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Claim federal railway funding while it's still there

BY DI EDITORIAL BOARD | JANUARY 24, 2012 7:20 AM

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The Iowa Legislature and Gov. Terry Branstad should heed the results of an ongoing study on the construction of a passenger rail system connecting local cities to the Chicago area and accept federal funding for the project.

The Federal Railroad Administration last year approved a $782 million funding package, including a $230 million grant for new locomotives and cars for a passenger rail system that would effectively connect every major city in the Midwest — including routes from Iowa City to Chicago via the Quad Cities.

If executed correctly, the project would carry immediate and long-term benefits. The required construction would put thousands of Iowans to work and breathe some much-needed fresh air into the ailing American manufacturing industry. In the long term, the railway would enable more cost- and fuel-efficient travel for tens of millions throughout the Midwest.

But this train has encountered plenty of barriers.

Branstad and the Legislature have withheld support of the project because of a significant statewide subsidy that would be needed to keep it running — millions each year, the administration estimates. Currently, there is not much funding available for transportation. Even without the proposed railway costs to consider, state officials are mulling an 8-cent gas-tax increase to offset the state's road-construction deficit.

An additional 2 cents has the potential to raise $44 million in state revenue — just $6 million shy of Branstad's savings and efficiencies quota. Though higher fuel prices are often viewed in a negative light, it would make sense that a state devoid of highway tolls pay an additional gas tax. Also, the higher the cost of gasoline, the more likely people will opt to board a passenger train, thus offsetting the costs further.

Critics also fear that the project could fall to the same fate as California's high-speed rail system through Los Angeles, which incurred extremely high costs. But the Midwest project is much leaner and has much more potential benefits.

Combating a volatile political and physical landscape, California has seen the projected costs of its railway triple since it was first proposed, according to the Los Angeles Times. The latest plan, released in November, projects the total costs to exceed $98 billion — around $2,669 per California resident. For comparison's sake, Iowa's contribution to the project should cost around $137 million, or approximately $46 per resident.

While state funds are tight, and the current political climate deters this type of spending, the benefits of the rail project could outweigh the costs if it were to be implemented correctly.

According to estimates by the Office of Rail Transportation, nearly 600 jobs per year would be created over four years during design and construction. Even though the unemployment rate in Iowa is one of the nation's lowest at 5.7 percent, the rate in the construction industry is more than double that at 13.3 percent, according to September data from the Associated Builders and Contractors Iowa Chapter. These newly employed workers would contribute millions to the state's economy.

While difficult to predict, there will surely be an increase in economic activity at each of the rail's stops. It is estimated that an increase of $25 million in business activity would occur each year after the completion of the rail. This increase would also contribute to the tax base, which would help fund the project.

Funding could also come from the municipalities that would directly benefit from the creation of the rail service. Some form of a local tax increase or fee in order to help pay for the project could be created through a council vote or ballot initiative. If a municipality declines to contribute funding for the project, the rail would pass through a different town instead. These free-market principles are already employed through the bidding system used by independent contractors throughout the state for other developments.

The project is being currently studied by the Iowa Department of Transportation.

Amanda Martin, the freight and passenger rail policy coordinator for the Office of Rail Transportation, says that the study is largely due to federal regulation.

"We have to look at several routes in the state," she said. "Federal requirements [demand] an evaluation of potential service and ridership and impacts on the environment."

Environmental consciousness has contributed to public demand for the rail service. As with bus and subway systems, passenger rail reduces each passenger's carbon footprint. American locomotive companies such as CSX have developed technologies that sharply cut emissions and still maintain speed and economic efficiency. The resources are available to make the rail viable in all senses of the word.

As Iowa Sen. Matt McCoy, D-Des Moines, pointed out in a letter to Branstad, there is $87 million in federal funding earmarked for the project that could be lost because of delays by Iowa leaders.

Action is needed as soon as possible. The potential benefits from the project are numerous and ought to be considered in today's economic, political, and environmental atmospheres.


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