PASSENGER RAIL NEEDS IN THE
UNITED STATES
Funding and finance through 2027
Prepared by the AASHTO Passenger Rail
Funding and Finance Modal Team
August 2008
PASSENGER RAIL SERVICE IN THE STATES
1A.
THE CURRENT LANDSCAPE
1-A1. EVOLUTION OF PASSENGER RAIL SERVICES AND FUNDING
Federal policies have driven passenger rail investment in the United States since the mid-19th
century. Currently, the federal government is the largest financer of intercity passenger rail,
providing approximately $1.3 billion annually to Amtrak, the national passenger rail carrier. In
contrast, the states contribute approximately $223 million1 to support Amtrak routes and
improve infrastructure.
The Safe, Accountable, Flexible, Efficient Transportation Equity Act – A Legacy for Users
(SAFETEA-LU) expires September 30, 2009. National transportation interest groups, including
the American Association of State Highway and Transportation Officials (AASHTO), are
preparing their recommendations for Congress for the next transportation authorization bill.

The National Surface Transportation Policy and Revenue Study Commission issued
its report in January 2008 recommending bold changes in policies, programs and
institutions that would affect our nation’s transportation system over the next 50 years.

The National Surface Transportation Infrastructure Financing Commission issued its
interim report in February 2008 assessing the current approach to funding our surface
transportation infrastructure.
The AASHTO Passenger Rail Funding and Finance Modal Team presents this report to assist
state CEOs and AASHTO officials in advising Congress on recommendations for developing a
national passenger rail policy framework – a framework that will make passenger rail an integral
part of the larger transportation vision for a national, intermodal transportation system.
In this paper, the Passenger Rail Modal Team reviews the history of passenger rail services and
funding in the United States, discusses current funding issues and needs, and presents options
for implementation of an expanded passenger rail program.
1-A2. Creation of Amtrak and glide path to self -sufficie ncy
Passenger rail provided the bulk of intercity transportation in the late 19th and early 20th
centuries. Passenger traffic peaked in 1920 when it reached a total of 47 billion passengermiles, but this decade saw rail passenger traffic begin to lose its prominent position with the
onset of widespread automobile use. By 1933, total passenger-miles plunged to 16.3 billion, a
little more than one-third of the 1920 total. The introduction of diesel-powered steamliners in
the 1930’s brought a renewed interest in train travel, but the railroad share of intercity trips
continued to decline prior to World War II.
1
AASHTO, Standing Committee on Rail Transportation, Intercity Passenger Rail Transportation 2002, Corridor Profiles, pp. 62-148.
PASSENGER RAIL NEEDS IN THE UNITED STATES
Funding and finance through 2027
1
World War II brought about a huge resurgence in passenger rail traffic with troop movements
and government rationing of fuel and rubber. By 1946, though, rail ridership continued its prewar erosion. The changing demographic patterns that emerged after the war and the increase
in federal funding to construct the nation’s highway and airway systems had a dramatic effect
on rail travel. The privately run railroads found that continuing to run passenger trains was an
expensive undertaking. Passenger service suffered from a lack of public or private sector
investment resulting in outdated equipment, decrepit stations, and a management focus on
freight rail operations. Government regulation and labor union issues were also factors in
passenger service decline.
By 1970, the private rail lines that were providing freight and passenger rail service were in
serious financial trouble. The federal and state governments had been investing heavily in the
nation’s aviation and highway systems, and gasoline prices were relatively low. Thus, the public
came to rely upon and use the highway and aviation systems much more than they used the
rail system. It became clear to Congress that for passenger rail to be a viable transportation
option in the United States, it needed government policy and funding support. Thus began a
decade of important congressional legislation to address the public policy goal of providing
continued national rail service, both freight and passenger.
Congress passed the Rail Passenger Services Act (RPSA) in 1970. Out of this legislation
emerged the National Rail Passenger Corporation (Amtrak), a quasi-public corporation that
received a federal grant of $40 million, federal loan guarantees of $100 million, and
contributions from the railroads of equipment and $197 million in cash. The railroads received
common stock in exchange for their contributions. As part of the legislative agreement, Amtrak
assumed operation of intercity passenger trains and received priority access to the freight
railroad lines at incremental costs.
Amtrak began operations on May 1, 1971. However, not all passenger service in operation prior
to the initiation of Amtrak was maintained; about half the former passenger rail network was
discontinued after May 1, 1971. Several railroads continued to operate their own passenger
service for several years after the formation of Amtrak.
Amtrak struggled during its first few years and some believed it would stop operations after an
initial period of service. In the early 1970’s, legislation was enacted periodically to provide
funding for the national rail passenger system, generally through federal appropriations and
loan guarantees. In return, Amtrak was required to provide detailed submissions, including data
on ridership and on-time performance.
The Regional Rail Reorganization Act of 1973 established Conrail and set the stage for Amtrak
to take over the right-of-way and infrastructure on the Northeast Corridor. This was
accomplished through The Railroad Revitalization and Regulatory Reform Act of 1976.
By 1978, Congress conceded that Amtrak could not be profitable and free of federal subsidies.
In The Amtrak Improvement Act of 1978, the language of the Amtrak statute was amended
from “shall be a for-profit” corporation to “shall be operated and managed as a for-profit
corporation.” The Act also set goals for service improvements on the Northeast Corridor.
The 1979 legislation focused on what Congress saw as inadequately defined goals. The Amtrak
Reorganization Act of 1979 called for additional on-time performance and scheduling goals,
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PASSENGER RAIL NEEDS IN THE UNITED STATES
Funding and finance through 2027
system-wide average speeds, and improvements in revenue generation. At the same time, this
legislation required a reduced fare program for elderly and handicapped passengers. The
Amtrak Improvement Act of 1981 reduced the number of Amtrak directors to nine and issued
preferred stock, which gave the federal government a stake in the corporation. Amtrak
ridership stabilized at about 5 to 6 billion passenger-miles and 20 million passengers annually.
During the 1980’s and early 1990’s, Congress continued to provide annual subsidies to Amtrak
with no major changes in policy.
1A-3. Lack of Amtrak reauthorization
In 1997, Congress enacted The Amtrak Reform and Accountability Act: 1997-2002, which gave
Amtrak more flexibility in business decisions, including route structure and labor-protection
provisions. It authorized appropriations totaling about $5.2 billion over the period from 1998
through 2002. It also allowed access to about $2 billion from the Taxpayer Relief Act of 1997.
Since passage of this Act, Amtrak has not been reauthorized, but it has received annual
appropriations.
Amtrak found it difficult to adopt many of the cost-saving measures that were authorized in the
Reform Act. Labor issues were especially difficult; arbitration only lowered labor protection (pay
for laid off workers on discontinued routes) from six years to five years, which reduced the
company’s ability to fully introduce cost-cutting business measures.
In spite of the opposition of some freight railroads, Amtrak expanded its mail and express
service in an attempt to reduce losses and increase revenue. Amtrak invested in specialized
freight equipment and began delivering time-sensitive freight; however, passengers
experienced schedule disruptions. The result was increased revenue but reduced overall
income. This activity was, therefore, terminated in 2002.
By this time, Amtrak had exhausted its ability to borrow. Facing the potential of a shutdown,
the Administration orchestrated a $100 million loan, and Congress passed a supplemental
appropriation of $205 million. From its inception in 1973 through 2003, Amtrak had received
about $27 billion in federal subsidies.
The Amtrak Reauthorization Act of 2002 was never enacted, and the organization has continued
to subsist on federal appropriations, subject to congressional and federal agency oversight. See
Chapter 2 for annual appropriations amounts provided to Amtrak since 2003.
To provide a framework for future practices, Amtrak prepared and released a number of
Strategic Business Plans. The most current is the FFY 2005-2009 Strategic Business Plan
released in June 2004. It is a strategic capital investment and operating plan, which aims to
restore Amtrak’s physical plant and train equipment and improve operational reliability. The
Plan identifies four strategies:

maintain the focus on stabilizing the railroad;

ramp up the capital program;

continue the emphasis on operating efficiencies; and

encourage investment in improved service.
Amtrak has found that partnering with states to establish new state corridor service is a
successful approach to accomplishing the fourth strategy – encouraging investment in improved
PASSENGER RAIL NEEDS IN THE UNITED STATES
Funding and finance through 2027
3
service. Amtrak has repeatedly told Congress that its key focus is to “pivot from the state
corridors” where costs are shared and service is in high demand.
The Plan also calls for federal funding averaging $1.6 billion per year. The Plan reiterates
current federal policy that Amtrak not initiate new train service unless the full operating loss is
paid for by the state or states served. Amtrak continues to seek full state funding for “direct”
operating losses on existing state-supported trains. Amtrak is currently updating its Strategic
Plan for release in the spring of 2008.
From 1972 to 1981, ridership continued at a slow and steady pace, growing from 16.6 million to
21 million. The gradual increase has continued:

22.5 million by FFY 2001,

24.0 million by FFY 2003,

24.3 million by FFY 2006, and

25.8 million by FFY 2007.
In FFY 2007, Amtrak reported $1.52 billion in revenues, a 6.3 percent increase in ridership over
FFY 2006 and a 10.8 percent increase in ticket revenues. In FFY 2008, ridership continues to
increase over the same period in 2007.
1A-4. Commuter rail
The federal Rail Passenger Services Act and subsequent legal decisions define commuter rail as
short-haul rail passenger transportation in metropolitan and suburban areas usually having
reduced fare, multiple-ride, and commuter tickets and morning and evening peak period
operations. The RPSA also defines “Intercity rail passenger transportation” as rail passenger
transportation, except commuter rail passenger transportation.
The Penn Central Transportation Discontinuance decision (338 ICC 318) resulted from a 1971
investigation held to determine whether certain trains constituted commuter service, thus
placing them outside the jurisdiction of the newly formed Amtrak. Specifically, the ICC
concluded that a commuter service would likely include some or all of the following:

Passenger service is primarily used by patrons traveling on a regular basis either within
a metropolitan area or between a metropolitan area and a suburb.
Service is usually characterized by morning and evening peak periods.

Service usually honors commutation or multiple-ride tickets at a reduced fare.

Service makes several stops at short intervals, within a zone or along the entire route.

Equipment may consist of little more than ordinary coaches.

Service should not extend more than 100 miles at most, except in rare instances.
Both the RPSA and the ICC specifically defined commuter rail service in the manner described
above, stating that intercity rail is all other passenger rail service not falling under the
commuter category. The inclusion of state-supported rail service under the RPSA definition of
“intercity” is critical because Amtrak has the right under the RPSA to access freight railroad
tracks at incremental cost for the operation of intercity rail passenger services.
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PASSENGER RAIL NEEDS IN THE UNITED STATES
Funding and finance through 2027
Twenty commuter rail systems are operating in the United States today. These systems,
according to third-quarter 2007 APTA figures, carry a total of 1.66 million daily riders. They
range from the Metropolitan Transit Authority (MTA) in New York (including Long Island
Railroad and Metro-North), which carries an average of 635,400 passengers a day, to the Music
City Star in Nashville, Tennessee, which carries 500 passengers a day. The MTA carries about
38 percent of all daily commuters in the country. When combined with New Jersey Transit,
which also serves New York, the total climbs to almost 55 percent of all U.S. daily commuter
trips.
The second major hub of commuter activity is the Chicago area. The 310,800 riders of METRA,
combined with the 14,800 riders of the Northern Indiana Commuter Transportation District
(NICTD) South Shore line, constitute almost 20 percent of U.S. commuters. The Chicago/
Indiana systems combined with the New York/New Jersey systems constitute 75 percent of the
nation’s commuter rail use.
1-B.
AMTRAK SERVICES
1B-1. System trains
System trains are certain trains that Amtrak operates on short distance routes that were part of
the DOT-designated “basic system” of Amtrak routes, which Amtrak was required to operate
from its inception in 1971 until a 1997 statutory change. These trains consist of:
Empire Service/Maple Leaf: New York – Niagara Falls
Regional: Washington – Newport News; New Haven – Springfield, MA
Pennsylvanian: New York – Pittsburgh
Wolverine: Chicago – Pontiac
Hoosier State: Chicago - Indianapolis
1B-2. State-supported services
Fourteen states provide funding for Amtrak-operated service in their respective states2 – in
some cases, through bi-state cooperation, including:
Illinois-Wisconsin for Chicago-Milwaukee service
Oregon-Washington for Cascade Corridor service between Eugene and Seattle
Texas-Oklahoma for service between Fort Worth and Oklahoma City
States may also support a percentage of the total service between end points in a state or
states. Two examples are:
Pacific Surfliner corridor between San Luis Obispo and San Diego in California
Cascade Corridor between Portland, Oregon and Seattle, Washington
2
California, Illinois, Maine, Michigan, Missouri, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, Texas, Vermont,
Washington and Wisconsin.
PASSENGER RAIL NEEDS IN THE UNITED STATES
Funding and finance through 2027
5
California provides the greatest number of trips on three state-supported corridors, a total of 43
per day, followed by Illinois with 14, seven of which (Chicago-Milwaukee service) are jointly
funded with the State of Wisconsin.
1B-3. Long-distance trains
Amtrak operates 15 long-distance trains over 18,500 route miles serving 39 states and the
District of Columbia. Of the 48 contiguous states, only South Dakota and Wyoming do not have
Amtrak rail service, although Wyoming is served by Amtrak Thruway bus service.
In FFY 2007, long-distance trains carried 3.8 million passengers (14.8 percent of total Amtrak
ridership) and produced ticket revenues of $376 million (24.7 percent of Amtrak’s total).
Patronage ranged from 504,977 on the Empire Builder connecting Chicago and St. Paul to
Portland, Oregon and Seattle, to 63,336 riders on the Sunset Limited (3 trains weekly)
connecting Los Angeles and New Orleans. Long-distance trains run primarily on tracks owned
and maintained by private freight railroads. Long-distance trains typically consist of sleepers,
coaches, a diner and/or a lounge car.
In addition to linking states and major metropolitan areas, long-distance trains provide essential
service to areas of the country with few transportation options. Long-distance routes are
important in maintaining support for federal funding for Amtrak as part of a national transportation system that benefits the entire country.
Long-distance trains serve three unique roles:

National connectivity – Collectively, long-distance trains form most of the national
intercity passenger rail network that links national services and markets. The
preservation of a national network of intercity passenger train service was one of the
key reasons Congress created Amtrak.

Essential services – Many long-distance trains serve areas with limited or no air or bus
service. Rail transportation often provides the only affordable and reliable source of
public transportation in these areas.

Redundancy to the transportation system – Long-distance trains can provide an
alternative form of travel during periods of severe weather or emergencies that affect
other modes of transportation.
1B-4. Northeast Corridor (NEC) Washington DC – Boston
Amtrak owns and operates 363 miles of the 457-mile NEC between Washington and Boston
(a total of 1219 track miles). Two sections are not owned by Amtrak: 56 miles between New
Rochelle, New York and New Haven, Connecticut, which is controlled by the Metro-North
Railroad and owned by the States of Connecticut (47 miles) and New York (9 miles); and 38
miles between the Massachusetts/Rhode Island border and Boston, which is owned by the State
of Massachusetts. Amtrak also owns 62 miles of track between New Haven and Springfield,
Massachusetts, as well as 104 miles of track (274 track miles) between Philadelphia and
Harrisburg.
The NEC is a multi-use corridor, hosting freight, passenger and commuter trains, with over
1800 trains each weekday. It includes 30-50 mile-per-hour freight trains, commuter trains
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PASSENGER RAIL NEEDS IN THE UNITED STATES
Funding and finance through 2027
reaching 90 miles per hour, Amtrak regional service with speeds of 110-125 miles per hour, and
Acela Express trains, which are capable of traveling at speeds up to 150 miles per hour.
In addition to the primary Washington-Boston segment, the NEC handles trains including the
New York-Harrisburg; Washington-St. Albans, Vermont; and Newport News-Washington-Boston
services. A network of feeder corridors connect to the NEC spine, including Rutland, VermontNew York City; Buffalo-Albany-New York City; Montreal-New York City; Portland, Maine-Boston,
and Charlotte/Raleigh, North Carolina-Washington DC. The Shore Line East Commuter Railroad
also operates on the NEC.
In FFY 2007, the NEC had over 10 million patrons, about 39 percent of total Amtrak ridership.
A noticeable increase was seen on the Acelas, where ridership increased 19.6 percent over
FFY 2006. While accounting for about 28 percent of ridership, the Acelas provided almost
49 percent of ticket revenues.
Amtrak also owns trackage in Illinois, Indiana and Michigan. It owns approximately 100 miles of
trackage between Porter, Indiana, and Kalamazoo, Michigan, and two miles around Union
Station in Chicago, Illinois.
PASSENGER RAIL NEEDS IN THE UNITED STATES
Funding and finance through 2027
7
PASSENGER RAIL NEEDS
2A.
HOW SERVICE IS CURRENTLY FUNDED
2-A1. Congressional appropriations
Amtrak, the National Railroad Passenger Corporation created in 1970, provides U.S. intercity
passenger rail service in a 21,000-mile network, including 500 communities in 46 states. Since
2003, Amtrak has received Federal Railroad Administration (FRA) grants provided through
annual federal appropriations acts:
FEDERAL FISCAL
YEAR
CONGRESSIONAL APPROPRIATION
FOR AMTRAK
2003
$1.05 billion
2004
$1.20 billion
2005
$1.20 billion
2006
$1.35 billion
2007
$1.294 billion
2008
$1.325 billion
In the FFY 2008 Consolidated Appropriations Act, Congress also provided $30 million to
establish an Intercity Passenger Rail Grant Program to be administered by FRA as 50/50
matching grants to states for capital investment in intercity passenger rail service. Projects must
be included in a state’s transportation improvement program at the time of application to be
eligible for funding. Priority will be given to projects that:

improve the safety and reliability of intercity passenger trains,

involve a commitment by freight railroads to an enforceable on-time performance of
passenger trains of 80 percent or greater,

involve a commitment by freight railroads of financial resources commensurate with the
benefit expected to their operations,

improve or extend service on a route that requires little or no federal assistance for its
operations, and

involve a commitment by states or railroads of financial resources to improve the safety
of highway/rail grade crossings over which the passenger service operates.3
US DOT recently announced that 22 states have applied for funding under this limited program
– a strong indication from states of the interest in expanded passenger rail services.
3
2008 Consolidated Appropriations Act (HR-2764), Federal Railroad Administration, Capital Assistance to States–Intercity Passenger
Rail Service, pp. 550-551.
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PASSENGER RAIL NEEDS IN THE UNITED STATES
Funding and finance through 2027
Another provision of the FFY 2008 Consolidated Appropriations Act provides $20 million for
grants to states for rail line relocation and improvement. This program was authorized in
SAFETEA-LU, with funds appropriated for the first time in FFY 2008. About one-fourth of the
funds are directed to specific state projects.4
$47 million over five years (or an average of $9.4 million annually) is authorized for the
Railway-Highway Crossing Hazard Elimination in High Speed Rail Corridors program by
Section 1103(f)(2) of TEA-21, as modified by SAFETEA-LU. Congress appropriates funds for
this program annually. $13 million is authorized for FFY 2008.
The Congestion Mitigation and Air Quality Improvement Program (CMAQ) is a federal-aid
highway formula funding program available to all states in at least a minimum allocation. In
some states, the funds are used in urbanized areas that have not attained the ozone and
carbon monoxide air quality standards established in the federal Clean Air Act or that have been
designated as maintenance areas for ozone and carbon monoxide. Since passenger rail projects
can reduce carbon dioxide (CO2) and nitrous oxide (NOx) emissions, they are eligible for funding
under this program in all states. A total of $8.5 billion over five years (or an average of $1.7
billion annually) is authorized for CMAQ-eligible projects. It is not clear what percentage of total
CMAQ funds are used for intercity rail projects.
It has been some time since the Federal Transit Administration’s New Starts program has
funded new intercity rail service. New Starts is primarily designed to fund commuter rail
projects. It is over-subscribed, with more eligible commuter projects applying for funds than
there are funds available. Thus, only a limited number of intercity passenger rail segments have
received New Starts funding; they have been the exception, not the rule.
2-A2. Amtrak services
State and regional services, long-distance services, and Northeast Corridor services all have
different funding sources. Amtrak fully funds its 14 long-distance routes as well as some or all
of the trains in eight specific corridors.5 Fourteen states provide operating and/or capital
support for corridor routes in those states. As mentioned in Chapter 1, Amtrak’s current
strategic business plan reiterates current federal policy that Amtrak not initiate new train service
unless the full operating loss is paid by the state or states served. Amtrak continues to seek full
state funding for “direct” operating losses on existing state and regional trains.
In the early 1980’s, the federally funded Northeast Corridor Improvement Project made
improvements to the Northeast Corridor; however, infrastructure on the NEC has deteriorated
since then. In the 1990’s, the track north of New Haven was electrified. It was not until 2003
that Amtrak began funding a renewed capital program and made significant progress in
upgrading infrastructure and equipment. The result has been better on-time performance,
modest time reductions at both ends of the NEC, and more comfortable equipment.
4
Conference Report 110-446 to accompany HR-3074, making appropriations for the departments of transportation, and housing
and urban development and related agencies, p. 128.
5
The eight corridors are: NY/Albany/Buffalo/Niagara Falls; New Haven/Hartford/ Springfield; Philadelphia/Harrisburg /Pittsburgh;
Washington DC/Richmond/Newport News; Chicago/Detroit/ Pontiac; Chicago/St. Louis; LA/San Diego; Seattle/Portland.
PASSENGER RAIL NEEDS IN THE UNITED STATES
Funding and finance through 2027
9
No specific formula determines and allocates costs and compensation among Amtrak, freight,
state and commuter lines for shared-track operations on the NEC. Commuter rail agencies
negotiate contracts with Amtrak to establish their contributions for infrastructure access and
capital contributions.6 With hourly frequencies and top speeds of 135-150 miles per hour, NEC
service generates sufficient revenues to cover operating costs, but not capital costs.
2-A3. California high-speed rail
High-speed rail in California benefited from transit and intercity rail bond measures enacted in
1990. Proposition 116, a $2 billion bond measure, provided funds for initial engineering of a
segment of the southern California to northern California corridor. Other state funds were made
available for additional studies, including corridor evaluations, economic and ridership studies,
preliminary environmental work, and creation of the California High Speed Rail Commission,
which oversaw the studies. The Commission was dissolved in 1996 after adopting the studies.
The California High Speed Rail Authority was established to continue the project with additional
studies of the proposed corridor. The Authority developed investment-grade forecasts of
ridership and revenue by 2000 and produced a certified statewide final program-level Environmental Impact Report/Environmental Impact Statement by 2005. Further studies have refined
potential alignment, station locations, and ridership and revenue forecasts.
The system envisioned would have a 400-mile spine connecting the Los Angeles metropolitan
area with the San Francisco Bay Area, with additional branches to San Diego and Orange
County in southern California and to Sacramento in northern California. When completed, the
system would have 30 stations and, by 2030, potential ridership of 86 to 117 million.
The 2007-08 California State Budget provides $20.7 million to continue project implementation.
The funding will go towards a project financial plan, project management activities, and
continuation of detailed project design. However, California voters must approve bond funding
to continue the project. The November 2008 ballot will include a $9.95 billion bond measure,
with $9.0 billion for the high-speed rail project and $0.95 billion to improve rail services that
connect with the high-speed system. Other states, including North Carolina, Texas and Florida,
are also at various stages of considering high-speed rail options.
2-A4. Commuter rail
There is an interrelationship between intercity passenger rail services and commuter services in
many areas of the United States. Commuter agencies generally obtain local and regional public
funds in addition to federal funds for their systems. All commuter rail operators rely heavilty on
state and local operating subsidies.
One important aspect of commuter service, which affects many U.S. commuter agencies and
which has a great impact on present and potential future funding, is the role played by Amtrak.
Many existing commuter rail agencies are provided some level of access to Amtrak infrastructure and services – train operations, maintenance of equipment, maintenance-of-way,
United States Government Accountability Office, GAO-06-470, Commuter Rail Issues should be Considered in Debate over Amtrak,
April 2006, p. 24.
6
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PASSENGER RAIL NEEDS IN THE UNITED STATES
Funding and finance through 2027
dispatching, ticketing and security services. Amtrak infrastructure includes Amtrak-owned or
operated stations or service on the NEC, as well as Union Station in Chicago.
This is an issue particularly in the Northeast, where seven of nine commuter systems operate
on Amtrak-owned portions of the NEC. Of the approximately 1800 trains that use some portion
of the NEC, more than 1600 (89 percent) are commuter trains. Only four of the operating
commuter systems in the country7 do not avail themselves of any Amtrak services or
infrastructure. On the other hand, five agencies8 are totally reliant on Amtrak services, including
train operations.
A number of states make payments to Amtrak through transit agencies or state transportation
departments for use of Amtrak-owned NEC facilities by commuter trains. These agencies or
states also provide other funding on the NEC, including capital funds for infrastructure and/or
stations.9 In addition, Amtrak has agreements for access and/or maintenance where Amtrak
trains operate over locally owned segments of the NEC in three states.10
7
Metro-North [MTA], NICTD, Trinity Railway Express [TRE] and Tri-Rail.
8
Virginia Railway Express [VRE], Caltrain, Connecticut Dept. of Transportation [SLE], and PennDot.
9
These states include Connecticut, Delaware, Maryland, New Jersey, New York, Pennsylvania and Virginia.
10
Connecticut, New York and Massachusetts.
PASSENGER RAIL NEEDS IN THE UNITED STATES
Funding and finance through 2027
11
2-A5. Current passenger rail system map
The following map shows the current national passenger rail network, which is comprised of
Amtrak passenger routes and state corridor routes. While other corridors are federally
designated as high speed rail corridors,11 only those that currently operate at high speeds or
expect to be operating at high speeds during the map timeframe are designated as high speed
routes on the maps in this paper.
Existing Intercity Passenger Rail Network
Vancouver, BC
Seattle
Spokane
Portland
Montreal
Eugene
Fargo
Portland
Minneapolis
Albany
Toronto
Boston
Milwaukee
Redding
Reno
San Francisco
Omaha
Sacramento
Denver
Bakersfield
Las Vegas
Phoenix
Philadelphia
Indianapolis
Cincinnati
St. Louis
Washington
Richmond
Raleigh
Trinidad
Los Angeles
San Diego
Kansas City
New York
Cleveland
Chicago
Salt Lake City
San Jose
Sam Luis
Obispo
Detroit
Madison
Albuquerque
Oklahoma City
Atlanta
El Paso
Dallas /
Ft. Worth
Charlotte
Savannah
Jesup
Meridian
Jacksonville
San Antonio
Houston
New Orleans
Legend
Existing Amtrak Network
Existing High Speed Rail
Tampa
Miami
Background map based on “America 2050: A Prospectus”, www.america2050.org, Regional Plan Association
11
Designation allows a corridor to receive specially targeted funding for highway-rail grade crossing safety improvements and
recognizes the corridor as a potential center of high speed rail activity. Corridors designated include the California Corridor, Pacific
Northwest Corridor, South Central Corridor, Gulf Coast Corridor, Chicago Hub Network, Florida Corridor, Southeast Corridor,
Keystone Corridor, Northeast Corridor, Empire corridor, Northern New England Corridor.
12
PASSENGER RAIL NEEDS IN THE UNITED STATES
Funding and finance through 2027
2B.
FUNDING NEEDS THROUGH 2027
2-B1. Developing cost-estimates for capital investment
When preparing cost-estimates for the nation’s intercity passenger rail needs, it is important to
include the roughly $5 billion that is needed to fund deferred maintenance and capital backlog
projects to return the Northeast Corridor to a “state-of-good-repair,” under which only routine
maintenance would be needed.12
Passenger rail needs for the remainder of the country have been compiled in two reports:
Intercity Passenger Rail Transportation 2002, Corridor Profiles, prepared by AASHTO’s Standing
Committee on Rail Transportation, including a 2008 update, and a 2007 report prepared by a
Passenger Rail Working Group (PRWG)13 for the National Surface Transportation Policy and
Revenue Study Commission, Vision for the Future, U.S. Intercity Passenger Rail Network
through 2050.
The PRWG considered the historical role of intercity passenger rail in the U.S., looked at the
existing passenger rail network, examined costs and benefits of an expanded system, and
developed a cost-estimate for its vision. The analysis was driven by the 2002 AASHTO
estimates; however, the rail lines included were illustrative only. The PRWG included most of
the corridors that AASHTO considered in 2002 as well as some corridors in planning stages and
others where future passenger rail corridors made sense to connect city-to-city pairs within 500
miles of each other.
The PRWG analysis, which was undertaken to estimate the costs of intercity passenger rail
expansion over 50 years, indicates the need for $66 billion through 2015, $159 billion through
2030, and $132 billion through 2050, for a total intercity passenger rail investment of $357
billion. Actual cost-estimates from the states for projects in their existing state rail plans over
the period of the next three surface transportation authorization bills (2010-2027) along with
the PRWG estimates, converted for this period, are shown in the table at the end of this
section.
The following AASHTO 2008 estimate of Intercity Passenger Rail Corridor Investment Needs is
provided for reference; it disaggregates capital cost estimates by corridor, based on information
provided by the states for corridor routes with developed studies and reliable estimates. A 2002
AASHTO study team asked state rail providers to provide their planned investments for the
coming 20 years in order to estimate the collective capital investment needs. The study team
collected data on a corridor-by-corridor and year-of-expenditure basis.14 AASHTO staff recently
conducted a survey to update this information for 2008, adding planned service that was not
envisioned earlier.
12
Report of the Committee on Commerce, Science and Transportation on S.294, Passenger Rail Investment and Improvement Act
of 2007, Senate Report 110-67, May 22, 2007, p.4.
13
Passenger Rail Working Group, Vision for the future: U.S. intercity passenger rail network through 2050, December 6, 2007.
14
Where year-by-year data were not available, the study team contacted the state to determine a likely range for construction and
distributed the projected cost evenly across the years, adjusting from the base year provided to a year-of-expenditure value,
assuming an average annual inflation rate of 3 percent. When all data were collected, assigned to a year, and adjusted to reflect
year-of-expenditure values, the summary totals were calculated, deflating to a constant 2006$ base year to ensure a consistent
comparison.
PASSENGER RAIL NEEDS IN THE UNITED STATES
Funding and finance through 2027
13
AASHTO 2008 UPDATE
INTERCITY PASSENGER RAIL CORRIDOR INVEST MENT NEEDS
2007-2027 (in mi llions, 2006 dollars)
C or ri d or
Northeast Corridor
Keystone Corridor (Philadelphia-Harrisburg)
Empire (NY-Albany-Buffalo) and
Adirondack (NY-Albany-Montreal) Corridors
Midwest Regional Rail Initiative System
Chicago-Detroit
Chicago-Cleveland
Chicago-Cincinnati
Chicago-Carbondale
Chicago-St. Louis
St. Louis-Kansas City
Chicago-Quincy/Omaha
Chicago-Twin Cities
Other Chicago
Rolling Stock
SEHSR Washington to Charlotte
SEHSR Extension (Charlotte to Macon)
Florida Intercity Passenger Rail
(Statewide)
Capital Corridor
(San Jose-Oakland-Sacramento)
Pacific Surfliner Corridor
(San Luis Obispo-Los Angeles-San Diego)
San Joaquin Corridor
(Oakland/Sacramento-Bakersfield)
California Coast Corridor
(San Francisco-Los Angeles);
Extensions to California Corridors (Reno,
Redding, Palm Springs, and Las Vegas)
Pacific Northwest High Speed Rail Corridor
South Central Corridor
Gulf Coast High Speed Corridor
Northern New England High Speed Corridor
Colorado Corridor
Ohio & Lake Erie Regional Rail (Ohio Hub)
Louisiana Recovery Rail System
(Baton Rouge-New Orleans)
Downeaster Extension
(Portland-Brunswick, Maine)
Virginia Passenger Rail Program (Statewide)
North Carolina Passenger Rail Program
(Statewide)
Totals
14
PASSENGER RAIL NEEDS IN THE UNITED STATES
Funding and finance through 2027
S u b t ot als
200 7 -2 012
Total
201 3 -2 027
7,155
134
18,825
-
25,980
134
408
867
1,275
4,549
4,579
9,128
646.4
638.2
258.1
75.7
463.0
105.8
392.0
1,046.4
74.5
848.8
387.3
767.4
459.7
199.2
64.4
952.4
363.9
893.7
3.3
488.1
1,033.7
1,405.6
717.8
274.9
527.4
1,058.2
755.9
1,940.1
77.8
1,336.9
1,443
806
2,699
1,209
4,142
2,015
3,500
6,500
10,000
1,002
2,802
3,804
1,349
3,050
4,399
388
1,382
1,770
550
360
910
155
118
273
212
150
310
963
6,625
3,355
5,515
2,964
4,801
4,919
6,837
3,505
5,825
2,964
4,801
5,882
48
-
48
80
-
80
-
372
372
183
884
1,067
23,385
71,826
95,211
At least 36 states have developed intercity passenger rail plans for future service.15 The
AASHTO data was initially compiled for a 2002 report on state corridor profiles; thus, it has
some limitations and inconsistencies. Not all states provided cost-estimates for rolling stock,
station costs, or recapitalization costs, and frequencies for today’s corridor operations are
missing. The PRWG numbers were based on vision maps and the cost of service necessary to
provide the service in these maps.
AASHTO’s recent survey collected updated information from the states for a more accurate
cost-estimate. The 2008 AASHTO Update indicates the need for $95.2 billion through 2027
($25.9 billion for the Northeast Corridor and $69.2 billion for state-supported corridors. Data for
the state-supported corridors is converted to a rough estimate of revenue needs for three sixyear bills and summarized in the table below with the converted AASHTO data.
ESTIMATED INTERCITY PASSENGER RAIL DEVELOPMENT COSTS
IN STATE CORRIDORS THROUGH 2027 (in billions)
2010-2015
2016-2021
2022-2027
(6 yrs.)
(6 yrs.)
(6 yrs.)
TOTAL
(18 yrs.)
PRWG Analysis
$44
$63
$52
$159
AASHTO 2008 Update
$20
$24
$25
$69
Amtrak System
Capital Needs
$13
$13
2-B2. California high-speed rail studies
The 400-mile California high-speed rail project connecting Los Angeles and San Francisco, with
additional branches to San Diego, Orange County and Sacramento is estimated to cost between
$35 and $40 billion dollars. Other high-speed projects in California are in varying stages of
study. These include both steel-wheel on rail and magnetic levitation (maglev).
DesertXpress is a proposed, completely new high-speed steel wheel service connecting
Victorville, California (in San Bernardino County) with Las Vegas, Nevada. t would largely follow
the Interstate-15 freeway alignment. The estimated capital cost is $3.5 billion in private funding
for design, construction and rolling stock. Revenues from fares and advertising are expected to
cover the on-going operating costs, including maintenance. The Federal Surface Transportation
Board issued a Declaratory Order finding that the project is not subject to state and local
environmental review and other permitting requirements because of federal preemption. The
Federal Railroad Administration (FRA) is the lead agency and is currently preparing a draft
federal Environmental Impact Statement.
A maglev project sponsored by the Southern California Association of Governments (SCAG)
considers a 92-mile corridor extending from Los Angeles International Airport (LAX) to Ontario
International Airport, then to March Inland Port in San Bernardino County. In 2000, a project
15
AASHTO, Standing Committee on Rail Transportation, Intercity Passenger Rail Transportation 2002, Corridor Profiles, p. 10.
PASSENGER RAIL NEEDS IN THE UNITED STATES
Funding and finance through 2027
15
description was submitted to FRA for funding. In 2002, the corridor was shortened by SCAG to
an initial segment that spanned 54 miles from West Los Angeles to the Ontario Airport. The
cost-estimate for this segment is about $8 billion. Between FFY 2001 and 2004, SCAG received
$3.4 million in FRA funding for corridor planning activities. Other maglev/high-speed rail
feasibility studies undertaken by SCAG include Los Angeles to Palmdale, LAX to southern
Orange County, and downtown Los Angeles to central Orange County.
From these studies, SCAG concludes that these projects have the potential to be self-funded
through public-private partnerships where the public sector will donate land and the private
sector will construct and operate the systems.
Another bi-state high-speed proposal is the Las Vegas-Anaheim Maglev Project. This is a 269mile maglev system connecting southern Nevada and southern California. The project would be
in five segments. A short segment, from Las Vegas to the California state line has been most
actively studied. The project would, as in the DesertXpress project, utilize large segments of
Interstate-15 right-of-way. This alignment would minimize the need for property acquisition and
provide the least complicated construction scenario. To date, the project has received $9.0
million in federal funding. Another $45 million is authorized in SAFETEA-LU over five years;
however, no funds have been appropriated to date.
2C. NO FEDERAL PROGRAM BUT FOR AMTRAK SERVICE
2-C1. Federal funding available for passenger rail investment
As indicated earlier, instead of reauthorizing The Amtrak Reform and Accountability Act, which
expired in 2002, Congress has appropriated approximately $1.3 billion to FRA annually for
grants to Amtrak. A number of other federal programs provide grants to states, but taken
together, these programs do not provide sufficient funds for states to develop new service or
pay for existing service in any substantive way.
Other US DOT programs that can be used to support passenger rail include the RailwayHighway Crossing Hazard Elimination in High Speed Rail Corridors program (FRA); rail line
relocation grants to states (FRA); matching grants to states for passenger rail capital
investment (FRA), and the Congestion Mitigation and Air Quality Improvement Program
(Federal Highway Administration – FHWA).
While the CMAQ program is an 80/20 federal-state program, only a portion of CMAQ funds are
used on passenger rail projects. Rail-highway crossing funds are 100 percent federal and are
readily used by the states to improve safety. However, the 2008 eligibility requirements for rail
line relocation grants and capital investment grants may curtail some states from participating.
For example, these programs require a 50/50 federal-state partnership, which is difficult for
some states to provide. The priority considerations in FRA’s capital investment grant program,
including the requirement of a freight railroad commitment to an enforceable on-time
performance of passenger trains of 80 percent or greater, may raise concerns for some states.
16
PASSENGER RAIL NEEDS IN THE UNITED STATES
Funding and finance through 2027
2-C2. The Passenger Rail Investment and Improvement Act of 2008
The Passenger Rail Investment and Improvement Act of 2008 (HR-6003) was introduced in the
House in May 2008 as a companion to S-294, which was passed in the Senate in October 2007.
The legislation provides funding for Amtrak’s operating and capital needs, funding to reduce
Amtrak’s debt, and an 80/20 capital grant program for the states. Funding levels compared:
Funding Amounts in House and Senate Amtrak Reauthorization Bills
Amtrak capital
Amtrak operations
ADA16 Compliance
Amtrak debt
State capital grants
High speed rail corridors
2008 HR-6003
Five Years
Average Annual
$4.2 billion
$840 million
$3.0 billion
$606 million
$1.0 billion
$200 million
$1.7 billion
$345 million
$2.5 billion
$500 million
$1.75 billion
$350 million
2007 S-294
Six Years
Average Annual
$4.9 billion
$818 million
$3.3 billion
$550 million
$1.8 billion
$293 million
$1.4 billion
$233 million
-
The approach taken in these bills is to employ FTA’s New Starts program as a model for funding
state intercity passenger rail projects. Unfortunately, some states have found the existing New Starts
evaluation process to be inefficient, expensive and overly bureaucratic. US DOT has arbitrarily given
more weight to certain project criteria than others, and the New Starts process has been lengthy.
For example, based on FTA estimates, it currently takes approximately 7.5 years to get from project
development to final design. Of particular concern to the states is Section 301 of HR-6003, which
states, “The Secretary shall give priority in allocating future obligations and contingent commitments
to incur obligations to grant requests seeking a lower federal share of the project net capital cost.”
This provision effectively does away with the 80 percent federal share for state capital investment
and eliminates some states from the competition.
More importantly, while the funding levels established in the bills represent a multi-year federal
commitment to funding intercity passenger rail, neither bill provides a dedicated federal funding
source for rail. As in years past, intercity passenger rail will continue to rely on the annual
transportation appropriations process to fund the authorizations provided in these bills.
2-C3. Potential funding through climate change legislation
Rail provides significant environmental benefits through a reduction in petroleum usage and
greenhouse gas (GHG) emissions. Oak Ridge National Laboratory estimated that in 2003 Amtrak
consumed 18 percent less energy per passenger mile than airlines and 17 percent less than
automobiles. According to the American Association of Railroads, in 2007, the nation’s major freight
railroads moved a ton of freight an average of 436 miles on each gallon of fuel.
As Congress considers legislation to address climate change, there may be an opportunity to secure
federal funds for intercity passenger rail projects that reduce GHG emissions. There are two potential
models that would provide incentives for reduced GHG emissions; both are potential sources of
federal funds for intercity passenger rail.
16
Americans with Disabilities Act
PASSENGER RAIL NEEDS IN THE UNITED STATES
Funding and finance through 2027
17
Carbon Cap and Trade – Several Cap and Trade bills have been proposed in recent months. Cap and
Trade is an administrative procedure where the government sets a cap on pollutants and companies
or groups are issued allowances of credits to emit a certain amount. If the company or group
reduces emissions below its allowance, it is permitted to auction credits to those companies or
groups that are unable to reduce emissions. The trading market would set a price for a ton of carbon
emissions based on the supply and demand of such allocations. The Lieberman-Warner climate
change bill (S-3036) sets aside $170 billion of the cap and trade auction proceeds through 2050 for
transit investments. A similar, separate set-aside for rail could provide dedicated federal funding.
Carbon Tax – Under a carbon tax, the government would impose a tax on carbon output. The more
CO2 for each unit of energy emitted, the higher the tax. Again, the revenue from a carbon tax could
represent dedicated federal funding for rail.
2D.
FUTURE FUNDING NEEDS
At least 36 states have developed intercity passenger rail plans for future service. The states have
made significant investments in infrastructure and equipment. They have completed environmental
analyses and engineering studies for expanded service. The preliminary 2008 Update to AASHTO’s
Intercity Passenger Rail Transportation Report indicates the need for $95 billion in capital investments through 2027 ($26 billion for the NEC and $69 billion for state corridors). This is an average
annual investment of $5.3 billion ($1.4 billion for the NEC and $3.8 billion for state corridors) for a
period of 18 years. To cover 20 percent of the $3.8 billion need, the states together will need to
invest an additional $760 million annually on average.
18
PASSENGER RAIL NEEDS IN THE UNITED STATES
Funding and finance through 2027
2E.
PROPOSED INTERCITY PASSENGER RAIL SYSTEM
The Passenger Rail Working Group created a set of maps depicting estimated costs for
passenger rail expansion under immediate (2007-2015), mid-term (2016-2030), and long-term
(2031-2050) scenarios. AASHTO’s Standing Committee on Rail Transportation reviewed the
maps and revised them to reflect the states’ current thinking on rail passenger development.
The 2015 map shows the current system with proposed service expansion in major regional
corridors. It should be noted that the 2015, 2030 and 2050 maps in this paper are illustrative
only. The routes shown do not constitute the exact routes that will be included in the passenger
rail network by 2015.
States may determine that some of these routes should not be included and that others should
be added during these time periods. It should also be noted that freight railroads own the
infrastructure on which most passenger trains operate outside the Northeast Corridor. Before
going forward with new service, states will need to negotiate with freight railroads for capacity
on their lines. This negotiation will affect final plans and funding needs.
2015 Proposed Intercity Passenger Rail Network
Vancouver, BC
Seattle
Portland
Montreal
Duluth
Eugene
St. Albans
Minneapolis
Boston
Milwaukee
Redding
Madison
Dubuque
Des Moines
Reno
San Francisco
Sacramento
Detroit
New York
Cleveland
Chicago
Philadelphia
Columbus
Cincinnati
San Jose
Sam Luis
Obispo
Albany
Buffalo
Washington
Richmond
Bakersfield
Los Angeles
Raleigh
Palm Springs
San Diego
Charlotte
Marshall
Meridian
Jacksonville
Legend
Proposed Corridor – Up to 79 mph
Proposed Corridor – 79-110 mph Track
Proposed Corridor – 110 + mph
Tampa
Miami
Existing Amtrak Network
Existing High Speed Rail
Background map based on “America 2050: A Prospectus”, www.america2050.org, Regional Plan Association
PASSENGER RAIL NEEDS IN THE UNITED STATES
Funding and finance through 2027
19
The 2030 map continues service expansion throughout the country with significant further
improvements in each of the regional corridors.
2030 Proposed Intercity Passenger Rail Network
Vancouver, BC
Seattle
Portland
Pendleton
Montreal
Duluth
Eugene
Portland
Boise
Minneapolis
Albany
Toronto
Boston
Milwaukee
Redding
Reno
San Francisco
Salt Lake City
Cheyenne
San Jose
Omaha
Philadelphia
Denver
Bakersfield
Las Vegas
Palm Springs
Trinidad
Columbus
Cincinnati
Quincy
St. Louis
Raleigh
Asheville
Albuquerque Oklahoma City
Tulsa
Wilmington
Atlanta
Dallas /
Ft. Worth
Legend
Proposed Long Distance – up to 79 mph
Proposed Corridor – Up to 79 mph
Proposed Corridor – 79-110 mph
Proposed Corridor – 110 + mph
Marshall
Macon
Meridian
Funding and finance through 2027
Savannah
Jesup
New Orleans
San Antonio
Houston
Background map based on “America 2050: A Prospectus”, www.america2050.org, Regional Plan Association
PASSENGER RAIL NEEDS IN THE UNITED STATES
Charlotte
Jacksonville
Baton Rouge
Existing Amtrak Network
Existing High Speed Rail
20
Washington
Richmond
Wichita
San Diego
El Paso
New York
Cleveland
Chicago
Sacramento
Los Angeles
Detroit
Madison
Tampa
Miami
The 2050 map includes some new service but focuses instead on increasing speeds and
frequencies.
2050 Proposed Intercity Passenger Rail Network
Vancouver, BC
Seattle
Portland
Pendleton
Montreal
Duluth
Eugene
Portland
Boise
Minneapolis
Albany
Toronto
Boston
Milwaukee
Redding
Reno
San Francisco
Salt Lake City
Sacramento
San Jose
Cheyenne
Bakersfield
Las Vegas
Palm Springs
Phoenix
San Diego
Trinidad
Omaha
El Paso
Dallas /
Ft. Worth
Legend
Columbus
Cincinnati
St. Louis
Tulsa
Chattanooga
Marshall
Raleigh
Morehead City
Wilmington
Atlanta
Macon
Charlotte
Savannah
Jesup
Meridian
Jacksonville
Baton Rouge
Proposed Long Distance – Up to 79 mph
Proposed Corridor – Up to 79 mph
Proposed Corridor – 79-110 mph
Proposed Corridor – 110 + mph
Washington
Richmond
Louisville
Bristol
Nashville Asheville
Wichita
Albuquerque Oklahoma City
Philadelphia
Indianapolis
Kansas City
New York
Cleveland
Chicago
Denver
Los Angeles
Detroit
Madison
New Orleans
San Antonio
Houston
Tampa
Naples
Existing Amtrak Network
Existing High Speed Rail
Miami
Background map based on “America 2050: A Prospectus”, www.america2050.org, Regional Plan Association
These maps represent the current thinking of states that are interested in increasing or enhancing
their rail service. Increasingly, states are recognizing that passenger rail will be an important
component of their transportation systems if they wish to offer their citizens the mobility choices they
want and need and also address issues related to global climate change and increasing gas prices.
States will determine their financial capacity to carry projects forward based on the revenue available
to them to complete projects.
Like the building of the highway network over the last half of the 20th century, states will only be able
to accomplish the rail plans envisioned in these maps if there is a dedicated, ongoing federal revenue
source that enables them to execute this vision.
PASSENGER RAIL NEEDS IN THE UNITED STATES
Funding and finance through 2027
21
PASSENGER RAIL POLICIES
3A.
CURRENT CHALLENGES TO PASSENGER RAIL’S FUTURE
3-A1. Limited federal funding sources for passenger rail currently available
to the states
As detailed in Chapter 2, the table below summarizes current federal programs available to
states to support rail. Rail-highway grade crossing funding is designed to address a specific
purpose and is not available for intercity rail expansion. The most significant challenge for
states that wish to expand rail capacity is the lack of a federal funding partner.
FFY 2008
Funding
FederalState/Local
Match Ratio
Railway-highway crossing hazard
elimination in high speed rail corridors
$13 million
100% federal
Congestion mitigation and air quality
improvement program
$1.7 billion
80/20
FRA
Passenger rail capital investment grants
$30 million
50/50
FRA
Rail line relocation grants
$20 million
50/50
Federal
Agency
FRA
FHWA
Federal Program
3-A2. Relationship of capacity issues to funding needs
While trade benefits the nation as a whole, the burden of accommodating the demand is
currently borne by states and local governments at international gateways and on trade
corridors. To retain their current market share of the expected increase in freight transportation
in the coming decades, freight railroads will need to make significant capacity improvements.
AASHTO studies show that freight rail will be unable to do so without public funding in the
range of $2.65 billion annually for the next 20 years; and this estimate excludes the additional
expanded capacity needed for intercity passenger rail and commuter rail.
The freight railroads own approximately 97 percent of the track over which Amtrak operates,
including most tracks outside the NEC. The shared use of tracks creates liability and scheduling
challenges, especially since passenger trains operate at high speeds and must stop rapidly and
frequently. The increased passenger and freight traffic combined has led to rail congestion and
safety concerns. Payment for access is negotiated among the freight railroads, the intercity
passenger rail carrier, and the states. Amtrak’s business plan calls for federal funding averaging
$1.6 billion per year. Its plan reiterates current federal policy that Amtrak not initiate new train
service unless the full operating loss is paid by the state or states served.
22
PASSENGER RAIL NEEDS IN THE UNITED STATES
Funding and finance through 2027
3-A3. Public sector benefits of public investment on privately owned rail lines
Increased investment in freight rail infrastructure is important to the expansion of intercity
passenger rail in the United States because passenger rail service today is primarily operated on
freight rail lines. However, investing public funds in privately owned railroad infrastructure has
been limited to date because of institutional, legal, political and competitive issues.
Before such investment can be made at the state level, state legislatures must determine that
such investment is in the public interest and does not violate the state’s Constitution. In
California, for example, the Legislature determined that state highway funds, except for gas tax
revenues, could be invested in freight infrastructure projects. However, fuel tax revenues were
determined to be restricted to highway use by interpretations of the state Constitution.17
In California, the Legislature determined public benefit and included freight infrastructure in
official policy, stating “A goal of the state is to provide adequate, safe and efficient
transportation facilities and services for the movement of people and goods.” The Legislature
found that the State of California had the legal right to invest funds that were not specifically
restricted in the improvement of private freight infrastructure.18 Each state will need to examine
its Constitution individually to determine the legality of investing state funds in private rail
infrastructure.
At the federal level, the U.S. Constitution gives Congress the power to regulate commerce
among the states. Surface transportation bills beginning with the Intermodal Surface
Transportation Efficiency Act of 1991 (ISTEA) have declared it the policy of the United States to
develop a national intermodal transportation system that moves people and goods efficiently,
that serves the mobility needs of people and freight. The federal government has priority in
transportation matters under the legal principle of “preemption.” Where the U.S. Constitution
gives the federal government power, the states may be preempted by superior federal
legislation. It is, therefore, possible that federal transportation policy might preempt state
policy, including policy set in the state’s Constitution.19
While there is a legal basis for investing public funds in private freight rail infrastructure, this
could only be accomplished with consensus of policy makers, rail carriers, and infrastructure
stakeholders.20 The following objective scoring criteria could be used to assess the benefits of
public investment in private infrastructure:
▪
▪
▪
▪
▪
reduction of accidents,
reduction of delays,
increases in passenger rail service,
increases in capacity,
improvements in operations,
Norman Y. Mineta International Institute for Surface Transportation Policy Studies, Analysis of Policy Issues relating to Public
Investment in Private Freight Infrastructure, Daniel M. Evans and Norman Kelley, December 1999, p.6.
17
18
Ibid., p.9.
19
Ibid., p.14.
20
Ibid., p.26.
PASSENGER RAIL NEEDS IN THE UNITED STATES
Funding and finance through 2027
23
▪
▪
▪
▪
▪
economic development,
job creation and retention,
mobility options not provided by other modes,
environmental issues such as emissions reductions compared to truck traffic on
highways, and
congestion reduction on highways and airways.
The decision to invest or not invest public funds in private rail infrastructure and operations
turns on whether public benefits are commensurate with public investment. Cambridge
Systematics developed a “freight rail investment calculator” to assist Florida in evaluating public
participation in rail projects. The calculator quantifies benefits from transportation impacts
(avoided highway maintenance costs, shipper logistics costs, and highway delay at rail-highway
grade crossings); economic impacts (jobs and tax increases from industrial development); and
external impacts (highway safety improvements and environmental quality improvements). A
benefit-cost ratio is established for each project, and the projects are evaluated using a capital
budget model that maximizes the public benefits from every dollar invested.21 The State of
Washington also describes benefit and cost measures to be analyzed for rail projects in its 2006
report on system capacity and needs.22 Thus, a model exists to assist the states in deciding
whether or not to invest public money in private rail infrastructure.
If it is determined that public investment in freight rail infrastructure would benefit passenger
rail service, such public investment could be leveraged through strategic investments based on
the particular rail capacity problem being addressed. For example:
▪ Investment tax credits may be appropriate for funding investments in remote, nonurban areas that benefit the entire rail network but have little local constituency; and
▪ Federal-state matching programs and public-private partnerships could be used to build
capacity in local projects in areas of population density.
In any event, private investment should continue to be the largest source of capital in the
freight rail industry. Steps should be taken to assure that identifiable and measurable benefits
are agreed to up front by the host railroad, the funding agency and Amtrak.23
According to Amtrak’s CEO, Alex Kummant, the benefits of public investment in private rail
infrastructure are real – both for freight and passenger transportation. For Amtrak, additional
rail network capacity is critical to achieving growth and product excellence, which, if realized,
can lead to long-term passenger rail growth and a real multi-modal solution to the country’s
transportation challenge.24
21
Washington Statewide Rail Capacity and Needs Study; Work Plan.
Washington State Transportation Commission, Statewide Rail Capacity and System Needs Study, Cambridge Systematics with
Berk & Associates; Global Insight, Inc.; HDR, Inc.; Starboard Alliance Company; Transit Safety Management, December 2006.
22
24
23
Statement of Alex Kummant, President and CEO, Amtrak, before the Surface Transportation Board, April 11, 2007.
24
Ibid.
PASSENGER RAIL NEEDS IN THE UNITED STATES
Funding and finance through 2027
3-A4. On-time performance
On-time performance (OTP) is a key success indicator for any transportation service. The
significant demands on the current system make OTP a continuing concern for current and
future passenger rail service. According to a recent US DOT Inspector General report, Amtrak’s
on-time performance significantly undermines the viability of intercity passenger rail as an
option for travelers, and it weakens Amtrak’s financial position by reducing its revenues and
increasing its operating costs.25
The importance of OTP is underscored by the report’s estimate that increasing OTP to
85 percent would result in a $114.4 million increase in Amtrak’s revenues and a $39.3 million
reduction in Amtrak’s operating costs.
3-A5. Commuter rail issues
The allocation of costs for the services Amtrak provides, particularly on the NEC, is the subject
of ongoing discussions between Amtrak and the commuter agencies. The financial relationships
between commuter agencies and Amtrak vary widely and sometimes lack clarity due partially to
the limitations in Amtrak’s accounting practices and a lack of structure in financial
arrangements.
Considering the above, the future of Amtrak, in whatever form, is of great importance to the
fabric of U.S. commuter rail services. Amtrak’s chronic financial problems and ongoing
discussion of the type of intercity rail system the nation needs could have ramifications for
commuter systems in many regions of the country.
3B.
ISSUES DRIVING AN INCREASE IN PASSENGER RAIL DEMAND
3-B1. States in expansion mode
The states are addressing the need for expanded intercity passenger rail service by completing
environmental analyses and engineering studies, working with their state legislatures to explore
the possibilities for investing in infrastructure and equipment, and developing plans for future
service. Together, at least 36 states have identified capital investment needs of approximately
$129.7 billion through 2021.
3-B2. Ridership demand
Amtrak’s ridership has increased nearly 20 percent over the last five years, with 25.8 million
riders in FFY 2007. Among the factors contributing to growth are corridor service reliability
improvements, state support for enhanced and improved passenger rail corridor service, lack of
capacity for highway improvements, highway and aviation congestion, and higher fuel costs.
25
Effects of Amtrak’s Poor On-Time Performance, Federal Railroad Administration, Report Number: CR-2008-047, March 28, 2008
PASSENGER RAIL NEEDS IN THE UNITED STATES
Funding and finance through 2027
25
Amtrak Hiawatha Service Ridership and Midwest Retail Reformulated Gas Prices
Avg Daily Ridership
Midwest All Grades Retail Reformulated Gasoline Price (Cents Per Gallon, 2008 $)
2,400
600
Avg Daily Ridership By Month
2,000
Service Extension
to Watertown
Apr '98-Jul '98
Labor Strike
Jul '94-Sep'94
1,600
Station Opens
Aug '06
500
U.S. Economic
Recession
Mar '01-Nov '01
400
Amtrak Fiscal
Crisis
Dec '94 - Jul '95
U.S. Economic
Recession
Jul '90-Mar '91
1,200
WisDOT
funded
advertsing
begins Nov '04
Downtown
Milwaukee
Intermodal Station
Opens Nov '07
New Sturtevant
300
800
200
Illinois I-94/I-294 Rebuild & Widening (2007 - 2010)
400
100
Milwaukee Intermodal Station construction (Jul 2006 - Nov 2007)
Produced by: Wisconsin Department of Transportation, Bureau of Planning & Economic
Development
Contact: Ethan Johnson, ethan.johnson@dot.state.wi.us
Sources: WisDOT analysis of Amtrak monthly ridership data; U.S. Dept. of Energy, Energy
Information Agency, Midwest All Grades Reformulated Gasoline Price; U.S. Dept. of Labor,
Marquette Interchange construction (Apr 2004 - Nov 2008)
Jan-09
Jan-08
Jan-07
Jan-06
Jan-05
Jan-04
Jan-03
Jan-02
Jan-01
Jan-00
Jan-99
Jan-98
Jan-97
Jan-96
Jan-95
Jan-94
Jan-93
Jan-92
Jan-91
Jan-90
0
Jan-89
0
Month and Year
The chart shows the strong correlation between increasing motor fuel prices and increased
ridership on passenger rail trains. The consistent growth of Hiawatha service, a state corridor
service supported by the states of Wisconsin and Illinois, has shown that when gasoline prices
increase, service demand also increases. The Hiawatha has also benefited from among the
best on-time performance of any corridor in the Amtrak system.
26
PASSENGER RAIL NEEDS IN THE UNITED STATES
Funding and finance through 2027
Retail Gas Price (Cents Per Gallon, 2008 $)
Milwaukee Airport Station
Opens Jan '05;
I-94 tolls double for nonIPASS drivers Jan '05
The following table shows ridership growth among state-supported and other short-distance
corridors from the period October-July 2007 to October-July 2008:
Corridor
FY08
Ethan Allen
37,721
Vermonter
59,573
Albany-Niagara Falls-Toronto
284,882
Downeaster
379,683
New Haven-Springfield
291,822
Keystone
975,184
Empire (NYP-ALB)
825,752
Chicago-St. Louis (Lincoln service)
390,974
Hiawatha
606,997
Wolverine
391,959
Chicago-Carbondale (Illini/Saluki)
224,189
Chicago-Quincy (IL Zephyr/Carl
165,830
Sandburg)
Heartland Flyer
67,141
Pacific Surfliner
2,369,792
Cascades
611,924
Capitol Corridor
1,390,474
San Joaquins
777,514
Adirondack
87,930
Blue Water
112,426
Washington-Newport News
375,680
Hoosier State
25,844
Kansas City-St. Louis
123,882
Pennsylvanian
165,238
Pere Marquette
92,248
Carolinian
248,697
Piedmont
53,824
Special Trains
45,226
Subtotal 11,182,406
PASSENGER RAIL NEEDS IN THE UNITED STATES
Funding and finance through 2027
35,809
52,239
231,424
287,360
266,719
813,488
798,035
330,545
488,848
369,966
187,607
%
Change
vs. FY07
+5.3
+14.0
+23.1
+32.1
+9.4
+19.9
+3.5
+18.3
+24.2
+5.9
+19.5
138,396
+19.8
57,327
2,208,949
561,567
1,203,413
663,496
79,450
105,605
329,580
21,254
95,949
147,336
86,073
211,226
41,676
46,154
9,859,491
+17.1
+7.3
+9.0
+15.5
+17.2
+10.7
+6.5
+14.0
+21.6
+29.1
+12.2
+7.2
+17.7
+29.1
-2.0
+13.4
Ridership
FY07
27
3-B3. Aviation congestion
Intercity passenger rail can provide travel-time advantages over air travel. Airline passengers
are faced with late arrivals and departures. For example, in March 2007, only 72 percent of all
U.S. flights had on-time arrivals.26 Even with planned aviation improvements through 2025,
metropolitan areas and airports will still be congested.27 The U.S. is only beginning to locate
intercity passenger rail stations at its airports. Intercity rail connections to airports could reduce
airport congestion at major hubs. Another advantage of the passenger rail mode is it generally
takes passengers to their downtown destinations while major airports are located outside the
downtown areas.
More recently, air carriers are canceling service due to increases in their costs, primarily jet fuel.
Areas that may be hardest hit by these cancellations will be the smaller, more rural airports that
have few air options to start. As air service becomes a more expensive commodity and less
available in rural areas, national policy may need to consider whether passenger rail is an
option that could fill that void.
3-B4. Energy issues
The United States imports nearly 10 million barrels of crude oil per day. The increased use of
passenger rail transportation, which consumes 17 percent less energy per passenger mile than
airlines and 21 percent less energy per passenger mile than autos,28 would help conserve
energy at a time when both energy consumption and costs are rising.
3-B5. Land use and travel patterns
Transit-oriented development is often associated with improving urban areas by reinforcing
mixed-use housing, higher densities, and integrated modes of transport near rail stations. On a
per-capita basis, suburban sprawl development is more costly and generates travel patterns
that consume more energy on a per-unit basis than compact, well-planned urban development.
Rail stations are magnets for urban development in downtown areas, and suburban rail stops
actually make intercity passenger rail more accessible to more locations than air service.
Passenger rail also promotes economic development opportunities.
3-B6. Emergency preparedness
An effective intermodal transportation system, including intercity passenger rail, can help to mitigate
the impacts of natural and manmade disasters by providing alternative forms of transportation when
the population’s usual means of transport is shut down. Passenger rail can also help to facilitate
efficient evacuations as part of an integrated emergency response transportation strategy.
Machalaba, Daniel, The Wall Street Journal, “Crowds Heed Amtrak’s ‘All Aboard,’ Improved Service, Air Woes Lure Travelers in
Northeast; Long Hauls Still Suffer,” August 23, 2007, page B1.
26
27
The MITRE Corporation, Center for Advanced Aviation System Development, “Capacity Needs in the National Airspace System
(2007-2025), an Analysis of Airports and Metropolitan Area Demand and Operational Capacity in the Future,” May 2007, pp. 16-17
and 22.
28
28
Oak Ridge National Laboratory, Transportation Energy Data Book, Edition 26, 2007.
PASSENGER RAIL NEEDS IN THE UNITED STATES
Funding and finance through 2027
3-B7. Climate change issues
The transportation sector contributes about one-third of the carbon dioxide (CO2) emissions that
contribute to global warming.29 In the United States, CO2 emissions have grown by an average of 1.2
percent annually since 1990, with every gallon of gasoline burned producing 20 pounds of CO2
emissions.30 The average intercity passenger train produces 60 percent fewer CO2 emissions per
passenger-mile than the average auto and half the GHG emissions of an airplane.31 In fact, high
altitude GHG emissions have about three times the warming effect as ground-level emissions.32
Intercity passenger rail also generates fewer emissions of other pollutants than other modes.
In 2007, the Intergovernmental Panel on Climate Change (IPCC) commissioned by the United
Nations released its fourth and final draft report in the “Climate Change 2007” series. The fourth
report synthesizes the work of previous reports into a set of recommendations for policy makers, all
of which support the expansion of intercity passenger rail:
▪
Governments must adopt policies that will mitigate or reverse the impact of GHG emissions
on our climate.
▪
It is critical to align land-use policies and infrastructure planning to reduce transport-related
emissions.
▪
Various transportation policies, including “modal shifts from road transport to rail and public
transport systems …” will offset the projected growth of global emissions or reduce emissions
below current levels.33
29
Energy Information Administration, Department of Energy, “Emissions of Greenhouse Gases in the United States 2005,” Executive
Summary.
30
Davis, Todd and Hale, Monica. “Public Transportation’s Contribution to U.S. Greenhouse Gas Reduction,” Science Applications
International Corporation, September 2007.
31
Ryan, John C. NW Environment Watch, “Over Our Heads–A Local Look at Global Climate,” 1997, p. 43.
32
Carbonfund.org uses a multiplier of 2.7. This results in altitude-adjusted aviation emissions ranging from 0.49 kilograms per
passenger-mile for long flights to 0.65 for short flights, compared with just 0.20 for Amtrak [diesel 0.196; electric 0.20-0.215].
33
Intergovernmental Panel on Climate Change, “Summary for Policymakers of the Synthesis Report of the IPCC Fourth Assessment
Report,” Draft Copy, November 16, 2007.
PASSENGER RAIL NEEDS IN THE UNITED STATES
Funding and finance through 2027
29
FUNDING OPTIONS FOR IMPLEMENTATION
Based on the needs analysis, in order to implement a significant expansion of intercity passenger rail
services, states will require an additional $5 billion each year. The following funding options should
be considered to address intercity passenger rail plans in the next authorization bill or other
legislation. Each option has strengths and weaknesses.
4-A. FEDERAL GENERAL FUNDS
HR-6003 authorizes the use of federal General Fund (GF) dollars to support the expansion of
passenger rail through a federal match program up to 80 percent of capital costs. It can be argued
that since passenger rail expansion supports multiple national policy goals in addition to transportation mobility, including energy, emergency preparedness and environmental policy, it is appropriate
to use general funds to support some or all of its costs. However, considering the staggering
national deficit, this could result in General Funds being authorized, but not appropriated, for
passenger rail expansion.
4-B. FEDERAL SURFACE TRANSPORTATION TRUST FUND
The National Surface Transportation Policy and Revenue Study Commission recommended that all
surface modes be funded with one fund. The Commission believed that to fully integrate the surface
transportation system and encourage states and other institutions to make appropriate investments
in each mode, all modes should be fall under one planning, project development and funding stream.
To support this approach, the Commission suggested that the Highway Trust Fund (HTF), which
currently funds highways and transit, be expanded to accommodate passenger rail funding and be
renamed the Surface Transportation Trust Fund. However, it must be emphasized that this
recommendation was connected to a significant expansion of the revenue sources that support the
current HTF. The Commission recognized that all modes need a significant increase in revenues and,
without a fee increase, making passenger rail eligible for HTF funding will only help one mode to the
detriment of another.
To support the addition of passenger rail and to address the significant needs in the highway and
transit modes, the Commission recommended that the gas tax be increased between five and eight
cents each year for the next five years. Further, at the end of five years, the Commission
recommended that the gas tax be indexed to address the impact that inflation has had on the fund.
In addition to gas tax increases, the Commission recommended a variety of new taxes, including:
freight container fees, custom fees, and ticket taxes. The Commission strongly supported the “user
pay” and trust fund concepts.
More recently, the Brookings Institution published its report, A Bridge to Somewhere – Rethinking
American Transportation for the 21st Century. Like the Commission report, this document outlines
the current issues with the nation’s transportation system and outlines a series of recommendations.
One of the report’s recommendations addressed the funding of intercity passenger rail. The report
supports the Commission view that passenger rail should be funded in a manner similar to other
modes. Specifically the report states, “. . . a national plan must recognize the key role state and
30
PASSENGER RAIL NEEDS IN THE UNITED STATES
Funding and finance through 2027
metropolitan partners will play in the system in the coming decades. In this regard, intermetropolitan area passenger rail should be eligible for the broad flexible funding provisions that
govern the rest of the federal transportation program. If states and metropolitan areas wish to spend
federal transportation funds on passenger rail, they should be allowed to do so.” 34
4-C. TICKET TAXES
Some believe that each mode of transportation should contribute a revenue stream to a transportation trust fund if that mode will be financed by the trust fund. To support becoming a part of a
user-financed trust fund, they argue that passenger rail (and transit) should assess a ticket tax on
its passengers and deposit that tax into the trust fund. The National Commission supported the
implementation of ticket taxes, but they recommended these taxes be small and placed on new
service only.
4-D.
TAX CREDIT BONDS
Because passenger rail is the only surface transportation mode that is not currently supported by the
HTF, passenger rail advocates and members of Congress have investigated new revenue sources to
support its expansion. Tax credit bond legislation has been introduced at the federal level several
times. Some legislation has focused specifically on passenger rail financing while other bills, including
some in the 110th Congress, support long-term transportation, water and other infrastructure
projects.
AASHTO developed a concept in 2002 that would have issued tax credit bonds to fund transportation
infrastructure through a private, non-profit entity called the Transportation Finance Corporation
(TFC). In 2005, Senators Talent, Wyden, Coleman, and Corzine introduced the Build America Bonds
Act of 2005 that would have made $30 billion in tax credit bonds available through such a
corporation. More recently, Senators Wyden, Thune, Coleman, Klobuchar, Dole, Vitter and Collins
introduced the Build America Bonds Act of 2007 to make $50 billion in tax credit bonds available for
transportation infrastructure. The U.S. Chamber of Commerce, AGC, ARTBA and the AFL-CIO
Building Trades have all expressed interest in this concept.
Under some proposals, the tax credit bonds would be long-term debt issued by a federally chartered,
non-profit TFC. Instead of interest payments, investors would receive an annual tax credit that they
could use to offset their federal tax liabilities. The proceeds from the bond issue would fund freight
rail and intercity passenger rail improvements, highway corridors of national significance, freight
bottleneck solutions such as the CREATE project in Chicago, and transit New Starts projects.
In 2005 and again in 2008, members of the House Transportation and Infrastructure Committee
introduced the Rail Infrastructure Development and Expansion Act for the 21st Century
(RIDE-21). HR-6004 creates authority for states or interstate compacts to issue $12 billion in federal
tax credit bonds and $12 billion in federal tax-exempt bonds over a 10-year period for infrastructure
and equipment to complete high-speed rail corridors. Unlike the “Build America Bonds,” “RIDE-21”
bonds would be issued by non-federal entities. Under RIDE-21, the issuing entities, states or
interstate compacts would need enabling legislation to issue the bonds and a sinking fund to pay
back the bond issue at the end of the term.
34
Brookings Institution, A Bridge to Somewhere, 2008, page 62.
PASSENGER RAIL NEEDS IN THE UNITED STATES
Funding and finance through 2027
31
Unless the a tax credit bond program includes issuance by the federal government, and proceeds of
the bonds look like grants (similar to HTF grants to states), a tax credit bond approach for financing
passenger rail would not provide 80 percent federal and 20 percent state matching funds. The
matching ratio is more in the range of 50 to 70 percent federal to 50 to 30 percent state.
Finally, while tax credit bonds may represent a source of one-time financing, they do not represent a
long-term revenue source on which states can depend to develop and plan their intercity passenger
rail networks. It may be argued that bonding is better than nothing, but it will not likely address the
overall goal of having a dedicated revenue source that accommodates an 80 percent federal/20
percent state program
4-E. TAX EXPENDITURE S
The Association of American Railroads is advocating for federal investment tax credits for rail
improvements that improve capacity. A recent example is S-3742, the Freight Rail Infrastructure
Capacity Expansion Act, introduced in 2007. This bill provides incentives for capacity investments that
enhance freight rail infrastructure property through both tax credits and tax deductions. However,
states will be hesitant to support the use of public sector funds on these projects unless clear public
sector benefits are defined and associated with the projects. S-2345, the federal aviation
authorization bill, also included a tax credit provision for freight rail infrastructure.
HR-6003, the Passenger Rail Investment and Improvement Act of 2008, makes some progress in
defining public sector benefits. The legislation requires a state rail transportation authority to take
into account the following issues:

Contributions made by non-federal and non-state sources through user fees, matching
funds, or other private capital involvement; and

Rail capacity and congestion effects;

Effects on highway, aviation, and maritime capacity, congestion or safety;

Regional balance;

Environmental impact;

Economic and employment impacts; and

Projected ridership and other service measures for passenger rail projects.
4-F.
FUNDING SOURCES RELATED TO CL IMATE CHANGE
As Congress continues to grapple with the issue of climate change, it will assess policy options that
have the potential to raise revenue to mitigate or reduce the impact of greenhouse gas (GHG)
emissions on the environment. Congress is currently evaluating several approaches including a cap
and trade system and/or a carbon tax on a limited or expanded list of items that emit carbon dioxide.
Revenues from these efforts will be considered for a variety of options.
One approach to reducing carbon emissions in the transportation sector is to reduce overall vehicle
miles traveled (VMT). Increasing investment in less carbon intensive modes of travel (intercity rail
and transit) is one approach to reducing VMTs. According to a 2007 American Association of State
Highway and Transportation Officials (AASHTO) report, demand management strategies can be used
to reduce peak period congestion and slow overall growth in VMT. This would include shifting as
32
PASSENGER RAIL NEEDS IN THE UNITED STATES
Funding and finance through 2027
many passenger trips as possible to transit, intercity passenger rail, use of congestion pricing, such
as variable toll rates, and telecommuting.35
Rail and transit are transportation modes highlighted in the United Nation’s assessment of
transportation options that could mitigate or reduce GHG emissions. Therefore, passenger rail (with
transit) should have a first draw share of any revenues generated in climate change legislation.
35
AASHTO, “A New Vision for the 21st Century,” July 2007, page 34.
PASSENGER RAIL NEEDS IN THE UNITED STATES
Funding and finance through 2027
33
RECOMMENDATIONS
1.
Create a dedicated source of federal revenue to support capital investments in intercity
passenger rail. Dedicated funding will bring the stability needed to plan and invest in a national
intercity passenger rail network.
2.
To reflect the federal interest in state capital investment in intercity passenger rail programs,
dedicated federal funding should be available for up to 80 percent of capital project costs. This
program will enable states to fund their passenger rail expansions and improvements. The
funding should provide steady, annual increments to the states to facilitate planning and
implantation of their passenger rail plans.
3.
Allow for consideration of the best funding structure to support the policy of a consistent,
dedicated revenue source for passenger rail – whether it be from the federal General Fund,
from a diversified Surface Transportation Trust Fund, or from another revenue structure. The
Intercity Passenger Rail Leadership Group, AASHTO’s CEO group addressing passenger rail
authorization policy, is currently debating this issue and will provide guidance to the funding
and finance subgroup on the policy the CEOs wish to take to the Reauthorization Steering
Team and the AASHTO Board of Directors.
4.
Assure that any climate change legislation that includes a new revenue source for
transportation funds intercity passenger rail and transit projects. These modes emit less carbon
per passenger mile than other transportation modes and, as such, should receive preference
for this funding. In addition, intercity passenger rail is the only mode with no current dedicated
funding source. A high priority must be must be given to address this lack of funding with
climate change revenues. As noted earlier in this report, one of the recommendations of the
United Nations’ Intergovernmental Panel on Climate Change (IPCC) stated, “various
transportation policies, including ‘modal shifts from road transport to rail and public transport
systems . . .’ will offset the projected growth of global emissions or reduce emissions below
current levels.”
5.
Provide funding to meet Amtrak’s capital needs as well as an 80/20 capital grant program for
the states to reflect the federal interest.
ESTIMATED INTERCITY PASSENGER RAIL DEVELOPMENT COSTS
IN STATE CORRIDORS THROUGH 2027 (in billions)
2010-2015
2016-2021
2022-2027
(6 yrs.)
(6 yrs.)
(6 yrs.)
TOTAL
(18 yrs.)
PRWG Analysis
$44
$63
$52
$159
AASHTO 2008
Update
$20
$25
$69
Amtrak System
Capital Needs
$13
$24
$13
We recommend in the next authorization bill that $5 billion per year be invested in the state
corridor routes. These routes will focus on city-to-city pairs within 500 miles of each other and
34
PASSENGER RAIL NEEDS IN THE UNITED STATES
Funding and finance through 2027
will best address the demand for intercity travel to address congestion in our highway and
aviation systems, high fuel prices, and climate change goals. In addition, we recommend that
$2.2 billion per year be invested to support the capital needs of the Amtrak system, including
the Northeast Corridor and the system's long-distance routes.
6.
Prioritize federal funding for airports to promote investments that also offer some connection to
an intermodal system, including intercity passenger rail, commuter rail and other transit
systems. Require airports to consider such connections as part of their capital planning and
federal grant applications, such as Airport Improvement Program (AIP) funding. Further,
require that rail plans include some consideration of the tie-in to the aviation system in addition
to other intermodal systems. Expand the eligibility of Passenger Facility Charge funding to
support connections to or development of intermodal rail and/or transit service, to include
investment on off-airport property.
7.
Support tax credit bonds as a supplementary, limited source of revenue. It is not the view of
the group that tax credit bonds, as currently discussed, would be an ongoing dedicated source
of revenue for intercity passenger rail. If tax credit bonds are state-issued, not all states could
take advantage of a tax credit bonding program due to limitations on bonding at the state level
and caps on private activity bonding at the federal level. In addition, the state-issued bonds
would not provide an 80 percent federal and 20 percent state-funded program. Federally
issued bonds may be preferable in that they would provide an 80 percent-federally funded
option, but due to the nature of bond issuance, this funding approach cannot be viewed as a
predictable, ongoing revenue source.
8.
Invest in data collection to support multi-modal transportation planning. Policy makers and
planners need better tools to assess modal trade-offs as they evaluate the user and non-user
benefits of transportation projects. There is little institutional support for states or the Congress
to understand network needs. The Federal Railroad Administration functions as more of a
regulatory and safety agency, not a partner supporting states’ efforts to increase their
passenger rail capacity.
9.
Make intercity passenger rail planning an eligible use of any funds targeted to intercity
passenger rail capital investment. Several states have contributed to the AASHTO Bottom Line
Report Update, as well as the update to the PRWG map updates. However, states need the
capacity to evaluate their needs and outline their rail plans over the next 20 to 30 years in order
to establish a sound financial estimate for funding.
PASSENGER RAIL NEEDS IN THE UNITED STATES
Funding and finance through 2027
35