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  • Discussion related to Amtrak also known as the National Railroad Passenger Corp.
Discussion related to Amtrak also known as the National Railroad Passenger Corp.

Moderators: GirlOnTheTrain, mtuandrew, Tadman

 #1525752  by MACTRAXX
 
JP and Everyone:

In my Yahoo News this recent article concerning Amtrak has been appearing:
(Date: 11/16/2019)
https://nationalinterest.org/blog/buzz/ ... ming-97061

The publication: National Interest; The writer: Randal O'Toole (Cato Institute)

Consider the source...MACTRAXX
 #1525758  by Tadman
 
Mainstream media: "hi we need a 30 second soundbyte to fill in between the 24/7 Trump impeachment stuff with a really impressive-sounding soundbyte".
Code: Select all
Amtrak announced a smallest-ever “adjusted operating loss” of $29.8 million in the 2019 fiscal year,...

 Amtrak’s net loss according to Generally Accepted Accounting Principles was $874.8 million, up from $817.2 million in FY 2018.
Me: This is the biggest non-story of the day. Operating profit is ticket sales dollars minus expenses to run the trains. GAAP profit includes amortized capital needs, which on a railroad are quite large. Essentially, as we've been saying all along, the total ticket sales are probably bigger than the total fuel, trackage rights, and salaries. Total ticket sales are not bigger than the above operating costs plus 1/30th of the cost of 300+ locomotives, NEC trackage, 1500 coaches, 20 HST's, and 10 giant stations like CUS and LAUPT.

On a side note, this is why Indiana got fed up with the Hoosier state and why NCDOT supplied their own coaches for the Piedmont. Neither party wanted to pay full freight rates for new coaches, because the Horizons were not new. Neither party wants their operations to support a fraction of the big stations, or Beech Grove, or any other capital costs that give little benefit to local operations like Indiana or North Carolina.
 #1525789  by Arborwayfan
 
Someone remind me again why we get lectured on public spending and investments by an organization named after a guy whose big claims to fame, IIRC from my Boston Latin School days, were kicking men without enough money out of the Roman senate and constantly telling the other senators to utterly destroy a rival they had already beaten enough that it was no longer a threat. (Marcus Portius "Carthage Must be Destroyed" Cato the Censor).

Still, whether one is for or against public subsidies for passenger trains, it probably IS good to remind people that a set of trains making an operating profit using equipment purchased with capital subsidies is not the same thing as that set of trains actually being profitable. On the one hand, I don't want someone hearing that Amtrak made an operating profit in 2023 and then thinking we can sell Amtrak to private investors (not happening unless profits actually cover depreciation, overhead, etc., or unless we keep subsidizing those parts); on the other hand, people who oppose subsidies don't want people to think that Amtrak is about to be operating without any government money and is therefore totally innoccous from a fiscal point of view. But there's nothing shady about saying Amtrak is close to breaking even on operating expenses or even close to turning a small operating profit.
 #1525835  by ThirdRail7
 
Arborwayfan wrote: Thu Nov 21, 2019 4:52 pm But there's nothing shady about saying Amtrak is close to breaking even on operating expenses or even close to turning a small operating profit.
Perhaps, but it seems shady they always point out the allocated losses of the long-distance network but typically fail to mention the staggering costs of NEC.
 #1525836  by ryanch
 
I'm sure they're named for the other Cato, the one who fought ably for the Roman Republic against the wealthy interests tearing it apart, and then committed suicide when Caesar overthrew the Republic.
 #1525844  by Arborwayfan
 
ryanch, that makes more sense. And maybe that was Cato the censor. I'll have to do a little review of Roman history.

Thirdrail7, I have no particular argument with that. Any train, including long distance trains and NEC trains, should be evaluated on its avoidable costs, not on a share of the unavoidable main system costs; ie it would be dumb to cancel the LDs expecting to save the allocated costs of CUS and the reservation system and so on. I do think that arguing about how to allocate the fixed costs of the system is a separate question from the difference between turning a small operating profit and turning a small profit including capital costs.
 #1525867  by Gilbert B Norman
 
I'm "tapped out" of freebies at Business Week. Who knows for how long?

So I copied the Opinion piece noted by Col. Perkowski to an email that I sent to myself; hopefully now I can give it the justice I believe it deserves.

At first blush, it does not appear to be propaganda from any advocacy group, or on the other hand, "non-foamer foamer" Randall O'Toole.

Something tells me, there will be unanswered questions until the Audited Financial Statements are released likely during 1st Qtr '20. Is the $29.8M "loss" being touted some kind of "Earnings Before I Tricked The Dumb Auditor", bka EBIDTA - Earnings Before Interest, Depreciation, Taxes, Amortization, which is a measurement of Cash Flow from operations, or is it a measurement of Net Railway Operating Income. NROI does reflect Equipment Depreciation, and Amortization of Capitalized Leases, in addition to "all the rest" - Fuel, Salaries, Maintenance of both Way and Equipment.

Not reflected within NROI is Debt Service, Taxes, and any other expenses not related to running trains.

Now what I believe is unfavorable misleading is saying that payment from Local agencies (mostly State) to operate trains is anything other than Operating Revenue. The payments are made by the agency to Amtrak (or if the perpetual threat of another operator ever comes to pass) for operating trains to their specifications That is revenue just as much as walking up to the window (or more the case nowadays, clicking "Purchase") and buying transportation from A to B.

This will be interesting to watch as it unfolds.
 #1547775  by Jeff Smith
 
https://www.cato.org/publications/comme ... -20s-1920s

I'm going to resurrect this thread because it's similar in nature to the above article. I disagree with the conclusions for the most part, but it's worth a read.
he Investing in a New Vision for the Environment and Surface Transportation (INVEST) in America Act passed by the House of Representatives last week is a transportation bill for the ‘20s — the 1920s, that is. The bill, which has yet to be considered by the Senate, would massively increase spending on obsolete forms of transportation that are irrelevant to most Americans.

The bill would quintuple federal subsidies to Amtrak and intercity passenger trains to nearly $10 billion a year. I love passenger trains more than most people, but unlike some I don’t think other taxpayers should be forced to subsidize my hobby.

The bill would further increase federal subsidies to urban transit by 50 percent, to $21 billion a year, much of which would go for rail transit. It would also increase federal spending on highways, but with a poison pill: states will not be allowed to expand their highway systems until they get all of their existing roads and bridges in a state of good repair. While that sounds sensible, no similar requirement is applied to Amtrak or urban transit even though Amtrak has a $52 billion maintenance backlog in the Boston‐​to‐​Washington corridor and transit agencies have a $100 billion backlog (in today’s dollars), mostly for rail transit.
...
Also, the author is mentioned upstream in this thread as well. Interesting background: a former PV owner! For more on the owner: https://www.cato.org/books/romance-rail ... on-we-need
...
Randal O’Toole is a senior fellow at the Cato Institute who has written five previous books and numerous research reports on transportation and land‐​use issues, including Gridlock: Why We’re Stuck in Traffic and What to Do about It. He is also a rail fan who helped restore the world’s third‐​most powerful steam locomotive and who once personally owned five railroad passenger cars. As an amateur historian, he has written articles on rail history for Minnesota History and other history journals. Described by U.S. News and World Report as a researcher who “has earned a reputation for dogged legwork and sophisticated number crunching,” he has been a leader in innovative thinking on environmentalism, natural resources, and urban land use.
...
 #1547801  by Backshophoss
 
Am very leery of "think tanks" ,they tend to be out of touch with reality,
Too many of them would rather pave over land ,instead of working with Mass Transit.
The local version, the "Rio Grande institute" has been mostly "wrong"/out of touch with the state of NM,
ANY kind of statement from a "think tank" should be taken with a large dose of salt.
 #1547813  by NRGeep
 
Cato Institute certainly has an old school Conservative outlook, Heritage Foundation another story of rigid, government run transit "bad" and their all encompassing solution is to privatize on steroids and that includes Amtrak.
 #1547814  by Tadman
 
It's interesting that Cato goes after a $2b operation but lets other colossal wastes of far larger size get away with murder. There must be a reason.

Perhaps it's because The optics are just awful and the operation serves literally nobody.

Every week I make a post about "how about a robust regional system rather than a 1920 long distance system that has <1% of market share" or "I wish Amtrak would quit running a 1971 business model based on 1921".

I've never read the Cato report and I don't subscribe to them. It just so happens that me, a pro-rail guy, thinks the same as a vehement anti-rail group.

Just because it's a train doesn't mean it's carrying passengers.
 #1547958  by Tadman
 
My hobby is old cars and I have a problem with taxpayer-supported roads. We build big new shiny ones to nowhere and then we can't afford to repave the ones we have. We build tollroads and then make inside deals to sell them. Old cars has nothing to do with it, we spend hundreds of hours working on them and drive them an hour or two per month on backroads.
 #1547961  by Pensyfan19
 
Tadman wrote: Wed Jul 15, 2020 1:57 pm My hobby is old cars and I have a problem with taxpayer-supported roads. We build big new shiny ones to nowhere and then we can't afford to repave the ones we have. We build tollroads and then make inside deals to sell them. Old cars has nothing to do with it, we spend hundreds of hours working on them and drive them an hour or two per month on backroads.
Instead, intercity railway systems should be funded instead of highways. I remember reading that in the car dominated city of Milwaukee, WI, (where highways already paved over a good portion of Milwaukee Road ROWs) the funding for one ramp on a highway was the equivalent of 15 years of commuter service within the city! I am also somewhat of a car enthusiast and familiar with the different types of American and modern foreign cars which are present among American roads, and even I say that these highways are not helping the greater good since it allows for more people to sit in traffic, no matter how many lanes politicians want to add, rather than conveniently arrive at their destination via rail transportation. Other nations who fully fund their rail infrastructure get that simple reality.