Amtrak policy change means new challenges for regional service
By Sean Tubbs
Thursday, June 23, 2011
Virginia transportation officials are negotiating with Amtrak to gain a greater share of revenue from passenger fares before new federal rules are implemented two and a half years from now.
As proposed, the financial success of passenger trains recently added in Charlottesville would be undercut because only a portion of a passenger’s fare would be counted as Virginia travel. The changes will mean less revenue to help the state to pay for the service.
“We remain critically concerned about this,” said Kevin Page, chief of rail transportation for the Virginia Department of Rail and Public Transportation.
Slide from Kevin Page’s presentation to the CTB showing how Amtrak lines across the nation will be affected
In 2008, Congress passed the Passenger Rail Investment and Improvement Act, which devolved funding responsibility for regional service to state governments.
“This is the federal government wanting to get the burden of Amtrak off of their back,” said Virginia Secretary of Transportation Sean Connaughton at a meeting of the Commonwealth Transportation Board earlier this month.
The DRPT is in the middle of a three-year experiment to fund capital and operating costs for passenger rail that begins in Lynchburg and travels through Charlottesville to New York City. The DRPT also funded another new train that travels from Richmond to New York.
Under the new rules, the state will be responsible by October 2013 for paying for those trains as well as four existing routes that originate in Virginia that Amtrak has been fully funding.
“After that, absent an infusion of new revenue into the passenger rail operating and capital fund, there will be no money either to sustain the new services or to pick up the costs of the existing services,” said Meredith Richards, a former Charlottesville city councilor and chair of Cville Rail.
Page called the legislation a game-changer because it will dismantle a national transportation system. He said the law also created a new commission to coordinate service in the northeast corridor, but noted that Virginia is not a member.
“We still have a national transportation system providing rail passenger service, but now it has been disjointed to the point where you have long-distance trains, regional trains, and northeast corridor trains which all work co-mingled, especially in Virginia,” Page said.
A slide from Kevin Page’s presentation depicting how Virginia routes will be affected (Click to enlarge)
Under Virginia’s current contract with Amtrak, the state gets 79 percent of the total fare of a passenger who embarks on a trip to a destination in the northeast corridor, according to Page. He added that the formula has enabled the Lynchburg service to have a positive balance of $1.8 million over the past 12 months.
“It has been the outstanding performance of the Lynchburg train that has led us to not need money in fiscal year 2012,” Page said. “It has continued to out-perform any other train in the regional system of Amtrak.”
By comparison, the Richmond train funded by the DRPT is running at a $1.9 million deficit. The situation will get worse when the state assumes payment to operate four more trains that currently serve Richmond, Norfolk and Newport News.
Under the proposed changes, Virginia would only receive the portion of the fare that covers the cost of running the train through Virginia.
“If a patron gets on in Lynchburg, we [would] only get the revenue to Washington, D.C.,” Page said. He objects to the possibility that the rest of the fare would be shared with Amtrak and states in the northeast corridor.
Page said he and DRPT Director Thelma Drake are continuing negotiations to try to obtain a greater share of the revenue of the trains that head north of Washington.
Meanwhile, the state is continuing to study new revenue sources to pay for operations.
This year, the General Assembly passed legislation establishing a fund to pay for intercity rail operations, but no permanent funding source was identified.
“We have to get a funding source in this coming General Assembly session,” said Steve Pittard of the Virginia Department of Rail and Transportation.
The DRPT’s six-year plan currently shows a $110 million deficit in part because no permanent source of operating funds has been selected.
Connaughton said the state is weighing its options and will make recommendations to the General Assembly.