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Hemphill's January column - Government dole

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***, In order to share Mark's pessimism on the U.S. economy/transportation system, you have to take his claim of other forms of transportation being subsidized as an absolute truth, which of course it is not. As many of us have pointed out, on the federal level the majority of highway funds for the movement of intercity freight is paid for by user fees, with a very small porportion paid out of the general fund, and those usually come from economic development grants. It is true on the state and local level that highway funds come from non-user fees such as construction bonds or sales and property taxes, but that is by the choice of those state and local officlals, and such is not really germaine to a conversation on federal transportation policy, i.e. state's rights, not something the feds could get the states to change to true user fees. If what Mark desires is some form of equalization where each transport mode has the same percentage of user fees and subsidies at each government level, we would have to start with including railroads in the federal diesel fuel tax of 18 cents per gallon, charge railroads additional fees per axle loadings and gross train weight, add a little more in the form of funds out of the general fund, and then the government would turn around and reinvest this money into the rail infrastructure, and of course states and localities would have to chip in their share via their own fuel taxes/property taxes/bonds/etc. So on one hand, the railroads would be paying through the nose, cutting into their gross revenues, but would not have the liability of actually taking care of the tracks, which drastically cuts back on their expenses. Of course, Mark does correctly point out that allowing direct subsidy of what he describes as "franchise ownership" of the rails would be an issue, and you'd have the inherent red tape and beauracratic overhead of having the government in control of the maintenance of the rail infrastructure. But then again, that's how highways and waterways are managed, and if the railroads want to be equal..... That's only if this open access scenario took the form of government confiscation of the rails. I agree with Mark that this approach probably would not pass constitutional muster. What I and other open access supporters advocate is not a taking of the property, but instead using the auspices the Sherman anti-trust act and split the infrastructure companies from the operating companies, ala AT&T. As we all know from our recent history, the AT&T breakup DID pass constitutional muster, and a similar breakup of the de facto rail monopoly is also likely to pass legal challenges e.g. there is precedent in our favor with this approach. This type of split opens the door for eliminating property taxes for railroad right of ways, opens the door for allowing infrastructure owners to share in highway trust funds, e.g. typical private-public consortiums. From a practical standpoint, it is likely that the "purchase" price of the right of way would be a paper transaction, and the former owner operator would simply deduct their "toll" charge from that price. Only the new entrants would actually pay cash for access. This ensures that current operations are not severely inhibited, and prevents overt cherry picking of prime routes by the new entrants.
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