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Amtrak Subsidies vs. Megabus Private Enterprise

Amtrak made statewide news recently with its announcement that it has set ridership records in Michigan. But one frequent critic of rail transit says that isn’t necessarily a good thing.

Wendell Cox, a public policy consultant with Illinois-based Demographia, says that Amtrak is a far more costly option when compared to Megabus, a private bus service that launched in April 2006 and operates in about 50 major cities.

For example, Amtrak reported that its Detroit-to-Chicago rail service, known as the "Wolverine," had a 4.9 percent jump in usage. 

If someone were to purchase an Amtrak ticket for a Nov. 7 trip from Detroit to Chicago and then return the same day, the cost would be $32 each way, or $64 round trip. But Cox cites a 2008 study by the Pew Charitable Trusts that reports Amtrak lost $55 per rider on each leg of the Detroit-Chicago route. Cox says that’s $110 per roundtrip that taxpayers subsidized in 2008.

By comparison, the same roundtrip from Detroit to Chicago and back again on Megabus would take two extra minutes each way, but the Megabus roundtrip ticket costs $25.

Cox said Amtrak subsidies are hard to track, but judging by the Pew study, the Amtrak subsidy for one passenger could fund more than four passengers on Megabus on the Detroit-to-Chicago roundtrip.

“High quality bus service, featuring on-board high speed wireless internet, costs passengers less between Detroit and Chicago and takes about the same time,” Cox said in an email. “There is a big difference, however. Train riders are subsidized by taxpayers, while bus riders pay their full fare. In a nation that needs to cut unnecessary spending, Amtrak should be at the top of the list.”

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.

News Story

Will Teacher Right-to-Work Die With The Recall Election of Rep. Paul Scott?

If the recall election of Rep. Paul Scott, R-Grand Blanc, is off, does that mean the Right to Work for Teachers bill will flounder?

On Thursday, Ingham County Circuit Court Judge Clinton Canady ordered a halt to the recall election against Michigan House Education Committee Chair Paul Scott. In his ruling, the judge gave detailed instructions to Genesee County election officials on how to go about taking the recall question off the Nov. 8 ballot.

The Michigan Education Association (MEA), which paid for and coordinated the recall campaign against Rep. Scott, has said an appeal of the ruling would be filed with the Michigan Supreme Court. However, legal experts speculate that the short time frame involved could rule out any chance of the election being reinstated on the November ballot.

Meanwhile, the so-called “Freedom to Teach Act,” (Senate Bill 729) is in the state Senate. When Senate Majority Leader Randy Richardville, R-Monroe, announced the legislation a few weeks ago, it was referred to as the Right-to-Work for Teachers bill. In that context it was assumed the bill would free all public school teachers from being required to join unions.

Sen. Richardville and other Republicans insisted that political strategy or revenge against the MEA weren't motives behind the bill. However, when SB 729 was actually introduced it had been drafted so that only MEA teachers would be impacted. It did not apply to the state’s second largest teacher union, the American Federation of Teachers.

With the legislation so obviously targeting the MEA, claims that the real reason for the legislation wasn't political gamesmanship or strategy were greeted with skepticism. 

Now, with the recall of Rep. Scott seemingly stopped, tensions between the GOP and MEA might be lessened. Would that affect the future of SB 729? Will the incentive to pass the legislation evaporate?

“'Right-to-Teach', which would allow teachers to decide whether or not a union has earned their financial support, always was a bit of a half measure,” said Mackinac Center for Public Policy Director for Labor Policy Paul Kersey. “We would have preferred that the Legislature look at applying that to all workers. But right-to-teach had the potential to deliver real benefits for teachers and education. So it was disappointing to see when it turned out to be just a payback against the MEA and now maybe just a bargaining chip.”

Political consultant Eric Foster, of Foster McCollum White and Associates, said he thinks the recall election of Rep. Scott being canceled would be more likely to ensure passage of SB 729 than it would to delay or prevent it from being passed.

“If anything, I think it would be more likely to embolden the Republicans to move it,” Foster said. “The way I look at it, the decision to end the election, if it holds, was a big loss for the unions.

“Scott's chances of surviving the election were dicey at best,” Foster continued. “Now the Republicans could be encouraged to move forward. I don't think it will be enough for them to just load the gun with the Right-to-Work for Teachers bill. Sooner or later they have to be willing to pull the trigger.”

Foster, whose clients are most often Democrats, said the political dynamics have changed and the unions are playing catch up.

“Unions like the MEA are using political tools that worked during their heyday, but are out of date,” Foster said. “It's not 1980. Arguing that jobs need to be protected or services won't be delivered doesn't work anymore because everyone else has already experienced layoffs and cutbacks. To be successful today, at the bargaining table or in the political sphere, unions have to be able to show that they have a positive economic value. If they can't do that, they can't win. Some unions are beginning to understand this; but others don't.”

Inside Michigan Politics Editor Bill Ballenger said it's too early to tell if events involving the Rep. Scott recall would affect the legislation.

“I think we have to see how all of this plays out,” Ballenger said. “If I were the Republicans and the MEA keeps on fighting this, and they say they're taking it to the Supreme Court, I'd pass the legislation.

“Even if the MEA only managed to get the recall election on the Feb. 28 ballot, which would be much better for Scott's chances than Nov. 8, they (MEA) would still be forcing three more months of agony and concerns,” Ballenger added. “You have to start wondering whether, at some point, the MEA will finally decide to fall on their swords and give up on all of this. Frankly, I think they should do that now.”

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.