(The following story by Don Phillips appeared on the Washington Post website on November 14.)
WASHINGTON, D.C. — A House-Senate conference committee yesterday agreed on $1.22 billion in funding for Amtrak in the fiscal year that started Oct. 1, the most Amtrak has ever been given but almost $600 million less than railroad president David L. Gunn sought.
Gunn, in a statement reacting to the appropriations panel’s action, said the national passenger railroad will take the next month to determine how the lower number will affect operations and needed maintenance and capital spending. But he said the amount would be enough to at least keep the entire Amtrak system operating.
The budget number was a compromise between the House’s $900 million, which the administration requested, and the Senate’s $1.34 billion. The administration had pressed for a significant cut in funding as part of an effort to force the railroad to restructure by, among other things, privatizing some routes.
Like the Senate bill, the final compromise postponed repayment of an earlier $100 million government loan, effectively raising the budget by that much. Amtrak, which has lost money throughout its 32-year existence, received $1.04 billion from the government last year.
Under Gunn, Amtrak has begun an ambitious plan to rebuild wrecked passenger cars and perform badly needed maintenance on passenger cars, locomotives and the Amtrak-owned Washington-Boston Northeast Corridor. That work is underway at a pace that assumed a $1.8 billion federal budget, and Gunn has said repeatedly that it would be a serious mistake to cut back on that program.
However, sources close to Amtrak said Gunn may be able to continue with the program, perhaps at a slower pace, while pushing some of the cost into the next fiscal year. That would mean that Amtrak will probably seek a substantial budget increase again in fiscal 2005.
In an effort to operate more like a business, Amtrak carried over $200 million in working capital into the new fiscal year. Even though Congress has encouraged Amtrak to be more businesslike, the existence of that working capital allowed the conference committee to cut more from the Senate proposal than it otherwise might have, sources said.
To carry out the capital program it had planned for this year, Amtrak will have to spend virtually all of that working capital, leaving no reserve for contingencies such as an economic downturn or a terrorist attack, the sources said.
However, Amtrak’s prospects have been improving due to a combination of operational and management cost cutting and higher ridership and revenue.
For the fiscal year that ended Sept. 30, Amtrak carried more than 24 million passengers, a record. For a while, revenue lagged as Amtrak offered deep discounts to attract passengers. However, revenue is now in an upturn and advance bookings for long-distance trains are “very good,” sources said.