Sen. Schumer calls for 2017 shortline tax credit extension

Written by Jenifer Nunez, assistant editor
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At Pactiv, a food packaging manufacturing company in Canandaigua, N.Y., U.S. Sen. Charles Schumer (D-NY) joined Finger Lakes Railway President Mike Smith and Pactiv Plant Manager Rod Kucera to launch his push for the Short Line Railroad Rehabilitation and Investment Act of 2013, which extends the tax credit to shortline freight railroads.


Sen. Schumer explained that big employers in Ontario County, such as the 750-employee Pactiv Plant, rely on the Finger Lakes Railway to transport in raw materials and others rely on it to ship out finished goods to interstate railways, which then take their products to market. Because of a missing 11.5-mile railroad link, cargo shipped to and from western destinations on the Finger Lakes Railway must now be diverted 380 miles to as far as Selkirk, N.Y., in the Capitol Region in order to connect with the main CSX line.

Currently, more than 5,600 rail cars a year are forced to use this 380-mile detour, which adds an extra two days to the route and an estimated $150 per rail car for the average Finger Lakes-based customer, which amounts to more than $840,000 in additional costs per year for Finger Lakes regional employers.

The Finger Lakes Railway is now in the process of negotiating with Norfolk Southern to acquire an existing 11.5-mile stretch of track, the “Corning Secondary Line”, that would give Finger Lakes Railway a new direct connection to the CSX mainline in Lyons, N.Y.
The line has been abandoned for several years and is in need of repairs and Schumer’s legislation would extend federal capital financing for the infrastructure repairs and upgrades the Finger Lakes Railway needs to quickly bring this new 11.5-mile railroad line back into operation once it acquires the line from Norfolk Southern. Specifically, the tax credit is valued at 50 percent of the cost of track maintenance and improvements, up to $3,500 per mile, but is now set to expire on January 1, 2014.

Finger Lakes Railway is counting on these shortline rail tax credits to help finance the repairs needed for the NS “Corning Secondary” line from Geneva to Lyons. The short-line federal tax credit has already provided significant benefits to regional railways in Upstate New Yor, and must be extended for further benefit, Sen. Schumer noted.

In each of the past four years (2009-2012) the federal tax credit has offset $436,610 annually for Finger Lakes Railway, enabling it to undertake dozens of repairs and capital improvements to the rail system. The credit received from eligible improvements supports new improvements and investments. As a shortline railroad, Sen. Schumer argued, improvements and investments would be difficult without this credit and without rail grant programs. Specifically, over the past four years, the federal tax credit has supported many repairs and upgrades including bridge replacements in Ontario County; rail replacements along the Auburn Industrial Track in Cayuga County; four highway grade crossing upgrades and replacements in Seneca and Cayuga Counties; surfacing projects on the Auburn Road Line and retro-fittings of railway lines in Onondaga, Ontario, Cayuga and Seneca counties.

Sen. Schumer says the extension of this tax credit until January 1, 2017, would be a boon for regional manufacturers, smaller railways, local employees and ultimately consumers across New York State.


Categories: OFF Track Maintenance, Shortline/Regional