Inside IIJA’s Rail Funding: Let the Dreaming Begin

First in a three-part series

Last March as President Joseph R. Biden was laying the groundwork for an infrastructure rebuilding plan he was about to send to Congress he spoke about how it could spark a second rail revolution.

In a March 31 speech to introduce his American Jobs Plan, Biden remarked, “You and your family could travel coast to coast without a single tank of gas onboard a high‐​speed train.”

More than a week later, Biden repeated the same claim but added, “close to as fast as you can go across the country in a plane.”

It was a bold although unrealistic vision and it turned out the infrastructure bill, formally known as the Infrastructure Investment and Jobs Act, did not contain funding for high-speed rail.

Nonetheless, Biden’s plan to spend 1.2 percent of the U.S. gross domestic product a year for the next eight years to boost the economy captivated rail passenger advocates.

 Rail Passengers Association President Jim Mathews put Biden’s vision into a rail passenger context in a column published in Passenger Train Journal, titled “$80 Billion Buys a Lot of French Toast.”

The headline referenced the $10 billion a year Biden’s plan would devote to rail service.

“Injecting $10 billion more each year into rail projects would let Amtrak expand passenger rail to 160 new stops, add at least 30 new corridors, and boost frequencies beyond once daily in at least 15 states,” Mathews wrote.

Seven months later the infrastructure bill has cleared Congress – albeit barely – and RPA is hailing it as a “new era for America’s passenger rail network.”

Amtrak CEO William Flynn issued a statement that said in part, “This bill will allow Amtrak to advance significant infrastructure and major station projects on the NEC [Northeast Corridor], purchase new passenger rail equipment and develop new rail corridors, bringing passenger rail to more people across the nation.

Similar rosy statements have been issued by other trade associations representing Class 1 railroads, short line and regional railroads, and public transit agencies.

The $1.2 trillion in the IIJA is a lot of money and passage of the bill is historic. It is a blueprint for spending about 1 percent of GDP per year on such things as roads, bridges, rail, public transit, water systems, broadband, and power systems.

That will increase federal spending on infrastructure to the highest level of GDP that it has been since the 1980s.

Flynn told the news website Axios that the $66 billion for rail in the bill is “more funding than we’ve had in our 50 years of history combined” with about half of that money being used for expanding intercity rail passenger service.

But will the IIJA prove to be the catalyst that creates a sea change for U.S. passenger rail that results in the type of expansive network that rail passenger advocates have been dreaming about for decades?

It could be a step in that direction. Yet many are reading into the IIJA what they want to believe the legislation bill could deliver.

William C. Vantuono, editor of Railway Age, sounded a cautionary note about the effects of IIJA by quoting consultant Jim Hanscom who described IIJA is an authorizing bill.

“It is managed by Congressional authorizing committees. Appropriating committees are separate, and cover what is appropriated for spending in any given year. There is nothing to say that all the money gets spent,” he told Vantuono.

Read that last sentence again while keeping in mind that IIJA contains a five-year surface transportation spending plan.

Authorizing money is not the same as appropriating money, which is subject to the vagaries of the annual congressional appropriation process.

There are a number of things regarding passenger rail that IIJA does not do.

It does not establish a permanent dedicated funding source for passenger rail, something Amtrak and rail advocates have sought for decades and failed to achieve.

It does not repeal a federal law requiring state and local governments to pay for Amtrak routes of less than 750 miles.

It does not allocate nearly enough money to cover the estimated $75 billion cost of implementing the Amtrak ConnectsUS plan that Mathews was referencing in his PTJ column. IIJA is at best a down payment on route expansion.

It does nothing to overcome host railroad resistance of new Amtrak service or reign in their strategy of demanding expensive capital improvement projects in return for allowing passenger service.

Not all of the money in the bill will go directly to Amtrak. Most of it will be channeled to the Federal Railroad Administration through the U.S. Department of Transportation.

The FRA in turn will dole out funding through discretionary grants or to specific initiatives spelled out in the legislation.

The legislation gives the FRA 180 days to “establish a program to facilitate the development of intercity passenger rail corridors.”

Section 22308 of the bill contains criteria the FRA is to take into account when drawing up the grant eligibility guidelines.

This includes whether a proposed route had already been identified as part of a regional planning study; is part of a state’s rail plan; the route’s potential ridership, capital requirements and expected trip times; anticipated public benefits; the level of readiness of the operators and the community to accept federal funds; and existing support from operators and host railroads.

New services are expected to benefit rural communities; enhance “regional equity and geographic diversity;” and/or benefit underserved, low-income communities or areas of “persistent poverty.”

Not all of the money the IIJA will award will necessarily go directly to Amtrak. Eligible recipients include states, interstate compacts, regional passenger rail authorities, regional planning organizations, state political subdivisions, federally recognized Indian Tribes, and “other public entities” recognized by USDOT.

In an interview last month with Trains magazine passenger correspondent Bob Johnston, FRA deputy administrator Amit Bose said, “There’s no other way to dice it: state support and involvement is essential. So is host railroad agreement and support of those projects.”

That underscores a hard truth that some rail passenger advocates will have a hard time swallowing.

The money the FRA will have available is for federal-state partnership projects. It is most likely to go to those states that have shown a willingness to fund a share of the project cost.

That is likely to favor projects already in the works, such as a second Chicago-Twin Cities Amtrak train for which Minnesota and Wisconsin have approved spending for planning work.

This could be bad news for Ohio and the 3-C project, which has received public support from some public officials, namely mayors and legislators along the proposed route, but those whose views count the most have been silent or noncommittal.

Without the governor and legislative leaders being onboard 3C may find itself toward the back of the line.

Next: Breaking down the rail funding in the Infrastructure Investment and Jobs Act.

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