ASLRRA PERSPECTIVE, RAILWAY AGE, DECEMBER 2021 ISSUE: Christmas came early this year and the short line stocking was filled to the brim. The Infrastructure Investment and Jobs Act (IIJA) is the biggest federal infrastructure spending bill since, well, since ever.
Compared to the 2015 FAST Act surface transportation bill, it’s a huge expansion in total funds, $1.2 trillion vs. $305 billion, and a huge increase in the breadth and scope of the bill. For short lines, it dramatically increases grant funding opportunities for the most expensive rehabilitation projects, expands short line eligibility in infrastructure programs, provides set-asides for small and rural area projects that help protect short line participation, and creates new highway grade crossing elimination funding.
Just as important as what is in the legislation is what is not. The early iterations of the infrastructure bill included a railroad crew size mandate, an unworkable and unreasonable blocked crossing provision, and other onerous operational and regulatory provisions. None of this bad public policy made it into the final bill. And finally, there was no increase in truck size and weights, a perennial effort that every infrastructure bill attracts like pesky moths to a flame.
The best stocking gift in the bill is the dramatic increase in funding for the CRISI grant program—$1 billion a year over five years, minimum. That compares to the current 2021 funding level of $375 million. Most remarkable of all, the legislation pre-appropriates this funding. Historically, bills such as the IIJA authorize program funding levels, but the corresponding Appropriations bills set the actual spending levels, which is almost always less than the authorized amount. The infrastructure bill guarantees the full $1 billion in annual CRISI funding will be available, and then authorizes additional money on top of that for potential additional annual appropriations in the future.
CRISI is especially important for short lines because it is the only federal program where short lines are directly eligible applicants, and our track record is pretty good.
Since CRISI grants were first approved in 2017, 84 short lines have received more than $520 million. In addition to CRISI, the five-year bill includes:
• $8 billion in guaranteed funding for the INFRA program, with a tripling of multi-modal flexibility (up from 10% to 30%) and an increased small project set-aside (up from 10% to 15%).
• $7.5 billion in guaranteed funding for the RAISE program (successor to BUILD and TIGER).
• $3 billion for a new grade separation program.
• $1.2 billion in continued funding for Section 130.
• $2.2 billion for a port infrastructure program in which land-side rail projects are eligible.
• $5 billion for a new multi-modal mega projects program.
• $7.15 billion for the state freight formula program, with more multi-modal flexibility than before.
It’s a lot, and taken together will allow many short lines to tackle some of their more expensive and otherwise financially out-of-reach railroad projects like bridge replacements, major steel rail replacements, new spurs and sidings, and reviving out-of-service track.
It is a huge opportunity for short lines, but with big opportunity comes big competition. Days after the bill’s passage, a Wall Street Journal headline read, “How Cities Could Spend $1 trillion on Infrastructure.” The article quoted governors, mayors and state transportation directors cataloguing the huge and hugely expensive infrastructure projects they will pursue with these newfound funds.
Job number one for short lines is to firmly insert themselves into this conversation. Starting now, they need to start identifying their most needed projects and preparing detailed costs and benefits and compelling narratives that they can take to their local, state and federal officials. They need to start building support for their projects among local economic development officials, their local Chamber of Commerce, and their elected representatives in Washington who can support their applications with the USDOT decision-makers. They need to start identifying public entity partners, as all of these programs except CRISI require a public entity to be the applicant, and even with CRISI the most successful applications still involve meaningful public-partner relationships.
Few if any short line projects will have the headline-grabbing allure of the mega projects like highway bridges and passenger rail expansions already being discussed by governors and mayors, so short lines need to do what they always do: work from the ground up to build support and visibility for smaller, targeted, effective freight rail infrastructure projects that would otherwise be lost in the shuffle.
Job number one for the ASLRRA is to do everything we can to help short lines understand what is available, how to apply and adequately meet the requirements of the application process, and how to effectively communicate their project benefits to the Washington decision-makers. We began that task at ASLRRA’s November Annual Meeting, and we will stay on task as the Biden Administration rolls out the schedule and requirements for these programs.
Christmas did come early this year, and Ebenezer Scrooge was nowhere in sight as the packages were wrapped. It should make for a great Christmas Future.