COOPERSTOWN – United States Senator Charles Schumer is pushing for a short-line rail tax credit that will make it easier for New York based railroad companies to grow and maintain their operation.
Schumer visited the New York Susquehanna and Western (NYS&W) headquarters in Cooperstown on Thursday to announce his efforts to restore and extend federal tax credits for short-line operators that expired on Jan. 1. The senator's “Short Line Railroad Rehabilitation and Investment Act” would restore and extend tax credits to short-line railroads, like NYS&W, for infrastructure repairs through 2016.
According to NYS&W, the tax credit would greatly benefit the company in maintaining its 400 miles of track in New York, New Jersey and Pennsylvania, including its Utica Maine Line in Chenango County. That line which connects Chenango County to a larger trunk line in Binghamton has been inoperable since being damaged by heavy flooding in 2006 and further damaged by flooding again in 2011.
“The New York Susquehanna and Western Railroad has numerous opportunities for growth and development, but only if they have the capital to make needed infrastructure improvements,” said Schumer.
The short-line tax credit is valued at 50 percent the cost of track maintenance and improvements, up to $3,500 per mile. NYS&W saved over $7.5 million over the course of the tax credit before it expired at the beginning of the year. If that credit is renewed, the company proposes a $2.5-3 million increase in infrastructure improvements through 2016.
“That's a significant investment,” added Schumer, noting that the credit also benefits other short-line operators throughout the state. “There are scores of railroads, all the same, that connect different parts of more rural New York either directly to the Port of New York, or to the bigger trunk lines that go from Buffalo to Albany or the others that go across the Southern Tier to Binghamton.”
Currently, NYS&W provides transportation services to 85 businesses throughout the three states where the it operates, with its biggest beneficiary being agriculture related industries. What's good for the rail line is good for the businesses that depend on it, said Schumer. He added, “It's essential that the connector that allow our businesses to continue exportation and expand new markets be able to thrive.”
While the tax credit would certainly help NYS&W maintain its functioning lines, NYS&W President Nathan Fenno explained it would also help the company with its 10-year obligation to maintain the Utica Main Line as part of the railroad revitalization project in Chenango County.
Efforts led by the Chenango County Industrial Development Agency (CCIDA) to restore the local line are underway. In 2011, the project received a state Department of Transportation grant for $772,722. That funding was supplemented in 2013 by a $4.7 million grant from the Federal Economic Development Administration to cover 80 percent the estimated cost of the project.
The project also calls for a $85,825 contribution from NYS&W as well as a commitment from the company to maintain the line for 10 years when the project is complete.
“The project in Chenango County is a big project with a lot of challenges in front of it. We have made the commitment for 10 years,” Fenno said, citing state and federal funding sources that have kept NYS&W optimistic that the project will move forward. “The stage it's in right now, essentially, is a detail study from outside engineers … That's really going to determine the future of the project, to have the engineers do an inch by inch inspection and come up with a project that will work.”
When asked of the likelihood of the short-line federal tax credit passing through Congress, Schumer said he's optimistic and hopes to see an agreement in Washington by the end of March.