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.

Free Trolley Rides? More Expensive Than You Might Think

As the North Shore Connector moves closer to completion and light rail cars are set to make their maiden voyage under the Allegheny River in March of 2012, Downtown boosters are angling to make the area around the Golden Triangle-from Station Square to the North Shore-a free travel zone with trolleys running with much greater frequency. A consultant who studied the idea produced a figure of $1.5 million in additional costs should the recommendation be implemented.

It is unclear how that number was derived since the frequency of operation and fare amount have yet to be determined officially by Port Authority officials. For close to a year there have been inklings that the Port Authority would be receptive to the plan if private/foundation support could be found in the form of station or zone naming rights and sponsorships.

According to the National Transit Database, PAT’s light rail operating expenses in 2009 were $51 million while fare revenues on light rail were $7.8 million, and the number of unlinked trips was 7.3 million. Thus, the subsidy required to cover operating expense per unlinked trip on PAT’s light rail system was $6.01. And this does not include the very large capital expense of the light rail system!

Leaving logistics of trolley operations and station arrival intervals aside for the moment, we have to question whether it is good policy for a transit agency in severe financial straits to be providing free service. Clearly, running the trolleys with much greater frequency in the Downtown area will substantially increase operating costs, and not collecting fare revenue means the agency is leaving money on the table. It is doubtful that sponsorship or naming rights will recover the combined costs that could run into several millions of dollars each year.