Wisconsin Gov. Tommy G. Thompson was holding the weekly working breakfast for his cabinet in the executive mansion here last December when Amtrak President Thomas Downs unexpectedly telephoned.
It was a courtesy call to tell Thompson, who completed a 4 1/2-year term on the Amtrak board a few months earlier, that for budgetary reasons that agency planned to gut service in the Chicago-Milwaukee corridor.
“I knew when my term expired that they were in terrible financial shape and would have to cut some service, but I never thought they’d terminate all service” between Chicago and Milwaukee, he said.
The 86-mile corridor between the largest cities in Illinois and Wisconsin was widely considered by transportation officials to be one of the few in which Amtrak could beat the competition. It is too short for the airlines to profitably fly, and trains, at 92 minutes on the run, are faster than cars or buses, which take approximately two hours.
Before cutting the number of trains on the route, ridership had more than doubled from 186,325 in 1987 to 408,888 last year. Wisconsin’s Transportation Department is conducting studies that indicate that with additional trains to provide hourly service annual ridership could reach a million.
The immediate problem is that Amtrak is in financial trouble and under pressure from the Republican Congress to slash its annual operating deficit now at $392 million. Washington has poured $10.6 billion in annual operating subsidies and an additional $2.2 billion in capital grants into Amtrak from its inception in 1971 to the end of 1994.
That doesn’t include $197.1 million the freight railroads gave Amtrak in 1971 to get out of the money-losing passenger business that cost it an estimated $476.8 million in red ink in 1970.
The crisis hit in late 1994, when Amtrak was forced borrow $65 million to stay in business. This year, it had to cut $220 million.
It laid off 1,500 people and raised the subsidies it charged the states to run short-haul trains, such as the Hiawatha from Chicago to Milwaukee. Illinois also subsidizes Amtrak trains to Carbondale, Springfield and Quincy.
Downs said the cuts have forced his agency to take a closer look at each route it operates.
“The real bottom line is that we have to be out of the operating subsidy business by the year 2000,” he said. “There isn’t a single (Amtrak) line that breaks even on a fully allocated (cost) basis.”
At a time when another federal agency, the Federal Railroad Administration, and states such as Illinois and Wisconsin are talking about high-speed trains to link major cities, Amtrak again is struggling to maintain its service.
The agency has been embroiled in controversy for most of its existence. Its early years were marred with startup problems, such as the inability to keep the trains’ air conditioning and heating systems operating, breakdowns and old equipment.
Crews, who were on the payrolls of the freight railroads that ran the trains, were often surly. The agency ran political trains, such as the empty daily round-trip through the West Virginia congressional district of U.S. Rep. Harley O. Staggers, then chairman of the House Commerce Committee, which oversaw Amtrak.
Even some of its early attempts to improve service backfired. A computerized reservation system it bought was designed for airlines. It treated trains as if they were non-stop flights and denied reservations on half-empty trains to intermediate passengers. Microwave ovens in food service cars made hamburgers taste funny.
However, with a federal infusion that peaked at more than $900 million in operating and capital subsidies in 1981, Amtrak got its trains and crews in order.
Enter the budget cutters.
“What happened was David Stockman and his change machine began clicking out quarters,” said Downs of the budget director under President Ronald Reagan. “The administrations of Reagan and Bush knew they couldn’t kill Amtrak because of (its support in) Congress, but they knew they could starve it for capital and it would eventually collapse.”
Though operating subsidies remained high in the Reagan years, capital subsidies were chopped to as little as $2 million in 1986.
Downs says that though nothing seemed wrong to the public and to passengers, Amtrak began deferring maintenance and using those funds to cover deficits-the road to oblivion for railroads.
“Deferring capital expenses cost Amtrak $200 million in (additional) operating expenses. Your operating expenses go way up because to have to keep repairing old equipment that breaks down,” he said.
Despite the problems, W. Graham Claytor, who became a railroad legend when he headed the Southern Railway before taking over Amtrak, painted a bright future for rail travel in the U.S. as late as 1990 and promised his agency would be able to eliminate government subsidies by 2000 if it could get $2 billion in capital grants to expand and replace outmoded facilities. He retired at 81 in late 1993.
The cracks began to show when recession hurt ridership in the 1990s and budget airlines began to serve Amtrak cities, preventing it from raising prices. Service began to deteriorate, giving critics more ammunition, as Amtrak ran short of cash and its equipment aged.
Downs claims that Amtrak can continue to operate and eliminate its operating deficits by 2000 if it can only get a stable source of capital money-a minimum of $600 million a year, or the equivalent of a half-cent federal gas tax.
The House Transportation Committee on Thursday gave Amtrak a four-year reprieve by approving new subsidies until 1999, though they would decline annually from $712 million next year to $403 million in the 1999 fiscal year.
Amtrak’s critics claim the agency’s problems go a lot deeper than its financial troubles on Capitol Hill, however. They cite service at Amtrak’s Chicago hub and the Hiawatha corridor to Milwaukee as examples of some strategic problems the Washington-based bureaucracy has largely ignored almost from its inception.
The underlying issue in the debate over the Hiawatha is the role Amtrak sees for itself in the national transportation picture and whether it should continue to run trains across the vast continent or should concentrate on short-haul service between major cities.
“Politically, Amtrak is still popular among congressmen in lightly populated areas where trains are still an important part of the transportation system,” said retired UCLA economist and transportation historian George W. Hilton.
For example, the Empire Builder’s Chicago-to-Seattle route carries it across the 1,075-mile length of North Dakota and Montana with a combined population of 1.4 million served by 19 Amtrak stations.
The five counties along the 86-mile Hiawatha route served by four stations have a combined population of 6.9 million. Lake County, Ill., and Racine County, Wis., with a combined population of 691,451 have no stations but North Dakota, population 641,364, has seven.
Amtrak officials did not respond to repeated requests for financial data on the two routes, though they did provide ridership data that showed the two routes in 1994 carried an almost identical number of passengers. The service cuts this year resulted in a drop in ridership of 25 percent on the Hiawatha from July 1994. The Empire Builder lost 19 percent of its riders in that period.
Even Amtrak’s most respected critics, such as Association of American Railroads official Frank N. Wilner, author of a recent book called “The Amtrak Story,” says the agency ought to concentrate on corridors in California, around Chicago and in the East and forget the “rolling national parks” as he calls the scenic routes such as the Empire Builder.
“If rail passenger service is going to make it, it will be in certain regions where there is population density-both coasts and the corridors radiating from Chicago. The corridors with their congested highways are where you are going to get a bigger bang for your buck,” Wilner said.
Amtrak’s preoccupation with the Northeast and its long-haul trains at the expense of the Chicago grates Wisconsin officials.
“We could have a heck of a system if we could figure out how to do it,” said Thomas Walker, head of the Wisconsin Department of Transportation’s planning division. “We’ve left it up to Amtrak, and they don’t see Chicago as an opportunity.”
His boss is more blunt. Thompson points out that the Amtrak board is dominated by Easterners preoccupied by service between Boston and Washington. “I’ve always accused the board and Tom (Downs) of being provincial and having a biased view in favor of the Northeast Corridor. I was the lone wolf from the Midwest.”
Except for a union official from Ohio picked by labor, the Amtrak board consists of four Easterners, one from Ohio and one from California. Republican Thompson’s replacement was Delaware Gov. Thomas R. Carper, a Democrat.
A review of the history of the Hiawatha route supports Thompson’s assertion. Amtrak started service in May 1971, with five daily round-trips between the two cities, including one by the Empire Builder, and increased it to seven trains before the year was out. Service was cut to three trains in 1981, then gradually increased back to seven by 1991.
Chicago attorney James E. Coston, a passenger train enthusiast and Amtrak board hopeful, said the agency got off on the wrong foot when it decided to run the trains over the Milwaukee Road mainline through mostly open country, ignoring the heavily populated Chicago & North Western mainline that ran through Evanston, Waukegan, Kenosha and Racine and a number of suburbs of Milwaukee and Chicago.
Over the years Amtrak “has done nothing to promote the service,” Coston added.
“Traffic has compounded at something like 12 percent per year despite the fact that Amtrak offered spartan service with no food or beverages available, no business class and no phones,” he said.
Traffic counts on Interstate Highway 94 show 60,000 cars a day pass the state line, but Amtrak at its peak carried only 1,200 riders a day. “Traffic on the highway is increasing at 3 percent per year, but even high-speed rail service would probably divert only 1 percent of it. A lot of the (interstate) travel is not between downtown Milwaukee and downtown Chicago but between intermediate points,” Walker said.
Amtrak is responding to critics by trying to put together a crash marketing program to mollify Thompson and reverse the disastrous drop in ridership that resulted from the service cuts in Hiawatha service this year.
Just the announcement that the Amtrak board in December decided to cut all six round-trip Hiawatha shuttles between the two cities but retain the money-gobbling Empire Builder caused some riders to bolt.
“Ridership dropped 5 percent when they announced the cuts just because of the uncertainty over whether the service would be there,” said Daniel T. Yeh, economic development strategies planner for Wisconsin DOT.
Though Wisconsin officials by the time the cuts took effect in April were able to save four of the six the trains, ridership is off 45 percent.
Thompson admits he was hopping mad after getting the call from Downs. “I have an Irish temper, and I told him he had a hell of a fight on his hands,” the governor recalled.
He adjourned the cabinet meeting and drove to his office in the Capitol to call Downs back. “The longer I thought about it, the madder I got. It was part of my fee for lobbying with the Republicans on Capitol Hill that Amtrak restore some of the service. I’ve done a lot of lobbying for them,” Thompson said.
Though he hails from the west-central hamlet of Elroy that saw its population fall to 1,500 from 2,600 when its railroad line was abandoned this century and eventually turned into a bike trail, Thompson admits he did not have much of an interest in passenger trains until President George Bush asked him to serve on the Amtrak board in early 1990.
Since then, he prodded the Wisconsin Transportation Department away from its former preoccupation with abandoned branch freight lines and into passenger trains. The state amended its constitution in 1992 to allow it to provide capital subsidies to railroads. The lack of such subsidies to fix up track was a major factor in the abandonment of Chicago commuter lines to Walworth and Lake Geneva in the 1970s.
The deal Thompson cut with federal officials to get service back to its pre-cuts level of seven daily trains requires Wisconsin and Illinois to increase their subsidies to cover the trains’ deficit. Fares were also increased 50 percent, to $25 one-way and $38 round trip.
Over the next 15 months, Wisconsin will pay $2.3 million, up from about $450,000 in prior years, and Illinois will ante up $750,000 to keep the Hiawathas running. Thompson talked the U.S. Transportation Department into using highway money-a fund to mitigate congestion on roads-to subsidize the trains.
