SCHUMER ANNOUNCES THAT, AFTER HIS PUSH, SHORT-LINE RAILWAY TAX CREDIT HAS PASSED OUT OF SENATE FINANCE COMMITTEE – NOW THAT FIRST BIG HURDLE IS CROSSED, SCHUMER URGES PASSAGE IN FULL SENATE
Upstate Railroads Have Long Relied on Short-Line Tax Credit to Complete Necessary Track Maintenance and Upgrades and Make Capital Improvements to Infrastructure – Schumer Visited Short-Line Railways In Cooperstown, Saratoga & Canandaigua to Push for Extension of Credit
Schumer Pushed to Include the Tax Credit in the Tax Extenders Bill that Passed out of the Finance Committee Today – Now Urges Full Senate to Quickly Take Up and Pass Tax Extenders Package
Schumer: Short-Line Rail is the Engine of Many Upstate Local Economies and Needs Fed Tax Credit – Infrastructure Improvements Will Speed Commerce, Help Local Businesses that Transport Goods by Rail, and Grow the Economy
Last week, U.S. Senator Charles E. Schumer announced that his effort to restore and extend for two years a crucial tax credit for short-line railroads has crossed the first big hurdle by passing out of the Senate Finance Committee as a part of the EXPIRE Act, which reinstates a package of expired tax provisions. Now that the tax credit was successfully included in the bill that passed out of the Senate Finance Committee today, Schumer is urging the full Senate to quickly take up and pass the full package. Schumer pointed to the New York Susquehanna and Western Railway, the Saratoga and North Creek Railroad, and the Finger Lakes Railway as examples of short-line rail networks in New York that have pending infrastructure projects that would greatly benefit from the tax credit.
Schumer has long advocated for the extension of the short-line rail tax credit, which helps railways undertake infrastructure improvements. The tax credit is valued at fifty percent of the cost of track maintenance and improvements, up to $3,500 per mile. Schumer highlighted that over 50% of rail track in New York is short-line rail. Approximately 550 short line railroads preserve nearly 50,000 miles of track across the country. The short-line rail industry in New York and across the country relies on this credit to maintain their tracks, and make improvements that help area businesses transport their goods to market faster, or attract more riders to the commuter rail lines that use their tracks.
“Including this tax credit for short-line railways in the tax extenders bill means we’ve crossed the first major hurdle in restoring and extending the provision. Short-line railways support commuter rail lines, connect our local businesses with major distribution hubs, and help grow our economy from the ground up. Providing these railways with this tax credit simply makes sense. It will keep our tracks safe and up-to-date, and allow railroads to take on exciting new projects that will benefit railways and local businesses. I urge my colleagues in the Senate to swiftly pass this bill to reinstate the credit and get our short-line railways chugging along on new infrastructure improvements,” said Schumer.
Schumer supported the extension of the short-line rail credit as a cosponsor of the Short Line Railroad Rehabilitation and Investment Act of 2013. Schumer explained that the tax credit, if extended until 2016, would fund capital improvement projects along New York’s short-line railways. Schumer pointed to three railways as an example of the type of improvements these credits have funded in the past, and could fund in the future. Schumer visited each of these railways to push for the restoration and extension of the tax credit for two years.
Finger Lakes Railway:
Big employers in Ontario County, like the 750-employee Pactiv Plant, rely on the Finger Lakes Railway to transport in raw materials and others rely on it to ship out finished goods to interstate railways, which then take their products to market. Unfortunately, because of a missing 11.5-mile railroad link, cargo shipped to and from western destinations on the Finger Lakes Railway must now be diverted 380 miles to as far as Selkirk, NY in the Capitol Region in order to connect with the main CSX line. Currently more than 5,600 rail cars a year are forced to use this 380 mile detour, which adds an extra two days to the route and an estimated $150 per rail car for the average Finger Lakes-based customer, which amounts to over $840,000 in additional costs per year for Finger Lakes regional employers. The Finger Lakes Railway is now the process of negotiating with Norfolk Southern railroad to acquire an existing 11.5 mile stretch of track – the “Corning Secondary Line” – that would give Finger Lakes Railway a new direct connection to the CSX mainline in Lyons, NY. The line has been abandoned for several years and is in need of repairs, and the short-line tax credit would extend federal capital financing for the infrastructure repairs and upgrades the Finger Lakes Railway needs to quickly bring this new 11.5 mile railroad line back into operation once it acquires the line from Norfolk Southern.
Saratoga and North Creek Railroad:
Schumer explained that the Saratoga and North Creek railway has been a success for tourism and is looking to upgrade rail infrastructure to increase ridership for passenger service, as well as begin hauling minerals out of two Adirondack mines. Currently, the rail line serves approximately 50,000 passengers per year, bringing leaf peepers, skiers, and holiday travelers alike from Saratoga through Thurman and into Warren County. The short-line tax credit would aid efforts to increase that ridership by enabling track maintenance along the current passenger route, and would also aid in the effort to begin freight service in the Adirondacks. Specifically, S&NC has obtained about $300,000 worth of these tax credits for maintenance between Saratoga and North Creek for the past two years, and would seek to utilize an additional $300,000 in credits to help make improvements to both the passenger and freight rail portions of the S&NC rail-line. The S&NC, and its parent company Iowa Pacific, own the 30-mile stretch of tracks from North Creek to Tahawus. This line ceased operation almost 25 years ago and is in need of significant repair. In addition, the line will also serve the Barton garnet mine in North River. Establishing this freight business, Schumer explained, will mean business continues along the line even when tourism is not at its peak, and allow the entire railroad to flourish. Schumer will fight for the extension of this tax credit to pass the full Senate, to help fund efforts in 2014 to upgrade the line from North Creek to Tahawus to haul these tailings.
New York Susquehanna and Western Railway:
Over the course of the life of the tax credit, New York Susquehanna and Western has used roughly $7.5 million in tax credits to take on about $15 million dollars in track upgrades that would’ve been difficult to undertake without the presence of the Short line Rail tax credit. The tax credits were used to replace railroad ties, solidify the surface under the railroad, and make other general maintenance improvements to the railroad. The tax credit allows New York Susquehanna and Western not only to improve the efficiency of travel their railroad, but also allows them to maintain their good safety record. The NYSW believes it would undertake an additional $2.5-3 million in maintenance and upgrades if the tax credit were extended. Schumer noted that the NYSW 400 mile track is a particularly long stretch of track for a short line railroad, which puts track maintenance and upkeep at a premium. The tax credit would allow the NYSW to undertake more projects on more miles of track than without the credit.