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 Post subject: Tennessee suspends short line infrastructure funding
PostPosted: Tue Nov 05, 2013 3:38 pm 
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This story was on Trains Newswire, and basically the state put sales tax in a shortline fund, and now they can no longer collect sales tax on the railroad diesel fuel,due to lawsuit by the Class I's so they halted all projects. The loss of funding poses a risk to five excursion trains and Nashville’s Music City Star commuter train if the host railroads are unable to continue to fund proper track maintenance. The Nashville & Eastern, which hosts the commuter train as well as tourist trains of the Tennessee Central Railway Museum, Three Rivers Rambler, on the Knoxville & Holston River Railroad; Tennessee Valley Railroad, with three excursion routes including the ex-Louisville & Nashville Hiwassee loop line; and Southern Appalachia Railway Museum in Oak Ridge. During the past 35 years, more than 18 new Tennessee short lines were created and more than 800 miles of track were saved from abandonment after Class I railroads deemed them unprofitable.

http://www.tennessean.com/article/20131102/BUSINESS01/311020042/Music-City-Star-small-rail-networks-face-funding-pinch-from-lawsuit

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 Post subject: Re: Tennessee suspends short line infrastructure funding
PostPosted: Tue Nov 05, 2013 9:12 pm 
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Why does it not surprise me CSX is on this? Downright wrong, in my opinion!

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 Post subject: Re: Tennessee suspends short line infrastructure funding
PostPosted: Tue Nov 05, 2013 9:40 pm 

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So could this possibly be the end of the Three Rivers Rambler, or what is exactly happening, could someone put it in layman's terms.


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 Post subject: Re: Tennessee suspends short line infrastructure funding
PostPosted: Tue Nov 05, 2013 9:48 pm 
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southern154 wrote:
So could this possibly be the end of the Three Rivers Rambler, or what is exactly happening, could someone put it in layman's terms.


I maybe wrong, but the way I read it, two Class I's are sueing the state because they are having their diesel fuel taxed @ a 7% rate. The tax was used to save money for Tennessee shortlines, and they froze the money when they were sued; so no shortlines can use that money. Some of these shortlines cannot operate or pay their bills unless this money is unfrozen. CSX and BNSF filed separate but similar cases.

The state might propose a new tax that brings it to the same level as the over-the-highway diesel tax ($0.18/gallon), but the current tax of 7% would actually cost the railroad less, but this is all if I understand this correctly.

If it is not, I'll delete my reply.

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Last edited by CoryClaxon on Wed Nov 06, 2013 9:20 am, edited 1 time in total.

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 Post subject: Re: Tennessee suspends short line infrastructure funding
PostPosted: Tue Nov 05, 2013 11:02 pm 

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Maybe I'm missing something, but the only shortline mentioned by name is the N&E. I didn't see TVRM and Three Rivers mentioned. Perhaps we should wait for word form official representatives of those organizations if they are effected before we jump to conclusions.

Also, to the person damning CSX, if you carefully read the article, this has been an issue with just about every Class I, save for UP, that serves the state of Tennessee.

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 Post subject: Re: Tennessee suspends short line infrastructure funding
PostPosted: Wed Nov 06, 2013 7:52 am 

Joined: Sun May 09, 2010 10:40 am
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I can't speak for anyone other than Southern Appalachia Railway Museum and the Heritage Railroad. The owners of Heritage Railroad which is the freight operation between Oak Ridge and Blair (NS interchange) have committed to keep the track in good condition, and I do not see this having any effect on SARM. I know that CSX and CN both filed suit regarding the tax. I am unaware that NS ever joined those efforts in court. The predecessors of the present day Class One's agreed to this tax years ago as a means to divest themselves of lines that were not profitable. Abandonment would have been impossible on many of those lines due to the presence of one or two customers. The railroads which owned those lines let the track go down and then wanted to abandon them or pawn them off on shortlines. Everyone knew that there was not enough profit in those lines to maintain the track and a shortline operator would be doomed to failure. As a compromise, the tax was created and the grant program began. This ensured that businesses that were located on those lines did not lose rail service and thus saved many jobs. While the railroad is a private for-profit business, it is also a utility much the same as water and electricity, and cutting it off is a death sentence for some businesses. CSX and CN are both backing out of an agreement that their predecessors made and that has been in place for many years. I can't stand an individual or a corporation that does not keep their word and I have no respect anymore for either of those two companies. I have not heard an official stance on any of this from Norfolk Southern. I can also tell you that legislators in the state as well as many business owners are not happy with CSX and CN. I think the Class One's are eventually going to wish they had just kept their mouth shut and paid the tax.


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 Post subject: Re: Tennessee suspends short line infrastructure funding
PostPosted: Wed Nov 06, 2013 8:53 am 

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If you know individuals from any of the mentioned organizations...minus Nashville & Eastern...or if you bother to do fact checking...the true impact of this lawsuit doesn't reach to your favorite Tennessee tourist operations.

Further fact checking would illustrate that the State of Tennessee doesn't fund SARM, TVRM, TRR, etc. None of these organizations are even mentioned in the Nashville article.

Between the investment in the Music City Star and the amazing transformation of the old Tennessee Central into the Nashville & Eastern...you can be sure that there will be a resolution. The Nashville & Eastern is a class act and not a 15mph cast away.


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 Post subject: Re: Tennessee suspends short line infrastructure funding
PostPosted: Wed Nov 06, 2013 9:20 am 
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Apologies, I was not trying to single out TVRM, I thought I had read an article that mentioned their name. I have stern stance against CSX because I don't agree with some of their policies, that was why it didn't surprise me that they were one of the railroads filing a law suit.

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 Post subject: Re: Tennessee suspends short line infrastructure funding
PostPosted: Wed Nov 06, 2013 9:22 am 

Joined: Sun Aug 22, 2004 1:51 pm
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It occurs to me that if the only way you can survive and keep the doors open/trains running is by government funding through taxation, then you're not really "surviving."

I will grant you that there's a difference between a for-profit business and a non-profit philanthropic/charity group, and between commuter rail/Amtrak and intermodal freight. But the message should be the same: don't become so dependent upon governmental graces that you're forced to shut down if that source should somehow disappear.


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 Post subject: Re: Tennessee suspends short line infrastructure funding
PostPosted: Wed Nov 06, 2013 10:35 am 

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Alexander D. Mitchell IV wrote:
It occurs to me that if the only way you can survive and keep the doors open/trains running is by government funding through taxation, then you're not really "surviving."But the message should be the same: don't become so dependent upon governmental graces that you're forced to shut down if that source should somehow disappear.


OK, then how do we justify the taxation and expenditure to provide such things as roads, public waterways and ports, and air traffic control? Why should rail transport be different?

dave

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 Post subject: Re: Tennessee suspends short line infrastructure funding
PostPosted: Wed Nov 06, 2013 11:59 am 

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Dave wrote:
Alexander D. Mitchell IV wrote:
It occurs to me that if the only way you can survive and keep the doors open/trains running is by government funding through taxation, then you're not really "surviving."But the message should be the same: don't become so dependent upon governmental graces that you're forced to shut down if that source should somehow disappear.


OK, then how do we justify the taxation and expenditure to provide such things as roads, public waterways and ports, and air traffic control? Why should rail transport be different?


I'm going to ask that we not "go there." That's a much broader philosophical debate involving whether the rail network nationally should be a nationally-administered infrastructure, as it is in most other countries. Remember, that which giveth can taketh away just as readily. And even in countries with that philosophy--Britain, for example--excursion lines still own their own track.

Just yesterday I read a reasonably good argument for vastly increased localization of highway and transportation funding, arguing against funneling the money to Washington for them to dole back out with lengthy conditions attached. We've already had folks here make the case that government grant money is often not worth the extra strings, hoops and hurdles that come with them for rail preservation projects.

This is simply another reminder: If your existence is dependent upon the good graces of a government landlord (the Department of Parks and Rec, the state Museum Commission, the National Park Service, whatever) or an annual government appropriation, you're not necessarily any better off than your brethren who scrimp and scrape to get by on their own property and wherewithal.


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 Post subject: Re: Tennessee suspends short line infrastructure funding
PostPosted: Wed Nov 06, 2013 1:20 pm 
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I wasn't trying to say that the the tourist trains where in trouble at this very moment. Train's Mag may have sensationalized this a bit, but the point was that many of our museums run excursions over track belonging to short line railroads. At this point if a short line had a washout, bridge failure etc, and didn't have cash on hand to cover it, they can no longer go to the state for help at this point, and then said excursions could be impacted.

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 Post subject: Re: Tennessee suspends short line infrastructure funding
PostPosted: Wed Nov 06, 2013 2:33 pm 

Joined: Wed Feb 02, 2011 9:40 pm
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wilkinsd wrote:
Maybe I'm missing something, but the only shortline mentioned by name is the N&E. I didn't see TVRM and Three Rivers mentioned. Perhaps we should wait for word form official representatives of those organizations if they are effected before we jump to conclusions.

Also, to the person damning CSX, if you carefully read the article, this has been an issue with just about every Class I, save for UP, that serves the state of Tennessee.


UP probably isn't involved because what little fueling they do in the area is done at Marion, on the Arkansas side of the river.

Still, I see no reason why any railroad should pay highway tax on locomotive diesel fuel or diesel fuel for machinery.


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 Post subject: Re: Tennessee suspends short line infrastructure funding
PostPosted: Wed Nov 06, 2013 6:30 pm 

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Because they agreed to do so in order to be permitted to abandon track they no longer wished to maintain, which the state deemed worthy of saving for future use. It's all back in the thread.......

dave

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 Post subject: Re: Tennessee suspends short line infrastructure funding
PostPosted: Wed Nov 06, 2013 9:10 pm 

Joined: Sun Oct 19, 2008 12:58 pm
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So it's okay to undo only half the agreement? How about in order to be relieved of this tax burden they have to reaquire the branch lines, maintain them and provide service on them? That would be the proper way to undo the horrible agreement the prior management made.

Otherwise it's a pretty good scam...agree to do this in exchange for being allowed to do that...then when a few years pass file suit to try to cancel the promise you made.

Steve


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