Heartland Flyer Passenger Rail Update
Monday, August 1, 2022 10:00 AM
Also, Amtrak is planning on having a rolling day-long event on July 18 as the second Missouri River Runner round trip returns, starting in St. Louis in the morning, on train #311. The purpose of the event is to at each station stop on the route thank the community for their support. Members of MORPAC’s marketing and legislative committees, along with Amtrak and MoDOT, met this afternoon to begin planning for this.
Bryan J. Ross, MPA
Railroad Operations Manager
Missouri Dept. of Transportation
For a time, we were concerned that Missouri's legislators would disregard the Economic Impact Study completed in December 2021 which was commissioned by MODOT. Fortunately, the opposite happened and the IMPLAN Study completed by Cambridge Systematics had a profoundly positive effect on the Missouri legislature. In fact, the state of Missouri would actually LOSE tax revenue were they to defund one or both round trips. Please see attached document produced by Cambridge Systematics for all the details. For a super brief recap, the Missouri House Transportation Subcommittee added $2.4M back into the River Runner's budget for a total of $13.2M to annually operate the train. This got approved by both houses and was signed into law July 1, 2022. Cambridge Systematics, using IMPLAN software discovered the Missouri River Runner (at 2 round trips/day) generates $22M in tax revenues annually. Almost twice what it takes to support the train. So, tax revenues were flowing into the state's coffers, but no one knew the true magnitude of the benefit until Cambridge Systematics did their study. They also discovered, among other things, there was a $208M Economic Impact to the state by virtue of the train service. We encourage you to view the attached summary.
Service Development Plan Analysis
We are also aware that KDOT will not be using IMPLAN for their Benefit Cost Analysis in 2022, but rather a software program called Treddis. The Service Development Plan of 2011 also was created using Treddis, and we have been told this is primarily a highway transportation analytical tool. A quick look at the SDP of 2011 finds the following on page 151:
"Increased labor/business productivity, increased worker wages, increased output, possible increased employment" was a category mentioned, but not evaluated. Cambridge Systematics, on the other hand found $65M in annual labor income and 1250 jobs annually resulting from River Runner service. Here is a link to the Service Development Plan of 2011: KDOT-Passenger-Rail-SDP.pdf (northernflyeralliance.com)
The SDP of 2011 also made no mention of tax revenues generated. Part of this can be credited to the software chosen to evaluate the train. However, in 2010 Texas Transportation Institute was able to calculate tax revenue generation on the Heartland Flyer without the use of IMPLAN. Early in the report on page xxiii can be found this reference and identified benefit: "The sales tax impact of the Heartland Flyer on the communities it serves appears to be rather substantial. Purchases made by Heartland Flyer passengers resulted in estimated total sales tax revenue of almost $1.4 million to the communities served by the Heartland Flyer. The distribution of this sales tax revenue is $731,412 in Texas(53 percent) and $654,254 in Oklahoma (47 percent)." Here is a link to the Texas Transportation Institute Study: Microsoft Word - 169116-1.doc (northernflyeralliance.com)
Quantifiable benefit to the host railroad was also not addressed in 2011. With track improvements allowing for speeds of 79mph for passengers and 60 for freight, the host railroad will get their goods to market faster and more efficiently. There is a quantifiable benefit here, and it was not identified. We were provided a quote by a BNSF representative some years ago, which we have used in many presentations, and it is as follows: "For every 1 mph gained system-wide, the host railroad saves $90M annually."
The 2011 Service Development Plan also makes clear that a benefit-cost ratio is different from an economic impact analysis, which was the justification for not identifying economic multipliers, nor tax revenues in the study. Another quote from 2011: "A benefit-cost ratio in excess of 1.0 indicates that a project will generate more benefits to society than its costs and is justified within the limits of BCA." Without economic multiplier or tax revenue analysis, a Benefit Cost Ratio cannot adequately identify the benefits to society generated by the train.
We hope this recap and analysis of previous studies will provide some clarity as we anticipate KDOT's cost figures this summer, and the final study the first of 2023.
Kansas and Oklahoma Rail Caucus
In other news, the Kansas Rail Caucus now stands at 68 members, and the Oklahoma Rail Caucus finished the year with 29. We held two virtual meetings, one in each state with Caucus members of both states invited to participate. In early March, Kansas Senator Carolyn McGinn presided over the City Manager/Chamber/Economic Development Panel, the content of which had lots of very interesting information. Later that same month, Oklahoma Representative Ken Luttrell presided over the program entitled, "Hiding in Plain Sight, Oklahoma's Robust Passenger Rail Legislation". There were many surprises as we plumbed Oklahoma's "Titles" searching for passenger rail-related legislation for this presentation. The main ones being,
1) There is a $2.85M codified "set aside" for passenger rail
2) Oklahoma has a revolving fund (as does Kansas) and they use it
3) There is a Multi-State Compact waiting in the wings to be passed into law by an adjoining state in order to become effective (there are $1M federal grants available to stand up these state compacts)
4) A Regional Transportation Authority can be created by any town, county, or group of towns and counties that would then have the authority to levy up to a 2% sales tax to help pay for the operational support of the train. Given that substantial sales tax has been proven to be generated by the existence of the train itself, a sales tax in Oklahoma may not be needed. But it's an option if it is.
We also learned in this presentation that federal CMAQ funds could be used for operational support of the Heartland Flyer and its Extension. Videos of both Caucus meetings can be found here: Videos (northernflyeralliance.com)
Next Step: Designated Corridor identification by the FRA
Our final topic is the status of the effort to get Designated Corridor identification from the FRA for the corridor beginning in Fort Worth, Texas and ending in Newton, Kansas. We now have seven Letters of Support for Corridor Designation, representing 14 communities/entities including Fort Worth, Texas. The link to these can be found here: Resolutions (northernflyeralliance.com) If your community or organization would like to send a support letter, we can draft a letter for you, or you can simply copy the text of your choice in the other letters on our website. While the FRA's Request for Corridor Designation is not yet open, ODOT is collecting these letters as we receive them.
Northern Flyer Alliance Board of Directors