State subsidies for Amtrak make no economic sense

According to a report in the Albuquerque Journal, a new study estimated it would cost about $9 million annually to maintain the New Mexico portions of the line used by Amtrak to run trains through New Mexico. If that money is not spent, New Mexico stands to lose between $3.3 and $3.7 million annually.

So, in classic government fashion (especially for Amtrak which has loses about $1.5 billion annually and has lost money for years), repairing the track for Amtrak’s benefit will have a net negative impact of over $5 million annually.

Oh, and lest policymakers get carried away with concerns that a $3 million economic impact is significant, New Mexico’s overall economy is $79.7 billion. amounts to all of .00376% of New Mexico’s economy. In other words, according to the study, Amtrak’s economic impact on New Mexico’s economy amounts to a rounding error.

Rather than subsidizing an already-money-losing national passenger railroad, it would seem that New Mexico should focus its limited economic development attention and resources elsewhere.

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6 Replies to “State subsidies for Amtrak make no economic sense”

  1. The Journal article indicates that the track in question is owned by Burlington Northern Santa Fe ( now a wholely owned subsidiary of Berkshire Hathaway.) Why is it that BNSF is not responsible for track maintenance? I can only assume that the geniuses at AMTRAK assumed contractual liability for track maintenance. Your federal government and tax dollars at work.

    1. As I recall, part of Bill Richardson’s folly was to have the State of New Mexico assume responsibility for track maintenance as part of the Rail Runner debacle. Martinez may found a way to wriggle out of the agreement: I just don’t know.

  2. Shouldn’t cut off one’s nose to spite one’s face.
    The end result of not supporting AMTRAK would be the potential loss of a growing and pleasant visitor attraction and $$$$ from Tourists!

    1. Yes, as the study notes, about $3.3 million in annual economic impact in exchange for a total of $9 million annually. That’s a bad deal no matter how you slice it. Amtrak’s western routes should be privatized and managed as an excursion company as Canada does. The other areas like the DC-Boston corridor would be better off managed privately as well.

  3. The only profitable use of trains today is for freight. There is not enough density of population, especially in NM to support a RailRunner type service. I am not sure what it loses each year (In the millions I think) but every one in NM is paying for something only a very few use. Bill Richardson’s debacle also cost $500 million in transportation funds that I believe were illegally appropriated and should have been used for road maintenance. When are we going to realize it may be nice but it is not a wise way to spend public funds. We should just shut it down.

  4. Rail runner

    What was their expenditure, total (operating cost), in 2013?
    What was the fare receipt, total, in 2013?
    Expenditure, minus fare receipt, is our cost.

    What was the passenger ridership, total, in 2013?

    What were the passenger miles, total, 2013?

    We are riding Canadian rail, Vancouver to Halifax, in late Spring

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