Amtrak in the Red, as Taxpayers On the Hook for Enormous Overtime Costs

The economy is struggling to regain footing after a recent report that gross domestic product fell at a 1% annual rate, vs. the 0.1% increase first estimated earlier in the year.  This pain is being felt by the millions of Americans who continue to look for a job and those that have a job try to make ends meet with fewer dollars.  Government officials seem oblivious to the dire economic straits as the President proposes new regulations and Congress fails to cut spending.  But, probably the most out-of-touch government entity is Amtrak, which continues to lose more money and ask for more from taxpayers.  The Taxpayers Protection Alliance uncovered astonishing overtime numbers that show that thousands of employees receive more than $35,000 in overtime compensation.

The House Transportation, Housing and Urban Development Appropriations (THUD) Bill for fiscal year (FY) 2015 details the alarming overtime figures.  In 2013, Amtrak paid out more than $185 million in overtime expenses.  Of that amount, $49 million was paid to 1,022 employees who accrued more than $35,000 in overtime.  Doing some simple math, that means each employee averaged $47,000 in overtime.  With an average salary of more than $80,000, these overtime expenses push those salaries to more than $120,000.

AMTRAK OT expenses, 2010-2013 (courtesy THUD Bill FY 2015)

This revelation comes at a time when Amtrak is projecting losses and looking for $1.19 billion in operating costs and capital expenses.

The deficits Amtrak has been running are nothing to take lightly, the specific numbers should call into question why exactly taxpayers are continuing to subsidize something that loses hundreds of millions of dollars each year:

Amtrak operating deficits

2011 = $446 million loss
2012 = $362 million
2013 =  $358 million
2014 =  $340 million (projected)
2015 = $333 million (projected)

TOTAL = $1.8 billion

Should the projections for the next two years come within the $300,000,000 mark, Amtrak (read: taxpayers) is looking at total losses of $1.7billion in just five years.

Another nugget revealed by the House report are the astounding losses Amtrak has suffered in their food/beverage service since 2010.  In FY 2010

Amtrak food/beverage deficits

2010 = $82.4 million
2011 = $84.6 million
2012 = $72 million
2013 = $73 million
2014 = $75.8 million (projected)

TOTAL = $387 million

This problem came to light from an inspector general’s report late last year. The OIG found that losses in the tens of millions were accrued in 2012.  According to a news report,  “An audit from Amtrak’s Office of Inspector General reveals the transit system lost $72 million on some of its food and beverage services last year, financial losses ultimately subsidized by federal taxpayers… The audit, reviewed by the News4 I-Team and the chairman of a U.S. House subcommittee, shows the cost of selling food and drinks far exceeds the revenue Amtrak generates selling food and drinks on its long-distance routes.”

The pattern is simple to follow when it comes to Amtrak: more money is being spent than what the system is taking in from customers, and taxpayers are picking up the tab for the bills that can’t be paid whether it’s massive overtime for employees or expensive food/beverage costs.

The long-term picture is even more frightening: Amtrak has been around for more than forty years and has received $40 billion in federal subsidies. After all those years and all those taxpayer dollars, Amtrak has never turned a profit. Nothing to show for the tens of billions the government has poured into the system since the 1970s and the government still insists on using taxpayer dollars to prop-up this public-sector fiscal train wreck (pun intended).

Amtrak officials are clearly living in a bubble where self-preservation on the backs of taxpayers is all they care about.

As the THUD Bill moves forward, capping overtime pay is a good start, but the real challenge for Congress is to start moving towards increased oversight on Amtrak. Congress has missed the train for far too long, time to get off the Acela Express and get to work.