Economy
Costly Ties That Bind Are Off Track
February 25, 2016 
Short line railroads in Idaho will soon be blowing their horns over a proposed taxpayer funded subsidy that will amount to more than $2 million in federal tax credits which comes out to $14,090 per railroad employee. AND, that is just for Idaho rail companies.
Recently defunct Thunder Mountain Line was a Short line carrier.
Short lines are the the railroads that connect to the big mainline trains like Union Pacific and Burlington Northern. The Boise Valley RR between Nampa and Federal Way in Boise is a short line.
Senator Mike Crapo and Sen. Ron Wyden are behind the scheme to make permanent what has become a regular special break for the railroads. They call it “Building Rail Access for Customers and the Economy–BRACE Act.
The GUARDIAN sees the special interest tax break as Organized Fleecing For Tax Refunds Abusing Citizen Kind–OFF TRACK.
Here is how Crapo spins his special interest tax break:
WASHINGTON – Idaho Senator Mike Crapo and Oregon Senator Ron Wyden today introduced the Building Rail Access for Customers and the Economy, or BRACE Act, which would make permanent a critical tax credit used to repair and upgrade short line railroads.
“Small business freight railroads connect Idaho’s farms to markets across the nation and around the globe. For too long, Congress has taken a short term view of these crucial economic corridors. This measure will allow short line railroads to make long-term plans for infrastructure repairs and upgrades,” said Crapo. “Short lines are a crucial economic link to thousands of railroad customers. This legislation will improve the link between our communities and the national freight railroad network.”
The short line railroad track maintenance credit provides short line and regional railroads a 50 percent tax credit for railroad track maintenance expenses, up to $3,500 per mile of track owned or leased by the railroad. The short line railroads ensure that small manufacturers’ products can get to markets in an efficient and cost-effective manner. Last December, Congress passed the Short line Short Line Railroad Rehabilitation and Investment Act of 2015, which expanded and extended the credit through 2016.
Since 2006 Congress has acted periodically to extend the credit, often retroactively and often almost a year after expiration. This uncertainty causes private investment to decline, limits investments in safety and customer service, and provides uncertainty to businesses, farmers, and employers that cannot be globally competitive without freight rail.
Meeting farm to market demands, nine small freight railroads serve the Idaho economy operating 624 miles of privately owned freight track—40% of all railroad track in the state. These railroads directly employ 155 Idahoans and serve as the crucial link to the dozens of rail-dependent businesses that employ thousands more and would not be competitive without rail access. These railroads serve as the crucial link to the dozens of rail-dependent businesses that employ thousands, and would not be competitive without rail access.
Crapo and Wyden’s bill is also cosponsored by Sens. Jerry Moran, R-Kan., Johnny Isakson, R-Ga., Pat Roberts R-KS, Bob Casey, D-Penn., Charles Schumer, D-N.Y., and Richard Blumenthal, D-Conn.
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Comments & Discussion
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Feb 25, 2016, 9:27 pm
Last I heard, American railroad networks would embarrass a third world country because we have neglected them for so long, in favor of trucks. Rail is far more efficient than trucks at moving freight, so improving the railroads before gas and diesel prices take another moonshot is probably a very good use of Federal money. I’d much rather see our $$ spent on the railroads than exotic war toys, or the fantasy of going to Mars. I think this is just some forward looking folks preparing America for the end of cheap oil.
Feb 25, 2016, 10:24 pm
The railroad you call the Treasure Valley Railroad is actually called the Boise Valley Railroad.
To the best of my knowledge they have never done any track repair or upgrade and one sometimes wonders.
Source: Track is directly behind my backyard in Nampa.
EDITOR NOTE: Thanks, we fixed it.
Feb 26, 2016, 9:13 am
What you are not realizing is the subsidies trucking companies get in the use of our highways and infrastructure. Railroads are solely responsible for the maintenance of their rail lines which can get very expensive. Once these lines and track go out of business, it is almost impossible to justify bringing them up to operating condition. If we allow these small railroads to go out of business it will force more product on to the highways and increase pressure to allow even heavier loads. Rail is a very efficient way to move heavy freight.Most of us don’t have a clue to how freight moves over rail. The majority of freight trains are running during the night as day light hours are used to maintain the rails.
Feb 26, 2016, 12:19 pm
Instead of tax breaks that enter a companies balance sheet and can be directed as the company wants, maybe the government should own all the rail lines, maintain the lines and lease use of the lines to the railroads. The government can increase or decrease the lease rate to accommodate any needed incentive to keep lines running and to try to recoup as much of the maintenance costs as the economics of the line will provide.
I suggest that halfheartedly, I struggle to think of a federal program where I think it is run efficiently and effectively.
Feb 26, 2016, 12:24 pm
Fast, long distance rail has many advantages over trucks. Once upon a time I remember BNRR losing a new Caterpillar Tractor on a flat car for 7 weeks somewhere between IL and ND… They parked it in a bad neighborhood and it was shot at by the gangs. Thankfully those days are gone. Today the mainline rail companies have greatly improved their logistics with computers, modular loads, and by shedding low yielding side tracks. I’ve seen UPS and FedEx trailers on express freight trains. A large portion of the recently extracted North Dakota oil is shipped by rail. Coal is exclusively shipped by rail. Passenger rail for short to medium distance could beat airlines if done right.
However, rail cannot hold a candle to trucking and buses for small loads or short routes. The newest trucks are beating 10mpg with 80,000lbs loads. They have NatGas fueled trucks too.
I suggest turning the short-line RRs into nature trails so as never to spend a dime on them ever again. Most of the short lines were built before we had reliable roads / trucks. Someday the rail beds could be reclaimed for high-speed passenger rail perhaps… but no need to preserve short freight rail unless there’s some military strategic value.
I mention the military because rail is how they quickly move 200 tanks at a time to the ports. Look at the Army tank depot hidden in the desert to the SE of Boise. N43.296977, W116.057967. Without rail the heavy armor of fast reaction forces will need to be located at the port cities or in forward deployed storage. Note, this depot is very near the UPRR mainline.
Both the rail and road infrastructure in the USA is literally ready to fall down. It’s disgusting and on par with the failed water system in Flint, MI. It upsets me that our elected officials pee money away on stuff like this.
Oh, one more thing; modern trains still start fires… all that steel and friction… and embers from big diesels. They actually follow trains around with a wild land fire truck to put out the fires. Far better than the old steam trains though.
Feb 26, 2016, 12:32 pm
Yeah. Crappy Crapo surfaces every five years as re-election draws nigh. I guess his days otherwise are spent with wine (actually vodka) and who knows if he sings or not. He’s never around enough for us to know and he certainly is never in the office to take phone calls.
Feb 26, 2016, 9:30 pm
PORK BELLIES!
Or, Crapo and Congress could instead focus on subsidizing a high-speed rail from coast to coast…. you know, like the rest of the developed world has available to them.
Imagine shipping light-weight cargo and people on a bullet train from Silicon Valley to Chicago and New York INSTEAD of diesel.
Feb 26, 2016, 9:44 pm
Dave Kangas, if what you write is true, that rail is very efficient, then it should not need subsidies and will always prevail over truck, barges, and courier pigeon.
Rail over Roads, You mention the need for short lines as if “without rail the fast reaction forces will need to be forward deployed”.
Hmmm so shall we just ignore all the actual Marine forces already forward deployed24/7/365? Oh wait, you think Gowen’s tanks are our “Fast reaction forces”… okay, now I understand.
In any case, I would rather see tax dollars develop/improve rail from Lewiston to the Portland port for replacing Lewiston’s shipping barges. Now that’s worth some tax dollars.
Oh wait,,,, did someone say rail is more efficient and shouldn’t need subsidies? 🙂
Feb 27, 2016, 8:14 am
Easterner – You need to do a little research before commenting…
“…Trains are far more energy-efficient than trucks — and they always will be…”
“…trains can move a ton of freight more than 450 miles on a gallon of fuel. What they don’t tell you is that, in 1980, that distance was only 235 miles. While freight trains have doubled fuel efficiency over the past few decades, tractor-trailers remain nearly as inefficient as they were in the 1970s. The average semi got 5.6 miles per gallon in 1973, and today that has improved to just 6.5 miles. (The American Trucking Association did not respond to a request for comment.)…”
https://www.washingtonpost.com/national/health-science/lets-make-an-effort-to-move-more-freight-by-rail-and-less-by-road-trains-are-more-efficient/2014/03/03/d1947278-9d90-11e3-9ba6-800d1192d08b_story.html
Feb 27, 2016, 12:38 pm
Europe did passenger rail right, but they still have a thriving short, medium-haul airline business. So don’t be so sure about the superiority of high speed passenger rail… it’s incredibly expensive. And urban passenger rail has a nasty problem of frequent collisions with people and cars.
Mainline freight-rail in the USA is second to none. Get a few feet off the mainline and it’s a waste of money though… close most of the spurs and use trucks.
((Eastie, read me again. Military, There are forward deployed units all over the world… often on ships (my god how boring). For sustained conflict or very large conflict, the local armor is moved to the ports. If you look at Gowen and places like it, they have huge expansion capacity as a rear area assembly and training point. It is outdated pre-ICBM era planning, but that’s still the Army thinking. It’s why Gowen has so many empty buildings and vast space… and a rail spur. So, just a few spurs are needed for t military nationwide at places like Gowen and other tank depots. The remaining short-line logging and farm rail is not needed any longer. Rip it up so politicos won’t waste money on it.))
Feb 27, 2016, 5:49 pm
I personally have witnessed rail, ballast and tie upgrades on the BVR lines between Yakima Rd and Franklin Rd area. Back in the early 2000s, about 20% of the rail between Gowen Rd and Nampa needed to be brought up to FRA Class 3 standards for a passenger commuter to run. That 20% are in segments that I saw being repaired. I assume that is what they were attending to.
Rail is the backbone of long haul heavy transport. That is rail’s best efficiency. If established, even short haul rail can compete vs trucks. Trucks are best at local delivery and short haul or specialty long haul. Rail shouldn’t need subsidies if they are efficient, neither should trucks or air freight. But, they ALL get subsidies. We all like our cars because they give us independence, but does that mean they are efficient when we take trips to the store for one item?
Remember, markets are and have been distorted for a very long time. Does the banking/credit-debt industry look efficient? Look at Gold and Silver and tell me if that market is being manipulated or not.