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Identify Appropriate Federal Funding Mechanisms for Rail Infrastructure

Background:

• Projected growth in both domestic and foreign trade will fuel increased demand for freight movement. Measured in tons, freight demand will almost double from 16 billion tons today to 31.4 billion tons in 2035, and when looked at in ton-miles, freight will increase nearly two-fold from 6 trillion ton-miles today to 11 trillion by 2035. With truck volumes projected to double by 2035, and worsening congestion throughout the system, the inability to move goods efficiently to market will negatively impact U.S. competitiveness. Freight rail offers an alternative, but a lack of investment capital affects the railroads’ ability to absorb a larger share of the growing freight market.

Íæż½ã½ã Message:

• Freight Rail is Capital Intensive and Privately Funded. Since 1980 the railroads have invested $420 billion in private investment into the rail lines, investing 40 percent of their revenue to improve and maintain their infrastructure and equipment.
• Establish Federal Funding Source to Supplement Private Investment in Freight Rail Infrastructure. The railroads do not receive federal funding to meet there growing infrastructure needs. User-fees paid for by railroads and shippers could ensure the necessary capital to continue investment in infrastructure. Expanded rail infrastructure is necessary to reduce congestion on the nation’s highways and meet the projected freight growth in the next 10 years.
• Oppose Highway Trust Fund Revenue Support for Rail Infrastructure. The Highway Trust Fund was established to improve the nation’s surface transportation system with revenue provided by highway users. Highway Trust Fund revenue should be used for rail infrastructure only to improve intermodal connectors to freight rail facilities, highway/railway grade crossings, and overpass or bridge work.
• Create Tax Credits for Rail Infrastructure Investment. Creating tax credits for capital expenditures in freight rail infrastructure would benefit taxpayers by giving the railroads, shippers, and others incentives to lay new track. Also, putting the railroads on equal footing with trucking companies and barges by allowing railroads to expense their infrastructure spending would increase their motive to invest.