State leaders mount efforts to defeat a cutoff of federal funds that could push the struggling railroad into bankruptcyCover Story
Every weekday morning Rod and Betsy McCaughey board the 7:24 Amtrak express from Princeton Junction that takes him to his banking job in Newark and her to her position with the Federal Reserve Bank in New York City. The McCaugheys are among the 11,000 daily New Jersey riders on Amtrak, whose funding is once again under attack in Washington, D.C. Any sharp cuts in Amtrak service would be ?a major disaster,? says Rod McCaughey, unless NJ Transit was able to pick up the passenger traffic.
This year the threat to the deficit-ridden National Railroad Passenger Corp., as Amtrak is officially known, could be the greatest since the railroad was cobbled together from the remains of the Penn Central and other passenger lines in 1971. President Bush wants to eliminate all federal funding for Amtrak in the fiscal year that begins in October and push financial responsibility for running the railroad down to the states. Critics say so abrupt a cutoff would spell bankruptcy for Amtrak.
While the New Jersey congressional delegation and other Northeastern lawmakers insist that the states are in no position to pay the tab, many legislators elsewhere back the Bush plan. ?Let?s face it, the Northeast doesn?t have the political clout it once did on so many issues,? says Chip Hallock, president of the Regional Business Partnership, who is organizing state business leaders to lobby for increased Amtrak funding.
?Power has shifted in Congress so that the Southeast and Southwest are important political constituents,? says Hallock, ?and they don?t have the Northeast Corridor.?
Some observers view the Bush plan as a negotiating ploy. ?It?s designed to get people?s attention,? says Martin Robins, director of Rutgers University?s Alan M. Voorhees Transportation Center, who last summer wrote a report on Amtrak?s importance to New Jersey. ?He doesn?t mean to carry out the threat.?
If that is what Bush intended, his plan has clearly had an impact. ?It?s helped to cause Amtrak to take a really close look at what changes could make it a more efficient rail system,? says Hallock.
Amtrak is an economic locomotive for New Jersey. The railroad employs nearly 1,700 New Jersey residents with an annual payroll of $89 million and last year it spent $38 million to buy goods and services in the state. Its presence has also helped spur commercial and residential development near stations that it shares with NJ Transit.
Nonetheless, Amtrak could not survive without government life support. The railroad lost $1.3 billion last year on $1.8 billion of revenue that included $1.2 billion in federal subsidies. Last month Amtrak?s four-member board, all of whom are Bush appointees, asked Congress for $1.8 billion to operate the railroad in the coming fiscal year.
The financial strain is greatest on Amtrak?s 15 long-distance trains like the Sunset Limited from Los Angeles to Orlando, Florida, and the Empire Builder from Chicago to Portland, Oregon. Such lines lost $520 million last year to account for nearly 40% of Amtrak?s deficit. Compounding those problems are quirks like food service that costs Amtrak $2.50 for every $1 of sandwiches and coffee that it sells.
Adding still more woe was last month?s sidelining of Amtrak?s 20 high-speed Acela trains to fix cracked brakes. Acela generated $295 million in revenue last year. The shutdown for the repair work, which is scheduled for completion this summer, was swiftly felt in New Jersey when Amtrak halted four rush-hour ?Clocker? trains between New York and Philadelphia to provide cars for trains to replace the Acela service. While the Clocker suspensions were described as ?indefinite,? crew members said they would probably be permanent. To pick up the slack, NJ Transit put on additional rush-hour service.
?It?s a system that?s not working,? Brian Turmail, spokesman for the U.S. Department of Transportation, says of Amtrak. ?Taxpayers are not getting a return on their investment.?
The brightest spot for the railroad is the heavily trafficked Northeast Corridor line, which stretches 456 miles from Boston to Washington, D.C. It would turn a profit if track maintenance and capital improvements were not included on its balance sheet. In recognition of this, Bush?s six-year reform plan calls for the use of federal funds to upgrade the Northeast Corridor line so it can be sold to a private company.
That hasn?t won over New Jersey Democrats Jon Corzine and Frank Lautenberg, who were among 35 U.S. senators who last February signed a letter saying they were deeply concerned about the Bush plan. Democratic U.S. Representative Robert Menendez, whose district includes parts of Essex, Hudson, Middlesex and Union counties, last month cosponsored a House measure that seeks $2 billion a year to strengthen Amtrak. ?The goals of our plans are simple,? Menendez said in a statement. ?Run more trains, run them faster and run them on time.?
Such plans are endorsed by railroad enthusiasts like Al Papp, a director of the New Jersey Association of Rail Passengers, a 350-member rider-advocacy group. ?It?s time for a change in the U.S.,? says Papp. ?It?s time for us to put flesh on the skeleton of Amtrak.?
At NJ Transit?s Newark headquarters, officials worry that deep cuts in Amtrak funding would damage the reliability of their own trains. NJ Transit carries 94,500 passengers every weekday on Amtrak-owned tracks and runs 75% of the trains operating between Trenton and New York. The agency counts on Amtrak to maintain tracks, signals, bridges and overhead power lines, some of which date back to the 1930s.
Since 1992, NJ Transit has poured more than $1 billion into track and station maintenance. This has included $488 million to upgrade tracks and power systems at New York?s Penn Station, a facility owned by Amtrak, and $551 for the new Secaucus transfer station and the Kearny connection. Meanwhile, the Port Authority of New York and New Jersey spent $415 million to construct a connection to Newark Liberty International Airport that opened in 2001.
As Congress debates the merits of Amtrak, critics decry a government that readily funds highways, airports and ports at the expense of the national passenger railroad. ?We can?t just keep investing in airlines that are going through a period of turmoil and building more lanes for our highway system,? says Papp. ?We need a balanced transportation system in our country.?
AMTRAK AT A GLANCE
What it is Private company
called National Railroad Passenger Corp. whose stock is owned by
the federal government
U.S. riders per year 25 million
New Jersey riders 3.85 million
New Jersey employees
1,687 with $89 million
in total wages
New Jersey purchases
U.S. employees 19,700
States served 46, excluding
Alaska, Hawaii, South Dakota
Total track miles 22,000
Federal subsidies since 1971
2004 revenue $1.8 billion,
including $1.2 billion in
2004 net loss $1.34 billion
City Annual Riders
Princeton Junction 932,261
New Brunswick 85,656
Newark Airport 74,440