posted
In the "rail news" section of this website, there is a article in a newspaper that says a study shows that "41 of Amtrak's 44 routes lose money"
I hope the OP won't mind me lifting their response from the comment/reply column, they have only used a pseudonym, but it's nice to know that somebody out there cares, and understands enough to reply:
"You slam Amtrak, but over the last few months alone, my tax dollars have been thrown at: *$130 Billion to bailout automakers - www.gmbailout.com/tag/ford-bailout *$8 Billion last year and another $26.8 Billion raided from the general fund of the Treasury to keep the Highway Trust Fund afloat - www.cbo.gov/ftpdocs/104xx/doc10482/s1474.pdf *$3.5 Billion to $4.5 Billion for the "cash-for-clunkers" boondoggle - environment.about.com/od/cashforclunkers/ Well over 100 $$Billion$$ showered on cars and roads with nothing really to show for it. At 5%, the interest alone PER YEAR on such an amount would operate an the Amtrak system and carry EVERY PASSENGER FOR FREE."
Well said that man or woman!
notelvis Member # 3071
posted
It has to do with the absence of an even playing field.
Thanks for giving this response the light of day it deserves.
Gilbert B Norman Member # 1541
posted
Here is the material noted by Mr. Williams:
Ignoring the needless emotional rant appearing at the site Mr. Williams located, the issue that Subsidyscope addresses is that Amtrak, in its unaudited Monthly Performance Reports, is understating the financial results (mostly losses) of each route in that they do not charge Depreciation as a cost of providing service over a route.
OK lets take a closer look at Depreciation and especially within Amtrak since on one hand it is a private enterprise and on the other a government agency.
To start, let's consider that the definition of an Asset is a piece of property, tangible or intangible notwithstanding, from which economic benefit will be derived over current and future accounting periods. Depreciation is a systematic method over which the cost, i.e. the expenditure of an asset from which economic benefit will be realized over a number of future accounting periods, incurred in a current period is allocated to those future periods.
Additionally, and this is important in the case of Amtrak and many another transportation company that use leased equipment, Depreciation also represents a restatement of lease obligations so that the cost of the economic benefit is better expressed over the asset's economic life as distinct from the timing of the lease payments. This is known as a Capitalized Lease and is required under existing accounting Literature so that a fair comparison may be made between enterprises that purchase their assets and those that acquire such by lease.
Virtually all of Amtrak's locomotives and rolling stock is leased.
Amtrak's audited Financial Statements of course recognize Depreciation as an expense; there is further recognition of Depreciation within the unaudited Monthly Performance Reports. However, it appears that no allocation of Depreciation is made to the routes resulting in an, as Pew sees it and for that matter the GAO, a misstatement of a Route's financial performance. Rather, Amtrak considers Depreciation be be an expense no different than that of the Bureaucracy - 60 Mass and elsewhere.
To restate route performance with depreciation of equipment assigned to such as an expense element would make for inconsistent reporting - and Consistency is a standard of financial statements considered by the Accounting profession. Additionally, we have to consider a significant difference between Government Accounting and that of private enterprises. In government, Depreciation is not recognized. For example if the Navy builds an aircraft carrier which takes five years to build and will see active service for thirty, the costs incurred each year it is being built will be reported during the construction period. After that, it sails the Ocean Blue and going "pop pop" after the Bad Guys, without any Depreciation. On one hand Amtrak is government so why have Depreciation and especially why allocate over each route? But on the other, Amtrak's "Depreciation" is mostly represented by lease payments so it IS 'cash out the door'. But on the other hand, Amtrak is private enterprise (or so they tell me ); therefore Depreciation should be recognized.
Wish I knew the answers - and as most know after I left the railroad industry, I embarked on a twenty one year career in private practice as a CPA.
notelvis Member # 3071
posted
Mr. Norman,
I'll argue that Amtrak is 'Private Enterprise' when you tell us that Amtrak is eager to reinstate 'Sunset East'!
sfthunderchief Member # 7204
posted
The oft reported "losses" associated with Amtrak has become one of the older saws reported and repeated time after time. Is there any other transportation system that is so subject to a similar degree of scrutiny?
What is most irksome however (for me) is that the amount of loss is held up as an incredibly high and unbearable burden on the public trough.
If Amtrak operated at a 100% loss, or let's say, 100% publicly funded in 2008 with not 1 red cent in return, how much would that have been: something like $1.4 billion? On the national economic scale that is less than peanuts, actually more like 1 peanut out of the 2 in the shell.
$1.4 billion is a fortune for an individual, and for most businesses. But comparatively evaluated against the national economy it is about like an average person missing 1 to 2 cents at the pump after they drive down the street and see another station with a lower price.
Critics of Amtrak need to get real, because their perspective is incredibly "unreal."
sojourner Member # 3134
posted
Having decent public transportation, including long-distance train transportation, improves the economy of the regions it serves. The businesses then provide more jobs for locals, pay taxes to the government, etc. etc. It is like anything else government does to improve the economy. Its profits and losses cannot be properly calculated without taking that into account. For example, Flagstaff AZ has a reasonably attractive downtown with a convenient Amtrak stop. For that reason, I have twice been to Flagstaff AZ, stayed in its hotels, eaten in its restaurants, visited one of its museum, shopped in its gift shops, used its taxis, etc etc. When I came home by train from Tucson last year, I stopped for 2 nights in San Antonio and 1 night in Austin. I would never have done this if I were flying. And so on.
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