POSTED: Tuesday, Jan. 26, 2010

Second northbound Amtrak train is a waste of money

The second Amtrak train that connects Seattle and Vancouver, B.C., carries very few people, costs taxpayers millions of dollars and hurts local Washington companies.

Last August, Amtrak began operating a second train between Seattle and Vancouver, B.C. The second train is a pilot project to connect the two largest regional urban areas as the Winter Olympics start in February. Both Washington state and Canadian officials are waiting to assess passenger demand before deciding whether to make the second train permanent.

The new train makes a single round trip between Seattle and Vancouver every day, and makes about a half dozen stops, including the Fairhaven Station in Bellingham. According to the Washington Department of Transportation (WSDOT), the average number of passengers on each leg is about 67.

The National Railroad Passenger Corporation presented a report to Congress in October 2009 that estimated the second Seattle/Vancouver line would lose about $1 million in operating costs per year.

Canadian officials are also considering whether to charge the state $500,000 per year in inspection fees. Canadian border guards must inspect each train that enters the country but the second train arrives in Vancouver after normal business hours and requires higher labor costs to perform the security checks. Officials have waived the inspection fees until shortly after the Olympics, but would likely require them if the service is made permanent.

All of this means Washington taxpayers would be on the hook for $1.5 million per year to pay for 67 people a day to travel between Seattle and Vancouver, B.C.

Canadian officials have said they will decide to make the train permanent based on whether it makes financial sense. This means ridership must reach a certain point to justify its costs. But the current ridership estimates were collected between August 19 and December 31. State and Amtrak officials offered a 25 percent discount on all fares to and from Vancouver over the same time period. Artificially lowering prices during a time in which the state is measuring demand (in the hopes of justifying permanent service) does not seem very objective but that's exactly what happened.

Either way, spending $1.5 million per year in public taxes to move 67 people between Seattle and Vancouver does not make a lot of sense.

Supporters say instead of measuring mobility, officials should also look at the economic benefits of adding a second train. They point to a WSDOT study that shows Amtrak passengers on a second train would spend $13 million to $26 million a year in the Vancouver area, which as supporters claim, more than offsets the public cost of providing the service.

It is reasonable to expect passengers from the United States to spend some money in the Vancouver area. But if the WSDOT finding is correct, then those 67 passengers would have to spend between $36,000 and $71,000 every day they crossed the border. That is simply unrealistic.

The study also mistakenly assumes this economic activity would not occur otherwise. Most travelers who want to visit Vancouver would do so with or without a second Amtrak train. They would just find a different way to get there and the economic benefits would still take place.

Forcing taxpayers to subsidize the travel of 67 people commuting between Seattle and Vancouver B.C. is a waste of resources and it also hurts other local businesses.

Public intercity rail programs like Amtrak compete with private companies that provide the same type of intercity travel; Washington companies like Alaska Airlines, Argosy Cruises or the locally owned and operated Bellair Charters based in Bellingham.

Using public taxes to artificially shift demand from an efficient sector of the economy to one that loses money is a waste of resources and places these hometown businesses at a competitive disadvantage.

Public intercity rail advocates routinely overestimate demand and its local economic benefits to convince unwitting lawmakers that expanding the system, like the second Amtrak train between Seattle and Vancouver, B.C., is a good idea. But a realistic examination of the numbers shows that the second Amtrak train would not only waste taxpayer money but also hurt local businesses.

Michael Ennis is transportation director at Washington Policy Center, a nonpartisan, independent policy-research organization. You can learn more by going online to washingtonpolicy.org