South Dakota railroad leaders in Washington facing uncertainty over infrastructure

Mark Wegner says he's optimistic they will get the 45G tax credit renewed.
Mark Wegner says he's optimistic they will get the 45G tax credit renewed. (GRAYDC)
Published: Mar. 8, 2018 at 3:23 PM CST
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Railroads drove a massive spike in the growth of our country, but a shortage in federal funding could leave the industry in the past. Some rails in South Dakota are 126 years old. For Mark Wegner, it is a reminder of much needed updates to infrastructure. Trains that ride these tracks generally cover small distances, and connect rural communities to the major railway corridors. Wegner's Twin Cities and Western Railroad relies on what's called the "45G tax credit".

“Just so that we can make sure long term that these folks can have continued rail service,” said Wegner.

Under the tax credit, railroads get 50 cents back for each dollar spent on track and bridge improvements, up to $3500 per-mile. It expired in 2017, and its future is at the mercy of Congress. Legislation currently sitting in both chambers would make the credit permanent.

Jerry Vest with Rapid City, Pierre and Eastern Railroad, says some rural communities could be in trouble if Congress doesn’t come through.

“The real problem is we can’t improve the railroads fast enough to serve our customers the best we can,” said Vest.

They are turning to their Senator Mike Rounds (R-SD) to help them out. The tax credit being in the hands of a preoccupied Congress means it could get lost in the shuffle.

“It sure makes it a lot easier if they don’t have to come in every single year and make that request,” said Rounds.

Rounds says he wants colleagues to acknowledge the needs of railroad officials in his state. He says he is optimistic the tax credit will be available in 2018 and cover work already done by these companies.

“When you’re looking in terms of the impact on the economy it can be significant,” said Rounds.

The legislation has 254 cosponsors in the House and 56 cosponsors in the Senate, putting it on track to pass.