Pennsylvanian per Rider Subsidy

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

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.