(The following story by Lindsay Peterson appeared on The Tampa Tribune website on September 19.)
TAMPA BAY, Fla. — Florida officials decided four years ago that the state needed to do more with its transportation taxes than build highways. The railroads, they said, should get some of the money, too.
Since then, the state Department of Transportation has approved giving the companies more than half a billion dollars. The money is mostly for upgrades and new construction of private tracks used in their for-profit freight hauling operations. The companies have finished about $17 million worth of projects.
For years, state and local governments have given the railroads money for crossings – for both maintenance and safety. However, paying them to improve and expand their own tracks, in areas the public never crosses, is something new for Florida.
Gov. Charlie Crist defended the spending, even though he’s asking for cuts in everything from education to law enforcement to cover a $1.1 billion budget gap.
“It is good public policy to offer transportation options to move people and goods in the state,” Crist said in a written statement last week. “Investing in freight rail improves freight mobility, reduces truck traffic on major highways and improves safety.”
State Rep. Rich Glorioso, a Plant City Republican and member of the House committee that oversees DOT, said he knew the state gave money to the railroads but he didn’t realize how much. He’s not opposed “if it’s part of an overall transit program we’re working on or part of a national program,” he said. “But if it’s just to give money to the railroads because they ask for it, I don’t go along with that. That’s something I want to check into.”
At the Transportation Department, rail office administrator Ed Lee is in charge of analyzing the rail work to ensure the public is getting a good deal. He hasn’t turned down any of the 15 or so projects he has looked at in the state’s five-year work plan, he said. His job is to “make sure the right projects happen.”
He would not provide the Tribune with documents the agency uses to determine the public benefits of a rail project. He said he needed to check with the rail companies first because the information could be exempt from the state public records law as trade secrets.
Until 2003, tax money to the rail companies was restricted mostly to crossing safety programs. That changed with the creation of the Strategic Intermodal System, which shifted DOT’s role from one of building roads to developing hubs and corridors for every major form of transportation.
Looking To Long-Term Transportation
The shift put railroads in line for state tax money, along with seaports and airports. The ports are run by public agencies, but the 15 railroads are private companies. Jacksonville-based CSX Transportation, a publicly traded company, controls most of the 2,800 miles of tracks across the state, followed by Florida East Coast Industries, which owns a rail line between Jacksonville and Miami. Florida East Coast recently was sold to Fortress Investment Group, based in New York.
The state’s effort to create an “intermodal” transportation system goes back to 1998, with a task force that studied how freight moved across the state. The group of trucking, port and rail officials was led by a CSX Transportation executive, Peter Rutski.
The task force’s recommendations became a part of the long-term transportation plan the state adopted in 2000, the second year of Gov. Jeb Bush’s administration. After months of meetings throughout the state, a steering committee recommended that nearly every port, airport and rail line in the state be eligible for state funding.
The Transportation Department still spends billions on road construction and maintenance, but its 2006-11 spending plan contains more than $420 million for rail projects. All of the projects require matching money from the companies.
The railroads have finished about $17 million of work paid by the state and are43465 in the middle of about $40 million worth, including a $14 million upgrade on tracks owned by a subsidiary of U.S. Sugar that surround Lake Okeechobee.
Nearly $280 million is set aside for the state’s deal with CSX, which is expected to be finalized before the end of the year. About $211 million will come later. According to an August 2006 agreement between the state and CSX, the state will buy 61 miles of CSX tracks in the Orlando area for commuter rail and pay for upgrades on other CSX tracks into a hub the company plans to build in Polk County.
The rail companies say these projects are good for them and taxpayers. “They enable the smaller railroads to keep pace with other modes of travel, and that keeps freight affordable and helps provide jobs,” said Judy Sanchez of U.S. Sugar subsidiary South Central Florida Express.
Norfolk Southern spokesman Robin Chapman said these projects reduce highway congestion and spending by shifting freight from trucks to rails. Norfolk Southern has received about $2.5 million to extend a section of its tracks in North Florida.
Several states give money to the railroads for track upgrades and additions, said Jim Reed of the National Council of State Legislatures. “They do it when it meets the interests of both parties.”
State Asks Railroads To Assess Projects
Florida asks the railroads for lists of their needs, then chooses the projects that meet the state’s transportation goals, Lee said. The public-benefit analysis of whether it is a good deal for taxpayers is the last step.
The information for Lee’s analysis comes largely from the railroads. They’re asked a series of questions, such as how many trucks the project will remove from the roads and how many new nonrail jobs it will create. Then Lee plugs the answers into a computer program.
In its 2006 annual report on rail operations in the state, the department used the hub that CSX plans to build in Polk County to show how the analysis works. The analysis showed that the taxpayers came out ahead, with the project bringing in $3 billion in benefits, compared with a $352 million contribution from the state.
Polk County officials have questioned the numbers used to reach that $3 billion in benefits, specifically the 8,500 jobs CSX says the project will create. Only 2,000 jobs will come from the hub itself and a distribution center to be constructed with it. According to a CSX report, the other jobs will be generated from outside the development, including restaurants and convenience stores in the area.
Lee said the process is in its early stages, and he has had to work with the rail companies to get the information he needs. In early 2006, after receiving forms from Florida East Coast that were partially completed, he sent them back for more information. The company was seeking state money to build an extra set of tracks along several sections of its line, enabling it to run more trains. It was ultimately awarded about $42 million.
At one point in the process, he advised the company on how to adjust the information on one project to improve its public-benefit score.
Lee said he wasn’t trying to help the company; he was only trying to present the most accurate numbers. He said it’s important to show how these projects help the public.
“My interest is in making sure that as much traffic that can move by rail moves by rail to get trucks off the highways.”