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Taxes picking up tab for Amtrak losses

Mitchell Hartman Oct 27, 2009
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Taxes picking up tab for Amtrak losses

Mitchell Hartman Oct 27, 2009
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Kai Ryssdal: If you’ve taken Amtrak lately — and I realize that doesn’t apply to a whole lot of people outside the Northeast corridor — but if you’ve ridden the train recently from, let’s say, New York to Boston, you paid $62 for that trip. We, as in we the taxpaying public, kicked in another 5 bucks. That’s the taxpayer subsidy that Amtrak gets on that ticket according to a new report from the Pew Charitable Trusts. Marketplace’s Mitchell Hartman reports.


MITCHELL HARTMAN: The Pew report says taxpayers provide a $32 subsidy per Amtrak ticket, on average. Amtrak puts the subsidy at just $8.

The difference is Pew includes all the costs of running a railroad, like depreciation — that’s wear-and-tear on tracks and trains — and overhead, like the legal and HR departments. Taxpayers pick up those costs too. Amtrak got $1.3 billion in funding last year.

MARCUS PEACOCK: The Northeast regional line, which has lots of passengers, flips from being a profitable line using Amtrak’s figures, to one that actually loses money.

Marcus Peacock runs Pew’s Subsidyscope project. He says Amtrak’s high-speed, high-priced Acela line along the Northeast Corridor makes money. The Sunset Limited from New Orleans to Los Angeles loses the most — $462 per passenger.

PEACOCK: Some of the longer routes have some of the fewest passengers, and I think that combination results in some of these very high costs.

The report is fodder for critics who say Amtrak should shut down unprofitable routes.

Randal O’Toole of the conservative Cato Institute says, don’t throw more taxpayer money at a system that can’t get enough riders to break even.

RANDAL O’TOOLE: Best thing we can do for mass transportation would be to privatize it, let the private operators respond to the market, and then we’ll have a more efficient system that might be attractive to more people.

Amtrak’s supporters, though, argue that every public transportation mode in the U.S. gets subsidies from highways to airports. They’re calling for additional public subsidies for Amtrak to upgrade service and attract more riders.

I’m Mitchell Hartman for Marketplace.

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