Clinton Giveth, Clinton Taketh Away - President Clinton's FY2000 budget proposal - Brief Article

Railway Age, March, 1999 by Frank N. Wilner

President Clinton's $1.8 trillion Fiscal Year 2000 budget proposal provides a 14% boost for mass transit, a 6% cut for Amtrak, and a 16% increase in FRA safety-related spending. FY 2000 begins Oct. 1.

The FRA budget would slip to $746 million from $778 million in FY 1999, due mostly to a $38 million reduction in Amtrak grants. Actually, Amtrak would receive the entire $571 million it sought-all earmarked for capital spending, but that definition is stretched to include rehabilitation and preventive maintenance. In 1997 Congress voted $2.2 billion for Amtrak capital improvements to be paid out over two years.

Mass transit grants paid through the Federal Transit Administration would soar to $6.1 billion from $5.4 billion in FY 1999. Included are increased grants for local and regional light and commuter rail. The Transportation Equity Act for the 21st Century guarantees at least $5.8 billion in FY 2000 for mass transit.

The President's proposal for FRA's non-Amtrak spending-$175 million-includes $35 million transferred from a projected $1.5 billion Highway Trust Fund windfall and earmarked for three FRA pet projects. These include $15 million for grade-crossing closings on high speed rail lines, $10 million to implement positive train control on two demonstration corridors, and $10 million to help connect railroads with 67 decommissioned Air Force global-satellite base stations. The proposed budget also contains huge new freight railroad user charges that really are increased taxes as railroads have no choice but to accept Surface Transportation Board and FRA regulation.

While some $17 million is proposed for STB-about what it received in FY '99-the president wants the entire sum recovered through charges on unspecified users of STB services. In recent years, STB recovered about $1.2 million annually from railroads and shippers. However, more than $900,000 of that was paid in annual filing fees by major railroads applying for merger authority. Previous Clinton Administration attempts to charge shippers and railroads unspecified fees to pay the entire STB budget were rejected by strong Democratic and Republican majorities in the House and Senate.

More than $88 million in FRA user charges would be imposed on freight railroads by the president to fund safety initiatives and high speed rail research. A Reagan Administration tax on railroads to recover safety-regulation costs was canceled after four years by Congress in 1995 because short line railroads were paving up to 17% of their net income in such fees. Troubling to freight railroads is that despite a projected budget surplus, the 4.3 cents per gallon deficit-reduction fuel tax-costing railroads $160 million annually and which does not apply to motor carriers-is not slated for cancellation.

Also upsetting is budget language to eliminate a TEA-21 provision allowing railroads to qualify for lower-interest private-sector loans under a federal loan guarantee program. It is of no risk to taxpayers because required insurance premiums must be paid by non-federal sources. Most affected would be proposed intermodal connectors and short line efforts to increase rail weight to accommodate heavier loads. A similar highway program benefititing truckers is not targeted for abolition.

The Clinton administration also said in its budget it wants railroads to apply reflectorized tape to all rolling stock and ERA unilaterally to impose new power brake standards. The entire Congress will finalize the FY 2000 budget by fall following House and Senate subcommittee and committee hearings.