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Amtrak getting states to pick up cost of unprofitable routes

May 3, 2013 at 3:18 PM   |   Comments

NEW YORK, May 3 (UPI) -- Amtrak is chugging along with its efforts to get U.S. states to pick up the cost of subsidizing unprofitable routes, officials said.

Amtrak is trying to get 19 states to cover the cost of providing 28 short-haul routes or discontinue them by Oct. 1.

Amtrak officials said if all states ante up, the money-losing passenger rail service -- which received $466 million in federal aid last year -- would take in $85 million a year on top of the $180 million states paid it last year, The New York Times reported Thursday.

"It's what Congress has been doing for years, that is to push costs down to the state and local level," Amtrak President Joseph Boardman said. "It's not going to be a windfall for Amtrak, but it will help reduce our costs."

Amtrak has never turned a profit since its creation in 1971, but has reduced its red ink from a high of $755 million in 2004. Amtrak's total federal subsidy was about $1.4 billion last year, covering operations, rail maintenance and equipment purchases, the newspaper said.

Robert Puentes, a rail expert at the Brookings Institution, a Washington think tank, predicted all the states eventually will agree to sharing route costs, producing revenue to upgrade tracks and improve stations.

"The larger implication is that it will have a positive impact on Amtrak's budget and improve passenger rail service," Puentes said.

He suggested Congress, Amtrak and the states consider similar cost-sharing efforts on money-losing, long-distance routes to further reduce Amtrak's dependence on federal support.

"It's not something we would endorse," Boardman told the Times. "Some states might pay, while others might not. That would leave gaps in the network and impact overall service."

© 2013 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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