March 22, 2019

Just a day after the White House released their budget proposal for 2020, which would significantly cut funding for rail and transit programs, the House Appropriations Subcommittee on Transportation, Housing and Urban Development held a hearing on March 12 to discuss the challenges and opportunities regarding passenger rail development.

The subcommittee and three witnesses met with the understanding that the Trump Administration’s budget aims to shift much of the fiscal responsibility for passenger rail (intercity and local) from the federal level to the state level. This is reflected in the budget’s proposed 23 percent reduction from levels approved by Congress in fiscal year 2019 for Amtrak and intercity rail programs. Additionally, the Trump Administration recommends cutting $1 billion from the New Starts Capital Investment Grants program (new and improved subways and light rail), 39 percent less than in 2019.

In this context, and as the subcommittee works to draft a fiscal 2020 appropriations bill, the hearing paid particular attention to investment priorities, positive train control systems (PTC), and the future of intercity passenger rail.

The following stakeholders were invited to testify and share their expertise:

• Jason Orthner, Rail Division Director, North Carolina Department of Transportation (written testimony here);
• Stephen Gardner, Senior Executive Vice President, Commercial, Marketing and Strategy, Amtrak (written testimony here); and
• DJ Mitchell, Assistant Vice President, Passenger Operations, BNSF Railway (written testimony here).

As for investment priorities, the majority of the conversation was given to the Southeast corridor project, the Northeast Corridor (specifically, the Gateway Program of projects), PTC, and new rail lines altogether for underserved markets.

The big takeaway is that in order to be completed, stakeholders say these projects need more federal funding, and that funding needs to be more consistent. Unlike aviation and highways (both of which have federal trust funds with dedicated revenue, which in turn allows funding to be guaranteed for several years in advance), there has never been a stable, predictable funding source for intercity passenger rail.

Speaking of the Southeast corridor project, Orthner said, “the full project, like many across this country, cannot be constructed at current federal fund levels. Existing discretionary grant programs are very helpful for maintaining current services. However, a consistent funding program that could be relied upon without evolving criteria for project eligibility will allow new interstate rail infrastructure programs to be established for continued growth.”

Gardner reiterated this same point when asked by Katherine Clark (D-MA) about the backlog of billions of dollars necessary for the Northeast Corridor, compared with the $650 million for Amtrak capital grants for the Corridor provided in each of 2018 and 2019. Without a reliable multiyear source of funding, he stated, Amtrak is unable to sign a contract or make commitments for things like internal construction as they don’t know if they’ll be able to provide the full funds. This applies to the Gateway Program, but also all intercity passenger rail projects around the country.

Bonnie Watson Coleman (D-NJ), upset at Deputy Transportation Secretary Jeffrey Rosen for dismissing the Gateway Program as a local responsibility and the Administration proposing to cut Amtrak’s Northeast corridor funding around 50 percent, asked Gardner to highlight the consequences of the Gateway Project not being completed. Gardner explained two critical projects in Phase I of the Gateway Program are to rebuild infrastructure to modern standards and create additional capacity over time. The loss of this infrastructure, even for a day, has huge potential impacts. “The Northeast Corridor Commission, of which Amtrak is a member, as well the state’s and DOT, has estimated the loss of infrastructure here causes, essentially, $100 million of productivity and disruption expenses,” Gardner asserted, “any significant reduction in funding to Amtrak’s Northeast corridor network or the national network poses substantial risks.”

As another priority, Amtrak wants funds to research the performance of its host railroads and the cost of performing poorly. These rails host freight trains and the shared right-of-way are causing delays and a reputation of unreliable service. Gardner emphasized the problem with some numbers: “Since 2018, for instance, Amtrak trains were delayed 1.2 million minutes by freight trains. Of our 15 long-distance trains, only one service was on time more than 70 percent last year.” Mitchell of BNSF also recognized the need for better coordinating freight and passenger rail.

Representative Will Hurd (TX) asked, “what needs to happen in order to see that increase in passenger rail traffic between a place like Houston and San Antonio?” Gardner recognized Texas as an excellent example of a place that could benefit greatly from increased rail but is currently offering marginal service. Putting rail in these areas “could do a lot more for the communities, but it’ll require dedicated investment, reliable funding and a partnership with the freight railroads to achieve better outcomes.” Orthner had said in his testimony, “As highways and airports become more congested and more difficult and costly to expand, investing in effective and productive transportation along a separate network will increase mobility between rural and urban centers, maintain highway capacity, and allow for economic expansion.”

Subcommittee chairman David Price (D-NC), when reflecting on the recent rail success of his home state North Carolina in improving passenger service and contributing to economic growth, framed this success in the context of future action, “If we want to accelerate this progress and replicate it, we’re clearly going to need more funding properly targeted. Maintenance needs to continue to grow, particularly in the aging Northeast corridor, and establishing new passenger rail corridors in the Southwest, Midwest and Gulf Coast and other regions will require a major commitment from Congress.”

Archived video of the hearing can be viewed here.