DOT could work on developing Chicago to Iowa City train

Gov. Terry Branstad says the state won't subsidize operation of a new Chicago-Iowa City passenger rail service, but that may depend on how you define ”subsidy.”

“We are looking at all the options,” said Tammy Nicholson, director of the Iowa Department of Transportation's office of rail transportation.  “The DOT can and will contiunue to work on developing the Chicago to Iowa City corridor.”

Iowa and Illinois would share operating costs not covered by passenger fares. Iowa's annual share is estimated at $3 million. Although Branstad has said he doesn't want the state “getting into the operating-subsidy business” for the twice-daily trains that would begin running in 2015, he hasn't withdrawn $11.5 million in state money through July 2013 for planning and early capital improvements needed before the trains can roll.

Most of the start-up costs are covered by a $230 million Federal Rail Administration grant. That will cover the purchase of cars and locomotives for the service as well as well as improvements to track and signals owned by the BNSF Railway and Cedar Rapids-based Iowa Interstate Railroad over whose tracks the trains will operate.

“The governor has not proposed turning back the federal funds,” said Nicholson. “That's important.”

Legislation has been passed calling for another $6.5 million in state funds starting July 2012. That's beyond the two-year budget Branstad announced Thursday.

The Iowa City trains would be similar to state-supported Amtrak services in 15 states, and Nicholson said her staff will be looking at how those operations are funded.

“Most of them have been supported with general funds,” Nicholson said.

But some of Amtrak California's costs are covered through the state gas tax, and Washington State taps vehicle license fees, both under the justification that the rail option reduces wear on highways. The study supporting Iowa's federal grant application (pdf) estimated the trains would reduce highway travel by 25,611,484 vehicle-miles a year.

Other states tap lottery revenues to support their rail service.

”The governor is really looking at all the options of how to fund the passenger service, specifically the operating subsidy,” Nicholson said.