A report by the Government Accountability Office has revealed that taxpayer-funded Amtrak has lost more than $800 million in food and beverage sales over the last ten years, largely due to waste, theft, and a lack of proper oversight.
The New York Times has more information:
The railroad’s food and beverage service has never broken even since it was required by Congress to do so in 1981. The losses were the focus of a House Transportation and Infrastructure Committee hearing on Thursday that reflected partisan views over how Amtrak should be run. Republican lawmakers suggested that food services should be privatized. Democrats questioned the need for the hearing, saying the railroad was dealing with the losses.
Joseph H. Boardman, president and chief executive of Amtrak, confirmed the losses but said the railroad was taking steps to address the problem. “We are still looking for ways to improve our cost recovery,” he said.
According to audits by the Government Accountability Office, an investigative arm of Congress, and the railroad’s own inspector general, Amtrak loses about $80 million a year selling food. Since 2002, Amtrak’s food service has lost $834 million.
Amtrak said it was increasing the use of credit cards for food sales to cut down on cash thefts by employees, reducing staff, creating a better system to track inventory and to collect revenue. It has also set up a three-person loss-prevention unit.
“It’s an outrageous cost to taxpayers,” said John L. Mica, a Florida Republican and chairman of the House committee. “There has to be a better way. We can’t keep on paying this subsidy." [Emphasis added]
So how is the subsidized rail line managing to lose more than $800 million dollars in food and beverage sales in just ten years?
According to the report, Amtrak's own employees are likely stealing between $4-$7 million annually, or $40-$70 million over ten years.
Similarly, while the line sells soft drinks for $2, they actually cost the taxpayer $3.40. Hamburgers sell for $9.50, but cost the taxpayer a whopping $16. Therefore, even if Amtrak sold 100% of their inventory, it would still be impossible for them to turn a profit.
One Amtrak employee defended the unsustainable budget, saying: “You may just see us handing out hamburgers, but we do other things.”
Rep. John Mica (R-Fla.) held a press conference with a $1 burger from McDonald's to demonstrate that if the private company can turn a profit with $1 burgers, a taxpayer-funded "Soviet-style" rail line selling $16 burgers should be able to at least break even.
“You may even see me on an Amtrak train with a sign that says, ‘Don’t eat the food, it adds to deficit spending,’” Mica joked.
But he's serious about cutting taxpayer liabilities with Amtrak.
“They’re violating the law,” he said, “and I may look at some legal recourse to stop them from doing it.”