Amtrak Requests $141 Million Cut in Its Own Budget

March 21, 2019

Amtrak (formally the National Rail Passenger Corporation) sent its fiscal 2020 budget request to Congress yesterday and asked for $141 million less than Congress actually appropriated for fiscal year 2019. The 2020 request of $1.80 billion is the amount authorized by Congress in the FAST Act of 2015, but Congressional appropriations for Amtrak and other railroad programs in 2018 and 2019 have exceeded the authorized amounts significantly. The budget request was followed today by release of Amtrak’s updated five-year (FY 2020-2024) service line plan.

While the U.S. Department of Transportation submits its own budget request on Amtrak’s behalf, Amtrak’s quasi-private status means that it also submits its own request to Congress directly, and its request is usually quite different from DOT’s request. Amtrak’s own request is $313.5 million higher than USDOT’s request on Amtrak’s behalf, once you add the Restoration and Enhancement grants account request, which USDOT is proposing to use to replace the operating subsidy component of Amtrak’s National Network appropriation.

Millions of dollars. FY19 FY19 FY20 FY20 FY20
FAST Enacted FAST DOT’s Amtrak
Account Authorized Appropriation Authorized Request Request
Northeast Corridor 557.0 650.0 600.0 325.5 600.0
National Network 1,143.0 1,291.6 1,200.0 611.0 1,200.0
R&E Operating Subsidy Grants 550.0
Total Amtrak Appropriations 1,700.0 1,941.6 1,800.0 1,486.5 1,800.0

$1.8 billion would be 26 percent of the $6.9 billion that Amtrak plans on spending in 2020, with the remaining $5.1 billion coming from its own revenues, borrowing for the capital program, or other funding sources.

FY 2020 Amtrak Proposed Total Spending, by Source
Millions of dollars.
Northeast National
Corridor Network TOTAL
Federal Grant
Operating Costs 0.0 629.6 629.6
Capital Costs 587.0 562.4 1,149.4
Other Set-Aside 13.0 8.0 21.0
Total, Federal 600.0 1,200.0 1,800.0
Other Amtrak Revenue
Operating Costs 1,373.7 1,544.9 2,918.6
Capital Costs 1,718.8 469.2 2,188.0
Total, Amtrak Revenues 3,092.5 2,014.1 5,106.6
TOTAL AMTRAK SPENDING 3,692.5 3,214.1 6,906.6

Amtrak proposes to spend $629.6 million of its federal National Network grant on operating subsidies, with the bulk of that ($528.0 million) subsidizing operating losses on long-distance trains. $67.5 million would go to subsidize operating losses on state-supported routes, and the other $34.1 million would be spent on operating costs of infrastructure access and ancillary services.

It is this $595.5 million of operating subsidies for long-distance and state-supported Amtrak trains that the Trump Administration is proposing to eliminate and replace with $550 million in operating assistance grants from the Restoration and Enhancement grant program, which would gradually taper off to zero over four years.

In its own budget request, Amtrak took note of the Administration’s proposal to restructure and sunset the operating subsidies, saying “Amtrak appreciates the Administration’s focus on expanding intercity passenger rail service to today’s many underserved cities and corridors across the nation. We believe that a modernization of the National Network, with the right level of dedicated and enhanced federal funding, would allow Amtrak to serve more passengers efficiently while preserving our ability to maintain appropriate Long Distance routes. We look forward to working with the Administration, Congress, our state partners, and other stakeholders to consider these proposals in more depth.”

In terms of total operations, Amtrak’s 2020 request assumes $3.55 billion in spending. Minus the federal operating grant request of $629.9 million, the remaining $2.92 billion of that has to come from Amtrak’s own operating revenue. Amtrak reports that their FY 2018 actual revenue was $3.21 billion and that they are on track for $3.29 billion of revenue in FY 2019. $2.26 billion of the 2019 total is ticket revenue, $238 million comes from states who are subsidizing individual Amtrak routes in their states, $330 million is from ancillary revenue and $292 million is from “other core revenue.” The FY 2020 budget assumes $3.57 billion in Amtrak revenue.

Amtrak breaks down that $3.55 billion in proposed operational spending by service line. The following graph shows the proposed spending on each service line and by source fund.

The five-year service plan breaks down the finances of each service line in greater detail:

Amtrak’s Proposed FY 2020 Budget, by Service Line

Millions of dollars.
Northeast State Long Infrastructure Ancillary AMTRAK
Corridor Supported Distance Access Service TOTAL
Financial Sources
Ticket Revenue 1,320.5 569.2 467.7 0.0 0.0 2,357.4
Charter/Special Trains 1.8 2.5 0.0 0.0 0.0 4.3
Food and Beverage 50.0 29.3 68.8 0.0 0.0 148.1
Payments from States 0.0 355.6 132.3 438.0 130.9 1,056.9
Other Amtrak Revenue 53.7 11.1 7.4 86.1 203.7 362.0
Financing Proceeds 562.7 0.0 0.0 0.0 0.0 562.7
FY19 Carryover Federal Grant 289.9 108.8 29.2 164.8 3.6 596.3
FY20 Federal Grants 417.8 386.2 707.1 259.0 27.9 1,798.0
Total, Financial Sources 2,696.4 1,462.6 1,412.7 947.9 366.1 6,885.6
Financial Uses
Operating Costs 869.8 920.8 1,063.0 296.7 302.6 3,453.0
RRIF Debt Payments 95.3 0.0 0.0 0.0 0.0 95.3
Legacy Debt Payments 131.1 13.0 21.0 7.1 3.8 176.0
Capital Expenditures 1,373.3 489.9 369.2 913.3 15.7 3,161.3
Total, Financial Uses 2,469.5 1,423.7 1,453.2 1,217.2 322.1 6,885.6
Remainder 226.9 38.8 -40.5 -269.2 44.0 0.0

(The difference between the $6,906.6 million grand total in the second table above versus the $6,885.6 million grand total in the table immediately above is $21 million, which is the amount of the Amtrak appropriation that would be set aside for the Northeast Corridor Commission, the State-Supported Route Commission, and the 0.5 percent FRA oversight set-aside.)

While Amtrak is only requesting $1.80 billion from Congress in 2020, their request acknowledges that Congress appropriated more money than requested in 2018 and 2019, so table 2 in the request document cleverly spells out how Amtrak would spend the extra $141 million if Congress should somehow see fit to give them the same amount in 2020 that they did in 2019:

Portal North Bridge NJ +$20 million
Chicago Union Station Master Plan IL +$20 million
Zoo-Paoli Catenary Pole Design PA +$20 million
East River Tunnel Rehabilitation NY +$20 million
B&P Tunnel Replacement Design MD +$20 million
Concrete Casing Segment 3 NY +$21 million
Connecticut Bridge Replacement CT +$20 million
TOTAL +$141 million

Table 2 then goes on to list how Amtrak would spend another $500 million beyond that in 2020, should Congress give them the money. And in the back of the book, Table 34 lists $46 billion in other Amtrak projects that Congress could consider funding in an infrastructure bill.

Amtrak’s budget request also goes quite far afield of Amtrak’s own appropriations, getting in the business of several other federal agencies and accounts. Table 32 of the request document urges Congress to boost appropriations for the Federal Transit Administration’s Capital Investment Grant program to $3.35 billion in 2020 (almost $800 million over the 2019 appropriation, probably making room for the Hudson River Tunnel, which wants so much CIG money that it would have trouble fitting into that program at its historic funding levels). And Table 33 shows how Amtrak wants Congress to beef up the Homeland Security grant program for rail security from $10 million per year to $25 million per year.

They also ask for report language in several non-Amtrak FRA accounts, asking for a $5 million set-aside in the Railroad R&D account for Amtrak workforce development programs and asking for report language ordering DOT and OMB to give Amtrak a better RRIF risk rating and to give back its old RRIF loan credit risk premium money once a loan is retired. Amtrak also wants the appropriators to add the following report language to the FRA Safety and Operations account:

“Metrics and Standards. – In July 2018, the DC Circuit Court ruled that PRIIA Section 207 is, constitutional. The Committee now looks forward to FRA and Amtrak jointly developing new metrics and standards to measure the performance and service quality of intercity passenger train operations. Considering it has now been more than a decade since PRIIA was enacted into law, the Committee directs FRA and Amtrak to publish new final metrics and standards within 90 days of enactment of this Act. The Committee expects that the process for developing and adopting the metrics and standards shall be similar to the process that was used in developing and adopting the original metrics and standards (Docket No FRA 2009-0016).”

Like last year, the 2020 Amtrak budget actually requests that Congress make five years worth of appropriations in the 2020 appropriations act. Then the 2021 budget would appropriate money that would become available in 2025, the 2022 bill would fund 2026, et cetera. This is an attempt to give Amtrak the same kind of certainty that highway and transit funding from the Highway Trust Fund has through multi-year contract authority. However, Congressional budget rules cap the total amount of such “advance appropriations” and there is currently no room for any Amtrak advance appropriations. This kind of thing would have to get approved by the Budget Committees before the Appropriations Committees could act on it.

Table 36 of the budget request also gives the actual FY 2018 results of Amtrak’s operations on each of its individual routes. First, the good news. The Acela Express service had $624 million in allocated operating revenues in 2018 versus just $306 million in operating expenses, for a revenue-to-cost ratio of 2.04 to 1. Northeast Regional service was almost as good, with $687 million in allocated operating revenues versus $476 million in operating costs, or 1.44 to 1.

The bad news: the long-distance trains still post ridiculously high operating losses that lead to huge per-passenger operating subsidies (which, as shown above, come from the Congressional appropriation). These losses ranged from $13.90 per passenger on the Palmetto between New York City and Savannah, Georgia) to to $362.37 per person on the Sunset Limited between New Orleans and Los Angeles.

Fiscal 2018 Operational Results of Amtrak Long-Distance Trains

Number of Passenger- Operating Operating Operating Loss per Loss per
Passengers Miles Revenue Costs Deficit Passenger Pass.-Mile
Palmetto 387,919 94,908,198 $30,869,529 $36,262,835 -$5,393,306 -$13.90 -$0.06
Auto Train 224,837 193,584,657 $71,989,213 $87,461,429 -$15,472,216 -$68.82 -$0.08
City of New Orleans 237,781 100,272,820 $19,399,123 $40,437,972 -$21,038,849 -$88.48 -$0.21
Texas Eagle 335,770 154,765,722 $25,742,874 $57,527,780 -$31,784,906 -$94.66 -$0.21
Silver Star 368,518 165,945,944 $34,842,292 $69,730,438 -$34,888,146 -$94.67 -$0.21
Lake Shore Limited 337,882 149,358,299 $28,411,059 $64,083,465 -$35,672,406 -$105.58 -$0.24
Coast Starlight 417,819 194,382,390 $44,541,555 $90,112,715 -$45,571,160 -$109.07 -$0.23
Silver Meteor 337,023 190,075,999 $40,082,745 $79,869,814 -$39,787,069 -$118.05 -$0.21
Empire Builder 428,854 303,918,093 $57,626,494 $109,501,033 -$51,874,539 -$120.96 -$0.17
Capitol Limited 219,033 98,779,079 $21,380,052 $49,009,554 -$27,629,502 -$126.14 -$0.28
California Zephyr 418,203 295,678,349 $59,058,662 $116,349,708 -$57,291,046 -$136.99 -$0.19
Crescent 274,807 129,039,734 $33,141,871 $72,559,789 -$39,417,918 -$143.44 -$0.31
Cardinal 96,710 33,313,579 $7,127,007 $22,643,665 -$15,516,658 -$160.45 -$0.47
Southwest Chief 331,239 272,714,245 $45,511,902 $102,680,813 -$57,168,911 -$172.59 -$0.21
Sunset Limited 97,078 73,279,546 $12,391,231 $47,569,328 -$35,178,097 -$362.37 -$0.48

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