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$170M in Economic Benefits Hinge on Mobile City Council Vote

January 24, 2020

For Immediate Release (20-2)

Contact: Sean Jeans-Gail, Rail Passengers Association (202-408-8362; [email protected])

$170 Million in Economic Benefits to Gulf Coast Hinge on Mobile City Council Vote

Alabama Should Pursue the Infrastructure Investment Model That Has Produced Dividends Across the U.S.

Washington, D.C. — The Rail Passengers Association urges the city of Mobile, Alabama, to move ahead with the creation of passenger train service between Mobile and New Orleans, which the most conservative estimates predict will add $19 million each year to Alabama’s economy. From a regional perspective, Amtrak service to the corridor would be worth more than $170 million to Mississippi, Alabama and Louisiana. This is a proven model that has produced hundreds of millions of dollars in return on investment in other states, and our Gulf Coast members are urging the city council to vote “yes” on this critical project.

The states of Mississippi and Louisiana—in partnership with Amtrak—have collectively committed $31 million toward capital improvements to bring back New Orleans - Mobile train service. However, a $3 million commitment from Mobile toward operations across three years is required.

A decision by the City Council to withhold support for funding could endanger the project—not just for Mobile, but for the entire Gulf Coast, since Mississippi and Louisiana have already committed their funds.

Members on the City Council’s finance committee have voiced concerns over the fact that the ticket fares won’t cover the entire cost of train operations. However—just as airports and highways don’t cover the entirety of their capital and operating costs through user fees, but through the economic activity they generate—the Gulf Coast passenger train will more than pay for itself by increasing business opportunities in the region.

The economic impact study, commissioned Southern Rail Commission and Transportation for America, quantified the benefits from new tourists and tourist dollars; new jobs to operate and maintain the trains, stations, and signal systems; and new construction jobs to upgrade track and signals, renovate stations, and construct maintenance bases. Rail Passengers has successfully made this argument in towns across the U.S., where experience has borne it out.

We’ve highlighted three recent examples of where local investment has produced results.

  • Amtrak Virginia: a decision made by the Commonwealth of Virginia to invest in two new train services and three extensions to Amtrak’s Northeast Corridor has paid off handsomely, with $1.4 billion in economic returns to the state, more than 1,400 jobs created or sustained each year​, and $390 million in new tourist spending​. The decision to invest in additional frequencies has elevated the financial performance of the service, and the service has become operationally profitable (“above the rail”).

  • Amtrak Downeaster (Maine): after a 35 year hiatus, Maine resumed operations of the Downeaster (Portland - Boston, MA) in 2001. This Amtrak service now carries more than half a million passengers each year. This train provides $6.2 million in wages to directly employ 100 local workers, and supports 155 Maine businesses through the purchase of $5 million in local goods and services. Amtrak’s Downeaster also transports 100,000 annual visitors to Maine, who bring in $29 million in tourism revenue​.
  • Amtrak Hiawatha (Wisconsin): with ridership up 103 percent since 2001, a coalition of Wisconsin businesses operate a series of private shuttles to connect their workforce to this corridor, and are actively working with state leaders to help support an additional 10 daily frequencies (the state currently support seven). The Hiawatha provides $4.8 million in wages to directly employ 62 Wisconsinites, and injects $12.7 million in local businesses through vendor contracts.

“While taxpayers have every right to ensure there is sensible oversight when it comes to public funds, the opponents' of this train have made arguments that are misleading and fail to fully capture the tremendous benefits this train will bring to Mobile and the rest of the Gulf Coast,” said Rail Passengers President and CEO Jim Mathews. “We shouldn’t judge this service by the money it makes Amtrak. Trains deliver value to the served communities; the important conversation is taxpaying citizens collecting a ‘Return on Equity.’”

Rail Passengers urges the Mobile City Council to embrace an ambitious vision for their city and their state by voting to commit local funds next week.


About the Rail Passengers Association

The Rail Passengers Association is the oldest and largest national organization serving as a voice for the more than 40 million rail passengers in the U.S. Our mission is to improve and expand conventional intercity and regional passenger train services, support higher speed rail initiatives, increase connectivity among all forms of transportation and ensure safety for our country's trains and passengers. All of this makes communities safer, more accessible and more productive, improving the lives of everyone who lives, works and plays in towns all across America.