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I-Team Waste Watch: Amtrak spending

KALAMAZOO, Mich. (NEWSCHANNEL 3) - The Newschannel Three I-Team is taking a closer look at how much taxpayer money is being spent on every person who rides Amtrak.

This year, the state has had to increase what it spends on Amtrak routes that cross into Michigan after the federal government stopped supporting some routes.

That includes the lines crossing through Kalamazoo.

Mary Jo Schwab rides Amtrak just a few times a year says she's glad it's there.

"I come to see my son and his family, this time I came for a baby shower for my granddaughterit's very convenient," says Schwab.

But what Schwab and many riders don't know is how much what the state chips in for every ticket.

An analysis from the Mackinac Center estimates it could be as much a $98 dollars for each round trip.

"It does surprise me but we need the service because it helps a lot of people. So hopefully they can work something out because people do need the train here," says rider Tommy Riddle.

Economist Michael Farren wrote the analysis.

"They should just eliminate the subsidy and allow the actual price of using Amtrak as transportation to be paid by the people that are using Amtrak," says Farren.

He also points out the subsidy money comes from the gas tax, meaning people driving cars subsidize train riders.

"Is it better to keep Amtrak running for the relatively small amount of passengers it provides service for, versus better road maintenance."

But MDOT estimates the subsidy is much less, it calculates it using the total number of riders, not using round trips like the Farrens analysis.

MDOT gave us these answers to our questions about the subsidies.

In fiscal year 2013, MDOT provided state funding for the Blue Water (Chicago-Port Huron) and Pere Marquette (Chicago-Grand Rapids) services under contract with Amtrak at a total cost of $8 million. Total ridership in FY 2013 for the two services was 295,597, leading to an operating subsidy of $27.06 per passenger.

For fiscal year 2014, due to an MDOT funding increase mandated by federal legislation, the total cost for all three services under contract with Amtrak is expected to be $25,178,000.  Using the average 4.5% ridership increase based on each of the past 10 years, there is an expected annual ridership of 840,908 for FY 2014 on all three services. That corresponds to an operating subsidy of $29.94 per passenger.

The total state appropriation for rail programs is $40.6 million, including $2 million from the self-sustaining Rail Freight Fund. After deducting the $25.2 million for operating support, the remaining $15.4 million will be invested to support a variety of passenger and freight rail efforts. MDOTs efforts include freight rail investments, as well, and all MDOT rail investments will:

  • Continue to enhance allowable train speeds on the Chicago-Detroit/Pontiac corridor, reducing travel times and encouraging higher ridership levels
  • Provide for the maintenance of the Chicago-Detroit/Pontiac line that was recently acquired by MDOT (primarily using federal grant dollars) in an effort to preserve both passenger and freight rail service; and
  • Support and enhance freight rail efficiency and access for businesses throughout the state.

As previously mentioned, these investments benefit both freight and passenger services, which benefit Michigans economy. Station communities also benefit from these investments. Having the ability to provide passenger rail service in Michigan provides more diverse transportation options improving overall safety, efficiency and the environment.

Rail certainly is not the only mode of transportation subsidized by public funding. Public money at the federal, state and local levels goes into our airports, highways and public transportation system.

These are investments in the operations, maintenance and building of transportation infrastructure critical to economic prosperity. MDOT is developing a long range plan to increase ridership and revenue which helps reduce overall operating costs and subsidies. Some of these initiatives include improving on time performance, reducing travel times, increasing the use of technology to purchase tickets, and adding amenities that rail customers want, such as Wi-Fi, bikes on trains, quiet cars, etc., to make the service more attractive to new and existing passengers. MDOT is committed to leveraging federal funding to improve infrastructure, which was seen in the FY 2012 budget allocation. In addition, there will be new passenger rail cars and engines put in service beginning in 2016. Every service experience where this has been done has seen increased ridership.  MDOT's plan also calls for regular reviews of passenger ticket prices to determine when prices should be increased so that revenues from passengers will continue to grow and state funding support will decline.