From the Seattle PI- another interesting article. In it, they admit that WA DOT has long had a stealth campaign to increase passenger train service between Portland (actually it goes as far south as Corvallis) and Vancouver BC. This despite the fact that the current AMTRAK trains are never at capacity despite a substantial subsidy on every passenger (at least $100, depending on trip length) and despite the fact that AMTRAK is supposed to go away in 2002 if it doesnt start to break even, something the last three GAO audits say they wouldnt bet on. Like many transit projects, advocates treat this as a capacity shortage (build it and they will come) despite the fact that the current trains they have running on the same route are never full. THIS IS A DEMAND PROBLEM, NOT A SUPPLY PROBLEM! In the meantime, we have been continuing to shovel WA DOT money into this program, without even very much public discussion.

In the meantime, Sound Transit is busily buying MORE cars and locomotives in the hopes that they can sink enough money into Sounder that they can use the old we must spend more money to finish it, otherwise we lose our investment weve already made, ploy.

http://www.seattlep-i.com/local/rail101.shtml

One of those, state Rep. Ruth Fisher, D-Tacoma and co-chairwoman of the House Transportation Committee, said yesterday she would fight for the restoration of rail funding during the upcoming session. Over 10 years, the project will cost $669 million. As a result of losing motor vehicle excise tax revenues, state transportation officials say they would have to halt expansion of the intercity fleet of European-style trains operated by Amtrak between Portland, Seattle and Vancouver, B.C.

Yet an operating agreement remains to be signed with Burlington Northern Santa Fe. In addition, the state may come up short on its financial commitment before service begins in September. "The road to getting there is going to be challenging," Sound Transit Executive Director Bob White said after the train arrived in King Street Station. Transit officials are laying a large part of the blame on the passage last month of Initiative 695, which does away with the statewide 2.2 percent motor vehicle excise tax. The loss in revenue means the state Department of Transportation has decided not to budget its $35 million share of track and signal improvements from Seattle to Tacoma. For the same reason, the transportation agency is not budgeting $12 million as its share of building a $52 million train maintenance facility in Seattle for Amtrak and Sound Transit trains. Without the maintenance facility, Amtrak will not participate.

-- Craig Carson (craigcar@crosswinds.net), December 10, 1999

Answers

Ruth Fisher? I thought she resigned. Hmm. Must be another Ruth Fisher.

-- Paul Oss (jnaut@earthlink.net), December 10, 1999.

For a good evaluation of passenger rail prospects, read the THREE last annual General Accounting Office reports of AMTRAK's plan to become self sufficient of operating (but not capital) subsidies. It is interesting to note how they are making what modest progress they have made, mainly by funding their operating expenses with capitalization money, in complete defiance of standard accounting principles. Basically, this dog just won't hunt, no matter how much rail advocates desire it to.

It never fails to amaze me that WA DOT is so determined to build a passenger rail service where there is no demand. Here is the GAO reference regarding AMTRAK service.

RCED-99-181, July 9, 1999 (27 pages). Intercity Passenger Rail: Amtrak's Progress in Improving Its Financial Condition Has Been Mixed. [Hard Copy] Since its creation in 1971, Amtrak has accumulated massive financial losses, with recent losses averaging more than $800 million per year. To help Amtrak sustain operations and make needed capital investments, the federal government has provided Amtrak nearly $23 billion in financial assistance since 1971. In this report, GAO discusses (1) Amtrak's overall financial performance in fiscal year 1998, (2) the prospects for Amtrak to meet its financial goals for operating self-sufficiency outlined in its most recent strategic business plan, and (3) the extent to which current and anticipated federal funding and recently enacted legislative reforms aimed at helping Amtrak better control its costs are likely to help improve its financial condition. Basically, GAO found that Amtrak's overall losses increased in fiscal year 1998 after several years of improvement. http://www.gao.gov/AIndexFY99/abstracts/rc99181.htm

If, at any time more than 2 years after the enactment of the act and implementation of a financial plan for operating within authorized funding levels, the Council finds that Amtrak is not meeting its financial goals or that it will require operating funds after December 2002, then the Council is to submit to the Congress, within 90 days, an action plan for a restructured national intercity passenger rail system. In addition, if the above events occur, Amtrak is required to develop and submit an action plan for its liquidation. Conclusions Amtrak has focused its strategic business plan on the near-term goal of becoming operationally self-sufficient by 2002-a goal established by the administration and the Congress. Amtrak's plan is ambitious; and, to its credit, it is currently somewhat ahead of the plan's financial goals. Yet the overwhelming bulk of the expected financial benefits of the plan are still to come-with most to be achieved in the final year of the plan. Our concerns are two- fold. First, several aspects of the plan are subject to considerable uncertainty, including, but not limited to, identifying over $160 million in productivity and other improvements during the remaining 3 years of the plan. Second, Amtrak has a history of not meeting its financial goals, and the current 4-year plan anticipates achieving about 5 times as much in financial improvements as Amtrak was able to achieve through its business plans over the previous 4 years. We recognize that all plans by their very nature are subject to uncertainty. However, given the uncertainties in the current plan, Amtrak's history of missing financial goals, and the magnitude of the savings still to be achieved, it is difficult to be confident that Amtrak will become operationally self-sufficient within the next 3 years. The stakes are high: The Congress gave Amtrak until the end of fiscal year 2002 to reach operational self-sufficiency and required that plans for restructuring and liquidating Amtrak be prepared if the railroad does not meet this goal.

Amtrak believes that the preferred measure of progress toward achieving operating self-sufficiency is not net loss but rather its "budget gap," an Amtrak financial measure that excludes expenses funded from its capital program. Amtrak apparently misunderstood the purpose of our work. As stated in the draft report, the objective of this portion of our work was to assess Amtrak's financial performance in 1998. The work was not limited to assessing progress in meeting its goal of operational self-sufficiency. Consequently, a discussion of financial performance that is limited to Amtrak's budget gap would be inappropriate and incomplete. We have clarified the objective and the discussion of this topic in the report. Amtrak also disagreed with our inclusion of expenses for progressive overhauls in our discussion of Amtrak's progress in achieving operational self-sufficiency. Amtrak stated that while generally accepted accounting principles require Amtrak to record such spending as operating expenses, it funds progressive overhauls through its capital program and therefore believes that they should be counted as capital costs. As a result, in Amtrak's view, the costs of progressive overhauls would be excluded from the calculation of Amtrak's progress toward achieving operational self-sufficiency by 2002. As discussed in our report, generally accepted accounting principles consider progressive overhaul expenses to be operating expenses. As a result, we have not revised how these costs are categorized. We have added to this report Amtrak's rationale for excluding progressive overhaul expenses from its budget gap and show the impact of both including and excluding it.

For full text, go to: http://frwebgate.access.gpo.gov/cgi- bin/useftp.cgi?IPaddress=162.140.64.21&filename=rc99181.txt&directory= /diskb/wais/data/gao

-- (craigcar@crosswinds.net), December 10, 1999.