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Local railroad stresses need for rehabilitation funding

Staff Reports • Updated Nov 22, 2017 at 8:00 AM

Johnny Cash topped the country music charts about 50 years ago singing, “I hear that train a comin,” from his legendary ballad, “Folsom Prison Blues.”

While the train he heard sent him to the pinnacle of country music, the clickety-clack of trains rumbling down track heard in Wilson County currently helps provide jobs and economic stability, according to Wilson County Mayor Randall Hutto.

Hutto described the Nashville and Eastern Railroad’s presence in Wilson County as a “leading force in local government’s ongoing effort to create new job opportunities, attract new industry and strengthen the local economy.”

The Nashville and Eastern has been providing freight rail service to Wilson and three other Middle Tennessee counties, including Davidson, Smith and Putnam, since 1986, when the company was formed “to resurrect short-line freight rail operations over 110 miles of what was neglected and soon-to-be abandoned track,” according to Stephen Drunsic, Nashville and Eastern Railroad president.

Several companies in Wilson County are customers of the railroad and made the decision to locate locally because accessibility to rail service, said Hutto and others, including Watertown Mayor Mike Jennings, who also serves as chairman of the Nashville and Eastern Rail Authority.

Both officials said the railroad was a major factor in landing the new Wonder Porcelain manufacturing plant on Highway 109, a facility that includes about 800,000 square feet under roof and is to employ more than 350 workers.

“Having railroad freight service available gives us a certain advantage when recruiting a new industry. Just being able to say we have direct access to rail service makes an important statement about our county. It says we’re connected, and we have an amenity that many counties don’t have,” Hutto said.

While local chambers of commerce, community leaders, government officials and others speak to the importance of railroad operations in the community, there is concern certain financial challenges faced by railroads may threaten or impede rail service in many rural areas.

According to leaders in the railroad industry in Tennessee, short-line railroads across the state are dealing with an issue that is crippling their ability to have the financial resources to rehabilitate track and infrastructure on which their trains operate. 

When many of the short-lines came into existence decades ago, they, in most cases, took over track with so little business that the large Class I railroads like CSX, Norfolk Southern, Illinois Central and others had asked to abandon them.

In most cases, the track and bridges assumed by the short-lines were in considerably bad repair from years of little or no maintenance by the Class I operators.

Recognizing the value of short-lines for economic development and that there was a need to provide a funding source to aid in the high cost of rehabilitating track and infrastructure, state government under the leadership of the late Gov. Ned McWherter provided that taxes generated from the sale of diesel fuel to all railroads would be placed in a state fund held by the Department of Transportation and used specifically for track rehabilitation. 

Because almost all of the freight traffic handled by short-lines originates or ends on a Class I connecting carrier, the rehabilitation of these short-lines has a direct and positive impact on the volume of railroad freight handled by the Class I railroads, as well. 

In recent years, the ability of the state to tax railroad diesel fuel was challenged in federal court by Class I railroads, which resulted in a freeze on the fund that currently has a balance of nearly $68 million.

No revenue for track rehabilitation was distributed to Tennessee short-line railroads for more than four years, which left the railroads with no choice in the future but to make decisions that may have consequences that impact rail service to communities like Wilson County.

While confident the court will decide in favor of the state’s railroad diesel fuel tax, a decision not likely to be rendered until well in to 2018, short-line railroads across the state urge state legislators to provide interim funding until the court’s decision so they can provide freight rail service to dozens of rural Tennessee communities.

State Sen. Paul Bailey, who chairs the Senate’s transportation committee and whose senatorial district includes a portion of the area served by the Nashville and Eastern Railroad, said he recognizes the need for the rehabilitation fund as it enables short-line railroads to continue their service to towns like Cookeville, Carthage, Lebanon and others.

“Many in our state don’t realize how important short-line railroads are to the economic well being of a vast number of our communities, both big and small,” Bailey said. “Short-line railroads are strong contributors for attracting new industry and higher-paying jobs to areas that otherwise would not be considered.”

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