Sunday, August 21, 2005

More on Planes, Trains, and Automobiles

In response to my last post, my colleague Ernie Goss remarked that he was glad that I enjoyed my trip to Chicago via the train, and that he hoped I appreciated his contribution via federal subsidies to Amtrak. Of course, I always enjoy his good natured ribbing. And both of us share concerns about how taxpayer dollars are spent to support private activities.

However, it should also be noted that federal spending supports other modes of transportation as well. As previously discussed, the recent highway bill will pump billions into road projects, some of which would appear to benefit relatively small groups of people who use the improvements each day. Improvements here in Omaha that are near Creighton University will amount to approximately 18 million, which is a small part of the total appropriations but a big benefit for the local infrastructure that provides a link to the university area as well as to the Quest center, which is patronized by thousands of people each year. Few folks outside this area benefit directly, but then they get their largesse from the bill for their own projects. Plus, we all benefit from a network of transportation that allows us to get to more places, even if we don’t personally want to go there.

Looking at some rough estimates of the measure of federal subsidy for Amtrak, it appears that the federal government appropriated just over $1.2 billion to support Amtrak operations in FY 2004. Total passengers carried on Amtrack are approximately 25 million. Thus, this amounts to a little over $45 per passenger. This does sound high, though I suspect that the amount really varies a lot depending on the route served. Some commentators, including those from a group called United Rail Passengers (see their website for more on this) suggest that the real costs are being incurred in eastern routes that are underutilized, as opposed to the longer distance trains. (My own experience on the longer distance train seems to confirm that utilization was high – at least on this trip.)

Looking out this another way, if we divide the $1.2 billion by U.S. population, then the total subsidy is less than $5 each. This means that for an extra $5, you have the option to take the train. Is that worth it to you? I think there is some value in having the option to travel via some other means than air between major cities. The problem, if there is a problem, is that the rail network is probably too constricted.

By comparison, we spend about $14 billion each year on the FAA. In preparing this post, I was unable to get current year figures for airline passengers, but the figure for 2000 (before the disruptions in 2001 due to terrorism) was about 660 million passengers. This translates to a “subsidy” of common costs of about $21 per passenger. Of course, this figure may not cover other costs, such as homeland security costs, which have to be incurred to prevent airliners from becoming weapons used by terrorists. It is easy to see how these figures increase on a per passenger basis. We do generate tax revenues from airline tickets, though, and this would offset some of these government expenses.

The subsidy question for Amtrak remains a rich area for inquiry. Amtrak has some annual reports and other reports to Congress on its website. A gadfly group, the United Rail Passengers, has its own site devoted to reforming the operations of Amtrak. That web page is located here:

Edward A. Morse

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