This is the fourth and final in a series of summaries posted over the past two weeks on the contents of the newly-passed five-year federal surface transportation authorization law, Fixing America’s Surface Transportation (FAST) Act. The first part explored the law’s funding and the future fiscal health of the Highway Trust Fund. The second part described the highway program elements of the law. The third summary described public transportation or transit policy and this final section focuses on the funding and policy changes to federal passenger rail programs.
The FAST Act provides $305 billion for highway, transit and railway programs. For rail, it would continue to provide much-needed capital investment for the nation’s passenger rail network while implementing bipartisan reforms aimed at increasing performance and accountability of the nation’s rail operator for intercity passenger service, Amtrak. The law authorizes $10.4 billion for passenger rail programs over the next five years. This authorization does not guarantee funding as this investment must actually be provided annually by Congress via the traditional appropriations process.
Amtrak would receive modest annual funding increases of, on average, $90 million which amounts to a total funding level of $8.1 billion over five years. However, a key change in Amtrak budgeting is that funding will be separated between investments that can be spent on the (profitable) Northeast Corridor (NEC) and the (unprofitable) remaining National Network (NN). Over the life of the bill, $2.6 billion will be spent on the NEC while $5.5 billion will be spent on the NN. Remaining Federal Railroad Administration (FRA) grant programs would receive $2.2 billion over the next five years.
The FAST Act also:
- Requires Amtrak to submit profit and loss statements for both the NEC and NN accounts. This will help ensure that adequate investment is being provided for capital infrastructure on the NEC and further seek to end the NEC “cross-subsidy” of long distance, state-supported routes;
- Improves the Railroad Rehabilitation and Improvement Financing (RRIF) program, which provides long-term, low-interest loans for railroad-related improvements, by adding process improvements like approval deadlines to add clarity and reliability for potential borrowers;
- Requires infrastructure owners like Amtrak and states to annually produce five-year asset management plans and business line plans based on current authorization levels. There shall be four business line plans: NEC; state-supported routes; long-distance routes; and ancillary services;
- Provides further instruction to the NEC Operating and Advisory Commission and the Amtrak board of directors to produce a more sustainable, long-term investment and operating plan for both the NEC and the national network; and
- Establishes an independent study of methodologies for determining the cost-benefit and value of routes and services which will be an important process for determining the future scope of the national route network and the offering of intercity passenger rail service. This report will be provided to Congress in 2016 and the Amtrak board of directors will consider the recommendations within 90 days of its release.
Our Report Card graded the nation’s rail system at a “C+,” noting that passenger rail service continues to receive record-high ridership levels at 31 million trips in fiscal 2014, up from 24 million in 2005, which included growth across all segments: the NEC, shorter regional routes and long-distance routes.
A robust rail system is critical to the nation’s ability to move both passengers and freight as a part of a sustainable development and effective mobility strategy. As regional and intercity transportation corridors in the United States become increasingly congested, investment in intercity passenger rail systems is increasingly attractive as part of an overall transportation mobility strategy to provide added capacity and high quality service. Solely adding more lane miles to the Interstate Highway System will not improve freight movement or relieve urban congestion – there should be a holistic approach to viewing these networks as part of an overall national surface transportation system.