Testimony of THOMAS M. DOWNS
President and CEO
NATIONAL RAILROAD PASSENGER CORPORATION (AMTRAK)
Before the Senate Environment and Public Works
SUBCOMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
Oversight Hearing On FLEXIBILITY AND ELIGIBILITY
March 13, 1997

Mr. Chair and Members of the Subcommittee: Thank you for the opportunity to appear before this Subcommittee to discuss Amtrak's top priority for 1997: Inclusion of a dedicated source of capital funding, as well as program eligibility, for intercity passenger rail in the upcoming reauthorization of the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA). Our top priority is the creation of a trust fund for intercity passenger rail, which will require cooperation among the committees of jurisdiction, and second, eligibility for intercity passenger rail under the various programs, which clearly comes under the jurisdiction of this Committee.

ISTEA was truly visionary legislation. It was the first step down the path toward a balanced transportation system. It was the first law that sought to put movement at the forefront, and not the different interests that comprise our methods of movement. At many state DOT's, "Intermodal" needed to be defined and added to the vocabulary.

But ISTEA brought us only part way down the path. In order to reach our ultimate destination - a truly balanced transportation system - we must eliminate modal bias. A significant step in the right direction would be to discontinue the bias against intercity passenger rail that is inherent in ISTEA. That is consistent with what has historically been the position of this Committee, and the Senate as a whole, and it is my hope that this year, with the jurisdictional problems in the House resolved, the Senate's position will prevail.

For those who were not here, in 1991 the Senate-passed version of ISTEA included passenger rail as an eligible entity in all state-administered programs, but when the conference on the bill began we were left in no-man's land between the insurmountable boundaries of jurisdiction in the House. And it was there that eligibility for intercity passenger rail died - on a jurisdictional impasse, not due to any substantive objection. Now, after it being codified that way for six years, we need to remind people it was never a policy decision to exclude rail - we fell victim to clearly drawn lines of committee jurisdiction. Now, with jurisdiction over all surface transportation programs, including Amtrak, consolidated in the House Transportation and Infrastructure Committee, the obstacle has been removed, and this indefensible modal bias should be eliminated.

Everyone on this Subcommittee knows that public policy on transportation modes is incredibly skewed - and that goes well beyond the gross inconsistencies in funding levels for the different modes. Current federal funding policies distort state and local decisionmaking. The federal government offers generous matches to a state if they are making highway, transit or aviation investments, but offers little or no funds to match state investment in rail passenger service. The result is states and localities are discouraged from investing in rail even when it's the best system for the area. Elimination of modal bias and the desire for a balanced, truly responsive intermodal transportation system demands that this change. And "NEXTEA" is the most appropriate vehicle for that change.

As you know, highway trust fund monies can be spent on mass transit, bus acquisition, light rail, bike paths, pedestrian walkways, technology research, planning, snowmobile trails, intermodal freight facilities, driver education programs, hiking trails, and much more. I am not here to discourage these types of investments, but I would like to point out the absolute inconsistency on prohibiting expenditures on intercity passenger rail. If a state chooses to spend a portion of their federal transportation allocation on Amtrak, they should clearly be allowed to do so.

Including passenger rail as an eligible use of Congestion Mitigation and Air Quality (CMAQ), Surface Transportation (STP), National Highway System (NHS) and eligible transit program funds would eliminate this bias. States would be able to leverage a 75 or 80 percent match on their investment, and thus would be financially free to choose the best transportation solution based on transportation efficiency, not skewed economic incentives.

The legislative discrimination against passenger rail should be terminated with the enactment of NEXTEA. Inclusion of passenger rail as an eligible use of NEXTEA funds would require no new spending, would not change any federal transportation allocation formulas, and would not mandate that a state spend one penny on rail service. What it would do is provide states with the flexibility to buy the transportation service that best meets their needs.

In 1995 when Amtrak announced a major route and service restructuring, governors from across the country made personal appeals to then Secretary Pena asking that ISTEA funds be approved for expenditure on intercity rail service. Except in the most narrow case, where the Secretary found the grounds for making an exception, federal law prohibited it. Instead, these governors were forced to seek and spend state general revenues - dollars that are much harder to come by, that are wrestled from State Legislatures, and that provide no leverage of federal funds - to support Amtrak service. Despite that, many of the states worked with us, and came up with the funding to preserve some form of the service proposed for termination. We currently have thirteen states partnering with us for services, so it's clear that states want to have these partnerships. It is clear that the American people want a national passenger rail system - the challenge for this Congress is how best to support it and ensure its healthy existence. Allowing states the right to spend a portion of their federal transportation allocation on Amtrak, if they so choose, is one critical response to this challenge.

The Senate approved legislation to provide this flexibility and eligibility in 1991, and again, by a nearly 2-1 bipartisan vote, during consideration of the National Highway System Designation Act (NHSDA) in 1995. Sixty-four Senators in the last Congress, supported by many of the nation's governors, voted in favor of this. I am pleased to see that Senator Moynihan's ISTEA reauthorization, cosponsored by Senators Lautenberg, Lieberman and others on this Committee, includes this eligibility for Amtrak. I urge this Committee to ensure that whatever bill is reported to the full Senate for consideration include this very important eligibility for intercity passenger rail. Simply, it is a states' rights issue. If a state decides that Amtrak best meets their transportation needs, that state should be able to leverage the same amount of federal dollars for rail service that it can for a new highway, a new bridge, a transit improvement or a bike path.

That is what Amtrak is seeking. Parity. Parity doesn't require an indictment of our highway system, or our transit systems, or our aviation system. As a former highway administrator, the head of a bridge and tunnel authority, a transit agency and a state DOT, I have never argued the merit of one mode over the other. Each serves a different need and a different population. They should be woven together to supplement and enhance each other.

The other issue that must be addressed in NEXTEA is the inclusion of a dedicated funding source for Amtrak. Amtrak has explained why we need it, GAO has agreed the National Commission on Intermodal Transportation has called for its creation, and leadership on both sides of the Hill have agreed. I'm not going to sit here in front of you and "cry wolf," but I know our national rail system cannot survive intact through yet another year of inadequate funding, and I can assure you that Amtrak will have to break its commitment to achieve independence from federal operating support if we are not given an adequate, reliable dedicated source of capital funding. As we have always said, operational self-sufficiency is absolutely dependent on adequate capital investment in the system. For some reason Amtrak, the only major mode of transportation which does not have a dedicated source of funding, is held to a higher standard than any other mode, all of which are dependent on the federal government for support and none of whom are called upon to defend themselves in terms of "profitability." We are also held to a higher standard than any other passenger rail system in the world, all of which rely on some level of federal support. Amtrak covers more of its operating costs - an estimated 84 percent - than any other passenger railroad in the world, and serves more than 93 percent of the continental United States, while receiving less than 3 percent of all federal transportation spending.

Although we were not witnesses, providing flexibility and a dedicated source of funding for Amtrak has been discussed in previous hearings before this Subcommittee, and I must address some of the issues that have already been raised. One issue discussed, when the Highway Users Federation and the Surface Transportation Policy Project were testifying, was the number of riders on different modes. To provide some context, if Amtrak were an airline carrier, we would be the third largest in the United States. We carry almost half of the combined air-rail market between Washington, DC and New York, and when intermediate cities (such as Baltimore and Philadelphia) are included, Amtrak's share of the air-rail market rises to seventy percent. Loss of Amtrak service in this corridor would not only put a huge financial burden on the affected states, it would require another 7,500 fully-booked 757's to carry our passengers every year, or hundreds of thousands of cars added to already congested highways. If Amtrak disappeared tomorrow, there would be an additional 27,000 cars on the highway between Boston and New York every day. To address the particular Northeast city pair discussed by Mr. Fay and Senator Chafee at an earlier hearing, between New York and Philadelphia Amtrak service removes 18,000 cars from the highways every weekday.

That number - 18,000 cars a day - does not include the thousands of commuter rail passengers, and their parked cars, that are carried on Amtrak's Northeast Corridor by commuter agencies such as New Jersey Transit (NJT) and the Southeastern Pennsylvania Transit Authority (SEPTA) every day. These commuter agencies could not operate if Amtrak did not maintain the track, bridges, signals and electric traction system on the Corridor. Above and beyond Amtrak's enumerated ridership, another 220 million commuter passengers ride on Amtrak's Corridor between Boston and Washington, DC every year. You can measure Amtrak's impact not only in the number of cars removed from the road, but also in terms of avoided costs - as reported in the Journal of Commerce last May, Amtrak's presence eliminates the need for twenty additional highway lanes in New York City, and ten new tunnels under the Hudson.

Finally, it also must be noted that Amtrak carries all these passengers even as the terms of relative investment by mode become more and more disparate. In real terms, spending for highways approached $20 billion last year while capital investment for Amtrak was less than $450 million. In relative terms, between FY 1980 and FY 1994, transportation outlays for highways increased seventy-three percent, aviation increased 170 percent, and transportation outlays for rail went down by sixty-two percent. In terms of growth, between 1982 and 1992 highway spending grew by five percent, aviation by ten percent, while rail decreased by nine percent. The overall funding amounts as well as the relative levels of investment should make one wonder how Amtrak has managed to maintain a fairly constant level of ridership, not why it hasn't increased its share. Amtrak has been accused of not serving enough of the travelling population, but that must be weighed against the price of not serving those travelers. It isn't just a matter of slightly more clogged roads or additional pollution. For some people it is the only way "to get there from here."

It's not just the urban corridors that depend on our service. Some 22 million of our 55 million passengers depend on Amtrak for travel between urban centers and rural locations some of which have no alternative modes of transportation. Some of the most persuasive appeals for flexibility for Amtrak and some of the strongest advocates for a dedicated trust fund have been elected officials from those states who are facing the elimination of Essential Air Service (EAS) or the disappearance of local bus service, and truly face the elimination of all other modes.

I have also been advised that opponents have made claims in front of this committee about the sanctity of the highway trust fund. I believe that the highway trust fund was legitimately expanded long before ISTEA and the funding of bike paths, pedestrian walkways, and "enhancements" was allowed. Fifteen years ago, when mass transit fought for a piece of the revered Highway Trust Fund, it met fierce opposition from a powerful highway lobby - who claimed the Highway Trust Fund would become insolvent and the nations' roadways would all collapse, all within a few years. As everyone here knows, that is not the case. So when we hear these accusations against any usurping of the gasoline tax by Amtrak, realize they are not new, they are not accurate, and they are not convincing.

As the Chairman of this Committee has said, there is no law - no covenant with the people - that says excise fuel taxes need to be spent on highways, nor for that matter, transportation. States use revenues collected from the gasoline tax for non-highway uses, and it goes unquestioned. Texas spends 25 percent of what it collects on the state's education system, while for states represented on this Committee, the uses range from environmental protection in Florida and Arkansas to support for the Fish and Game Department in New Hampshire, to aiding the critically important ports and transit systems in Virginia, and maintaining snowmobile trails in Wyoming. Oklahoma already spends a portion of the gas tax on transit and railroad needs. Like the states, Congress should spend the revenues raised by the excise fuel tax on those programs it feels are deserving. I think passenger rail should be one of those programs.

Finally, I am not aware of any transportation system that supports itself sadly through user fees. According to the US DOT, in FY 1994 nearly $6 billion more was spent on highways than was collected in user fees. In FY 1995 nearly $8 billion more was spent on highways than was collected in user fees. That amount represents significantly more than Amtrak is requesting in funding over the entire six-year life of NEXTEA. It's not just highways - transit is exempt from the gas tax and received approximately $3 billion in gasoline revenues last year. No mode is self-financed. One parting thought. Like so many worthwhile things that have been done to little applause, ISTEA has faced criticism. You have invited witnesses here to discuss the good and the bad, to criticize and commend, and they may disagree by mode, or by state, or by region. Despite that, I believe your highest priority must be defending the ground already gained with that landmark bill and to build on it.

If we are to continue the vision of ISTEA and maximize our transportation resources in NEXTEA, we must move past the counting up and comparing of costs of each mode. A truly balanced transportation system is like an effective education system. All of society benefits from its existence, those who use it directly and those whose lives are eased or enriched by its existence. That is what NEXTEA should embody, promote and protect, and we at Amtrak believe intercity passenger rail should be a part of it.