Let Us Hope That Good Sense Prevails

Written by Chuck Baker, President, ASLRRA
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ASLRRA PERSPECTIVE, RAILWAY AGE, OCTOBER 2021 ISSUE: In 2017, the previous Administration dubbed the week of June 5 as “Infrastructure Week” as part of an effort to promote its $1 trillion infrastructure plan. Seven times in the following three and a half years, that Administration declared that infrastructure would be the theme of the week, only to see those plans thwarted in one fashion or another each time.

As The New York Times eventually opined, “This has become a long-running joke where Infrastructure Week is less a date on the calendar than it is a Groundhog Day-style fever dream doomed to be repeated.”

Today though, it appears it is no joke. Lots can still go wrong, and please knock on wood as you read this, but Congress appears to be on the verge of finally enacting a significant infrastructure package that will benefit the entire American economy, most certainly including freight rail and the tens of thousands of customers we serve.

For short lines, the highlight of the bill (technically, the Infrastructure Investment and Jobs Act, IIJA) would be a dramatic increase in the CRISI grant program, to a minimum of $1 billion per year guaranteed over each of the next five years. That compares with the current FY 2021 funding level of $375 million. 

Short lines would still compete for that funding with other applicants and rail projects; however, this federal program is unique in that short lines are directly eligible applicants, and our track record competing for these grants is pretty good. Since CRISI grants were first approved in 2017, 84 short lines have received more than $520 million in funding. 

In addition to CRISI, the five-year bill if passed would include $8 billion in funding for the INFRA program, with an increase in multi-modal flexibility and an expanded small project set aside; $7.5 billion in 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 the Section 130 grade crossing program; $2.2 billion for a port infrastructure program in which land-side rail projects are eligible; and $7 billion for the state freight formula program with triple the multi-modal flexibility of the current law.

Taken together, to use a scientific term, that’s a lot, and it 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, and reviving out-of-service track. 

Given that all of these programs except CRISI require a public entity to be the applicant, and even with CRISI most successful applications involve extensive public-partner relationships, now is the time for short lines to step up communication and relationship building with relevant government partners—state DOTs, regional transportation authorities, ports, local units of government, and state and local elected officials. 

The additional multi-modal flexibility provided in the $7 billion freight formula program makes a good working relationship with state DOTs particularly important as, in addition to partnering on federal applications, they may now also have the ability to increase existing or create new state-based grant and/or tax programs.

Equally important, short lines should actively engage shippers in conversations about projects that could help those customers grow their businesses. When shippers, short lines and a public entity partner on applications, it is powerful and persuasive. 

R.J. Corman Carolina Lines

ASLRRA recently selected the winners of our annual Business Development Awards. All four of these short lines—Iron Horse Resources Santa Teresa Southern Railroad, Lake State Railway, Pan Am Railways, and R.J. Corman Carolina Lines—put together impressive partnerships with shippers and state and local officials to leverage public funds, secure the necessary permitting and right-of way access, and build community support for significant infrastructure projects. 

Iron Horse Resources Santa Teresa Southern Railroad

All four also understood that the strongest and most useful partnerships are built over time, not overnight. I encourage short lines that want to pursue these expanded funding programs to look at the creative ways these companies laid the groundwork in pursuit of their projects. See aslrra.org/BusDevAwards.

Lake State Railway

The politics surrounding this infrastructure bill are complicated by a simultaneous push for a much larger partisan reconciliation bill that proposes $3.5 trillion in spending on what is being billed as “human infrastructure,” to be mostly offset by a variety of individual and corporate tax increases and collection efforts. While it is possible that the parties will be unable to get to “Yes” on anything and the entire effort falls apart, the physical infrastructure bill has unusual bi-partisan support and has progressed further and faster than anyone predicted at the beginning of the year. 

Pan Am Railways

Let us hope that good sense prevails, and that 2021 marks the beginning of an Infrastructure Decade that involves actually building infrastructure, rather than more Groundhogs emerging to just talk about it. 

ASLRRA’s Annual Conference will be held in Phoenix, Ariz., Nov. 17-19. The conference will have more than 38 education sessions, including sessions focused on Congressional actions and grant funding. Registration information can be found at aslrra.org/ASLRRA2021Conference.

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