Amtrak’s latest budget submission asks Congress for $1.6 billion this year, and the government-owned passenger rail service continues to lose a lot of money. That’s bad news for taxpayers, not so bad for Amtrak employees.
The Taxpayers Protection Alliance, a nonpartisan government watchdog organization in Alexandria, Va., reviewed Amtrak’s books and found that the company is shoveling cash into the boiler. Last year Amtrak paid more than $185 million in overtime pay; some employes received as much as $35,000 in extra pay. Lax overtime-pay rules encouraged employees to turn $80,000-a-year government jobs into jobs paying $125,000. This reflects bad management.
A recent report by Amtrak’s inspector general reveals that Amtrak’s generous overtime pay is not the only source of questionable spending. Amtrak still has no idea how to sell food and drink, having lost $388 million on such sales since 2010. If it can’t make a profit on hamburgers and soda pop, how can it turn a profit in the rest of the operation?
“Meal and refreshment sales were once one of Amtrak’s biggest money-makers,” says Michi Iljazi of the the Taxpayers Protection Alliance. “But these days, it’s a money pit. The cost of selling food and drinks dwarfs the revenue they generate on Amtrak’s long-distance routes.”
Amtrak has been on the rails for more than 40 years and has received $40 billion in federal subsidies, but it has never turned the profit it promised. There’s little to show for the billions of dollars “invested” since the 1970s.
With a new transportation bill in the works, Congress has an opportunity to point Amtrak in the right direction by imposing a cap on the agency’s overtime pay. That would be a useful first step on the way toward the ultimate destination of privatizing Amtrak, and ending taxpayer bailouts of the runaway bureaucracy on the American rails. Passenger service is important, and cracking down on incompetence and sloth is crucial to good management. Those who use the trains — and it’s a growing number — should pay for the ride. The government, which owns Amtrak, is responsible for making sure the company is efficiently run, and the passengers, like the taxpayers, get their money’s worth.