Tax incentives to expand freight rail capacity would “make sense for America,” generating $1 billion in economic benefits and 20,000 green jobs, Norfolk Southern Corporation CEO Wick Moorman said today on Capitol Hill.
“America needs more transportation capacity and needs it now,” Moorman said on behalf of the Association of American Railroads during testimony to a U.S. House subcommittee. Noting that today’s transportation network is not designed to handle the doubling in freight demand projected by 2035, Moorman said, “Railroads are the most affordable and environmentally responsible way to meet this demand, and that is why tax incentives for rail capacity would be good public policy.”
Railroads have spent record amounts reinvesting in their own networks even during the economic downturn, Moorman said - a record $10.2 billion in capital improvements last year alone. “Since 1980, railroads have spent more than 40 percent of their revenues - some $440 billion - to maintain, improve, and expand their networks.
“Yet as much as railroads are investing, it isn’t enough to meet projected demand,” he said. A recent study found a $52 billion gap between the $148 billion needed for expanding freight rail capacity and the $96 billion railroads can expect to generate. Tax incentives “provide a sensible way to help bridge this gap,” Moorman said.
In addition to creating economic stimulus and jobs, public benefits would include reductions in fuel consumption, greenhouse gas emissions, and highway congestion, as railroads are more fuel efficient than trucks, and a single train can haul as much freight as 280 or more trucks, Moorman said.
“Numerous states are partnering with us,” Moorman said. “Thanks to the leadership of Pennsylvania Gov. Ed Rendell, Virginia Gov. Tim Kaine, and others, we are already investing to expand our system to meet the looming demands of moving our nation’s commerce. Congress should bolster these efforts by enacting tax credit legislation to encourage additional freight rail investment,” he said.
“America today has the best freight rail network in the world. Still, it is clear that rail capacity must increase as the economy and population expand in the years ahead. Tax incentives provide one way to ensure that happens,” Moorman said.
Norfolk Southern Corporation (NYSE: NSC) is a leading North American transportation provider. Its Norfolk Southern Railway subsidiary operates approximately 21,000 route miles in 22 states and the District of Columbia, serves every major container port in the eastern United States, and provides efficient connections to other rail carriers. Norfolk Southern operates the most extensive intermodal network in the East and is a major transporter of coal and industrial products.