Recently the Kansas legislature and governor decided to authorize the Kansas Secretary of Transportation to establish and implement a passenger rail service program in the state. This service would most likely be implemented through Amtrak, the federal passenger rail authority.
This service, true to the nature of Amtrak, would require subsidy from taxpayers in order to survive. Most of the arguments of rail supporters boil down to “other things get subsidy, so we want ours too.” The proper response to this is to advocate for ending all subsidy to all forms of transportation. In this way, we can fully learn which forms of transport are truly valued, and by what relative margin. Then private sector investment can be channeled to where people — not politicians, government bureaucrats, and rail enthusiasts — value it most.
Rail supporters — we should be accurate and call them taxpayer-funded rail supporters — argue that the total dollar volume of taxpayer funds redirected to support Amtrak is small. That, however, ignores the context of the passenger mile. In this context, government funding of rail travel is truly alarming.
In 2008, a Cato Institute report stated “In 2006, subsidies to Amtrak totaled just over $1 billion, or about 22 cents per passenger mile.” The subsidy to highways was about one-half cent per mile.
Subsidyscope, an initiative of the Pew Charitable Trusts, has a recent study about the taxpayer subsidy flowing into Amtrak. For the Heartland Flyer route, which runs from Fort Worth to Oklahoma, and is proposed by taxpayer-funded rail supporters to extend into Kansas through Wichita and Kansas City, we find these statistics about the finances of this operation:
Amtrak reports a profit/loss per passenger mile on this route of $-.02, meaning that each passenger, per mile traveled, resulted in a loss of two cents. Taxpayers pay for that.
But this number, as bad as it is, is totally misleading. Subsidyscope calculated a different number. This number, unlike the numbers Amrak publishes, includes depreciation, ancillary businesses and overhead costs — the types of costs that private sector businesses bear and report. When these costs are included, the Heartland Flyer route results in a loss of 13 cents per passenger mile, or a loss of $26.76 per passenger for the trip from Fort Worth to Oklahoma City.
This isn’t the type of business we should import into Kansas for economic development purposes. Hopefully Kansans will realize the tremendous burden to taxpayers that is Amtrak.