Five Takeaways From Last Week’s Big Passenger Rail Announcements

By Sean Jeans-Gail | VP, Gov’t Affairs + Policy | Rail Passengers Association

There’s been a burst of excitement and media attention over the past few days as Federal - State Partnership for Intercity Passenger Rail Program (Fed-State) grant announcements leaked out to the public and the inaugural Corridor Identification Program (Corridor ID) pipeline list was revealed.

But there also seems to be some confusion around what these announcements mean. A few reporters have conflated the two programs, while others seem to assume the absence of a route on the Corridor ID map is a fatal blow in bringing new and improved intercity rail service to their region.

To better help passengers understand this week’s announcements, Rail Passengers staff dove into the documentation released by the Federal Railroad Administration, and we came away with five key Takeaways.

1. Stay ready so you don't have to get ready

In meetings with local officials over the past decade, Rail Passengers staff would often predict that, eventually, the dam would break and we would see meaningful federal funding for passenger rail. If and when that did happen, the communities who had done the work to prepare for that eventuality would be the ones to reap the rewards.

Well, if the passage of the Bipartisan Infrastructure Law week’s announcement was the dam breaking, this week was the reaping.

All of the corridors that received major funding agreements this week went to states that have been investing resources into their state rail programs and, as a result, have the capacity to spend it out quickly. States like Virginia, North Carolina, and California have all been pouring local money into State-supported Amtrak service and regional rail agencies for decades.

Even the Brightline West project, while acquired in 2017 by Brightline’s holding company, Fortress Group, is founded upon the work done by DesertXpress, which launched back in 2005.

And for all the criticism California’s high-speed rail project has received -- much of it justified -- many of the delays and cost overruns can be traced back to the fact that California was attempting to enact an ambitious transportation program with uncertainty about whether there would be funding assistance from the federal government. This week’s $3 billion funding agreement is a repayment for that multi-year act of faith.

For passengers disappointed to not receive funding for their train in this round of awards, the time to begin to prepare for the next Fed-State Notice of Funding Opportunity -- scheduled for February/March 2024 -- is now!

2. The public needs more transparency on applications to BIL rail programs

It’s tough to properly evaluate the final slate of Fed-State grant recipients and Corridor ID, because we don’t have a complete picture of which entities applied, and for which programs.

Rail Passengers asked to see information on the applications to these programs. However, so far, the FRA has only shared the following: "FRA announced its first Notice of Solicitation of Corridor Proposals and Funding Opportunity for the Corridor ID Program on December 20, 2022, which closed on March 27, 2022. FRA received 95 proposals under this solicitation and is reviewing the eligibility, benefits, and technical merit of the submitted proposals." That’s not sufficient.

There were 69 corridors selected as part of the inaugural Corridor ID announcement. That could mean 26 proposals were rejected. Or, perhaps, some of the corridors were duplicative. It’s impossible to understand why some proposals were chosen and others rejected unless we have a clear sense of who applied. We’ve tried to piece together the applications here using publicly available information, but it’s unclear how complete this picture is.

This question takes on more relevance with the Fed-State program, where the requests are much higher and will have a more imminent impact on transportation networks and development patterns. We know, for instance, that the Washington State Legislature passed local funding to develop the Portland - Seattle - Vancouver, B.C. high-speed rail corridor, contingent upon securing federal funds. Amtrak also applied for funding for the Dallas - Houston high-speed rail corridor as part of its partnership with Texas Central. The public should be able to see which entities have applied for funding from federal rail programs, and have an understanding about why some projects were selected and others were not.

In fact, when the U.S. Government Accountability Office (GAO) looked back at the distribution of high-speed and intercity rail grant funds through the American Recovery and Reinvestment Act of 2009, it called for just this kind of transparency. In its report, the GAO argued that “to help ensure accountability over federal funds, the Secretary of Transportation should direct the Administrator of the Federal Railroad Administration to create additional records that document the rationales for award decisions in future high speed intercity passenger rail (HSIPR) funding rounds, including substantive reasons (1) why individual projects are selected or not selected and (2) for changes made to requested funding amounts.”

While the FRA has already added to its NOFO documentation, Rail Passengers believes it is critical for the public to have at least some high level of understanding about which applications were submitted and not selected to better inform its ability to better petition elected officials at the state and federal level.

3. This announcement earmarks funding from future Fed-State rounds

This week’s announcement trumpeted $8.1 billion in Fed-State National Network grants. That comes in addition to last month’s $16.4 billion in Fed-State National Network (NEC) grants.

However, the FRA only announced $4.6 billion in available FY22-23 funding for Fed-State National Network projects when soliciting applications, and up to $9.0 billion in Fed-State NEC projects.

So what’s the source of the discrepancy? A closer read of the announcement reveals that it includes a number of Phased Funding Agreements (PFA), which include both initial obligations and contingent commitments from Advance Appropriations in future rounds of funding. So, for instance, Brightline West will receive $2,020,292,014 in FY22-23 funds, with the FRA making a contingent promise to provide the balance of funds using FY24-26 awards.

Multi-year funding agreements are standard practice in many federal transit funding programs, and adding this to the FRA’s toolkit will help it, and state rail agencies, better manage large capital projects.

However, it’s important for advocates to note that this money is now spoken for and, as a result, the available pool of Fed-State funds will be reduced in coming years.

4. Passenger advocates need to keep an eye on the Fed-State split

With the ability to contrast and compare the Fed-State National and Fed-State NEC awards, it’s a good moment to step back and remind oneself that, for federal rail programs to be successful going forward, they must have a meaningful impact on bringing service to areas that aren’t currently served by intercity passenger trains.

Our Association isn’t surprised by the 2:1 ratio of NEC to National Network awards in this round of funding. The simple fact is that more projects are ready to go on the NEC, while more projects on the National Network are in-development or waiting on a Service Outcome Agreement with a host railroad (see Point No. 1).

However, going forward, we have to insist that a greater percentage of BIL funding should be available for non-NEC states to compete for. Americans who live in Midwestern, Western, and Southern communities have been subsisting on scraps for more than fifty years, and the FRA must acknowledge this fact in future rounds of funding.

We recognize the tough spot the FRA is in; they are trying on massive new grantmaking responsibilities as part of the BIL, with far fewer resources than their highway and aviation counterparts. But this is a change the FRA could easily enact. BIL directs the U.S. DOT to reserve “not less than 45 percent of the [Fed-State grants] for projects not located along the Northeast Corridor, of which not less than 20 percent shall be for projects that benefit (in whole or in part) a long-distance route,” and “not less than 45 percent of the [Fed-State grants] for projects listed on the Northeast Corridor project inventory.” That means the FRA has a 10-percent discretionary balance in how it distributes Fed-State funds. However, in the first round of NOFOs, the FRA decided to give the maximum amount of funding possible to NEC projects before it had received a single application.

This fact was noticed by Republican Senators on the U.S. Senate Committee on Commerce, Science and Transportation back in April 2023. In a letter to Transportation Secretary Pete Buttigieg, they responded to the notice of funding opportunity by writing:

“Curiously, FRA overlooked similar flexibility with respect to the IIJA money. The relevant appropriations language increased the ‘ceiling’ that could be spent on the NEC to two-thirds (and implicitly cut the minimum amount that must be spent in the rest of the country to one-third rather than forty-five percent). Nevertheless, FRA retains flexibility when spending the IIJA money: the agency could still spend as much as fifty-five percent on projects located in the 42 states outside the NEC and remain consistent with the law. In advertising the IIJA money, FRA could have indicated this flexibility by providing a range of funding amounts similar to how the agency has crafted notices for funding from annual appropriations as described previously.

“Instead, FRA advertised only the minimum required amount of IIJA money for projects in the rest of the country in the relevant notice of funding opportunity (just one-third, even though FRA could spend as much as fifty-five percent consistent with the law). Meanwhile, FRA advertised the maximum allowed amount of the IIJA money for NEC projects in the relevant notice of funding opportunity (fully two-thirds, even though FRA could spend as little as forty-five percent= consistent with the law). FRA has thus made a sweeping decision to favor jurisdictions served by the NEC and disfavor projects serving the nearly 270 million Americans who live elsewhere in the country without even considering the relative merits of the applications. For the IIJA money allocated to FY 2022 and FY 2023, this approach deprives projects in 42 states from the opportunity to even compete for at least $2.9 billion.”

This observation made by the group of Republican Senators is even more relevant when considering Takeaway No. 3. And these Republican Senators, in particular, will be critical in ensuring that these programs continue to receive meaningful funding when Congress begins to draft the next surface transportation bill.

As we enter the new year, Rail Passengers is committed to ensuring a level playing field for the 42 states not located along the NEC in future rounds of funding.

5. FRA’s Long-Distance Study should be a critical part of Corridor ID

There are some curious omissions from the Corridor ID list. They include, but are not limited to: the lack of a direct connection between Chicago and Atlanta; the absence of the old Pioneer route between Seattle, Portland, Boise, and Salt Lake City; and the lack of a San Antonio - Austin - Dallas segment within the Texas Triangle.

While we won’t fully understand the rationale or implication of these decisions until Takeaway No. 2 on this list is addressed, we do think it’s important to remind people about the work being done as part of the FRA’s Amtrak Daily Long-Distance Study.

Rail Passengers Association has been fortunate enough to take part in every one of the stakeholder meetings, and we’ve seen the good work that FRA staff is doing. As shown in the meeting materials, the Pioneer and Chicago - Atlanta corridors are very much still in play, and the product of this study should, we believe, help get these routes added to future rounds of the Corridor ID project pipeline (and, eventually, advance service restoration.)

So the absence of the Pioneer and a direct Chicago - Atlanta - Florida connection may ultimately be yet another argument for a stronger federal role in networking planning for America’s intercity rail system. But it’s up to the FRA to show their work and help the American public -- not to mention mayors, elected officials, and local transportation staffers -- better understand its decision-making process.