House subcommittee hearing examines federal rail funding flaws
5/8/2025
By Julie Sneider, Senior Editor
Improving the efficiency and effectiveness of federal funding assistance that helps ensure safe and reliable freight- and passenger-rail systems was the subject of a hearing held this week by the House Subcommittee on Railroads, Pipelines and Hazardous Materials.
Titled “America Builds: Improving the Efficiency and Effectiveness of Federal Rail Assistance,” the hearing was called on May 6 as Congress begins preparations for the surface transportation reauthorization legislation that will succeed the Infrastructure and Investment Jobs Act (IIJA) that expires on Sept. 30, 2026. Signed by President Joe Biden in November 2021, the IIJA included $102 billion in total funding for rail programs, including $66 billion from advanced appropriations and $36 billion in authorized funding.
Chaired by U.S. Rep. Daniel Webster (R-Fla.), the subcommittee heard testimony from:
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Matthew Dietrich, executive director of the Ohio Rail Development Commission (ORDC);
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Garrett Eucalitto, commissioner of the Connecticut Department of Transportation and president of the American Association of State Highway and Transportation Officials (AASHTO);
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Kevin Hicks, principal and senior vice president of rail and freight-market sector leader at Gannett Fleming Transystems (now known as GFT), and a board director for the National Railroad Construction & Maintenance Association (NRC); and
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Kristin Bevil, general counsel and chief legal officer at Pinsly Railroad Co., and an executive board member of the American Short Line and Regional Railroad Administration (ASLRRA).
The testifiers all praised the IIJA for its historic level of funding for programs that help pay for new or rehabbed railroad infrastructure, improve safety for railroads and the communities they serve, and expand rail service to reach more shippers and passengers. They also encouraged subcommittee members to support funding for the U.S. Department of Transportation’s rail programs at levels similar to what Congress approved under the IIJA.
Grants issued through such programs as the Railroad Crossing Elimination (RCE) and Consolidated Rail Infrastructure and Safety Investment (CRISI) programs are critical to improving freight-rail infrastructure and safety, said the ORDC’s Dietrich.
“Without these programs, many of the 24 projects that we have received funding for would not have happened,” he said.
Bevil stressed how important the CRISI program is to the short-line industry.
“Today, there are 600 short line railroads that manage a third of the freight-rail network. Short lines operate in 49 states, support 478,000 jobs and produce $56 billion added to the economy,” she stated. “And yet, short lines earn only about 6% of the freight-rail industry’s total revenue. They are small businesses that are critical to the communities in this nation.”
Although short lines invest up to a third of their own revenue in infrastructure maintenance, the backlog of short-line projects to upgrade rail and bridges to modern standards totals about $12 billion, Bevil said.
The ASLRRA’s top priority in the next surface transportation reauthorization is “predictable and robust” funding for CRISI, she told the lawmakers.
“It’s been transformational,” she said, noting that CRISI is the only federal grant program that short lines can apply to directly. “Short lines and regionals use those grant dollars to pay for infrastructure projects that improve rail safety, improve service to customers and promote economic development in rural communities.”
Of the 240 CRISI grants awarded to date, over $2.7 billion has been allocated for projects that benefited short lines. In the recent combined round of funding for the 2023-24 fiscal years, short lines received 81 out of 122 CRISI awards, providing more than $1.2 billion in funding. The awards were matched by local and private investments that ranged from 20% to 80%.
AASHTO’S Eucalitto said one of the IIJA’s key successes was the inclusion of a dedicated rail title with significant levels of authorized funding, and recommended that lawmakers do the same when they draft the reauthorization bill.
“These landmark funding levels have allowed state DOTs and freight railroads to actualize years of rail planning,” said Eucalitto. “The beneficial economic and social impacts of these investments highlight the need for continued federal support for rail program funding.”
Ideas for improvements
Those testifying also offered suggestions for streamlining the Federal Railroad Administration’s (FRA) funding application, project acceptance and disbursement process to expedite project timelines and minimize delays. It tends to take a long time for the FRA to approve environmental and other regulatory compliance, reach grant agreements and finally begin disbursing the funds. Many times, it takes years to complete the entire process before the funds are disbursed, several testifiers said.
The ORDC’s Dietrich focused on the RCE program as an example of a potential improvement. A new program under the IIJA, RCE funds large grade separation projects that involve working with multiple agencies, such as both the FRA and Federal Highway Administration (FHWA). Dietrich mentioned several ways that projects seeking funding through that program could be streamlined and still meet all federal requirements. Among them: enabling the FRA to accept projects already under development at other agencies, such as the FHWA or at state DOTs, when reviewing RCE applications; streamline the grant documentation process; and prequalify states to administer the grant funds.
“Please take these comments as constructive criticism,” Dietrich told subcommittee members. “We want to work with all of you and with our FRA colleagues to make this program better.”
Bevil said there is room for improving CRISI, as well.
“The time from award announcement to obligation and funding is simply too long,” she said. “Delays can cause overruns and costs, and our customers lose opportunities when we have to wait. Good options to speed up the process include batch processing of National Environmental Policy Act categorical exclusions, more aggressive use of pre-award authority, or setting deadlines for agency processing.”
Hicks, who spoke on behalf of the NRC, recommended reforming and consolidating the myriad steps involved in each layer of the FRA’s grant approval operation. Although the FRA staff is full of hardworking and talented people, the agency’s extensive procedures make the selection, obligation and implementation of grants less efficient and effective, he said.
Political rhetoric flows
Although none of the testifiers brought up the nationwide controversy over the Trump administration’s pause in January on disbursements of federal grants and loans to ensure they meet the policies and goals of the newly inaugurated president, several subcommittee members shared their political parties’ spin on transportation funding policies under the Biden and Trump administrations.
In his opening statement, Chair Webster reminded the hearing’s attendees that the previous administration’s FRA had a backlog of 3,200 federal grants that had not yet received signed agreements with recipients when the new administration entered office on Jan. 20. U.S. Transportation Secretary Sean Duffy has previously testified that his USDOT is working as fast as it can to move through that backlog.
“Responsibly, the [Trump] administration took the time to review these grants to ensure the best use of taxpayer dollars,” said Webster, adding that on the day of the hearing, Duffy announced the USDOT had since approved more than 180 grants totaling more than $3 billion. “I look forward to working with the administration to reduce the Biden backlog in a timely manner and ensure that federal grants are focused on improving critical infrastructure.”
But subcommittee member U.S. Rep. Rick Larsen (D-Wash.) used his opening statement in part to condemn the Trump administration’s slashing of federal IIJA dollars already approved by Congress, including for previously announced assistance for rail projects.
“In his first 100 days, President Trump has driven up costs and cut critical services,” Larsen said. “We have seen chaos and confusion in the constant freezing and unfreezing of transportation grants, attacks on the workforce that delivers these transportation investments, and conditions placed on grants that have nothing to do with transportation.”
For example, last month Duffy announced cuts in previously announced grants for rail infrastructure projects in New York City, Newark, Dallas and Houston, he stressed.
“Meanwhile, the department continues to signal that mass layoffs are coming even though USDOT staff who administer these grants are there to prevent waste, fraud and abuse of the money Congress allocates,” Larsen said. “The FRA is a grant-making agency. Approximately 2.2% of its budget is for salaries and benefits. Federal workforce cuts provide minimal cost reductions and will make the department less efficient.”
