Winning the hearts and minds of Congress

Railway Age, Feb, 2004 by Richard F. Timmons

In the Army, where I spent my previous career, gut instinct was one decision-making process. It is especially relied on during combat.

While short lines are not at war, we are engaged in the most important legislative campaign we have ever waged. We are asking the federal government to enact a rehabilitation tax credit to help us jump start the upgrade needed to make us 286-ready. Our studies indicate this entire job will cost nearly $7 billion. As written, the tax credit legislation (H.R. 876/S. 1703) would provide $1.75 billion toward that total over a five-year period.

We are not asking the federal government to fund the entire amount, but we are asking for help. Our gut tells us there is ample justification. Short lines provide small-town America with competitive transportation alternatives and in many cases the only connection to the national railroad network. We preserve well-paying jobs, reduce highway congestion and costs, and are more fuel efficient and environmentally friendly than trucks.

But in this campaign, gut instinct is not going to cut it. Congress needs the facts, and last year ASLRRA launched a national data study to get them. The surrey was conducted by the AAR Policy and Economics Department. The data will be analyzed by the Texas Transportation Institute. It is the most ambitious and most expensive project ASLRRA has ever undertaken. Happily, the response rate to the survey was 93% and includes data from 545 short line railroads.

The data collection process has now been completed. While the analysis portion of the study is in progress, it is already evident that this effort is going to provide government decision makers with a much clearer picture of the contribution short line railroads make to the nation's transportation system. The analysis will show results nationally, by state and by congressional district. We hope to have much of it completed in the first quarter.

Here are some interesting statistics:

* Eighty-one percent of total short line mileage is operated by railroads established since 1980. The federal government, through the Staggers Act and ICC regulatory decisions, made this possible. The government decided that preservation of vulnerable rural infrastructure was preferable to abandonment. Helping get these lines ready for the new 286 system is a logical extension of that same government policy.

* Nationwide, short lines serve over 11,500 individual customers. Together those customers employ over 1 million people. In just the last two years short lines have brought 895 new facilities to industrial parks and sidings in their service area. These facilities employ 35,700 people and are an economic shot in the arm for the small towns in which they are located.

* Short lines pay $320 million a year in federal corporate income and payroll taxes. Additionally, they pay $61.3 million in local property taxes on their right-of-way (a burden not borne by their trucking competitors) and $42 million in other state and local taxes.

* Short lines invest nearly $884 million a year in plant and equipment. While that is not enough to rehabilitate track inherited from Class I's, it is more than 30% of the our total annual revenue.

* Short lines consume 178 million gallons of diesel fuel a year. The trucking industry would use more than 500 million gallons per year to move all our traffic to the nearest interchange railroad, and many times as much if the entire haul shifted to truck. If short lines would divert just 1% of total ton-miles from the highway it would save the country tens of millions of gallons of fuel per year.

* Although individual short lines are small businesses, there are six states where short lines operate more than 80% of the state's total railroad mileage and another six states where they operate between 40 and 80% of total railroad mileage.

* While short lines haul some traffic between customers only on their line, they are largely their customers' connection to the national network. Three hundred and sixty five of the 545 short lines have no local traffic. Another 67 have less than 10% of their traffic that is purely local. That means that in addition to the 11,500 customers short lines serve directly, thousands of additional shippers on Class I's depend on a faraway short line to move product the last leg of its journey.

As of this writing, 247 Congressman have co sponsored H.R. 876. Many have short lines in their district and have seen first hand our importance. Some have joined based on gut instinct. Our cosponsor list has gotten the attention of the Congressional leadership. Now we need to convince those leaders that the short line railroad movement merits national attention. I believe our data study will do just that.

Richard F. Timmons is president of the American Short Line and Regional Railroad A2sociation and a retired Lt. General in the U.S. Army.