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Twin Cities Business - Short Lines, Big Problems http://tcbmag.com/news/articles/2017/June/short-lines,-big-problems The obvious question is why the state should consider a taxpayer investment in railroad infrastructure when other shipping modes exist. The simple answer is certain types of businesses can only ship by rail—and adjacent states are making investments to preserve their rail network and woo businesses (see bottom). "Businesses don't ship by rail because they like it," says Wegner. "They do it because it's the only economical alternative" Most of the industries served by short line rails use skilled labor and pay generous wages with good benefits. "We can have better jobs with rail," says Fellon. "These are not service industry salaries" Extrapolating data from economic impact studies of the Minnesota Prairie Line and TC&W conducted in 2013-14, short line railroads provide essential transportation for businesses that generate $4.70 billion in annual state commerce -11,403 jobs and $553 million in wages. The railroads' direct economic impact comes to $41.26 million annually; they employ roughly 275 people and pay annual wages of roughly $19 million. Still—despite this economic motivation and an absence of opposition—there has been little action. Individual short -line railroads and communities have been petitioning the legislature for decades, and a consortium of short lines has showed up at the Capitol for the last three legislative sessions, but no program or fund has been established. "Minnesota is fairly anti -rail in my opinion," says Fellon. "I look at their actions, not their words, and don't see the activity or the interest" State of indifference Though one-time bonding funds and occasional federal tax -credit programs have given short lines and shippers help, the state's primary assistance vehicle is the Minnesota Rail Service Improvement program (MRSI), which dates to 1976 and provides low- or no- interest loans for shippers and railroads. The program has been little used, railroads say, because of a variety of strictures that railroads, shippers or communities cannot meet. MVRRA's Julie Rath is dismissive, noting MRSI's capital improvement fund's limits are comically low. "Today, all $200,000 buys you is a switch" Mark Wegner says using tax credits would require 28 years to get the TC&W mainline to a good state of repair. Wegner's line needs $17 million over the next five years to replace 60 -year-old tracks. "I probably can't borrow $17 million," Wegner notes, "but if I did, what if then there are two or three drought years? My revenues crater and I can't cover my debt service." The state's willingness to fund the more urgent needs of the Prairie Line and Hugo Line will be a harbinger of TC&W's chances of state assistance. Minnesota has a rail plan defining the rail network and identifying needs and goals to meet the state's economic interest. It speaks covetously of a dedicated funding source for rail improvement. Neighboring states have put their money where their policy is. Wisconsin, Iowa and South Dakota were devastated by railroad abandonments in the late 1970s and early '80s. The situation was so dire that they took ownership of hundreds of miles of track and funded the renewal of hundreds more. Since 1980 Wisconsin has acquired 977 miles of railway, issued $275 million in grants and $130 million in loans. The state currently funds $10 million to $15 million annually in rail investments, and the program has been self-sustaining since 2007. ThgGteto goal is to get 95 percent of state railroad track to Class II status, meaning 25 mph track. "The original grant program was $2 million per year, but by the late 1980s we realized that it was putting Band-Aids 4 of 9 6/16/17, 11:35 AM