Amtrak Still In The Hole
January 26, 2000
Amtrak, the only long-distance rail passenger system in the U.S., might not meet its goal of operating without federal subsidies, reports the Amtrak Reform Council. The independent oversight panel, appointed by Congress in 1997, released its first Annual Report titled, "A Preliminary Assessment of Amtrak."
If the Amtrak Reform Council ultimately finds that Amtrak won't meet the financial goals of the Amtrak Reform and Accountability Act of 1997, it is charged by Congress with developing an action plan to restructure or liquidate the national passenger system.
- Under the act, Amtrak is required to become operationally self-sufficient by fiscal year 2003, though it would continue to receive capital funds to invest in infrastructure and equipment.
- The panel said Amtrak could fall $567 million short of meeting that goal, based on generally accepted accounting principles that include depreciation and certain expenses for overhauls of equipment.
- If Amtrak is forced to change its calculations, it would have to seek further subsidies from Congress, which has given Amtrak $23 billion since 1971.
- The council also noted that Amtrak carried about the same number of riders in 1999 as in 1989.
Amtrak believes the disputed items should be excluded from the expenses it has to cover. Sen. Kay Bailey Hutchison (R-Texas) noted that "No public transportation system covers depreciation at the fare box."
Amtrak officials say its bond rating has been raised, and ridership has increased on some key routes, and should rise more with the new, faster service.
Amtrak will begin a "high-speed" passenger train service between Boston and New York City next week, reports USA Today, so the trip will only take four hours, instead of five.
Source: David Field, "Amtrak might miss self-sufficiency deadline," USA Today, January 25, 2000; Daniel Machalaba, "Amtrak Accounting Methods Draw Fire, Raising Questions on Self-Sufficiency," Wall Street Journal, January 25, 2000.
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