City and county government have both passed resolutions expressing their appreciation for services provided by Caney Fork & Western Railroad.
“The short-line railroads are in jeopardy of losing funding and they are the lifeline for our community right now,” said Mayor Jimmy Haley. “Bridgestone and DN Plastics are highly dependent on our rail service.”
County Executive Herschel Wells says maintaining the railroad is important to existing industries, as well as critical for industrial recruitment.
“The availability of rail service is vital to maintaining necessary transportation options for existing industries and is critical to industrial recruitment efforts,” said Wells.
The two are concerned about a legal battle over railroad diesel fuel sales tax, a tax which has been on the books since the late 1940s. Since the mid-1980s, it had been earmarked for the Short Line Equity Fund – a 7 percent sales tax on diesel fuel for locomotives given to help the state’s short-line railroads pay for track maintenance and upgrades. Challenged by the state’s big railroads as discriminatory, the law was struck down last year by federal court and funding to short-line railroads was cut off.
Short-line railroads attempted to find a solution and the Tennessee General Assembly passed a bill last April setting up a new 17-cents-a-gallon tax to replace the sales tax, relying on guidance from the court that ruled the other tax discriminatory. The new tax was intended to continue the Short Line Equity Fund. It is being challenged by the state’s big railroads, as well.
According to Tri-County Railroad Authority chairman Louis J. “Jody” Baltz III, the fund in question goes toward capital improvements and will not affect day-to-day railroad operations.
“The equity fund has been used for capital improvements for Tennessee’s short line railroads, but does not impact the operational side of the railroad,” said Baltz. “The railroad is in excellent shape and the Tri-County Railroad Authority is debt free. The Caney Fork & Western Railroad intends to continue its service for the foreseeable future.”
The Warren County Commission passed the resolution 24-0, while the McMinnville Board of Mayor and Aldermen passed it 7-0.
Both resolutions will be sent to state representatives.