(09/19/06) Gov. Douglas deserves a lot of credit for taking action to adopt an agenda of affordability.  He recognizes high taxes threaten prosperity and are burdensome to families.  That’s why every tax dollar spent must be scrutinized and justified.

Amtrak’s proposal that Vermont participate in a rail demonstration project by buying new smaller passenger cars to save the state money has a high cost despite their claim it will increase ridership.  If it were such a win/win situation Amtrak would be making the investment themselves.

In looking at the details will Vermont taxpayers get railroaded at the end of the line?  Consider the following and then decide.

   1.  The current “Ethan Allen Express” from New York City to Rutland and the “Vermonter” with service from Washington, DC to New York City and St. Albans   is unsustainable due to increased costs and reduced ridership.

   2. Passengers have decreased about 20 percent while state subsidy increased 60 percent since FY01; Amtrak claims ridership will increase significantly with new cars but their projections have never met expectations.

   3. Vermont and Amtrak subsidy is $40 ($27 Vermont/$13 Amtrak) per passenger trip; Amtrak’s financial situation is very poor and they’re $3.5 billion in debt.  Is there any doubt why they’re bailing?

   4. Rail does little to attract economic development.  According to the Federal Transit Administration, rail only redistributes growth that would have occurred anyway.

   5. Rail can’t compete with bus transit.  Vermont Transit can provide the same service in two corridors and passenger revenue would fully support it whereas rail would still require a subsidy of $27 per passenger assuming the Amtrak subsidy was eliminated by efficiency.

   6. The proposed service requires Vermont to build its own maintenance facility. and require track upgrades and more rail maintenance investment.  Other hidden costs have not yet been identified.  The last Vermont rail demonstration had a 3X increase over its original estimated costs.

   7. Rail has a very difficult time competing with automobiles.  Cars are always the preferred mode because of flexibility, speed and convenience.

   8. Taxpayers bear the brunt of rail costs so a few rail riders can ride cheaply.  Currently, at least 40% is either paid by taxpayers or absorbed as a loss by Amtrak.

   9. Both Vermont and New Hampshire own rail track but Vermont spends $12.75 per capita on rail compared to 24 cents per capita in New Hampshire.

  10. Private sector investment ceases when an investment fails to generate an adequate return.  Rail service and track ownership is not the function of the state to compete with private enterprise.

  11. There’s an abundance of better options.  Using busses without any state subsidy is preferred.  Freeway efficiency measures, like tolls and/or congestion pricing, are fairer and less costly.

However, there’s an agenda in this state that rail is a way to ease traffic congestion and reduce pollution.   This argument has kept Amtrak alive with subsidies to cover its excessive service costs with the promise to provide more efficient service and reduce costs.  However, facts don’t cease to exist because they are ignored.

   1. The Cato Institute reports that Amtrak continues to make a negligible contribution to our national transportation system.  Just 0.4 percent of all passengers make intercity trips; Vermont intercity trips are so small that they are inconsequential.

   2. The Institute further reports that Amtrak has little impact on reducing traffic congestion, pollution or energy use.  If you doubled Amtrak’s ridership and every passenger drove a car instead, U.S. energy consumption would rise less than 0.1 percent.

Because Vermont is a low density state any decision to subsidize rail service should be cost justified and not decided on public/political “feel good reasons”.  It’s obvious that Amtrak, regardless of how it’s packaged, is very limited in meeting societal needs that can be achieved with more effective and less costly means.  Even the Congressional Budget Office says “federal subsidies to Amtrak become more difficult to justify” but evidently not in Vermont.

We shouldn’t let rail just chug away in Vermont, thinking this experiment will be a bellwether for national change.  It’s an inefficient use of public resources, ineffective at reducing congestion and unaffordable to taxpayers.  The $3.3M state Amtrak subsidy should be re-allocated to improve our deteriorating roads and bridges.  That would be a more appropriate investment of taxpayers’ dollars.

Frank Mazur
South Burlington

Related: www.DivestTerror.org.

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Frank Mazur, a small business owner and former state representative, is chair of the advisory board of Vermont FreedomWorks.