Note: This article is posted on behalf of NTU Foundation Research Analyst Eric Sundheim.

A recent study by Subsidyscope (a project of Pew Charitable Trusts "to raise public awareness about the role of federal subsidies in the economy") estimates that Amtrak loses $32 per passenger- four times the $8 figure Amtrak reported. The discrepancy is the result of contrasting accounting methods: Subsidyscope's calculation includes depreciation on capital and overhead costs (wearing down of trains, HR costs, etc.) while Amtrak's does not. Given that depreciation and overhead are included in virtually every other accounting department, I asked Steve Klum, Director of Amtrak media relations to explain this exception. He responded:

Farebox recovery [excluding depreciation] … is the accepted measure of financial performance in the passenger rail industry.

Seeing as Amtrak is the ONLY intercity passenger railroad in the continental United States, Klum is basically saying "because that's how we do it." In 2005 the Government Accountability Office suggested that Amtrak change their policy. Amtrak ignored the suggestion because they don't want to admit how much money they lose.

The question is: Why do taxpayers cover $462 of the $750 train ride from LA to New Orleans? The American Public Transportation Association says we should do it because we create "green jobs." They cite a study by the Economic Development Research Group which claims that increased train ridership reduces automobile emissions. Yet this study also claims that Amtrak investment directly and indirectly increased spending on manufacturing and construction which, last I checked, were not green sectors of the economy. If we want to help the environment, there are better uses for the $1.5 billion a year we currently spend on train ticket subsidies.

The next time you hear a headline stating that Amtrak ridership increased by 1,000 passengers last month you should be thinking, "great- taxpayers just lost 32 grand."