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Guest Blog: Fact-Checking DOT Secretary LaHood’s Latest Amtrak Promotion

Posted By Tom Rubin On March 11, 2011 @ 4:00 pm In Ongoing Priorities | Comments Disabled


As the President’s ambitious passenger rail program falters, U.S. Secretary of Transportation Ray LaHood is attempting to stem defections by presenting the train program as a jobs program. In a recent blog [2], LaHood stated:

In Meridian, Mississippi, for example, a small town mayor leveraged $1.3 million of public dollars and $135 million of private dollars to build a downtown transportation hub. Now, Amtrak service comes to the station and brings 350,000 passengers a year through a town of only 40,000. Rail has breathed new life—and new business—into a historic community.

As it turns out, the facts are in conflict with LaHood’s statement. A check of Amtrak’s Web site shows that total boardings and alightings for Meridian [3] were 13,923 in 2010.

Perhaps the 350,000 was intended to refer to the number of Amtrak riders that went through Meridian on the Crescent, the only Amtrak service to Meridian, which travels from New York City to New Orleans with one daily Meridian stop in each direction. Perhaps LaHood wanted to convey the local purchasing impact as passengers alighted to buy goods and meals during the seven-minute stop there.

As it turns out, this can’t be it either. Going again to Amtrak’s Web site, we find that fiscal year 2010 total ridership (page A-3.5 here [4]) on the Cresent was 298,688.

So where might that alleged 350,000 Amtrak boarding number come from? Well, certainly not from the city of Meridian [5]: “Passengers originating in Meridian or with Meridian as their final destination on Greyhound and Amtrak, as well as passengers on Meridian Transit System (MTS) buses average 242,360 per year.”

That isn’t the source for LaHood’s blog either—but, while we’re here, let’s consider how those 242,360 Meridian Union Station boardings and alightings breakdown. Amtrak accounts for 13,923 passengers—5.7 percent—leaving 228,437 to be split between Greyhound and MTS.

Almost certainly, the vast majority of the non-Amtrak riders are MTS riders. MTS operates seven weekday lines, mainly loop routes that start and end at Union Station.

Greyhound operates five buses per day through Meridian in each direction between Birmingham to the east and Jackson to the west. Comparing Greyhound and Amtrak service between Meridan and Birmingham, Amtrak wins on price ($28.00 versus $39.60), but Greyhound wins on frequency of service (five trips to Amtrak’s one) and on travel time (40 minutes—20 percent—shorter).

Greyhound ridership to, from, and through Meridian is not readily available. However, doing a common-sense comparison, 13,923 annual Amtrak boardings/deboardings average 38 per day. If, on each of the 10 daily Greyhound trips through Meridian, two passengers alight and two more board, then Greyhound Meridian origin-termination ridership trips would slightly exceed those of Amtrak in 2010.

Importantly, the Greyhound service is not subsidized by the taxpayers—in fact, Greyhound is a taxpayer. According to the September 2010 Monthly Performance Report (page C-1 here [4]), the Amtrak operating subsidy per passenger-mile for the Crescent for 2010 was $0.268. If we assume that the rail distance between Meridian and Birmingham is the same as the road distance (146 miles) then the taxpayer operating subsidy would be approximately $39.13—more than the Amtrak fare and, interestingly, almost exactly the same as the Greyhound fare.

Of course, the Amtrak operating subsidy does not include its considerable capital costs—paid by taxpayers—which leads to an observation that, rather than operating Amtrak service, federal taxpayers would be better off providing free Greyhound tickets to everyone who would otherwise use Amtrak. Given the time savings and more frequent service, one might speculate that most former riders, at least those on this leg alone, might not miss Amtrak very much.

That leaves the economic development benefits of Amtrak. As LaHood puts it:

In Meridian, Mississippi, for example, a small town mayor leveraged $1.3 million of public dollars and $135 million of private dollars to build a downtown transportation hub.

However, the city of Meridian—which is the owner and operator of Union Station—says otherwise [6]:

The project involves several constituents in an undertaking that has a construction price tag of approximately $6.5 million, including $5.1 million in federal and state contributions, $1.3 million from the City and $.43 million in contributions from Amtrak. Total project cost was $6.5 million [sic—sum is $6.83 million].

Evidently, LaHood’s “$1.3 million of public dollars” comprehended only the city’s contribution, not the $5.1 million from federal and state sources.

However, LaHood has presented total expenditures of $136 million and change for the “downtown transportation hub,” while the city totals are less than $7 million.

Where is the missing $129 million?

Although the $135 million is clearly identified as the cost of “a downtown transportation hub,” is it possible that he intended to refer to real estate development, outside of Union Station, that the Union Station development helped stimulate?

A Wikipedia article [7] on Union Station offers another set of facts:

The station has already encouraged more than $8 million in private investment in the Depot District, including office space, retail shops [8], a data processing [9]/computer training [10] center, upper-story apartments on the west side of Front Street, two hotels—the Terminal Hotel and the Union Hotel, the newly renovated Rosenbaum condominiums [11], two restaurants, and vital records storage [12] buildings. Future plans may include renovation of the historic Threefoot Building [13], possibly into an upscale hotel.

The citation is to the city Web site, but the particulars cannot be pinned down there. If these assertions are true, the $8 million, even if added to the approximately $7 million from the station, would total only about 11 percent of LaHood’s $135 million.

We do not know the sources of LaHood’s data, but we do know that some of his data appear at significant variance with actual figures, especially in the case of Amtrak Meridian boardings/alightings: 25 times greater than Amtrak (which LaHood oversees) reports.

LaHood should either explain his statements and disclose the sources for his data or retract them. Statements by a member of the President’s cabinet that appear to be at such great variance from actuality do significant harm to the credibility and reputation of the U.S. government.

Tom Rubin has spent over three decades as a senior transportation industry executive, consultant, auditor, and author.

Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2011/03/11/guest-blog-fact-checking-dot-secretary-lahood%e2%80%99s-latest-amtrak-promotion/

URLs in this post:

[1] Image: http://www.foundry.org/wp-content/uploads/amtrak.jpg

[2] recent blog: http://fastlane.dot.gov/2011/02/its-simple-rail-means-jobs.html

[3] total boardings and alightings for Meridian: http://www.amtrak.com/pdf/factsheets/MISSISSIPPI10.pdf

[4] here: http://www.amtrak.com/servlet/BlobServer?blobcol=urldata&blobtable=MungoBlobs&blobkey=id&blobwhere=1249221001538&blobheader=application%2Fpdf&blobheadername1=Content-disposition&blobheadervalue1=attachment;filename=Amtrak_1009monthly_final.pdf

[5] city of Meridian: http://www.meridianms.org/faq.html

[6] says otherwise: http://www.meridianms.org/transportunionstation.html

[7] Wikipedia article: http://en.wikipedia.org/wiki/Union_Station_%28Meridian,_Mississippi%29

[8] retail shops: http://en.wikipedia.org/wiki/Retailing

[9] data processing: http://en.wikipedia.org/wiki/Data_processing

[10] computer training: http://en.wikipedia.org/wiki/Electronic_learning

[11] condominiums: http://en.wikipedia.org/wiki/Condominium

[12] records storage: http://en.wikipedia.org/wiki/Records_management

[13] Threefoot Building: http://en.wikipedia.org/wiki/Threefoot_Building

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