Tag Archives: AMTRAK

Pennsylvanian per Rider Subsidy

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While passengers who use the Pittsburgh to Harrisburg Amtrak service-known as the Pennsylvanian-are gleeful over the state’s willingness to allocate $3.8 million to keep the train running, it is important for taxpayers not using the service to know what this means for them. Bear in mind that the total subsidy, including money from Amtrak sources, is $6.5 million to keep the train running in the next fiscal year. Remember too, that the one way fare between Harrisburg and Pittsburgh-and the other way round-is $40.

At a recent Transportation hearing in Harrisburg the deputy secretary of PennDOT told legislators the $3.8 million represents a subsidy per rider of $15 to $16. Coincidentally, that is the one way fare for a trip between Pittsburgh and Harrisburg on the MegaBus that offers three times a day service and makes the trip in less than four hours instead of the five and a half hours on the train.

Now, with the $3.8 million being just over half of the entire subsidy, then the total per passenger trip subsidy is $30 or more. Isn’t that swell; all those folks enjoying the train from Pittsburgh to Harrisburg while taxpayers pick up nearly half of the actual cost of their ride.

To his credit, the secretary did say that it might be time to contemplate higher fares on the service to lower the taxpayer subsidy. But raising the fare to, say $60, to cover two thirds of the subsidy would almost certainly reduce the passenger count as riders seek lower cost transportation. Some might even consider the $16 MegaBus trip. Then the reality would set in. If train riding demand is elastic over the range of the price hike to $60, then the Harrisburg to Pittsburgh service would generate less revenue than currently and the subsidy per passenger could go up rather down (assuming the cost of the operating the train is nearly independent of the number of passengers). Then too, the amount of the subsidy rises with the length of the trip so that someone going to Altoona from Harrisburg would receive less of a subsidy than a traveler going on to Latrobe. But the secretary was using an average and that is the best way to look at the situation. Without the volume of passengers from Pittsburgh to Harrisburg and vice versa the service would be far too expensive per rider to operate.

What a quandary for politicians. They could do the right thing and stop the heavy subsidization of train rides between Pittsburgh and Harrisburg altogether since there are no appreciable external or societal benefits compared to letting people take a bus that pays fuel taxes and tolls to help maintain the roads it travels. Now that is concept worthy of consideration.

Predictable Praise for State Subsidy of AMTRAK

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Proponents of all things paid for by someone else are effusive in their praise of the Governor’s agreement to pay $3.8 million to keep the once a day Pittsburgh to Harrisburg service operating. One editorialist was atwitter about how the $40 one way price is such bargain compared to the cost of driving a car and paying turnpike tolls. Never mind that almost $40 in taxpayer funds are required to subsidize that trip. Also ignored is the fact that the MegaBus service which take two hours less for the journey and offers three trips a day costs only $16 for a one way ticket. And guess what. No taxpayer subsidy is required.

The Governor’s deal sounds great to those who prefer riding trains. So why not ask the riders on the train to pay higher ticket prices to cover the true cost? Why can we not let go of the notion that just because some people like being subsidized, it is not mandatory that taxpayers have their pockets picked endlessly to accommodate their wishes?

Here’s a reasonable challenge for all the pundits who have pushed for the state subsidy and are now gleeful that the Governor has acquiesced. Push and cajole to get more passengers to use the Pennsylvanian in order to lower the per rider subsidy. If the decades’ long trend in declining passenger count continues, this move by the Governor will look foolish as the per passenger subsidy increases.

Maybe the big supporters of subsidized passenger service would be willing to buy up blocks of tickets to help defray the cost to taxpayers. Probably when pigs fly.

Should the State Subsidize Pittsburgh to Harrisburg Train Service?

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AMTRAK has informed Pennsylvania that the Pittsburgh to Harrisburg service-known as the Pennsylvanian-would likely be suspended unless the state comes up with the $5.7 million needed to cover the subsidy now being covered by money from the Federal government. 

 

 

 

The Keystone train service between Harrisburg and New York via Philadelphia offers several departure and arrival times each day. The Pennsylvanian, on the other hand, provides only one train a day inbound to Pittsburgh and one train outbound from Pittsburgh to Harrisburg with continuing service to New York City.  The single inbound train arrives in Pittsburgh at 8:05 PM having left New York at 10:52 AM and Harrisburg at 2:36 PM. Outbound from Pittsburgh departs at 7:30 AM and arrives Harrisburg at 12:55 PM and New York at 4:50 PM.

 

 

Does it make good economic sense for the state to contribute such a large sum to keep the Pennsylvanian running? The following discussion of the train’s status and some key data will shed light on the advisability of the state government subsidizing half the annual cost of operating the train between Pittsburgh and Harrisburg.

 

 

For fiscal year 2012, there were 129,372 boardings and disembarkings at the Pittsburgh station for both the Pennsylvanian train and the Capitol Ltd. service that goes on west to Chicago by way of Cleveland and east to Washington DC. The Capitol Ltd service is also one train per day in each direction leaving for Chicago at midnight and DC at 4:50 AM. Total ridership on the Capitol Ltd and Pennsylvanian are very nearly the same, posting just over 100,000 passengers each in the first six months of fiscal 2012.

 

 

The Pittsburgh station passenger count has fallen substantially since 2008 when it was well above 140,000. In any case, even if the majority of passengers at the Pittsburgh station are from the Pennsylvanian, the number of Pittsburgh passengers from that service is almost certainly fewer than 100,000 per year or 270 people per day-probably about evenly split between boardings and disembarkings.

 

 

Furthermore, the passenger count at the Altoona station, the busiest between Pittsburgh and Harrisburg, has fallen from 35,850 in 1998 to 26,798 in 2012, a drop of 25 percent. Thus, the recent trend of ridership on the Pennsylvanian is clearly down.  The key question is, “will the downward trend be reversed soon?” If not, should the state be putting money into a train route that will require increasing subsidies year after year as the gap between revenues and costs widens?  Obviously, with falling passenger counts, raising ticket prices to offset the loss of riders is not a viable option as an effort to raise revenue. 

 

 

Moreover, the single daily train in each direction way is obviously a weak selling point.  The departure and arrival times in Pittsburgh (the biggest station on the line) is not convenient for many potential passengers.  Then too, the five and half hour travel time to Harrisburg is off putting considering the alternatives.  Granted, the trip from Altoona to Harrisburg is shorter and if the final destination is Philadelphia or New York the trip times are much more comparable to travel by car or bus. But, that being the case, why has the passenger count at Altoona fallen so steeply?

 

 

Passengers going from Pittsburgh to Harrisburg on the train will pay $40 for the trip. Meanwhile, passengers traveling by MegaBus from Pittsburgh to Harrisburg pay $14 or $16 depending on which of the three daily departure times they choose. The MegaBus trip is a three and half to four hour journey with no stops.  Thus, the advent of the MegaBus has created major competition for the train in terms of departure time convenience, travel time and cost. By way of note there are three return trips from Harrisburg by MegaBus as well.

 

 

And without question, for most people making the trip to Harrisburg, especially people on business, getting to the Harrisburg train station is just the start of the excursion.  If they want to go to a meeting in Swatara or other neighboring communities, they will need transportation.  Unless someone is there to provide transportation, it will mean getting a cab or renting car. Either would represent considerable extra expenditure of money and time.  Moreover, the business person going to New York would not arrive in NYC until very late in the afternoon and would have missed most of the work day, meaning a night in a hotel. Whereas a flight leaving Pittsburgh at 7:30 AM or so would have the person in NYC in time to get in several hours of meetings or sales calls and still catch a late afternoon or early evening flight home.

 

 

In short, business travelers are unlikely to ever make up a big part of the Pennsylvanian’s passengers. And non-business travelers seeking to save time and money now have a much better alterative in MegaBus.

 

 

For the state to ante up the $5.7 million, which is about half the estimated cost of running the Pennsylvanian service, it will have to justify the expenditure of funds on other than economic considerations. Indeed, the state ought to survey the ridership to ascertain whether subsidizing half the cost of the trip is warranted.  Do passengers have alternatives or are they too poor to travel any other way? Are they riding the train simply because they enjoy the train ride experience and are happy that taxpayers are paying half the cost of the ride? What, if any, non-transportation benefits accrue to spending millions in subsidy to keep the Pennsylvanian running?

 

 

Absent compelling answers to these questions in favor of providing the subsidy, the only other reason to keep the line going would be to have it available and in working condition against the possibility of a major long term east-west corridor highway outage or restriction. Or perhaps Turnpike tolls will rise to a point that people will abandon the Turnpike in favor of a train ride.  

 

Romantic notions surrounding train travel should not drive the decision. The Commonwealth does not have money lying around that is not needed more elsewhere. Roads and bridges and unfunded pension fund liabilities come to mind.

Should the State Subsidize Pittsburgh to Harrisburg Train Service?

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AMTRAK has told Pennsylvania that the Pittsburgh to Harrisburg route-known as the Pennsylvanian-would likely be suspended unless the state comes up with the $5.7 million needed to cover the subsidy now being covered by money from the Federal government. This route has one train a day inbound to Pittsburgh and one train outbound from Pittsburgh to Harrisburg with continuing service to New York City. The inbound train arrives Pittsburgh at 8:05 PM having left New York at 10:52 AM and Harrisburg at 2:36 PM. Outbound from Pittsburgh departs at 7:30 AM and arrives Harrisburg at 12:55 PM and New York at 4:50 PM.

For fiscal year 2012, there were 129,372 combined boardings and disembarkings at the Pittsburgh station for the Pennsylvanian train and the Capitol Ltd. service that goes on west to Chicago by way of Cleveland and east to Washington DC. The Capitol Ltd service is also one train per day in each direction leaving for Chicago at midnight and DC at 4:50 AM. Ridership on the Capitol Ltd and Pennsylvanian are very nearly the same, posting just over 100,000 passengers each in the first six months of fiscal 2012. The Pittsburgh passenger count has fallen substantially since 2008 when it was well over 140,000. In any case, even if the majority of passengers at the Pittsburgh station are from the Pennsylvanian, the number of passengers is almost certainly fewer than 100,000 per year or 270 people per day-probably about evenly divided between boardings and disembarkings.

Further, the passenger count at the Altoona station, the busiest between Pittsburgh and Harrisburg, has fallen from 35,850 in 1998 to 26,798 in 2012, a drop of 25 percent. Thus, the recent trend of usage of the Pennsylvanian is clearly down. The key question "is the trend reversible?" If it is not, should the state be putting money into a train route that will require increasing subsidies year after year as the gap between revenues and costs widens?

The single trip each way is obviously a weak selling point. The departure and arrival times in Pittsburgh are not really the most convenient for many potential passengers. Then too, the five and half hour travel time to Harrisburg is off putting considering the alternatives. Granted the trip from Altoona to Harrisburg is shorter and if the final destination is Philadelphia or New York the trip times are much more comparable to travel by car or bus. But that being the case, why is the passenger count at Altoona in such decline?

Passengers going from Pittsburgh to Harrisburg will pay $40 for the trip. Passengers traveling by MegaBus from Pittsburgh to Harrisburg pay $14 or $16 depending on which of the three daily departure times they choose. The MegaBus trip is a three and half to four hour journey with no stops. Thus, the advent of the MegaBus has created major competition for the train in terms of convenience, travel time and cost.

And without question, for most people making the trip to Harrisburg, especially people on business, getting to the Harrisburg train station is just the start of the excursion. If they want to go to a meeting in Swatara or other neighboring community, they will need transportation. Unless someone is there to provide transportation, it will mean getting a cab or renting a car. Either would represent considerable extra expenditure of money and time. Moreover, the business person going to New York would not arrive until very late in the afternoon and would have missed most of the work day, meaning a night in a hotel. Whereas a flight leaving Pittsburgh at 7:30 AM would have the person in NYC in time to get in several hours of meetings or sales calls and still catch a late afternoon or early evening flight home.

In short, business travelers are unlikely to ever make up a big part of the Pennsylvanian’s passengers. And non-business travelers seeking to save time and money now have a much better alterative in MegaBus.

For the state to ante up the $5.7 million, which is about half the estimated cost of running the Pennsylvanian service, it will have to justify the expenditure of funds on other than economic considerations. Indeed, the state ought to survey the ridership to ascertain whether subsidizing half the cost of the trip is warranted. Do they have alternatives, too poor to travel any other way, or have no bus service? Is there a sizable group of people who ride the train to take advantage of the subsidy but who could easily afford to drive from Johnstown or Altoona?

The only other reason to keep the line going would be to have it available and in working condition against the possibility of a major long term highway outage or restriction. Or perhaps Turnpike tolls will get so high people will abandon the Turnpike in favor of a train ride.