Senator Savage, Representative Fisher, honorable members of the Joint Standing Committee on Transportation–

I will remind you that I am Representative Sharon Libby Jones of Greenville. I return before you today, as promised, to discuss some of the economic implications of our rail system. I can really only speak to those that I see for the northern part of our state, as that is where I live and it is where I have had the opportunity to observe personally just how vital the railway is to my constituents and all people who live up north.

The recent proposed sale of the Bangor and Aroostook Railroad System to a consortium of rail companies called Rail World, Inc., the Wheeling Corp. and additional investors, is the culmination of a very exhausting and frustrating process. The Legislative Delegation and the BAR “Working Group” have been involved with this topic since before session began. There became an acute awareness of serious implications for existing BAR customers and for the ability to attract new industry to northern Maine.

Maine is geographically disadvantaged in the North American Railroad network. We are not served directly by any of the four major trunk lines in the Northeast and eastern Canada. Rail users need ready access to those carriers in order to obtain competitive rates and service for interline traffic. It appears that the entire BAR line is going to remain whole, although this is not a certainty just yet. If this doesn't occur, the likelihood is that the east west Brownville Junction to Montreal line will remain at risk. This is the shortest route to the West and is the only one offering connections with all of the “Big Four” railroads in eastern North America – CSX, Canadian National, Canadian Pacific and Norfolk Southern. This line, abandoned or removed, would result in Maine Rail traffic being captive to a circuitous route to the north via Van Buren, to the south over an intermediate carrier, Guilford, before reaching the trunk lines. It is clear, that this would create a very high probability of monopolistic pricing for transporting freight over the single owner rail system.

We are discussing today the east west line, or CDAC, represents an alternative to the east-west highway across Maine. It would take freight off of the highways and offer access to a lucrative Canadian market for tourism. It would create an efficient way to expedite shipments inland from the revitalized port at Searsport. The state has already invested $16 million in the deepwater cargo pier. Having an efficient rail route inland that is not subject to the control of a competing East coast port interest is extremely desirable.

I just mentioned the state's investment of $16 million in Searsport. The state has already made other significant investment along the rail line. Peggy Schaffer of the Department of Economic and Community Development sent you all a memo outline some of them. Allow me to recap them for everyone's benefit.

Maine has made over $120 million of investment along the BAR rail line. This is through a combination of state and federal funds through CDBG, Business Development and other economic development programs. The list that she provided to you is by no means complete. It does not include the technical assistance work of the DECD's business Development Office, the Office of Tourism, the Community Development Program, or the work of the Commissioner. What is not included represents literally hundreds of hours of personnel time invested to assist our rural part of the state in our pursuit of economic development.

The state has invested in the creation of a high technology business incubator system. The goal of the business development centers is to nurture and grow high tech businesses until they are ready to “graduate” and move their businesses into the community. Along the rail line, there are four locations – Limestone, Lubec, Orono and Greenville.

As a part of Maine's economic development strategies, tourism plays a significant part. Tourism currently accounts for 25% of Maine's GDP. One of the focuses of the Office of Tourism is to not only increase the number of tourists who visit Maine, but also to encourage tourists to explore all of Maine from the coast to the mountains. The Penquis Tourism Association is an excellent example of regional efforts of statewide promotion. The rail can only augment our tourism industry, as you will see with the Acadia Rail Passenger Train proposal. It is clear that the development of local economic development infrastructure, which combines both traditional infrastructure and human infrastructure are the cornerstones of economic growth. The continuation and diversification of the rail and other transportation opportunities is one of the critical underpinnings of our economic success as a region.

In order to compete nationally and internationally, we must modernize our rail infrastructure. In fact, I would suggest creating additional rail corridors in order to improve efficiency, conserve energy and to foster more economic development. We need to recognize that what is needed is a dedicated long-term source of funding for rail – whether that occurs through capital financing or whether we issue tax-exempt bonds for this specific purpose.

To summarize what we need to do as a state:

1. MDOT needs to be given the resources to modernize the rail infrastructure and to develop long-term rail policies.

2. Issue tax-exempt bonds for the rail.

3. Must understand long-term NAFTA issues and the relationship between the railroad system of Maine and the Canadian system.

4. Stakeholders should be convened to assess current and potential economic needs.

5. We should market the services of the Derby Locomotive Repair Shop that is located in Milo.

We desperately need to keep the economic resources that we have in northern Maine, and to try to expand them. We are talking about a part of our state where almost 14% of the population is living below the poverty level. We are talking about a part of our state that has almost double the unemployment rate as the rest of the state. We are talking about a part of the state that depends dearly on the rail for both railroad related jobs, and paper company jobs.

This is not the time to stop investing in central and northern Maine. We need a strong coordinated rail policy for the entire state.

I appreciate this Committee's willingness to understand the extreme importance of not only the east-west rail corridor, but also how important a healthy economic climate is statewide.