Railroad Realism

It will take more than platitudes to save Amtrak. But good ideas are out there.
July 2002
By Jonathan Walters  |  Senior Editor
A Senior Editor of Governing, Jonathan has been covering state and local public policy and administration for more than 30 years.

Amtrak: it's a word that the country as a whole disdains but one that warms the hearts of a significant number of states and cities. Which is why the teetering passenger rail system always seems to stay on the tracks--just barely--as it creaks along its chronically shaky fiscal right-of-way. Enough people come to its rescue at regular intervals to keep it going.

The latest twist in the railroad's journey comes in the form of a report by the Amtrak Reform Council, a panel of experts created in 1997 to monitor the system's progress toward self-sufficiency. While governors and mayors might not be happy with some of the report's recommendations (such as a sharing of cost and responsibility that would impact state and local budgets), the report is a refreshing break from the traditional twine-and-bubble gum approach to dealing with Amtrak's operations and budget problems. Rather than merely offering windy platitudes about the promise of rail and the need for billions more in investment, it makes solid suggestions for the future of inter-city passenger rail service and how to deliver it.

One recommendation is that the National Passenger Rail Corp.-- Amtrak's formal name--be reconstituted as a small federal agency with oversight of two separate companies: one to deal with infrastructure, especially in the heavily used Northeast Corridor, and one to run the passenger service. As it stands now, the Reform Council argues, Amtrak is a politically driven, management-heavy mishmash.

The thinking here is clear: Amtrak as railroad has suffered from too much political oversight and not enough serious railroad management attention. The infrastructure corporation could concentrate on maintaining, improving and even expanding roadbeds (not just for Amtrak but also for commuter and freight rail), while the newly freed passenger service could keep the trains running efficiently.

The council suggests that Amtrak divest itself of some infrastructure (track and stations) more sensibly held and maintained by states and localities. But it also argues that states and localities deserve a more prominent seat at the Amtrak management table, and that as part of the reauthorization of federal transportation law, states be allowed to "flex" federal transportation money to Amtrak expenses, which is currently prohibited.

To some, the report's emphasis on reorganization might have an aura of rearranging the Titanic's deck chairs. But the overall tone is one of hard-nosed business realism. For example, there are no promises of a financially self-sufficient system. When it comes to privatizing service--particularly the system's money-hemorrhaging long-haul routes--the report suggests that the NRPC might consider proposals from private competitors for passenger rail if they promised merely to lose less money than Amtrak does. The report also says that Congress shouldn't mandate service to areas that are clear commercial losers without expecting to pick up the tab for the operating deficits.

Most fundamentally, the report offers a realistic vision for where passenger rail service might fit in the overall transportation picture. In the past, there has been little vision beyond the pleadings of mayors, governors and members of Congress for service to their particular cities and states.

Amtrak's management, meanwhile, has been something less than what Congress intended. The board of the NPRC--appointed by the president and confirmed by the Senate--was supposed to be made up of individuals with strong business backgrounds, preferably in transportation. And yet a quick glance at the Amtrak chairmen over the past few years reveals a string of political appointees without any direct experience in the transportation business, much less in running railroads.

Funding of Amtrak, meanwhile, has been so parsimonious that it has inspired such dubious long-term fiscal actions as mortgaging part of the railroad's flagship station--Penn Station in New York--to pay for operations, thereby saddling Amtrak with deep debt along with rapidly depreciating assets.

All of which is why the Amtrak Reform Council's action plan is worth serious consideration. With a vision in place, a solid set of performance measures, and a sound business and oversight structure to match, Congress can have more confidence that money handed to the system will be well spent. At the same time, allowing states to flex money to Amtrak would help them become more active partners in the inter-city rail picture.

What's the alternative? At the moment, governors and mayors seem enamored of South Carolina Senator Ernest Hollings'"National Rail Defense Act," a 9/11 piggy-back bill that would throw $4.6 billion a year at Amtrak for five years, along with a mandate to develop high- speed service.

But the tin-cup approach to keep Amtrak rolling always has been and always will be a losing strategy. What's needed is a fundamental restructuring aimed at making it an efficient and viable business. Governors and mayors shouldn't fight that; they should join forces with those who want to run the railroad the right way.