Cut to rail funding could leave state off track

Although it is as present here as winter snow and summer fireweed, the Alaska Railroad is not something we suspect most people give much thought to. But just because we may take it for granted, does not mean it is without value.

The railroad has played a significant role here for as long as it has serviced the state. Since its completion in the 1920s, Alaska Railroad has provided commercial and social links vital to helping communities take root and the state’s economy to grow.

Today, those links — and the railroad’s economic impact — are stronger than ever. Serving ports and communities from the Gulf of Alaska to the Interior, the Alaska Railroad generated more than $14 million in net income last year through its real estate holdings and year-round freight and passenger service.

It has close to $1 billion in total assets and employs about 800 people, 685 of which have year-round jobs. Additionally, according to a 2004 report by the University of Alaska’s Institute of Social and Economic Research, spending by the Alaska Railroad Corp. supports nearly 1,900 Alaska jobs that fuel the state’s economy to the tune of $83 million in annual payroll.

So Alaskans should be concerned about proposed federal legislation making its way through Congress that could reduce by more than 80 percent funding the railroad receives that is a central component of its capital improvement program.

The Senate version of the bill, which has already passed with bipartisan support, cuts $30 million from Federal Transportation Administration funding headed Alaska’s way. The House version of the bill preserves railroad funding, but support for that bill is uncertain.

Without the $30 million, up to a third of the railroad’s workforce could find itself jobless, according to railroad officials, and passenger service could face cuts, too. Additionally, the railroad would be forced to default on $137 million in outstanding bonds that are secured by the FTA funding, which could jeopardize future use of debt bonding to support economic development projects.

There is a lot at stake.

This will surely be a test of the experience and muscle of veteran Alaska Congressman Don Young. It falls on him to convince his House colleagues just how important the railroad is to Alaska, and how the proposed funding cut would have spillover effects that far outweigh the $30 million hanging in the balance.

We stand in strong support of Rep. Young’s efforts and wish him well in making Alaska’s case.