WASHINGTON — Amtrak is considering cutting more personnel, ending freight service and requiring states to fully subsidize money-losing routes within two years or risk losing them, according to a wire service.
Amtrak President David Gunn presented those ideas Thursday to the passenger railroad’s governing board as part of a proposed budget for the 2003 fiscal year, which begins Oct. 1. Mr. Gunn was hired in May to rescue the financially faltering company.
Ambitious expansion plans have been shelved, including a proposal to restore passenger service on Florida’s Atlantic coast.
Several high-ranking company officials have departed, including Chief Operating Officer Stan Bagley, and more cuts are expected. Amtrak spokesman Bill Schulz said cost-cutting steps imposed under Mr. Gunn have already reduced the railroad’s work force by about 400.
Another planned cut would affect one of Amtrak’s nonpassenger ventures.
In search of new ways to raise revenue, Amtrak won federal permission in 1998 to carry time-sensitive packages and freight shipments. Mr. Schulz said Amtrak has been losing about $3 million a year on the freight venture.
To make matters worse, the process of attaching freight cars to passenger trains has caused occasional delays, and freight railroads have complained to Congress that Amtrak is infringing on their business.
Amtrak has already started asking states to pick up more of the burden for running many current routes. That puts Amtrak in philosophical agreement with the Bush administration — which has called for states to assume more responsibility for train service — but will probably meet resistance from governors already struggling to balance their budgets.
Only in a few cases do states now cover the net operating loss of routes. Mr. Schulz said Oklahoma fully subsidizes the “Heartland Flyer” between Oklahoma City and Fort Worth, Texas, and California covers the losses of the “San Joaquins,” between Sacramento and Bakersfield.
Mr. Gunn’s goal is for Amtrak to recoup 100% of its net operating deficit for all its intermediate-distance routes within two years.
As for Amtrak’s long-distance trains, which roll through numerous states, Mr. Gunn says Congress should decide whether to keep them going.
“He recognizes that many long-distance services have been in existence for more than 30 years and have strong support in Congress,” Mr. Schulz said.
Mr. Gunn’s proposed budget assumes $1.2 billion in assistance from the federal government, an amount that isn’t assured. The Bush administration has said it won’t approve more than $521 million without significant reforms.