Recent concerns raised about the future financial viability of Caney Fork & Western Railroad are unfounded, according to Tri-County Railroad Authority chairman Louis J. “Jody” Baltz III.
“I wish to address the recent article that appeared in the Southern Standard and to offer clarification and assurances to the customers of the Caney Fork & Western Railroad,” said Baltz. “As you know, the railroad has served customers from Tullahoma to Sparta for over 30 years.”
Statements were made recently by Mayor Jimmy Haley and Warren County Executive Herschel Wells during a Joint Economic and Community Development Board meeting where they voiced concerns about a lawsuit over railroad diesel fuel sales tax.
The railroad diesel fuel sales tax had 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 this 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.
Baltz says the fund in question is used by short lines for capital improvements and will not affect day-to-day operations.
“While there is a dispute among the Class I railroads and short line railroads regarding the Transportation Equity Fund, this does not affect the current operations or service of the Caney Fork & Western. 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.”
Caney Fork & Western Railroad is debt free and service will continue, says Baltz.
“The railroad is in excellent shape and the Tri-County Railroad Authority is debt free,” he said. “The Caney Fork & Western Railroad intends to continue its service for the foreseeable future.”