stituency or shareholders-I mean, they have customers, too-but not the traveling public. So that's why I went into such great lengths about our concern about this recently developed, in the last couple of years, collective bargaining kind of process that Amtrak's gotten itself into, totally, I would say, against the history that Mr. Claytor so proudly spoke about in his own conduct of collective bargaining in the past in his various jobs. Mr. WHITTAKER. You may be very perceptive, Mr. Kennedy. Mr. LUKEN. Thank you, Mr. Kennedy and Mr. Mahoney, for your testimony and your assistance to the deliberations of our subcommittee. Mr. KENNEDY. Thank you, sir. Mr. LUKEN. Mr. Ross Capon, National Association of Railroad Passengers. We have your statement, which will be gratefully received, without objection. You may proceed, Mr. Capon. STATEMENT OF ROSS CAPON, EXECUTIVE DIRECTOR, NATIONAL ASSOCIATION OF RAILROAD PASSENGERS Mr. CAPON. Thank you, Mr. Chairman, I'll try to keep it brief because of the hour. We strongly support the funding levels set forth in H.R. 2350, and we thank you for introducing the bill. Fare trends among the modes are sending exactly the wrong message relative to our infrastructure. Over the past 8 years, air fares have declined an average of 6 percent; gasoline prices, 30 percent; while Amtrak fares rose 48 percent. It seems to me public policy goals should be for fares to encourage people to use infrastructure that has excess capacity. And, of course, the reason Amtrak fares have gone up is because Amtrak has so few cars. Capital investment is the key to making greater use of the unused capacity that Mr. Lindsey referred to on the railroads. Amtrak needs more cars so it can run longer trains and ease up on the fare increases without reducing its economic perform ance. And to alleviate more airport congestion, we need to earmark a gasoline tax penny for railroad projects so that Amtrak can run fast trains on many other routes. Both routes that it is currently operating slow trains on, such as all the corridors radiating from Chicago, as well as other routes such as Seattle-Vancouver, which was discussed earlier. I suggest that a portion of the, if you will, gasoline tax railroad penny should not go straight to Amtrak but should go to the States on a matching fund basis. The absence of Federal rail funds is a big obstacle to getting many States involved in rail improvements. A State rail official recently told me that the first question they ask in our State capitol is how much Federal funding would this project generate. Virtually every time the answer is zero. That's why those who are advocating State expenditures on rail projects have the deck stacked against them because there's little or no Federal matching money. I will conclude by referring to three legislative aspects. that Amtrak has been seeking for. We strongly support the proposed legislation on punitive damages. I checked with an attorney who is on my board, who represents plaintiffs involved in cases of this nature-not specifically Amtrak, but in general. He had no hesitation in agreeing with the proposal and pointing out to me that the sole purpose of punitive damages is to make an example out of the defendant. It is not to help the plaintiff. We strongly support the railroad unemployment insurance aspect of Amtrak's testimony. With respect to secondary picketing, there's one compromise that the Congress might want to consider at some point, and that is simply to build a wall between airlines and railroads. Why should the problems at Eastern Airlines cause a railroad passenger to have to be worried. That I just suggest as a compromise position that might draw some support. I will leave it at that, and I thank you very much for your time this afternoon. Mr. LUKEN. Mr. Capon, with respect to your figures on airline fares during the last 8 years, are those figures right up to date? It seems like airline prices have gone up in the last year or so. Mr. CAPON. Those figures are from a letter that Mr. Claytor sent to the Journal of Commerce in March. I can't comment on what's happened in the past few months but I suspect that when you come up with Mr. LUKEN. Did he say what the period was in that letter? Mr. LUKEN. To when is the question. Mr. CAPON. The implication is to the present; I would suspect to 1988. I think what you're looking at is an average where, as you know, in some of the most competitive markets there are some very cheap fares. In a lot of the smaller markets, there are some very high fares. Mr. LUKEN. Can you still find them? Mr. CAPON. I guess if you're traveling on Wednesday or Thursday with a small child this summer, you may find them. I have not flown in the past few years so I cannot speak from personal experience to that. Mr. LUKEN. It might be hard to come by some reliable figures. Does counsel have any idea how we can come by any? [No response.] Mr. LUKEN. Well, we'll leave the record open and see if the staff can come up with any reliable figures. [The prepared statement and attachment of Mr. Capon follow:] Statement of Ross Capon Executive Director National Association of Railroad Passengers Before the Subcommittee on Transportation The Honorable Thomas J. Luken, Chairman Committee on Energy and Commerce United States House of Representatives Amtrak Reauthorization May 17, 1989 Thank you for this opportunity to present the views of our non-profit, consumer-oriented organization, which for 22 years has been promoting "balanced transportation." I. WE SUPPORT AMTRAK'S FUNDING REQUESTS AS THE MINIMUM NEEDED TO END CONSUMPTION OF AMTRAK'S ASSETS . We support Amtrak's request for $656 mill. in FY 1990, and we share Amtrak President Claytor's view that this plus the "outyear levels in S. 462 ($684 mill. for FY 1991; $712 mill. for FY 1992) would, if appropriated, provide us "with the minimum capital we will need during the next several years to make a start on acquiring new rolling stock and improving some of our most obsolete maintenance facilities." Amtrak is a good bargain for the nation. As Amtrak grows, so does its positive contribution to several problems that afflict U. S. transportation: road and airway congestion; energy efficiency; negative environmental impacts; safety; and mobility for many smaller communities. Regarding energy efficiency, Oak Ridge National Laboratory (operated by Martin Marietta Energy Systems, Inc., for the Department of Energy) reported that, in 1984, Amtrak's energy efficiency was almost twice that of the airlines (5,600 BTUS per passenger-mile for airlines vs. 3,170 for Amtrak) and trends in both industries since then have probably strengthened Amtrak's advantage. Fiscal Year 1988 was the 6th consecutive year in which travel on Amtrak increased (to 5.7 billion passenger-miles) and the 7th consecutive year in which Amtrak's revenue-to-cost ratio improved. Travel increases on Amtrak are in spite of sharp fare increases. As Amtrak Pres. W. Graham Claytor Jr. noted in a letter published in the Mar. 9 Journal of Commerce, since 1981, Amtrak fares rose an average 48%--while air fares fell 6%, gasoline prices declined 30%. Amtrak sets fares to maximize revenue and is developing a computerized "yield management" system to further refine the "art" of setting fares. NARP strongly disagrees with those who think Amtrak should respond to generally high load factors with "bull-in-a-china-shop" massive across-the-board fare increases. The need for increased capital investment grows with each year. We support Amtrak's proposal that $50 million of Amtrak's FY 1990 funding be reserved to acquire Viewliner cars, which would replace the oldest cars Amtrak currently operates. As I noted a year ago, then-Federal Railroad Administrator John H. Riley testified that the purchase of Superliners (the doubledecker Western counterpart to Viewliners) "within the year reduced unit maintenance costs 50%." II. WE SUPPORT THE PROPOSALS IN AMTRAK'S 1989 LEGISLATIVE REPORT Of particular note is a proposal also supported by the Reagan Administration (and the new administration as well): extending to Amtrak the benefits commuter railroads were given last year-unemployment insurance premiums based on each individual railroad's employment record. For Amtrak this would mean an $8 million/year savings. Also, we strongly favor allowing Amtrak to issue tax-exempt bonds to the public. Since airports have long benefitted from-and depended on--tax-exempt bonds, giving Amtrak the same privilege would remove one of many federal policies that are anti-balanced transportation." [Robert J. Aaronson, director of aviation of the Port Authority of New York and New Jersey: "It is inconceivable that a modern airport, which under the existing tax code includes such public service accommodations as terminals and their related retail stores, runways, hangars, loading facilities, cargo buildings, parking areas and maintenance bases, as well as appropriately sized inflight meal facilities, hotels and meeting facilities, could be provided on any adequate scale by taxable financing" (Aviation Week & Space Technology, Sep. 16, 1985).] We oppose the administration view that states should pay 100% of 403(b) train costs. We think this would worsen the biggest problem with federal transportation policy: lack of federal matching funds for state rail projects. (Amtrak's share of 403(b) costs is in effect the federal share.) We question the wisdom of the administration's suggestion that Northeast Corridor commuter agencies pay the fully avoidable costs of using Amtrak-owned tracks. This must be viewed in the context of 8 years of Reagan Administration savaging of the federal mass transit budget, which also affects these agencies. They are imposing big fare increases just to cope with their present costs, so hitting them with new costs seems highly questionable given the public policy needs to maximize use of trains for daily commuting. III. NEEDED: A BETTER BALANCE IN FEDERAL TRANSPORTATION SPENDING We strongly support Amtrak's suggestion that the Highway Trust Fund eventually be used to fund Amtrak. Since Amtrak in many instances is even more relevant to airport congestion, ideally we would like to see a consolidated transportation trust fund that commingles all transportation user revenues. Such a fund should be used in part to fund Amtrak and to support state railroad projects. Mode-specific highway and air trust funds simply insure that we invest heavily in already-dominant modes of transportation even where rail could do the job better. The nation as a whole and the traveling public in particular suffer as a result. Federal transportation policy heavily influences state and local transportation spending. As one rail official told me, the first question they ask in our state capitol is: "How much federal funding would this project generate?" Lack of federal matching funds for railroad projects--in contrast with generous federal funding for highway and aviation projects--explains why states rarely give rail passenger investments the consideration they deserve. Imagine how much more airport congestion Amtrak could alleviate if state support of rail capital improvements was the rule (as it is becoming in California) rather than the exception! o Not one Chicago-area Amtrak route offers air-competitive schedules, yet "a recent street survey conducted by the Chicago Sun-Times showed that 3 of 4 respondents would prefer using improved Amtrak midwest corridor trains to flying....27% [of O'Harel flights serve destinations within 200 miles of Chicago. .......Fully 50%...goes to points within 400 miles of Chicago" (Illinois Association of Railroad Passengers news release, Dec., 1987). o Amtrak's Boston-New York running times remain around four and one-half hours, yet Northeastern University Prof. James Molloy, who did a survey for Associated Industries of Massachusetts, says "a surprising number of manufacturing executives would use fast trains to New York as an alternative to air travel from Logan International Airport. 'I was surprised at the answers because they (executives) are used to aviation and going (to New York) by (air) shuttle.' [Molloy] said about 45% of the 123 firms surveyed indicated they would use trains if the trip -3 |