Resource Development Council

RDC Comment Letter:
Federal Transit Administration’s funding
reduction for the Alaska Railroad Passenger Service

April 23, 2012

The Honorable Don Young
United States House of Representatives
2314 Rayburn Building
Washington, D.C. 20515

Dear Congressman Young:

I am writing to express the Resource Development Council’s opposition to the misguided and potentially-devastating Federal Transit Administration’s (FTA) funding reduction to the Alaska Railroad Corporation’s passenger service.

The U.S. Senate’s action in S. 1813 would cut federal capital funds for the Alaska Railroad’s passenger service by at least $26 million or 71 percent. In our view, S. 1813 is discriminatory and just plain wrong.

The FTA is responsible for supporting essential public transportation throughout the country. In 2000, the agency agreed that the Alaska Railroad was eligible to participate in federal funding programs like every other eligible public transportation provider. However, initially, the FTA determined only 10 percent of the Alaska Railroad’s public transportation services were eligible for federal funding, opposed to counting the entire passenger service miles. Given Alaska’s uniqueness and special circumstances, such a determination was off base and simply wrong. The Alaska Railroad was targeted because it served mostly rural areas, unlike most state and local passenger railroads across the nation.

In 2005, the Alaska Congressional delegation attempted to correct the inequity by ensuring the Alaska Railroad could at least count 60 percent of its system toward the FTA funding. In 2006 and 2007, the railroad issued bonds backed by federal FTA formula funds, as many other transportation providers have done and continue to do so today.

In recent Senate deliberations, the Alaska Railroad’s current 60 percent formula calculation was unfairly characterized as an “earmark” by some senators who want to reduce the railroad’s formula miles back to 10 percent. Like in the initial 2000 determination, Alaska is once again handicapped by its uniqueness, which some senators fail or refuse to recognize. Unlike other states, Alaska still has very few highways. Most Alaska communities and many Alaskan residents live off the road system in isolated locations accessible only by air, ferry or rail. Moreover, the railroad efficiently delivers hundreds of thousands of visitors to Alaska’s top tourism attraction, Denali National Park, and it is a key partner with the U.S. Forest Service in serving roadless areas of the Chugach National Forest, the nation’s second largest. The railroad also provides free travel to U.S. military on active duty, and offer lower resident and student rates to support its population. Many Alaskans who live off the road system depend on the railroad to link them to urban communities for essential services. These residents are spaced out over hundreds of miles of wilderness and rugged terrain.

Their action through S. 1813 has placed the Alaska Railroad in serious financial jeopardy. If the bill in its current form becomes law, it would level a devastating blow on an essential part of Alaska’s transportation network. The provision would force the Alaska Railroad to sharply reduce services and employment. If this cut is implemented, not only will there be a huge impact on passenger services, critical track and safety needs will not be met. In addition, the railroad will not have sufficient funds to repay $135 million in remaining bond debt under the approval and understanding of the railroad’s reliance on FTA funding.

The Senate bill singles out the Alaska Railroad as the only public passenger railroad operation to suffer such a large cut. Ironically, cutting FTA funding to the Alaska Railroad would not reduce federal spending or the budget deficit as funds taken from Alaska would simply be divided among other eligible transportation providers.

In conclusion, a stable and reliable passenger rail system in Alaska is critical and in some respects more vital than elsewhere, given the lack of other alternatives and transportation providers in our state. This letter is not a request for increased federal funding, we are only asking that the Alaska Railroad be treated fairly and that the current formula funding be retained.

Please mount a vigorous defense of the Alaska Railroad Corporation’s current FTA funding formula. RDC appreciates your service to our state and we look forward to your efforts to stop this misguided funding reduction.

Resource Development Council for Alaska, Inc.

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