Amtrak Accounting Approved
February 24, 2000
The chairman of the Amtrak Reform Council, the body appointed by Congress to make recommendations for restructuring or privatizing the national passenger rail service, has changed his position on an accounting issue that might have led the panel to call for liquidating the service.
Amtrak has been struggling to meet a requirement by Congress that it do without federal operating subsidies after 2002 -- although it would continue to receive subsidies for capital expenses.
- Gilbert Carmichael, chairman of the reform council, had previously said that capital depreciation should be included in figuring Amtrak's operating loss -- creating a projected revenue shortfall of $752 million for 2002.
- However, the chairman of the Senate surface transportation subcommittee, Sen. Kay Bailey Hutchison (R-Texas), and others, argued that Amtrak is a federal agency, necessitating different accounting standards than a private company, and that depreciation expense should not be counted against revenues.
- Last year Amtrak lost $916 million, including $360 million in capital depreciation.
- By its own projections, Amtrak will have to raise revenues 40 percent over the next three years to eliminate federal subsidies for operations.
Carmichael changed his position after hearing from senators at a hearing Wednesday.
Source: Jim Landers, "Change in Amtrak Rule Approved," Dallas Morning News, February 24, 2000.
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