Amtrak May Lose Money in Obama Transportation Plan

Rail users said they are concerned that Amtrak, the U.S. passenger railroad, and high-speed rail projects would lose federal money under President Barack Obama’s proposal to create a rail account in a new transportation trust fund.

The proposal for funding a new six-year surface transportation law would end direct operating subsidies to Amtrak and for the first time include rail programs in what has been called the “highway bill.” Amtrak received $1.57 billion in capital and debt service grants, and operating subsidies, in fiscal 2010.

Getting rail funding “on the table where it’s harder to forget is a good thing, but it will be interesting to see where the funding comes from,” said Ross Capon, president of the National Association of Railroad Passengers, based in Washington. “If the implication here is we’re going to try to shoehorn a size-26 foot into a size-16 shoe, it’s not going to work.”

He was referring to the current shortfall in the highway trust fund, which relies on revenue from the 18.4-cent-a-gallon federal fuels tax.

The administration proposes devoting $53 billion, including $8 billion in fiscal 2012, to its high-speed and intercity passenger rail initiative. Congress appropriated $2.5 billion to the program for fiscal 2010. Republican House leaders are proposing to eliminate high-speed funding in the continuing resolution to fund the government through the remainder of fiscal 2011, which ends Sept. 30.

Amtrak Funding

Under the proposal, Amtrak’s budget would increase 41 percent to $2.22 billion in fiscal 2012. The request to Congress today includes funds to buy 40 Acela Express coach cars to add seating on the high-speed rail line from Washington to Boston.

The proposal comprises $1.29 billion for capital investments to improve existing lines, including in the Northeast Corridor; $616 million to operate more than 300 daily trains nationwide, and $271 million for debt service.

Amtrak covers 85 percent of its operating costs with ticket sales and other revenue, leaving about 15 percent for the federal government to make up.

Northeast Corridor

The high-speed rail account would be divided into $4.05 billion for “system preservation and renewal” in fiscal 2012 and $4 billion for network development. The Northeast Corridor Improvement program, which provides capital funding for passenger rail service between Washington and Boston, would have to compete for money beginning in fiscal 2012.

Rail projects may also get funding from a $30 billion National Infrastructure Bank the president would create in his reauthorization proposal.

The fiscal 2012 budget proposes $22.4 billion for the Federal Transit Administration and calls for spending $119 billion over six years on transit programs.

The administration also establish a grant program for projects that increase energy efficiency and decrease greenhouse gas emissions. It would continue the New Starts grant program, the primary source of federal capital investment in transit infrastructure.

To contact the reporter on this story: Lisa Caruso in Washington at lcaruso7@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net