Amtrak Wants $4.9B for FY2021

Amtrak has named its price of keeping long distance trains running daily and preventing employee furloughs: $4.9 billion.

William Flynn

Amtrak President told a congressional committee on Wednesday that Amtrak would need that much in federal fiscal year 2021 to avoid service cuts and job furloughs.

Flynn told the U.S. House Transportation and Infrastructure Committee’s Rail Subcommittee that Amtrak is experiencing a “cash burn” of nearly $250 million a month right now.

Without supplemental funding, Flynn said Amtrak “would have to make very dramatic reductions across the company to stave off bankruptcy.”

Those would include even more substantial service cuts than it has already imposed during the COVID-19 pandemic and the planned reductions in frequency of most long-distance trains to tri-weekly operation in October.

Flynn said some long-distance trains would cease operating “if that’s the cash burn we’re having with no supplemental funding.”

During his testimony, Flynn argued that Amtrak generates a surplus in the Northeast Corridor and breaks even on state-funded corridor service but loses money on long-distance trains.

“So the vast majority, if not all, of that subsidy, if we were to do it on a service line basis, would be on the long-distance service,” Flynn said.

Flynn faced sharp criticism from some committee members over such things as Amtrak’s plans to reinstate making contributions to the 401K plans of top managers effective Oct. 1 and a request for proposals for communications services that would allow bidders to shift jobs outside the United States.

The Amtrak president defended the 401K contributions as necessary to keep key employees from leaving the company, but agreed to withdraw the request for proposals that would allow offshoring.

Committee Chair Dan Lipinski also rebuked Amtrak for not submitting a supplemental appropriations request to Congress for FY2021 until this week.

He noted that congressional staffers have been asking Amtrak since June to no avail for a figure of how much it would take to prevent the service cuts to long-distance trains and avoid employee furloughs.

Lipinski noted that the next federal fiscal year begins in less than a month.

Earlier this year Amtrak sought $2.04 billion for FY2021. In late May the passenger carrier told Congress it would need another $1.4 billion to avoid service cuts.

However, that supplemental request was based on the premise that most long-distance trains would operate less than daily starting in October.

In the meantime, a budget for FY2021 adopted by the House includes $10 billion for Amtrak with a mandate to keep the long-distance trains operating daily.

Jim Mathews, president of the Rail Passengers Association, said in his prepared statement that reducing the frequency of operation of long-distance trains to three times a week would result in a $2 billion economic loss to the communities served by those trains.

Mathews’ figures were based on a model developed in part by Transportation 4 America.

RPA has acknowledged that the COVID-19 pandemic has depressed Amtrak revenue by 83 percent compared with the same period last year and that travel on all modes of public transportation has fallen precipitously.

But Mathews contended that Amtrak service is essential, particularly in some of the smaller communities the intercity passenger carrier serves.

Flynn also said during his testimony that Amtrak has no plans to furlough workers at its Beech Grove shops located near Indianapolis.

He said Amtrak had to hire additional workers at Beech Grove after some employees took a buyout offer.

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