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Federal
Funding for Railroads Funding for railroad expansion and maintenance is a perennial problem, partially rooted in the fact that the track the trains run on is shared among multiple owners, and used both for freight and passenger service. In principle, there is general public and legislative support for the expansion of rail networks. However, the investment costs for these networks is astounding relative to the amount of money available. Highways get approximately $30 billion from the federal government in the Highway Trust Fund alone, while railway funding at best is $1 billion from all sources, for all purposes. Further, there is often debate concerning private vs. public management of rail systems for both practical and philosophical reasons. Amtrak, the U.S.'s semi-public rail company, is under pressure to cut costs while maintaining, improving, and expanding service. Generally, passenger and freight rail companies in the United States manage to run without direct federal intervention. Since the privately-owned freight companies were deregulated over 20 years ago, many people believe that Amtrak ought to be run as a for-profit, unsubsidized corporation, but it is uncertain whether this is actually possible. As a consequence, the overhaul of the nation's rail networks is incomplete, although there is much evidence indicating that this is necessary. Part of the problem with funding railroads is the interaction -- or lack thereof -- between the trust funds and appropriations spending limits. The Highway and Transit divisions in TEA-21 are "firewalled" -- no transfers of funding are allowed from one to the other, and programs outside the trust funds cannot be paid for by these trust funds, even though they may actually pay for the same thing. In the case of railroads, Amtrak cannot be funded from the trust fund. However, the annual appropriation for Amtrak's operating costs of approximately $500 million cannot begin to address the backlog in maintenance, and the need for additional construction on the existing infrastructure, or upgrade the tracks to carry high-speed trains such as Acela. The annual appropriation for Safety and Operations within the Federal Railroad Administration is only about $100 million, similarly inadequate for the purposes of infrastructure overhauls. The General Accounting Office completed a report July 27, 2001 on Amtrak's woes which can be found on the GAO web site under GAO-01-820T entitled: Intercity Passenger Rail: The Congress Faces Critical Decisions About the Role of and Funding for Intercity Passenger Rail Systems. The House Appropriations Transportation subcommittee expressed their irritation with the existing funding schemes in their FY 2002 appropriations report, saying:
Certainly this will become an issue in the next transportation authorization debate. In the meantime, the House and Senate are seeking to address the infrastructure modernization deficit by passing a bond program for Amtrak (see High Speed Rail). Annual Congressional Appropriations: The Federal Railroad Administration, the National Railroad Passenger Corporation (Amtrak), high speed rail, and specific railroad bridges that interfere with water navigation, are funded by congressional appropriations. In addition to the authorized programs, numerous individual projects are earmarked in the bill. Railroad Rehabilitation and Improvement Financing: TEA-21 does not pay directly for railways. No railroad improvement or rehabilitation funds were authorized in that legislation. However, in TEA-21, the Administrator is permitted to accept commitments from a non-federal source (i.e. a bank or other lending authority) for loan guarantees. These cannot exceed $3.5 billion, and not less than $1 billion must be used for class I carriers. These funds can be loaned to state and local governments, government-sponsored authorities, corporations, railroads, and joint ventures which include one or more railroads. The borrowing entity must be able to show that their project will fulfil certain use, efficiency, environmental, and other requirements. The funds can be used for intermodal or rail equipment, facilities, track, bridges, yards, and repair shops. These loans cannot exceed the 25-year repayment period. High-Speed Rail: TEA-21 includes a general fund authorization (i.e. requires a congressional appropriation) through fiscal 2001 of $10 million a year for planning (50 percent cost share requirement) and $25 million a year for technology improvements for the development of high-speed rail. Recently this has been funded at $25.1 million. It has been estimated that the full development of high-speed rail in the Northeast corridor, and other federally-designated corridors, will cost $50-$70 billion over 20 years. Amtrak supporters are quick to point out that this is less than two years of highway funding, and that benefits would be realized long before the entire corridor was completed. Efforts are afoot on Capitol Hill to pass the High Speed Rail Investment Act (H.R. 2329 and S. 250) which would authorize up to $12 billion over ten years in bonds, with a 20 percent match from the states. The House version of the Act was written after the release of a GAO critique of the original Senate bill, and attempted to address most of those criticisms. The Senate subsequently released a second version.
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