The Americans for Modern Transportation (AMT) on Tuesday lashed out against the short line railroad industry’s attempts to obtain further tax breaks.
The AMT launched in January 2017 and includes nearly 30 members, including shippers, carriers and retailers.
The coalition’s grievance came after the American Short Line and Regional Railroad Association (ASLRRA) on July 26 released an economic impact report that pointed out how the short line industry contributes to the U.S. economy. There were an estimated 603 short line railroads operating in the United States as of 2016, according to the report. These short lines collectively operate 47,500 route miles, or 29 percent, of the nation’s rail network.
Prepared by the consulting firm PricewaterhouseCoopers, the report also argued why the short line tax credit, also referred to by tax code reference 45G, should be made permanent.
The section 45G credit provides 50 cents for every dollar spent on infrastructure improvement, capped at $3,500 per mile of track.
Originally enacted in 2004, the credit has been extended six times, most recently by the Bipartisan Budget Act of 2018, which extended it retroactively through 2017.
Data from the Federal Railroad Administration illustrates that since the credit was enacted, train derailments on short line rails have declined by 50 percent, the economic impact report said. “Short line railroad safety performance is now approaching that of the longer haul Class I railroads and has improved at a faster rate than Class I railroads over the period the 45G credit has been in existence,” according to the report.
Additionally, the report said that according to data provided by the Railway Tie Association, railway tie purchases by the short line industry have grown at a much faster rate since the implementation of the 45G tax credit, increasing at an annual rate of 6.3 percent over the 2004-2016 period, compared to an annual growth rate of 0.1 percent over the 1988-2004 period.
“The ASLRRA and their recent economic impact report states that the short line railroad industry is currently healthy and even dominant in some parts of the country,” AMT Executive Director Randy Mullett said in a press release issued Tuesday. “This is due in no small part to special interest tax breaks that have been available to their industry over the years.
“Unfortunately, the ASLRRA has determined that receiving this handout from the taxpayers is not good enough anymore, and they are now pressuring Congress to block common-sense productivity gains being sought by the LTL industry,” Mullett added. “It is time to move forward on meaningful policy changes that could bring about productivity gains such as twin 33-foot trailers that would reduce congestion on our roads, improve the safety for travelers, lower costs for consumers and businesses, decrease the amount of wear and tear on roads and bridges, benefit the overall economy and bring about meaningful environmental protections.”
The ASLRRA is against initiatives to increase truck size or weight, saying that heavier trucks present public safety issues and increase the need for road and bridge maintenance.
However, a study commissioned in 2017 by the AMT found that increasing the national twin-trailer standard to 33 feet would increase each trailer’s volume capacity by 18.6 percent without exceeding the current federal weight limit. The national twin-trailer standard is currently 28 feet.
Typically, twin 28-foot trailer configurations fill up by cargo volume well before they reach the maximum weight limit, according to the study, which was conducted by Ronald Knipling, who has more than three decades of experience as a traffic safety researcher.
“Congress and the American public should not let the short line railroads continue to benefit from targeted tax breaks at the same time that they stand in the way of a strong and competitive intermodal transportation system,” Mullett said.
Although the 45G tax credit expired on Dec. 31, bills have been introduced in both the House and Senate to extend the credit on a permanent basis. The House Bill, H.R. 721, Building Rail Access for Customers and the Economy Act, was introduced Jan. 30, 2017, by Rep. Lynn Jenkins, R-Kan., and had 261 co-sponsors as of Tuesday. The Senate bill, S.407, was introduced on Feb. 16, 2017, by Sen. Mike Crapo, R-Idaho, and had 56 cosponsors as of Tuesday.