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4/15/2021
By Julie Sneider, Senior Associate Editor
Late last month, President Biden formally unveiled his $2.3 trillion American Jobs Plan and infrastructure proposal, which calls for the federal government to invest billions in the nation's transportation networks — including $85 billion for transit and another $80 billion designated specifically for rail.
For the nation’s smaller freight railroads, however, the president’s plan to rebuild the nation’s highways, bridges, ports and transit systems falls a little short. To be sure, it’s “exciting” that the White House would draft a plan that calls for massive investments in infrastructure, says Chuck Baker, president of the American Short Line and Regional Railroad Association (ASLRRA).
But the plan’s $80 billion for rail projects offers little for smaller freight railroads.
“From the details we can gather, it sounds like only $5 billion would be for the types of grants that short lines would be eligible for and the rest [of the $80 billion] would be focused on intercity passenger rail,” says Baker.
While the association has “no heartburn” over Amtrak or commuter railroads getting a bigger piece of the federal funding pie, Baker and his ASLRRA associates over the next several months will be making the case to policymakers that investing in short lines can generate the same sort of environmental, safety and mobility benefits that come with expanding access to intercity passenger rail, Baker says.
As congressional leaders determine what the infrastructure legislation ultimately will look like, ASLRRA will be talking up competitive discretionary grant programs like Consolidated Rail Infrastructure and Safety Improvements (CRISI), a federal program that funds capital projects aimed at improving the safety, efficiency and reliability of passenger- and freight-rail transportation systems.
CRISI has been popular with short lines, and Baker and his team hope Congress won’t change it in ways to reduce or exclude short-line participation. Biden’s proposed $1.5 trillion budget for fiscal-year 2022 includes $375 million for CRISI grants. The $320.6 million in CRISI grants awarded in September 2020 included 50 projects in 29 states, with 60% of those dollars awarded to rural projects — many of which benefited short lines. Twenty-four awards directly benefited ASLRRA members for a total of $137 million.
Other possibilities that short lines will be watching for in the package include new federal grant programs that fund carbon emissions-reduction projects. Biden has said that confronting the climate crisis will be a big part of his administration’s agenda, including through proposals aimed at building modern, energy-efficient and green infrastructure. As the freight-rail industry frequently points out, railroads can move a ton of freight an average 470 miles per gallon of fuel, which puts freight rail ahead of other transportation modes when it comes to limiting greenhouse gas (GHG) emissions.
“If a grant program is created to address climate issues, we want to make sure that short-line railroads will be eligible to apply because we think we could help meet the [carbon emissions reduction] goals of the program,” Baker says.
Some short-line customers also are supportive of smaller railroads’ having greater access to infrastructure improvement funding programs. National Association of Chemical Distributors (NACD) officials believe anything that helps increase competition among freight railroads — such as through federal funding that helps rail infrastructure projects — will benefit smaller chemical-distribution businesses.
Strengthening the short-line rail system would help provide much-needed competition when it comes to transporting goods safely and efficiently for smaller shippers, says Eric Byer, NACD’s president and chief executive officer.
“I’m hopeful there will be more opportunities for short-line operators to have access to funding to improve quality of service,” says Byer. “Short lines are very helpful to our folks getting products moved to their facilities.”
Although federal investment in infrastructure has bipartisan support on Capitol Hill, whether Congress will pass anything this year remains to be seen. Key questions are what form the legislation will take — as a separate bill, as part of surface transportation reauthorization or as a budget reconciliation measure; and how will it be paid for — increasing corporate tax rates (as Biden has proposed), hiking the federal gas tax or creating new revenue sources such as vehicle-miles traveled fees.
Even the definition of “infrastructure” is up in the air. For many Republicans, Biden’s definition is too far-reaching. The president’s American Jobs Plan not only calls for fixing highways, rebuilding bridges and upgrading ports, airports, freight rail and transit systems; it also tackles the nation’s electrical grid, high-speed broadband internet, schools, and social issues such as child and elder care.
“The less targeted a bill — and the more pieces that get folded into a single package — the more difficult it will become to gain Republican support,” wrote House Transportation and Infrastructure Committee Ranking Member Sam Graves (R-Mo.) and Highway and Transit Subcommittee Ranking Member Rodney Davis (R-Ill.) in a joint op-ed posted April 13 on morningconsult.com.
NACD’s Byer agrees.
“One of my frustrations with [Biden’s] proposal is that it seems like a catchall — everybody wants a piece of the pie,” he says. “I always worry that what I call traditional infrastructure — roads, rail, water, air, those outlets that are definitely needed now — will get watered down or forgotten in the process.”
With questions as basic as, “What is infrastructure?” on the table, some transportation industry advocates like ASLRRA’s Baker wonder whether Congress will be able to get any big infrastructure bill to Biden’s desk this year.
“But for us, it’s not our job to predict, it’s our job to try and make a difference,” he says. “And we’ll be as aggressive and loud as we can be to try to shape the bill, and let Congress and the administration know that for all the goals they have — economic growth, rebuild the middle class, improve the environment, reduce congestion, improve safety — short lines’ projects can help. We’re excited about the ability to be part of the solution.”