WASHINGTON — Amtrak President David L. Gunn says he has developed a fiscal 2003 budget that calls for more personnel cuts, an end to freight service and an eventual end to state-subsidized trains unless the states agree to cover all of their operating losses, reports the Washington Post.
The plan, which calls for $1.2 billion in federal subsidies, reflects movement by Gunn and the Bush administration — whose relations have often been strained — toward common ground on stabilizing the railroad for the next year or two while they prepare for later decisions on the passenger train’s long-term future.
Federal officials say they still want changes in an organization that has never made money in its 31-year history and long been criticized as inefficient. But Deputy Transportation Secretary Michael P. Jackson, who represents the administration on Amtrak’s board, says the administration will work with Congress to be certain that Amtrak avoids another cash crisis similar to the one that left passenger-train service within days of a nationwide shutdown in July.
“I don’t think there’ll be a fight over having enough money to survive,” said Gunn, who has met with Jackson and other administration officials in the past few weeks.
Gunn is scheduled to present the detailed budget to the Amtrak board of directors today and Friday.
He said that it will force Amtrak to delay many worthy projects, such as major track work on the Northeast Corridor. All new projects will be delayed or killed, including a plan backed by Florida Gov. Jeb Bush (R) to restore passenger-train service to his state’s east coast through Daytona Beach. “All of that expansionary stuff is gone,” he said. He would not predict how many of the projects would be revived.
Gunn said he will insist, however, on continuing with a program to rebuild wreck-damaged passenger cars. More than 100 passenger cars have been sitting around for years, earning no revenue, because there was no money to repair them.
With anything less than the full $1.2 billion requested, “We’re dead. It’s over,” Gunn said during an interview and in a meeting with Washington Post editors and reporters.
All long-distance trains will continue to operate under the budget. Gunn said that the future of the long-distance train is a political decision for Congress and the administration but that he will not object if Congress sets financial performance guidelines for those services, with those that do not meet the standards being discontinued unless the states want to contribute.
“I don’t mind having to be held to some standard,” he said.
The budget will reflect at least two major changes to Amtrak’s strategy, he said.
First, money-losing express freight service will end, although Amtrak will continue to haul mail, which is profitable. Express service, which involves adding freight cars to Amtrak trains, was supposed to help Amtrak become operationally self-sufficient. Instead, it has been a financial drag, delayed passenger trains and angered the freight railroads that Amtrak depends on to operate long-distance trains.
Second, he said, over the next two years, states that subsidize certain Amtrak routes must guarantee coverage of all losses. The state-subsidy program began many years ago to help states establish passenger service that Amtrak would not otherwise operate, but in most cases — except in California and perhaps Washington state — Amtrak still loses money.
Jackson said in an interview that the administration will continue to nudge Amtrak toward basic “reforms” that would eventually lead to more efficient operations and franchising out some current Amtrak service. But he said the administration wants Amtrak to be sufficiently funded in the short term as well as through next year — since it is unlikely the fiscal 2003 transportation appropriations bill will be passed before the fiscal year begins Oct. 1.
Without an appropriations bill, Amtrak and other transportation programs would have to be funded by a temporary “continuing resolution.” But in that event, Amtrak would receive funding only at the monthly rate of the administration’s $521 million fiscal 2003 budget, meaning it would face another cash crisis within weeks.
“The administration wants to work with Congress to find an appropriate continuing resolution mechanism to allow Amtrak to operate until the fiscal 2003 budget is passed,” Jackson said.
Administration sources said no “reforms” will be tied to the continuing resolution, and the administration’s requests for fiscal 2003 will not be extensive. They said the administration will ask that the bill clear the way for private enterprise to operate some Amtrak routes as an experiment, to determine whether competition could lead to more efficient service. Such service could then be set up in fiscal 2004.
Gunn said he still considers franchising unrealistic because Amtrak has the “gene pool” to operate passenger trains, particularly an operation like the Washington-Boston Northeast Corridor. “We are the only game in town when it comes to an electrified railroad,” he said.
Meanwhile, Amtrak appears to be emerging from the chaos caused by mechanical problems with its Acela high-speed trains, just as it is entering internal personnel chaos.
The Bombardier-Alstom consortium that built the Acela trains has completed temporary repairs on enough of them to allow a return to full service on weekends and nearly full service on weekdays. Gunn also said passengers returned to the Acelas almost as soon as the trains were back on the track.
Amtrak estimated the service problems, involving cracked shock-absorber brackets, cost it $9 million in revenue in August.
Meanwhile, Gunn has ordered further cuts in management staff by Oct. 1. Partly because of those cuts, Chief Operating Officer Stan Bagley retired suddenly on Monday. And Kevin E. Lydon, general manager of Amtrak’s commuter operations in Boston, said he was fired when he refused to cut personnel.
Bagley was well respected within Amtrak and had emerged as Gunn’s top lieutenant. But sources said he and Gunn could not agree on laying off significant numbers of operating managers.