RAIL Magazine Applauds Reauthorization Proposals from Obama, Camp

President Barack Obama inspects a new Green Line light-rail vehicle at Metro Transit's Saint Paul maintenance facility before his address at the neighboring Saint Paul Union Depot. Photo by White House Photographer Pete Souza

Yesterday, a pair of important developments took place that present encouraging signs for the process of reauthorizing the nation's surface transportation legislation, currently known as MAP-21. In Saint Paul, Minn., President Barack Obama announced his Administration's FY2015 budget will include a proposal for a four-year reauthorization of MAP-21, including full details on corresponding revenue sources to support the $302 billion investment. The President identified a number of tax loopholes that would be closed under his proposal as the sources of revenue to makeup the pending shortfall derived from the nation's transportation trust fund.

Meanwhile, Rep. Dave Camp (Mich.) - Chair of the House of Representatives's Ways and Means Committee - also announced a proposal that would deliver $126.5 billion over the next eight years to the trust fund, resolving the fund's forthcoming insolvency. Camp's proposal would target overseas bank accounts that are currently havens for tax-free stockpiling of capital. Among others, Rep. Bill Shuster (Pa.) - Chair of the House Transportation and Infrastructure Committee - signaled his initial support for Camp's proposal.

The twin proposals address the fundamental challenge of the reauthorization process: identifying new revenue to support levels of investment necessary to maintain and expand the nation's surface transportation network. During the legislative process in 2012 that ultimately produced MAP-21, revenue sources were not revealed to the public until passage of the legislation was imminent, and those sources were only stop-gap measures, hence MAP-21 was a two-year bill. Along with the more than 4,000 members of the Community Transportation Association of America (CTAA) – which publishes RAIL Magazine – we are encouraged by these developments from leaders in both parties at the federal level.

"The Community Transportation Association and its members embrace yesterday's proposals by the President and Chairman Camp as very positive indicators that reauthorization of our nation's surface transportation legislation is closer now than before," said CTAA Executive Director and RAIL Magazine Publisher Dale J. Marsico, CCTM. "The revenue sources identified by both leaders suggest robust support for investing in our nation's transportation network and are a recognition of the vital role that network plays in connecting Americans with the jobs, heath care, social services and all the other elements of strong communities necessary for a good quality of life. Our nation's community and public transportation network is a vital part of overall transportation infrastructure."

For the most in-depth coverage of the impact of MAP-21 reauthorization on the nation's community and public transportation providers, visit CTAA's MAP-21 Central. 

Why Rail Supporters Must Push for Investment in Bus Transit Capital

Sacramento Regional Transit's light-rail and bus networks share
cross-platform connections at the city's Sacramento Valley rail station.

Judging by the title of this post, you may surprised by its inclusion on a blog primarily focused on passenger rail topics. And, indeed, we don't spend much time on bus issues here, and occasionally get into discussions of the relative utility of Bus Rapid Transit (BRT) versus light-rail and streetcar projects. But all that is nuance compared to the reality of the current state of federal investment for the capital needs of the nation's bus transit operators.

The simple truth is effective passenger rail systems cannot realize their full potential without strong, complimentary networks of bus transit routes. There is not a single rail transit operation (heavy rail metro/subway, light rail, commuter rail, streetcar) that doesn't offer convenient connections to local bus routes. I know the importance of this first-hand as a daily rider of both bus and rail here in the Washington, D.C., region. Bus routes help satisfy many of the first mile / last mile needs of passengers and are crucial mainline transit carriers on corridors without quite enough density to support rail transit. The majority of transit trips – each day, each month, each year – happen on a bus.

And yet, despite the fundamental role buses play in our nation's transportation network, investment for bus capital needs – namely to buy new buses and construct new garages and maintenance facilities – actually decreased during the most recent version of the nation's surface transportation legislation, known as MAP-21 this time around. Although the two-year bill boosted levels of investment in formularized programs for both bus and rail transit, it completely eliminated the dedicated source of funding for new buses and bus facilities. Rail transit operations found their investment streams held steady for both maintaining aging infrastructure and launching new projects.

Not only was this outcome profoundly unfair to the nation's bus systems and the millions of people who use them, but it undercuts the ability of passenger rail systems to best serve their passengers. Without new buses to replace well-traveled vehicles and new or upgraded facilities to keep them maintained, the reliability of connecting bus routes decreases, ultimately impacting rail ridership. Moreover, rail advocates find a more receptive audience for additional transit projects of any kind when elected officials and community leaders recognize the value of all transit options, including effective bus service in smaller urban and rural communities. Do not underestimate the importance of this perception when legislation to fund high-speed, intercity and local rail projects comes before Congress or state legislatures.

What can be done to resolve this disparity? In short, simply restore the bus capital program in whatever legislation ultimately succeeds MAP-21. The process of hearings and constituent input for its reauthorization is already underway on Capitol Hill.

The Small Urban Network of the Community Transportation Association of America (CTAA) – the organization which publishes RAIL Magazine – has identified four key priorities to help meet bus transit  needs around the nation, most importantly the restoration of $890 million for bus capital needs that was the standard level of investment in the legislation that preceded MAP-21.

The trouble, though, is that most observers expect that Congress will not increase investment levels in the reauthorization process, given that the transportation trust fund that delivers investment for surface transportation programs is now bringing in lower levels of revenue than needed to support those programs. Efforts to raise new revue – such as increasing the federal gas tax or instituting new revenue methods, such as Vehicle Miles Traveled (VMT) – have no legitimate support by leaders in either party at the national level. Congress will have to scramble to move funds around just to keep investment at its current level.

As a result, cuts were necessary. In MAP-21, those cuts were borne, in large part, by the elimination of the bus capital program while the rail capital programs remained whole. The impact of that decision has been that many transit systems are running buses well past their recommended retirement age and construction of new bus facilities has ground to a halt.

Some public transportation advocates believe somehow more revenue will appear during the reauthorization process and the bus capital program will be restored without impacting current levels of investment, including rail programs. There is absolute consensus that such an outcome would be desirable for the entire industry. All advocates should make this case loudly and repeatedly.

However, the likelihood of new revenue materializing is minuscule in the current political environment. In such a world, many rail advocates seem like they would be okay with maintaining MAP-21's imbalance of investment between the bus and rail programs. Those same advocates also claim that changing that balance would amount to a modal fight and disrupt the chances of reauthorization legislation succeeding in Congress, essentially arguing that bus advocates should take what they're given and go home with their tail between their legs.

Bus advocates at this stage have nothing to lose by arguing against this imbalance, as their investment levels in MAP-21 were already decimated. It is highly unlikely that Congress would not simply extend the current structure of the legislation if a new agreement was not reached before MAP-21's October 1 expiration date. Were that the case, bus advocates would do no worse than they're already doing by receiving nothing. Rail wouldn't do any worse, either.

Accordingly, its in the interest of all sides to take measures to restore the bus capital program in whatever surface transportation legislation comes next. No one benefits when bus programs are pitted against rail operations, which MAP-21 succeeded in doing. The outcome is less effective transit networks for all passengers, whether they take bus or rail.

RAIL Magazine's Exclusive Interview with Amtrak President & CEO Joseph Boardman

Photo by Adam Sullivan, railpictures.net

Last week, Amtrak unveiled the first of its Cities Sprinter (ACS-64) electric locomotive fleet for use on the Northeast Corridor (NEC). On Thursday, February 6th, Vice President Joe Biden joined federal, state, local and Amtrak officials in welcoming ACS-64 #600 in Philadelphia. The following day, #600 hauled its first revenue trip on the NEC from Boston to Washington (see video below).

Photo courtesy of Amtrak

As part of the debut run, RAIL Magazine Editor Rich Sampson interviewed Amtrak President & CEO Joseph Boardman onboard the train (Northeast Regional #171) between the Baltimore Penn Station and BWI Airport stations. They discussed not only the arrival of the ACS-64 fleet, but also forthcoming equipment orders, how the railroad has attracted record ridership while reducing operating costs and the railroad's future in moving Americans from coast-to-coast. While discussing Amtrak's relatively steady position in comparison to discouraging news recently out of Canada of pending service cuts, Boardman explained that "you can't cut your way to prosperity." We couldn't agree more.

Click here to listen to the full discussion.

An Economic Fallacy: Long-Distance Trains Are Less Subsidized Than The NEC

On February 4, 2014, the United Rail Passenger Alliance (URPA) – a North American intercity rail advocacy group – released a report assessing Amtrak's FY 2013 metrics and concluding that unlike common perceptions, long-distance trains are more effective and less subsidized than Amtrak's Northeast Corridor (NEC) operations. (Take a look at Amtrak's numbers here, and our in-depth backgrounder on the NEC here).

First, we should be clear that RAIL Magazine is a strong proponent of all Amtrak services: NEC, corridor and long-distance. Your blogger has ridden several long-distance trains (Crescent, Lake Shore Limited, Vermonter, Capitol Limited, California Zephyr) and appreciates their value that's misunderstood by many: collections of smaller corridors that do very well despite limited resources.

Unfortunately, the central premise URPA's assessment is statistically misleading: the report argues that the distance one passenger travels is more important than the price one passenger pays. Essentially, it claims that if one passenger travels 1,000 miles and another travels 50, the 1,000 mile traveler means more. The reason why Amtrak doesn't base their operating budget on this is because the person who travels 50 on the NEC pays far more than the the person traveling 1,000 on a long-distance train.

Here's URPA's claim verbatim from the report: "the critical factor is that any passenger carrier, including Amtrak, exists to move people over distance. The best single measure of performance in this activity is "revenue passenger miles" (RPMs), not the simple number of sales transactions (ridership)."  

They base everything - everything! - on passenger miles traveled, not ridership. Yes, long-distance trains are less subsidized per passenger mile traveled. Quite the opposite is true per passenger carried.

A good analogy would be a passenger on an airline flight who claims that since a first class seat is empty after takeoff, they should just get to sit in it at coach fare. They don't understand the inherent economics of value pricing.

Just because there's empty seats on an NEC train doesn't mean that the train is losing money. Capacity does not automatically mean efficiency. URPA basically argues that since Amtrak's long-distance trains operate at or near capacity – which no one argues – that it inherently means that if there were more capacity, it would be met at a similar level. The report doesn't ask the question whether long-distance trains are meeting demand with the ideal amount of capacity. 

On page 6 of the report, URPA presents a apples-to-nothing comparison in regards to Amtrak's travel share on the NEC. While it claims that Amtrak only serves 2 percent of travel in the NEC (which they choose to define as all vehicle trips, including private automobiles), they never provide a similar percentage of traffic for intercity trains versus nationwide travel data. I haven't looked at the data, but I'd guess Amtrak's long-distance share of nationwide travel is infinitesimal. This is not even an apples-to-oranges comparison, but an apples-to-nothing measure. 

If Amtrak ran its books the way URPA thinks they should, there would be no more Amtrak, no more long-distance trains. The economic goal of transportation isn't to move one person the greatest distance. The economic goal is, in fact, to move one person the shortest distance for the greatest revenue.

The bulk of the report is a hack job on Amtrak and the NEC, hoping to raise suspicions by claiming Amtrak's data is unaudited. They scold Amtrak for making capital upgrades to the NEC while also not recognizing those capacity upgrades not only support the railroad's own NEC operations, but the vitality of the numerous commuter rail systems that utilize segments of the route. 

It's a real shame a group that claims itself to be advocates for intercity passenger rail spends the majority of its time attacking the nation's only intercity passenger rail provider. URPA seems to operate in a fantasy world where Amtrak has unlimited fiat over the freight railroads. We all know they don't. So, they're very limited in what they can do to make improvement to long-distance trains. The current struggles with both the Empire Builder (freight delays) and Southwest Chief (BNSF's planned decommissioning of the Raton Pass line) illustrate Amtrak's limited ability to make improvements on infrastructure it does not own.

UPRA often chooses to direct its fire at Amtrak rather than the real culprits: governments at all levels who refuse to make legislative and regulatory changes in favor of long-distance trains.   

In the meantime, how about celebrating that Amtrak - unlike VIA Rail and the Canadian federal government, which have been slashing intercity passenger rail across Canada - is not only maintaining and expanding its network, but also carrying more riders on all phases (NEC, corridor and long-distance) while reducing operating subsidies? To find that kind of productive advocacy, you may want to direct your attention to the National Association of Railroad Passengers.