Private-sector tax credits for rails will create jobs, cut costs, restore efficiency
FOR IMMEDIATE RELEASE — March 2, 2011
All Aboard Ohio Executive Director
CLEVELAND – The U.S. Government Accountability Office (GAO), a nonpartisan research body, made public an insightful report showing that greater use of fuel-efficient rail and water transportation modes is discouraged by government policies that favor less-fuel efficient trucking.
The report, “Surface Freight Transportation: A Comparison of the Costs of Road, Rail, and Waterways Freight Shipments That Are Not Passed on to Consumers” is timely because the U.S. Congress and the Ohio General Assembly are now debating their respective multi-year transportation budgets. The GAO report says:
“If government policy gives one mode a cost advantage over another, by, for example, not recouping all the costs of that mode’s use of infrastructure, then shipping prices and customers’ use of freight modes can be distorted, reducing the overall efficiency of the nation’s economy.”
One fact was most troubling: “GAO estimates that freight trucking costs that were not passed on to consumers were at least 6 times greater than rail costs.”
The 67-page report, including a highlights page, is available at:
GAO suggested “policy changes that align prices with marginal costs on a shipment-by-shipment basis would provide the greatest economic benefit” or “charging user fees based on average costs, subsidizing more efficient alternatives, or broadly applying safety or emissions regulations – can change the overall distribution of freight across modes.”
All Aboard Ohio testified Feb. 19 at a U.S. House Transportation & Infrastructure Committee field hearing in Columbus that the upcoming renewal of the federal surface transportation law should include tax credits for railroad capital investments (including federally mandated Positive Train Control installations on railroad-owned properties) and for right-of-way operating costs that their trucking competitors do not pay on government-owned highways:
• Dispatching and traffic management;
• Liability insurance;
• Policing and security;
• Public-benefit costs (eg: corridor preservation, hosting passenger rail).
Tax credits will accelerate transportation project delivery, reduce government bureaucracy and increase private-sector investment in transportation projects. All Aboard Ohio’s testimony and a summary is available at:
“All Aboard Ohio is concerned about public policies that affect freight rail because a healthy freight rail system that is able to compete for high-value, time-sensitive cargo is more compatible with fast passenger rail services,” said All Aboard Ohio President Bill Hutchison. “Indeed, before all levels of government got involved in building, owning and subsidizing highways, time-sensitive freight and passenger services coexisted on the same tracks – sometimes on the same trains – to a far greater extent than today.
“It’s long overdue to reintroduce the free market to our nation’s transportation system for the benefit of consumers who are hurting from rising costs of food, fuel and finished goods. The federal surface transportation law renewal is a great time to do this,” Hutchison concluded.