Commentary: Minnesota's economic future rides on railWhile politicians offer up competing plans to restore our economy and create jobs, American freight railroads are already doing their part — investing $23 billion this year alone to maintain and expand the nation’s rail network.
By: Randy Maluchnik, The Republican Eagle
While politicians offer up competing plans to restore our economy and create jobs, American freight railroads are already doing their part — investing $23 billion this year alone to maintain and expand the nation’s rail network.
Think about that for a moment: Railroads will pour the equivalent of $4,303 for every man, woman and child in Minnesota back into the nation’s rail system this year. That is a staggering sum. These are private dollars, not taxpayer money, going into infrastructure investments that benefit all of us. That is why the Association of Minnesota Counties recently passed a resolution highlighting the role of the rail industry in building a better economic future for Minnesota.
Taxpayers are on the hook to maintain highways, waterways and airports, but U.S. freight railroads are privately owned businesses that pay their own way. And while the most basic needs of publicly funded infrastructure are going unmet given budgetary constraints, railroads continue to invest record amounts in America’s future.
For Minnesotans, this means an ever more efficient means of delivering the products we use every day, and the safest, cleanest, most economical rail system in the world to export everything grown, manufactured and mined in Minnesota to national and world markets.
More than 4,000 Minnesotans make their livings working on the railroad. These are high paying jobs with great benefits. But the story does not end there. According to US Department of Commerce data, every direct railroad job supports 4.5 additional jobs — in the rail supply industry, on farms, in factories and mines, and throughout the economy.
That equates to an additional 18,000 jobs on average in our state.
According to the Minnesota Chamber of Commerce, more than 50,000 Minnesota companies in the manufacturing, retail, wholesale and agricultural sectors rely on the state’s multimodal network of road, rail, water and air to move their goods to market.
Minnesota’s 22 freight railroads and 4,538 route miles form a critical part of the State’s multimodal transportation system. As our Minnesota Department of Transportation notes, “Many of the state’s major industries rely on the rail system for efficient delivery of goods. The freight rail system is particularly critical in providing efficient connections to markets beyond the State’s borders, throughout North America, and to the world through the seaports on the Pacific and Atlantic coasts, and the Great Lakes. Rail provides critical options to shippers in terms of market access, modal economics, and service.”
The above comments from our state chamber and DOT illustrate how Minnesota benefits from a rail industry able to reinvest at a high level, keep pace with demand and carry as much heavy freight as possible over steel rails. The alternative is more and more trucks tearing up our roads.
When more heavy freight moves via rail, motorists benefit from decreased congestion. Taxpayers benefit because there is less wear and tear on our publicly funded highway infrastructure. The fuel efficiency of trains versus trucks means lower emissions of pollutants. And we all benefit economically because of the multiplier effect of investments in rail infrastructure.
Prior to 1980, the federal government virtually ran the rail industry in the United States under a system of economic and service regulations and tight bureaucratic controls. It didn’t work. Railroad profits were so anemic that rail companies could not reinvest in a crumbling rail network.
Congress estimated that the rail industry’s capital shortfall would approach $20 billion by the mid-1980s unless it either nationalized the railroads or implemented reforms allowing them to operate in the free market like other businesses. Fortunately, Congress chose the latter path.
Today, railroads still operate under strict federal regulations, but with enough flexibility to make service and investment decisions based on sound economic and business principles. As a consequence, instead of being in a $20 billion hole, as Congress projected 30 years ago, railroads are reinvesting an even greater amount each year back into the rail network.
We have a rail industry that is not only thriving, but driving economic growth and job creation here at home and nationwide. For Minnesota and the nation, our economic future truly is riding on rail.
Randy Maluchnik, a Carver County commissioner, is the Association of Minnesota Counties president.