax revenue.”
The Rail Users’ Network (RUN) advocates on the local and national levels for improvements in local rail transit and Amtrak. RUN Chair Richard Rudolph told Railway Age: “We welcome that the House Transportation Committee is taking action to provide additional funding to keep transit agencies solvent resulting from the loss of ridership, fare revenue, and state and local tax revenue due to the Covid pandemic. [However], it is not clear whether this draft legislation will be part of the $1.9 trillion bill that the Biden Administration is pushing or whether it is a separate bill which will need to be passed by both the House and Senate.”
RUN Vice Chair Andrew Albert, who is also Chair of the New York Metropolitan Transportation Authority (MTA) Permanent Citizens Advisory Committee (PCAC), knows about the problems that a downgraded transit system can cause for its riders and the local economy. He told Railway Age: “The $30 billion is recognition that the transit systems are the economic engines that move their respective regions. Without them, everything would stop dead in its tracks.”
Additionally, MTA Board Chair Patrick Foye organized an alliance of 22 major transit properties, nearly all of which operate at least a small rail component, to support the bill. They sent a letter, dated Feb. 3, to Senate Majority Leader Charles E. Schumer, Speaker of the House Nancy Pelosi, Senate Minority Leader Mitch McConnell and House Minority Leader Kevin McCarthy, MTA reported. In that letter, they said: “This emergency funding, along with that provided in the Coronavirus, Aid, Relief and Economic Security Act (CARES Act), has kept our agencies afloat, protecting critical service for essential workers while ensuring our agencies are positioned to support the nation’s economic recovery amid the vaccine rollout.” The letter also warned of dire consequences without future aid, citing the economic analysis that APTA also cited: “We request $39.3 billion in emergency aid for public transit agencies nationwide in the next coronavirus relief bill. Without additional federal resources, our agencies could be forced to implement drastic cuts to service, make unthinkable layoffs and/or delay or cancel critical capital projects.”
In his PCAC capacity, Albert expressed concern that New York’s local transit, along with Metro-North and the Long Island Rail Road would only get $6 billion under current FTA formulas. He said: “Please don’t even think that I’m ungrateful, but this is similar to the misappropriation from the formula, where we carry 40% of the nation’s riders, but only get 16% of the funding. What is wrong with this picture? If that’s what we get, the formula is very ripe for change.”
The budget bill before Congress includes $1.5 billion for Amtrak, as described in Section 7005. Because of the shutdowns associated with the virus, Amtrak’s ridership plummeted last year. So did revenue, and so did the level of service on most lines. State-supported corridors and trains were the hardest-hit at first, with some single-train routes eliminated and many corridors reduced to one round trip per day. Amtrak’s skeletal long-distance network is down to three round-trips per week. Only the Auto Train runs every day.
Subsection (a) says that the grant for the Northeast Corridor (NEC) “to prevent, prepare for, and respond to coronavirus” is $820,388,160. Under subsection (b), the appropriation for the National Network is $679,611,840, to be used for the same coronavirus-related purposes as appropriation for the NEC. Subsection (c) deals with long-distance service restoration and employee recalls. Not less than $165,926,000 of the money from the previous subsections would be directed for use by Amtrak to service to levels that were in effect as of July 1, 2020 and to recall and manage employees furloughed after Oct. 1. While the bill does not state a requirement for “daily” operation of the trains that ran every day, it appears that such operation is the intent of the bill.
Elsewhere on Amtrak, subsection (d) calls for $109,865,000 to be used in lieu of capital payments for states and commuter rail providers. This is the rent that local rail providers pay to Amtrak for trackage rights under Section 212 of the Passenger Rail Investment and Improvement Act of 2008 (PRIIA).
Subsection (e) makes $174,850 from the national network allocation available to offset amounts required to be paid by the States for State-supported routes. The basic allocation would be 7% of the costs allocated to the route in fiscal 2019. The allocation would not extend to the former Hoosier State in Indiana, because that train was eliminated before Feb. 1, 2020. Other proposed grants include $100,885,000 for debt repayment and $2,000,000 for project management oversight.
Amtrak’s aggregate request was $1.541 billion which, according to Amtrak, would be enough to bring the long-distance trains that operated every day until last July or October to resume daily service. The Amtrak funding proposed in the legislation is 97.3% of the amount requested, or only $41 million short of it. Is that enough to bring the national network back to daily operation this coming summer, while also addressing Amtrak’s other financial problems?
Before the bill in question was introduced, we asked Amtrak spokesperson Marc Magliari if the $1.541 billion that Amtrak had requested would be enough to restore daily operation of the long-distance trains. He intimated that it would. While the grant proposed in the bill is slightly less than that, the House T&I Committee noted in a Feb. 11 statement that the bill includes a grant for Amtrak of: “$1.5 billion to recall and pay employees furloughed due to the COVID-19 pandemic through the end of fiscal year 2021 and to restore daily long-distance service.” It appears highly unlikely that Amtrak would disobey Congressional intent by failing to restore the trains.
Advocates for Amtrak’s riders are hopeful but, now that the long-distance network has been running only three times a week for more than four months, some are skeptical. RUN Chairman Richard Rudolph welcomed the grants in another part of the bill that would keep transit going, but expressed his concern about the Amtrak provisions. He told Railway Age: “While we also support the committee’s effort to provide Amtrak with an additional $1.5 billion, we remain skeptical that the money appropriated will actually lead to the restoration of daily long-distance service that folks living in rural America depend upon to seek medical help, to work and shop and to see relatives. The [Amtrak] Board of Directors must insist that whatever money is received is first used to restore daily service on Amtrak’s long-distance routes.”
Both RUN and the Rail Passengers’ Association (RPA) have been fighting to get the long-distance trains restored to daily operation. An RPA statement from Feb. 10, the day before the bill was marked up, said: “These funds will be essential to restoring the trains we all count on.” The statement reported that an amendment by Rep. Scott Perry (R-Pa.) that would have gutted Amtrak funding was defeated, and continued: “We are one step closer to restoring daily National Network Service, which was decimated by Amtrak cuts in response to the pandemic… We have an opportunity to make sure all communities, but especially the smaller communities, aren’t left behind as lawmakers begin to discuss restoring and even boosting passenger rail and public transit funding.” RPA has called on its members to support funding for Amtrak, along with calling on the railroad to restore daily operation by the summer. With the bill calling for Amtrak to restore daily service within 90 days of passage, that is possible if the bill is passed soon and President Biden signs it shortly thereafter.
In the meantime, there is probably a great deal of pent-up demand for travel, especially since more places are opening up and President Biden expects more vaccine to become available during the spring. While daily service on the long-distance trains (at least all except the Cardinal and the Sunset Limited) may appear to be the most-pressing Amtrak issue at this writing, the state-supported trains and corridors are still running significantly reduced service, compared to pre-COVID schedules. So are the NEC and its branches.
Some advocates have said they are “cautiously optimistic” that the legislation can begin to improve the situation for transit and Amtrak, and for the riders on both. They may not be enthusiastic yet, but many have expressed far more caution than optimism for many years. This is the bill that might help Amtrak turn the corner.
What Can We Expect?
The House Committee on the Budget will next compile the Budget Reconciliation titles of each of the committees (including the T&I Committee Budget Reconciliation Title) and mark up the combined bill, according to APTA. The U.S. House of Representatives may consider the Budget Reconciliation bill during the week of Feb. 22.
It is likely that transit ridership will increase as more people are vaccinated against the virus. It will also help when there are more places to go; although nobody knows how much future demand there will be for the pre-COVID-19 style of commuting five days per week to get to the office for the start of the workday. The virus is bringing cultural change, including new travel patterns for many, some of whom were part of the old “9 to 5 army” of commuters. The precise nature of those new patterns remains to be seen.
At this writing, the vaccines that will fight the virus are still scarce and distribution has been a challenge. Additionally, this writer has noted that persons who depend on transit have a difficult time getting to vaccination sites, and has suggested that transit providers make their large facilities available for that purpose, if possible. (See “A Shot in the Arm for Transit”).
Still, the time is coming when more people will have received their shots and the protection that comes with them, and they will feel free to travel. That may be the light at the end of the tunnel, for which we have all been waiting for more than eleven months. Or it could be an oncoming train. Time will tell, but even Congress seems to know that if transit and Amtrak do not get some relief soon, a lot of Americans will not be going much of anywhere; at least not anytime soon.