(Reuters circulated the following story by Peter Kaplan on July 29.)
WASHINGTON, D.C. — The Bush administration is proposing to scrap direct federal funding of Amtrak and turn over much of the responsibility for national passenger rail service to state governments, officials said yesterday.
Transportation Department Secretary Norman Mineta plans today to unveil a proposal for legislation that would split Amtrak into operating and maintenance companies and open them to competition from outside contractors.
”I believe that our states and localities, in partnership with the federal government, are best suited to decide how and when to operate passenger rail service,” Mineta said in a statement.
Under the administration’s proposal, the billions of dollars in federal subsidies that have kept Amtrak afloat for decades would be replaced by 50-50 matching grants to states.
The plan calls for turning responsibility for Amtrak to the states gradually over a six-year period. Under the bill, states would forge regional coalitions to oversee train service and eventually would have the option of contracting service to private rail companies.
Senior Transportation Department officials said at a briefing yesterday that they hope to get the bill through Congress this year and said they would begin briefing legislators on it soon.
Currently, the nation’s only city-to-city passenger railroad is a for-profit federal corporation that has never made money in its 30-year history.
Amtrak has $4 billion in debt and says it needs $1.8 billion for capital projects next year.
Supporters say Amtrak has always been starved of adequate investment in train cars, tracks, and other equipment since its creation in 1971 from struggling operations run by freight railroads. But critics say Amtrak is woefully inefficient.
Administration officials said the new system is designed to allow state officials to set priorities and make decisions about how and where to provide passenger rail service. They acknowledged that some money-losing, long-distance train routes could be scrapped if state officials decide they are not worth funding.
”We’re trying to create a mechanism that would allow [routes] to be coordinated in a rational way,” one senior official said.
Amtrak president David Gunn declined to comment on the plan, saying the railroad wasn’t asked to work on developing the plan and hasn’t been consulted or briefed on it.
Senator John McCain, chairman of the Senate commerce committee, praised the idea of an Amtrak shakeup, saying the railroad has little to show for the billions of dollars spent on it. Reform is clearly needed, the Arizona Republican said.
But Amtrak supporters expressed dismay. ”This plan is not a solution, but a Trojan Horse that, if implemented, would mean the end of much, if not all, intercity passenger rail,” said Ross Capon, executive director of the National Association of Railroad Passengers.
Capon questioned whether financially strapped state governments could pick up the additional cost and said it might lead to endless bickering among states over scheduling.Congress is split over the right prescription for Amtrak.House Transportation Committee support last month for giving $6 billion to Amtrak over the next three years was tempered earlier this month by an appropriations subcommittee vote to provide only $580 million next year, well below the $900 million requested by President Bush.
The national passenger rail system had a record loss of $2.2 billion for the federal fiscal year that ended Sept. 30, 2002. It has long faced opposition in Congress to its funding proposals.
In the spring, Amtrak dropped fares on its flagship Acela Express trains from $127 each way to $99, which has initially increased ridership between Boston and New York by 13 percent.
But in the larger battle against the airlines for market share, Amtrak has been losing much of the ground that it gained after the terrorist attacks of Sept. 11, 2001.