Federal Subsidy Loss Puts Burden on States for Amtrak

According to a recent article in the New York Times, states are now faced with a difficult decision to make. Due to a loss in federal subsidies and a long history of financial losses, states must decide to foot the bill to maintain their intra-state Amtrak routes that are less than 750 miles in length.

There are several states that have already jumped on board because their routes have proven to be well-used, valued by riders, and have contributed to decreasing congestion issues, even if they rarely make a significant profit (or any profit at all). However, some states such as Indiana and California, are debating about whether to take on the responsibility of funding the routes or closing them altogether, the latter choice hitting small “ghost towns” hard and taking away a major means of mobility and accessibility.

                Amtrak was founded in 1971 and has received federal subsidies since its beginning, even though it has never made a profit. Many states and regions view the investment in Amtrak routes as an infrastructure investment. Infrastructure investments, like highways, are not expected to add to revenue (at least not directly) and that has been the case for many Amtrak lines.

                Joseph H. Boardman, the president of Amtrak, is a proponent of cost-sharing with the states. Due to the states’ increasing roles during the past several years in financing the intra-state Amtrak routes, the revenues and ridership have also increased. This is perhaps due to states being more effective at encouraging ridership on their individual routes rather than putting that responsibility on the federal level, which might have a harder time focusing on certain areas that could greatly benefit from passenger rail promotions.

                However, Boardman opposes the idea of implementing a cost-sharing plan between congress, Amtrak and the states for the long-distance routes. He feels that since the routes expand over several states, there can be issues with states not paying their fair share, which results in maintenance and funding gaps. Different states may have smaller portions of the rail lines in their states, or may not have as many stations as others, or if they do, they are perhaps less frequented. This can possibly lead to disputes regarding how much one state should pay compared to other states, and the resulting consequences end up just hurting the routes and their passengers. Amtrak feels that the long-distance routes should remain funded solely by the federal government and Amtrak, since those routes are considered to be more of a federal investment rather than a state investment.

Thank you to Brett Lezon for editing this post!

Here’s the link to the article: http://www.nytimes.com/2013/05/03/us/as-amtrak-aid-ends-states-face-decision-on-local-routes.html

Nixon, Ron. “Amtrak Subsidy Gone, States Must Pay the Freight to Keep Rail Routes.” The New York Times. May 2, 2013. Web.

Picture Source: https://en.wikipedia.org/wiki/File:Amtrak_System_Map.svg