March 21, 2019

Amtrak (formally the National Rail Passenger Corporation) sent its fiscal 2020 budget request to Congress yesterday and asked for $141 million less than Congress actually appropriated for fiscal year 2019. The 2020 request of $1.80 billion is the amount authorized by Congress in the FAST Act of 2015, but Congressional appropriations for Amtrak and other railroad programs in 2018 and 2019 have exceeded the authorized amounts significantly. The budget request was followed today by release of Amtrak’s updated five-year (FY 2020-2024) service line plan.

While the U.S. Department of Transportation submits its own budget request on Amtrak’s behalf, Amtrak’s quasi-private status means that it also submits its own request to Congress directly, and its request is usually quite different from DOT’s request. Amtrak’s own request is $313.5 million higher than USDOT’s request on Amtrak’s behalf, once you add the Restoration and Enhancement grants account request, which USDOT is proposing to use to replace the operating subsidy component of Amtrak’s National Network appropriation.

$1.8 billion would be 26 percent of the $6.9 billion that Amtrak plans on spending in 2020, with the remaining $5.1 billion coming from its own revenues, borrowing for the capital program, or other funding sources.

Amtrak proposes to spend $629.6 million of its federal National Network grant on operating subsidies, with the bulk of that ($528.0 million) subsidizing operating losses on long-distance trains. $67.5 million would go to subsidize operating losses on state-supported routes, and the other $34.1 million would be spent on operating costs of infrastructure access and ancillary services.

It is this $595.5 million of operating subsidies for long-distance and state-supported Amtrak trains that the Trump Administration is proposing to eliminate and replace with $550 million in operating assistance grants from the Restoration and Enhancement grant program, which would gradually taper off to zero over four years.

In its own budget request, Amtrak took note of the Administration’s proposal to restructure and sunset the operating subsidies, saying “Amtrak appreciates the Administration’s focus on expanding intercity passenger rail service to today’s many underserved cities and corridors across the nation. We believe that a modernization of the National Network, with the right level of dedicated and enhanced federal funding, would allow Amtrak to serve more passengers efficiently while preserving our ability to maintain appropriate Long Distance routes. We look forward to working with the Administration, Congress, our state partners, and other stakeholders to consider these proposals in more depth.”

In terms of total operations, Amtrak’s 2020 request assumes $3.55 billion in spending. Minus the federal operating grant request of $629.9 million, the remaining $2.92 billion of that has to come from Amtrak’s own operating revenue. Amtrak reports that their FY 2018 actual revenue was $3.21 billion and that they are on track for $3.29 billion of revenue in FY 2019. $2.26 billion of the 2019 total is ticket revenue, $238 million comes from states who are subsidizing individual Amtrak routes in their states, $330 million is from ancillary revenue and $292 million is from “other core revenue.” The FY 2020 budget assumes $3.57 billion in Amtrak revenue.

Amtrak breaks down that $3.55 billion in proposed operational spending by service line. The following graph shows the proposed spending on each service line and by source fund.

The five-year service plan breaks down the finances of each service line in greater detail:

(The difference between the $6,906.6 million grand total in the second table above versus the $6,885.6 million grand total in the table immediately above is $21 million, which is the amount of the Amtrak appropriation that would be set aside for the Northeast Corridor Commission, the State-Supported Route Commission, and the 0.5 percent FRA oversight set-aside.)

While Amtrak is only requesting $1.80 billion from Congress in 2020, their request acknowledges that Congress appropriated more money than requested in 2018 and 2019, so table 2 in the request document cleverly spells out how Amtrak would spend the extra $141 million if Congress should somehow see fit to give them the same amount in 2020 that they did in 2019:

Table 2 then goes on to list how Amtrak would spend another $500 million beyond that in 2020, should Congress give them the money. And in the back of the book, Table 34 lists $46 billion in other Amtrak projects that Congress could consider funding in an infrastructure bill.

Amtrak’s budget request also goes quite far afield of Amtrak’s own appropriations, getting in the business of several other federal agencies and accounts. Table 32 of the request document urges Congress to boost appropriations for the Federal Transit Administration’s Capital Investment Grant program to $3.35 billion in 2020 (almost $800 million over the 2019 appropriation, probably making room for the Hudson River Tunnel, which wants so much CIG money that it would have trouble fitting into that program at its historic funding levels). And Table 33 shows how Amtrak wants Congress to beef up the Homeland Security grant program for rail security from $10 million per year to $25 million per year.

They also ask for report language in several non-Amtrak FRA accounts, asking for a $5 million set-aside in the Railroad R&D account for Amtrak workforce development programs and asking for report language ordering DOT and OMB to give Amtrak a better RRIF risk rating and to give back its old RRIF loan credit risk premium money once a loan is retired. Amtrak also wants the appropriators to add the following report language to the FRA Safety and Operations account:

Like last year, the 2020 Amtrak budget actually requests that Congress make five years worth of appropriations in the 2020 appropriations act. Then the 2021 budget would appropriate money that would become available in 2025, the 2022 bill would fund 2026, et cetera. This is an attempt to give Amtrak the same kind of certainty that highway and transit funding from the Highway Trust Fund has through multi-year contract authority. However, Congressional budget rules cap the total amount of such “advance appropriations” and there is currently no room for any Amtrak advance appropriations. This kind of thing would have to get approved by the Budget Committees before the Appropriations Committees could act on it.

Table 36 of the budget request also gives the actual FY 2018 results of Amtrak’s operations on each of its individual routes. First, the good news. The Acela Express service had $624 million in allocated operating revenues in 2018 versus just $306 million in operating expenses, for a revenue-to-cost ratio of 2.04 to 1. Northeast Regional service was almost as good, with $687 million in allocated operating revenues versus $476 million in operating costs, or 1.44 to 1.

The bad news: the long-distance trains still post ridiculously high operating losses that lead to huge per-passenger operating subsidies (which, as shown above, come from the Congressional appropriation). These losses ranged from $13.90 per passenger on the Palmetto between New York City and Savannah, Georgia) to to $362.37 per person on the Sunset Limited between New Orleans and Los Angeles.