Amtrak - Public Funding

Public Funding

Amtrak commenced operations in 1971 with $40 million in direct federal aid, $100 million in federally insured loans, and a somewhat larger private contribution. Officials expected that Amtrak would break even by 1974, but those expectations proved unrealistic and annual direct Federal aid reached a 17-year high in 1981 of $1.25 billion. During the Reagan administration, appropriations were halved. By 1986, federal support fell to a decade low of $601 million, almost none of which were capital appropriations.

In the late 1980s and early 1990s, Congress continued the reductionist trend even while Amtrak expenses held steady or rose. Amtrak was forced to borrow to meet short-term operating needs, and by 1995 Amtrak was on the brink of a cash crisis and was unable to continue to service its debts. In response, in 1997 Congress authorized $5.2 billion for Amtrak over the next five years – largely to complete the Acela capital project – on the condition that Amtrak submit to the ultimatum of self-sufficiency by 2003 or liquidation. Amtrak made financial improvements during the period, but ultimately did not achieve self-sufficiency.

In 2004, a stalemate in federal support of Amtrak forced cutbacks in services and routes as well as resumption of deferred maintenance. In fiscal 2004 and 2005, Congress appropriated about $1.2 billion for Amtrak, $300 million more than President George W. Bush had requested. However, the company's board requested $1.8 billion through fiscal 2006, the majority of which (about $1.3 billion) would be used to bring infrastructure, rolling stock, and motive power back to a state of good repair. In Congressional testimony, the DOT Inspector General confirmed that Amtrak would need at least $1.4 billion to $1.5 billion in fiscal 2006 and $2 billion in fiscal 2007 just to maintain the status quo. In 2006, Amtrak received just under $1.4 billion, with the condition that Amtrak would reduce (but not eliminate) food and sleeper service losses. Thus, dining service was simplified and now requires two fewer on-board service workers. Only Auto Train and Empire Builder services continue regular made-on-board meal service. In 2010 the Senate approved a bill to provide $1.96 billion to Amtrak, but cut the approval for high-speed rail to a $1 billion appropriation.

State governments have partially filled the breach left by reductions in federal aid. Several states have entered into operating partnerships with Amtrak, notably California, Pennsylvania, Illinois, Michigan, Oregon, Missouri, Washington, North Carolina, Oklahoma, Texas, Wisconsin, Vermont, Maine, and New York, as well as the Canadian province of British Columbia, which provides some of the resources for the operation of the Cascades route.

With the dramatic rise in gasoline prices during 2007–2008, Amtrak has seen record ridership. Capping a steady five-year increase in ridership overall, regional lines saw 12% year-over-year growth in May 2008. In October 2007, the Senate passed S-294, Passenger Rail Improvement and Investment Act of 2007 (70–22) sponsored by Senators Frank Lautenberg and Trent Lott. Despite a veto threat by President Bush, a similar bill passed the House on June 11, 2008, with a veto-proof margin (311–104). The final bill, spurred on by the September 12 Metrolink collision in California and retitled Rail Safety Improvement Act of 2008, was signed into law by President Bush on October 16, 2008. The bill appropriates $2.6 billion a year in Amtrak funding through 2013.