Passenger Trains > Amtrak Requests $1.67 Billion

Amtrak requests $1.67 billion

WASHINGTON -- Amtrak has requested $1.67 billion in federal funding for the next fiscal year, 26 percent more than it is receiving this year, according to the Associated Press.
The Bush administration has asked for only $800 million for Amtrak, the same amount it proposed last year.

Amtrak's request, discussed at a House appropriations subcommittee hearing Tuesday, reflects increased costs connected to a recent labor settlement with most of the railroad's unionized workers. However, it does not include $114 million in back wages that are to be paid out next year.

The agreement, which still needs to be ratified by workers, makes payment of 60 percent of the back pay contingent on Congress providing the money. Amtrak has agreed to absorb the other 40 percent of the retroactive raises and pay it this year.

Chief Executive Alex Kummant told Congress the passenger railroad's largest cost increase would be in benefits, which are expected to rise by $50 million. He said the increase was primarily due to rising health care costs and would have been larger if not for cost-sharing agreed to in the recent labor negotiations.

Kummant also cited rising fuel costs as another reason Amtrak wants more federal funding despite increases in ridership and revenue last year.

Amtrak's strategic goals include providing faster service and developing short-distance corridor lines, Kummant said.

To achieve those, "Amtrak will continue to require a certain core level of operating assistance and capital investment from the federal government," Kummant said in prepared testimony.

Administration officials say reducing funding to $800 million will help wean the railroad off operating subsidies.

"This funding level encourages Amtrak to continue to undertake meaningful reforms and control spending," Federal Railroad Administrator Joseph H. Boardman said in remarks prepared for the hearing.

(The preceding Associated Press article appeared in The Houston Chronicle on February 26, 2008. To view Amtrak's formal request for fiscal year 2009 funding, click here.)

February 27, 2008

They should get alot more than that meager amount of money.

We'll see come October, I know Bush's request will get shot down as usual!

Already trying to welsh on the PEB-mandated back-pay. Typical mealy-mouthed stuff.

InsideObserver Wrote:
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> Already trying to welsh on the PEB-mandated
> back-pay. Typical mealy-mouthed stuff.


Labor is expensive. It needs to be paid for somehow, or substituted out through investment in capital.

>Labor is expensive.

Compared to what?

>It needs to be paid for somehow,

That pesky 13th Amendment again . . .

>or substituted out through investment in capital.

What an oxymoron.

If you needed an appendectomy, would you entrust your life to a surgeon who worked for minimum wage? Do you even have a medical plan? or are you just jealous?

> >Labor is expensive.
> Compared to what?

Machines.

> Amtrak's request, discussed at a House
> appropriations subcommittee hearing Tuesday,
> reflects increased costs connected to a recent
> labor settlement with most of the railroad's
> unionized workers. However, it does not include
> $114 million in back wages that are to be paid out
> next year.
>
> The agreement, which still needs to be ratified by
> workers, makes payment of 60 percent of the back
> pay contingent on Congress providing the money.
> Amtrak has agreed to absorb the other 40 percent
> of the retroactive raises and pay it this year.

Though my background is on management side of business and not labor, I'm curious about why Amtrak is not at least asking for the back wages from Congress. Unless they are planning to do it in separate legislation, there's going to hell to pay without at least having the good faith to try to get the money. Does anyone have an insight on what is going on?

InsideObserver Wrote:
-------------------------------------------------------
> >Labor is expensive.
>
> Compared to what?
>
> >It needs to be paid for somehow,
>
> That pesky 13th Amendment again . . .
>
> >or substituted out through investment in
> capital.
>
> What an oxymoron.
>
> If you needed an appendectomy, would you entrust
> your life to a surgeon who worked for minimum
> wage? Do you even have a medical plan? or are you
> just jealous?


Labor is expensive compared with finding ways to do things with less labor, i.e. fewer ticket clerks and more ticket machines or relying on home internet sales where the computer and printer are provided by the customer rather than the operator. This is why trains run now with smaller crews than 30 years ago, and why stations are increasingly unstaffed, and why diners are viewed as cost-prohibitive. If labor were cheaper, there would less need to reduce crew size to increase productivity, which is the driver in economics. Labor can be expensive if people are willing to pay for it, but frequently people are not, or else they pay for less of a product than might otherwise be provided.

The key thing for labor providers is to get into a field where expensive labor is not a problem.

raillady Wrote:
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> Amtrak requests $1.67 billion
>
> Administration officials say reducing funding to
> $800 million will help wean the railroad off
> operating subsidies.

Ok, so, did the Administration suggest reducing Air Traffic Control funding to help the airlines wean themselves off THAT operating subsidy? Hint: ATC authorized funding in FY2008 was $8.7 Billion, the FY 2009 request is $9.7 Billion.

And how is Amtrak supposed to cut operating costs when diesel fuel is roughly $1.00 more per gallon now than it was a year ago? The cost of electricity and everything else is going up too, in case nobody's noticed. This is from an EIA website for on-highway diesel, but since other costs haven't changed much and this is almost all the change in the crude oil component it's probably pretty close.

Btw, I've asked this before with no response -- the last monthly report available on the AMTK website is for last September. Are they no longer required to prepare them? I actually hope they aren't, since they obviously cost a bundle to prepare, money that could be better spent, although they certainly contained a wealth of relatively up-to-date information.

lowwater

I am sure the monthly reports are still being done, however, it is likely at the discretion of senior management as to whether they really want non-audited monthly reports posted on their website.

They still post on their website audited financial statements, reports made to Congress (i.e. funding requests) etc.

lowwater Wrote:
-------------------------------------------------------
> Ok, so, did the Administration suggest reducing
> Air Traffic Control funding to help the airlines
> wean themselves off THAT operating subsidy? Hint:
> ATC authorized funding in FY2008 was $8.7 Billion,
> the FY 2009 request is $9.7 Billion.

Of course the airlines and more directly, their passengers, pay for 91.5% of the cost of the ATC operation, however they only use 66.3% of the cost of the system. In other words, the airlines are subsidising the ATC system.

OliveHeights Wrote:
-------------------------------------------------------
> lowwater Wrote:
> --------------------------------------------------
>
> Of course the airlines and more directly, their
> passengers, pay for 91.5% of the cost of the ATC
> operation, however they only use 66.3% of the cost
> of the system. In other words, the airlines are
> subsidising the ATC system.

Sigh. I get so tired of this. A tax is a tax is a tax is a tax. The Airport and Airway Trust Fund is paid for entirely by passengers, directly or indirectly, and since ALL consumers pay eventually, through the price you pay for everything from life insurance to laptops to lettuce, for the taxes paid by business travelers, and through higher prices for everything because of lowered purchasing power of recreational travelers, that $9.7 billion subsidy is 100% taxpayer funded.

Btw estimating current taxpayers at 150,000,000 (a little more than 130,000,000 actual in 2003, last year I could find a number for easily), Amtrak's $1.67 billion request equals $11.13 each. The ATC and related systems: $64.67 each.

lowwater

< The Airport and Airway Trust Fund is paid for entirely by passengers, directly or indirectly, and since ALL consumers pay eventually, through the price you pay for everything from life insurance to laptops to lettuce, for the taxes paid by business travelers, and through higher prices for everything because of lowered purchasing power of recreational travelers, that $9.7 billion subsidy is 100% taxpayer funded. >

< Of course the airlines and more directly, their passengers, pay for 91.5% of the cost of the ATC operation, however they only use 66.3% of the cost of the system. In other words, the airlines are subsidizing the ATC system.>

Then so is Amtrak's entire subsidy, so what's the problem ? The numerical facts about the FAA is this:

FAA Operations get general funds as well as funding from the aviation trust fund. The general fund level was $3.01 billion in FY 2004. The FY 2007 enacted level is $2.703 billion, or 32.4% of the FAA Operations total of $8.331 billion. DOD and other government aircraft are often assumed to be responsible for just 15% of FAA Operations costs—that would be $1.25 billion in FY 2007, implying for this year a subsidy of $1.453 billion to private sector aviation (2.703 less 1.25). More than half of all control tower take offs and landings are general aviation (including business aircraft) and almost half of en route control center traffic is general aviation.

>The key thing for labor providers is to get into a field where expensive labor is not a problem.

Nope. You have it backwards. The labor /providers'/, the "workers'", intent is to maximize wages as much as possible. Labor is no more intrinsically "expensive" than lightbulbs or prescription drugs. The price is what the market will support, and using Congress to suppress wages is artificial and self-delusional price fixing.

The only way to find a place with "cheap" labor, is to go to places like Uzbekistan and Outer Mongolia where the relative value of the dollars is more "favorable" compared to here. Disregarding issues of quality control, the drawbacks are:

1) it's only a short term advantage because sending jobs to these places accelerates the increase in living standards there, which means your labor costs will still increase, evnetually becoming "too expensive" again. Don't say this doesn't happen because it already has, several times. In the 1950s, Japan was the source of "cheap labor"; by the 1970s, it became Korea and Macao, and Japanese companies were sending work there. Next came Thailand (where most of your cast brass pipe fittings are made) and India. Today, it's China, Vietnam, and Pakistan. Next - - - . It even happened within the US during the period of 1970-1990 when manufacturning migrated from the "expensive" North, which became the Rust Belt, to the South. Toledo-Beaver almost went out of business because of moving to South Carolina, not because of it's "high labor costs" in Ohio. Now jobs are migrating from the South to Mexico (NAFTA, which has also lowered living standards in Mexico) and even further "South".

2) by sending all the jobs away from the US, you will decrease the abilities of the populace here to earn the dollars to expend in taxes and buy your products, which calls into question the continued existence of your company, let alone your outsourcing schemes. Before reaching this point, however, your dollars will have long become worthless internationally, rendering outsourcing superfluous.

The best way to make Atk more "efficient" with regard to costs, its to adjust the managment/employee ratio so that it's in line with those of the freight rrs. Right now at Amtrak, there is about 1 RFE per 10 engineers; on the freights, it's more on the order of 1 per 50 or more. Although a manger's "wage" is called "a salary", this is merely a technicality because it's still the cost for the work involved. No matter what you call it, the freight rrs have lower costs for the labors of their managers (weed weaseling etc.).

You also have blithely ignored the maxim "you get what you pay for" because I notice you haven't answered my question about whether you would allow a surgeon making minimum wage to give you an appendectomy. If you can't or won't answer that question, all you're doing is flapping your gums in order to sound erudite, and only quasi- at that.

In the Denver Post online today was an article about NASA's 1.8 billion dollar nuclear-powered Mars probe, scheduled for launch in 2010. 165 million over budget and climbing plus a probable delay in launching to 2011 or 2012.

1.8 billion to operate and improve hundreds of miles of passenger rail operations or 1.8 billion to send 1 probe to Mars. Which makes more sense? You decide. My prediction is that we will build a HSR on Mars long before we ever build one in this country or even have a national passenger rail transporation policy.

krapplem Wrote:
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> My prediction is that we will build a
> HSR on Mars long before we ever build one in this
> country or even have a national passenger rail
> transporation policy.

Heck, we already have a couple of solar/electric ATV's up there.

Yeah and Mars will be like every other country on this planet that has HSR, make the US look bad as usual!

Somehow I see a great deal of similarity between the SST and HSR, particularly maglev.