Paulina Pineda, The Arizona Republic
A look at Amtrak and how the infrastructure vote could affect the proposed Phoenix-Tucson rail line
Amtrak officials dangled an enticing proposition to reestablish passenger rail service from Tucson to Phoenix and beyond, but the expansion largely hinges on federal funding that could come from an infrastructure bill expected to go to a House vote this week.
Phoenix is the largest city in the country without Amtrak service. The service never resumed after shutting down in 1996 for a criminal investigation into the derailment of a train in western Arizona that killed a crewman and injured 78 people.
The plan to launch passenger rail between the state's two major metro areas has received support from mayors along the proposed line. They say the route would diversify transportation options and spur development along the line.
A Phoenix-Tucson line has been discussed for years, but a lack of funding meant it never moved off paper.
Amtrak is banking on a multi-billion dollar infusion from the federal government to make it happen this time.
The quasi-governmental railroad company has asked Congress to invest $75 billion over 15 years to help develop and expand passenger rail nationwide as part of a funding reauthorization plan. The federal infrastructure package being considered in the House includes $66 billion for passenger and freight rail improvements, including funding for intercity rail service.
The infrastructure package represents the largest federal investment in passenger rail since Amtrak was created 50 years ago, the White House has said, but funding for the agency also is being considered in other budget bills moving through Congress.
"To make this vision a reality, the federal government must provide support," U.S. Rep. Greg Stanton said during a roundtable discussion with Amtrak officials and mayors and business leaders from communities along the line this summer.
Amtrak officials estimate it would take nearly $1 billion to get the Phoenix extension up and running, in addition to the operating costs once the line opens. The costs to operate likely would be passed on to local agencies.
City leaders along the proposed route say they would support the project, although operating costs are still unknown. The Arizona Department of Transportation doesn’t currently fund any Amtrak lines in the state and is not involved in Amtrak’s effort to bring passenger rail to Phoenix, an ADOT spokesperson said.
Operations double over 50 years
Congress created Amtrak in 1970 to take over intercity passenger service from private railroad companies that were facing competition from the growing popularity of road and air travel, and finding it difficult to maintain outdated and costly rail infrastructure.
Airports and highways were primarily funded by the state and federal government while railroads, with some exceptions, were privately owned and operated. Private railroads were required to provide passenger service as part of their regulatory duties but a lack of government support put rail at a disadvantage, said Todd Liebman, president of All Aboard Arizona, a passenger rail advocacy group.
Some of the private companies were close to filing bankruptcy and had discontinued routes after experiencing declines in ridership. The creation of the National Railroad Passenger Corporation, known as Amtrak, offered the companies an opportunity to contract out passenger service and 13 railroads initially joined the new national railroad service, according to Amtrak.
Amtrak service began May 1, 1971, with 184 trains a day serving 43 states. That included two existing long-distance lines that ran through Arizona:
- The Sunset Limited that ran from Los Angeles to New Orleans across southern Arizona with stops in Yuma, Phoenix, Tucson and Benson.
- The Southwest Chief that ran from Los Angeles to Chicago across northern Arizona with stops in Kingman, Flagstaff and Winslow.
The lines continue to operate and served nearly 100,000 riders in those communities in fiscal year 2019, playing integral roles in Arizona’s development. The main difference is that the Sunset Limited now runs through Maricopa instead of Phoenix.
“Both these routes are like a 19th-century skeletal system for Arizona,” historian and journalist Tom Zoellner previously told The Arizona Republic. “You can see how all the major towns in the northern and southern tiers were arranged for them as watering stops and division points.”
During its first decade in operation, Amtrak upgraded rail and infrastructure, modernized cars and increased ridership. Additional railroads turned over passenger service to Amtrak in the following years and Amtrak added new routes in response to demand for rail service.
Today, the company operates more than 300 trains that serve 500 locations in 46 states, Washington D.C. and three Canadian provinces. It has more than 17,500 employees and saw 32 million riders in fiscal year 2019, according to Amtrak.
How Amtrak is funded
Despite growth over the last 50 years, the company faced many of the same struggles as private railroads, Liebman said.
Amtrak is operated as a private, for-profit company but the federal government is the majority stockholder and provides annual funding. The company has a board of directors appointed by the president and confirmed by the Senate.
But support from Congressional leaders has waned since its creation despite the federal government being a major investor in Amtrak.
Amtrak eliminated routes and reduced service in the 1990s as federal funding was reduced. States stepped up to provide funding for passenger rail in response to the cuts. The partnership started with eight states and has grown to 17 states that support operations of 28 short-distance routes of less than 750 miles.
Arizona is not among those states.
Amtrak sought to cut passenger service to Phoenix in 1995 because it couldn’t afford to maintain the line linking southwestern Arizona and its capitol, owned by Southern Pacific Lines which was unwilling to upgrade the track or pay for annual upkeep. The company needed a last-second $30 million bailout from the state and local leaders in Phoenix and Tempe but officials said no help would be offered, according to a Republic article from that year.
The line to Phoenix was abandoned a year later after the derailment and the Sunset Limited was rerouted through Maricopa, which is about 35 miles south of Phoenix.
Amtrak nearly declared bankruptcy in 2002 after Congress again reduced its annual appropriation when the company failed to comply with a federal mandate to cover rail expenses through revenue it generated. The company avoided bankruptcy by getting a loan from the U.S. Department of Transportation, according to Amtrak.
Congress never intended for Amtrak to be subsidized by the federal government long-term and lawmakers hoped it would eventually become self-sufficient. That hasn't happened.
"The thought was it could be created as a for-profit agency because rail once made money operating passenger rail," Liebman said. "That's an unreasonable expectation. We don't expect the highways to make money and the subsidies to Amtrak are small compared to how much government money is invested in the highways."
The federal government has provided $45 billion in subsidies to Amtrak since it was created to fill gaps, according to the company’s financial documents. The federal subsidies and grants help cover capital costs, debt service and some operating costs, particularly on long-distance routes.
Prior to the pandemic, Amtrak was on track to surpass 32 million annual passengers and to break even financially for the first time in its history, according to the company. Ridership plunged by about 50%, which forced Amtrak to reduce services and led to a loss in revenue.
Financial documents show that Amtrak brought in more than $2.4 billion in revenue in fiscal year 2020, including $1.3 billion from tickets, food and beverage, $585.4 million from contracts with companies that use Amtrak-owned lines and infrastructure and $343 million from state subsidies. That was down $1.1 billion from the prior fiscal year.
It cost nearly $4.2 billion to operate the rail service, according to Amtrak’s annual financial report. The company received billions in annual appropriations and emergency pandemic funding from the federal government.
Expansion
Amtrak is now looking to expand services as it recovers from the pandemic.
The proposed Phoenix extension is part of a plan that would expand services throughout the country to address future growth, further connect urban and rural areas and help reduce vehicle and air congestion. Plans call to add service to 160 new communities and create 39 new routes, many which would be state-supported intercity corridors.
Locally, the new line would connect downtown Tucson to Buckeye with stops in six communities, including Queen Creek, Tempe and the Avondale-Goodyear area. The train would stop at Phoenix Sky Harbor Airport and in downtown Phoenix.
Amtrak is proposing expanding passenger rail in Arizona with a new route that would connect Tucson to to Los Angeles through Phoenix.
Service between Tucson and Buckeye would run round-trip three times a day. The route is 154 miles long, would operate on the existing Union Pacific Railroad line and would take just over three hours from end to end.
The expansion is estimated to cost $923 million, Amtrak President Stephen Gardner said during the roundtable discussion this summer. The cost includes:
- $658 million to upgrade rail infrastructure.
- $205 million to build new stations.
- $60 million for new trains, equipment and supporting facilities.
It would take at least three years for the line to be operational and it’s expected to attract 200,000 riders annually, Gardner said.
The company has asked for federal funding to cover construction costs and initial operating costs, Amtrak CEO William Flynn said during the discussion.
Operating costs would eventually be passed on to the state and local partners, Flynn said.
The exact operating costs and specific funding sources aren't yet known. Some partner states and agencies use general funds or transportation dollars to operate lines. In Colorado, where Amtrak and state officials are working on an expansion that will connect Denver to Wyoming, officials created a rail district with authority to secure funding.
Goodyear Mayor Georgia Lord said she supports the expansion coming through her city but a Goodyear spokesperson said it’s too early in the process to say if the city would help pay for the line.
Still, Lord noted during the roundtable discussion that everyone has to pitch in to bring the project to fruition.
“We can’t accomplish that on our own so we’re all going to put our hands in the pot and help,” she said.
Gardner said Amtrak is ready “to move quickly.”
Once federal funding is approved, Amtrak will work with cities along the proposed route to conduct a feasibility study, determine where stations will be built, craft a schedule and develop a service plan. Amtrak also will have to secure the use of the lines from the host railroads.
"Now we have to wait and see how Congress ends up considering this proposal but we're hopeful there will be more capital investment from the federal government necessary to help" with the project, Gardner said.
Liebman said the infrastructure package provides a "once-in-a-lifetime opportunity" to invest in rail improvements.
Operating costs would be minimal compared to construction costs and he hopes concerns about how it would be paid for don't hold up the project as it has in the past, he said.
"The fallacy is that the state of Arizona is going to be on the hook for some huge cost but we believe this corridor would have good farebox recovery," he said. "This is the time to get this going."