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October 2012





Part 1: Rail industry stakeholders weigh in on 2012 election issues

Part 2: Transportation infrastructure investment in an era of partisanship

Part 3: Is federal funding for Amtrak at stake?

Part 4: To what extent is rail transportation investment at risk?

Part 5: Freight-rail regulation: Will re-reg resurface?

Part 6: Truck size and weight will continue to be an issue for railroads

Part 7 Online Only: Election 2012: Rail experts sound off on funding, retirement, rules, policies and taxes

High-Speed Rail Article
Election 2012: Rail experts sound off on funding, retirement, rules, policies and taxes



High-Speed Rail
By Progressive Railroading Staff

Transportation topics aren’t getting much play on the national campaign trail in this electon 2012, but that doesn't mean the results of November's presidential, congressional and even local elections won’t have a significant impact on freight- and passenger railroads and transit systems.

When Progressive Railroading staff asked a cross-section of transportation industry leaders what's at stake for their industry in this election year, a host of big-picture trends emerged, which are outlined in the magazine's October cover story. But, they also raised some specific regulatory and funding issues, some of which have been swirling throughout President Barack Obama's term or longer.

A future for high-speed rail?
High-speed rail turned into a hot-button issue after President Obama included billions for it in the stimulus bill in 2009. That doesn't necessarily mean high-speed rail funding will be completely zeroed out during the next several years. Chuck Baker, for one, could see Congress appropriating about $100 million annually for the program just to keep some of the projects going.

Even without near-term funding, high-speed rail still has a promising future, believes Baker, a partner with rail lobbying firm Chambers, Conlon & Hartwell L.L.C. and president of the National Railroad Construction and Maintenance Association (NRC). States still are putting the $10.1 billion that’s been allocated under the High-Speed Intercity Passenger Rail program to work, and as projects are completed, "we'll have some great things to show for it," he says.

"Eventually the momentum will reform around passenger-rail investments and perhaps it can be done next time in a way that won’t stir such partisan sniping about it," says Baker. "I think the case for high-speed and intercity passenger rail is compelling, but the near term looks bleak."

On the other hand, Association for Public Transportation (APT) President Richard Arena sees a scenario where high-speed rail could actually flourish under a Republican administration.

"For whatever reason, rail — especially high-speed rail — is now ObamaRail, like ObamaCare. It's not going to get many Republican votes," he says. "But there are some Republicans who like rail, and if you have a situation where you have a Republican president and Republican majority, and someone says, 'Let's do a high-speed rail program," they would get a majority of Democratic votes, which might be enough to get a bill passed."

Transit funding on the ballot
Voters in many cities will consider more than who will be the next U.S. president, senator or congressman. Also on Nov. 6, a good number of local, "big-ticket" transit-related ballot measures will be decided by voters in communities around the country — an indication of public transit's importance at the local level, says Art Guzzetti.

"We think we [transit] will see some victories in November," says Art Guzzetti, vice president of policy at the American Public Transportation Association (APTA), which has observed the trend in recent years of voters deciding in favor of public investment in transportation infrastructure.

"The national trend can be measured by how people have been voting in general, and this year, the answer is unbelievable," Guzzetti says. "There have been 37 questions so far this year and 33 have passed."

Among the four that failed to pass was in Atlanta, where voters were asked in an election this summer to support the creation of a 1 percent sales tax that would have helped pay for transportation projects, including rail projects at the Metropolitan Atlanta Rapid Transit Authority.

Guzzetti doesn't believe Atlanta was a bellwether for transit ballot measures in other areas around the country.

"Atlanta was a local matter," Guzzetti says. "There was a very unique set of circumstances that led to that 'No' vote."

Los Angeles County is among the areas asking voters to support additional tax spending on transportation. Voters there will be asked to extend the existing Measure R sales tax for 30 years beyond its 2039 expiration. The proposed extension not only would continue funding for the Los Angeles County Metropolitan Transportation Authority (LACMTA) operations, maintenance and other regional projects, it also provide additional funds to enable the agency to sell bonds and accelerate several transit and highway projects, according to LACMTA Deputy Chief Executive Officer Paul Taylor.

Rail retirement benefits on the line
Frank Wilner, spokesperson for the United Transportation Union (UTU), listed a number of concerns should Republican Mitt Romney and running mate Paul Ryan win the presidential election. At the top of the union's list: the Railroad Retirement system’s future.

The Ryan budget plan calls for major changes to the retirement system for railroad workers, which UTU, the Brotherhood of Locomotive Engineers and Trainmen (BLET) and other rail-related organizations have indicated would have a dramatic impact.

Ryan's budget, which the House passed earlier this year and which Romney has said he would support, would conform Tier 1 railroad retirement benefits to Social Security benefits.

According to a recent summary on the BLET website, the Ryan budget would, among other things: eliminate the so-called '60/30' provision that allowed railroad workers to retire with full benefits at age 60 after 30 years of service; eliminate the system's occupational disability program; and increase the minimum retirement age for railroad employees to 62 and reduce benefits. Ryan and his plan’s supporters have said the railroad retirement benefits are supposed to mimic Social Security. Implementing the Ryan budget plan would bring the Railroad Retirement system in line with Social Security, which would amount to an estimated savings to taxpayers of $2 billion, they've said.

However, Wilner, union leaders and others who support the Railroad Retirement system as it is currently say that the Ryan budget would not save taxpayers any money because the system is funded by railroad retirees and their employers.

Also concerned about the Ryan plan’s proposed changes to the Railroad Retirement system was the Association of American Railroads (AAR), which sent a letter to Ryan in March when the House was considering the Ryan budget plan.

"Railroad retirement benefits — and railroad retirement taxes — were fully addressed by Congress during debate on the Railroad Retirement and Survivors’ Improvement Act of 2001,” said the AAR's letter, adding that the bipartisan railroad retirement legislation had “strong support of both railway labor and the railroads themselves."

"Conforming Tier 1 benefits to Social Security would not represent a savings to the federal government," the letter continued. “Under current law, the Railroad Retirement Tier 2 account — funded by contributions from railroads and rail employees — absorbs any costs by which railroad retirement benefits exceed what Social Security would pay."

In addition to the election’s potential impact on railroad retirement system, the UTU also is concerned with the Ryan plan's proposed changes to Medicare; Republican opposition to collective bargaining rights; and Republican support for the end of Amtrak's federal funding, says Wilner.

Despite UTU's "significant concerns" about the Republican positions on those issues, the UTU is bipartisan. Yes, it endorsed Obama-Biden for a second term. But it also is supporting 25 Republicans in congressional elections, he says.

"We always say the carriers have more friends than the Republican Party, and labor has more friends than the Democratic Party," Wilner says. “There are a lot of Republicans who are not anti-labor and we do support those Republican candidates. We are very energetic on behalf of any candidate, regardless of political affiliation, who understands and advances the issues that are important to UTU members."

More at stake
A few additional issues that transportation industry representatives identified as being important in the next presidential and congressional terms include:

• National freight policy. MAP-21, the two-year surface transportation funding bill that Congress passed in late July, calls for the creation of a new national freight policy. It requires the U.S. Department of Transportation to establish a two-part freight network, one being the "primary" network and the other, "rural." While the primary network will include existing roads that are critical to freight transport, the law does not mention rail — though the department can add it to the network and policy if it wanted to, says Anne Canby, director of OneRail Coalition, which advocates for freight- and passenger-rail policies. Freight-rail leaders hope the nation’s next transportation secretary will include them in the policy-making process, she adds.

"Freight policy in the MAP-21 bill is a critically important opportunity for the railroads to engage, and the railroads are interested in doing that," says Canby. "It's hard for me to understand how you can develop a national freight policy without the railroads.”

• Energy policy. The United States needs an energy policy that supports coal and fracking of natural gas, both of which are important to regionals and short lines, as well as Class Is, says Genesee & Wyoming Inc. Vice President of Government and Industry Affairs Jerry Vest.

"It's clear that there’s a need to develop a better energy policy," he says.

• Positive train control (PTC). For CSX Corp., lobbying for an extension to the federally mandated PTC deadline beyond 2015's end will be a top priority next year. An extension "has sympathy” on Capitol Hill, and the Federal Railroad Administration (FRA) in late August sent a PTC implementation report to Congress that stated railroads likely would not be able to completely install the technology by Dec. 31, 2015, says CSX VP of Federal Legislation Anne Reinke.

"I think a clean three-year extension would be best. We want to get it in a vehicle next year, but we’re not sure what the vehicle will be," she says, adding that a reworking or reauthorization of the Passenger Rail Investment and Improvement Act, which was enacted in 2008, is a possibility.

•Corporate tax reform. CSX also will be pushing for corporate tax reform next year, says Reinke. Railroads are the nation's highest effective taxpayers and have no overseas operations that could provide certain tax breaks, she says. CSX has joined the RATE (Reforming America's Taxes Equitably) Coalition, which seeks to reform U.S. tax code to make it fairer and simpler, and reduce the corporate income tax rate to make it more competitive with the nation's major trading partners. Other RATE Coalition members include AAR, AT&T, Boeing, FedEx, Lockheed Martin, National Retail Federation, United Parcel Service and Verizon Communications Inc.

"We haven't developed a position yet, but we're forming it," says Reinke.

• Hours-of-service rules. The Federal Motor Carrier Safety Administration's (FCMSA) hours-of-service rules are good on the surface, but they impact the availability of drivers going to and from ports and terminals, causing driver shortages, says Intermodal Association of North America President and CEO Joni Casey. In addition, the FMCSA has established safety ratings that rate motor carriers’ risk of an accident on a bell curve, "which may or may not reflect actual performance," says Casey. “It impacts intermodal equipment providers. We want an equitable assessment of motor carriers and intermodal equip providers," she says, adding that the FMCSA is tweaking the ratings per comments received from stakeholders.

Meanwhile, short lines are working on an hours-of-service waiver structure through the FRA, and currently are targeting the midnight-to-6 a.m. shift, says Richard Timmons, president of the American Short Line and Regional Railroad Association (ASLRRA).

"It's a Class I deal and short lines are caught up in it. Fatigue is not an issue for short lines because it's scheduled work with no weekends or overnight hours, for the most part,” he says. "It's a paperwork nightmare."

It would help short lines if the feds provided some sort of exceptions to hours-of-service rules, Timmons believes.
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