Re: [FJGRailroad] FW: Rail tax relief dies in budget, CSX ready to sue
FW: Rail tax relief dies in budget, CSX ready to sueBad news for Selkirk yard if they don't get some tax relief.Steve..On Sun, 19 May 2002 13:59:32 -0400 Gino & Kelly DiCarlo <dicarlos@...> writes:
Albany Times Union
May 18, 2002
Rail tax relief dies in budget, CSX ready to sue
Albany -- Citing failure of Legislature, carrier shelves plan for high-speed track work
By KENNETH AARON, Business writer
First published: Saturday, May 18, 2002
CSX Corp. plans to pursue a federal lawsuit challenging the way its railroad property is assessed in New York state after the Legislature derailed a plan for tax relief in the state budget.
The railroad company will also halt $15 million in planned upgrades to its freight track and other improvements to passenger rail -- work that is necessary for high-speed train travel, said John Casellini, the railroad's resident vice president of state relations.
Gov. George Pataki had amended his 2002-03 budget proposal to include a provision phasing in a 45 percent tax cut over seven years that would have benefited the Richmond, Va.-based railroad. But the reduction was not included in the budget approved by the state Legislature on Thursday.
Kevin Quinn, a spokesman for the state Division of Budget, said Pataki wanted to get something done. "Gov. Pataki proposed the initiative in his budget because he knows how important it is to upstate economic growth, and we're going to continue to discuss the proposal with the Legislature,'' he said.
But Casellini said the train had left the station on this one.
"We are looking at, really, I guess, at the possibility of doing something here as a separate piece of legislation, but one of our better chances passed us by when the budget passed by,'' Casellini said.
CSX and the state had hoped to avoid going to court, where CSX will accuse New York of improperly assessing railroad property. The freight hauler says that while it has just 7 percent of its tracks in New York, it pays 31 percent of its taxes here.
As recently as April, John Snow, CSX's chief executive, was optimistic something would get done. He pointed to the phased reduction proposed by Pataki -- which also would have reimbursed municipalities $70 million over 10 years for tax revenue they lost -- and said, "I think the remedy is going to come.''
But it didn't.
Casellini said the company will continue to spend money on its tracks for safety and maintenance purposes. But it won't expand operations.
And, as the company threatened in April, it could take that money elsewhere.
Despite the governor's backing, tax breaks were hard to come by this year, given the revenue shortfall that had to be plugged in the 2002-03 budget. The state will move forward with $311 million in previously scheduled tax cuts, along with $700 million over the next three years for businesses that make capital investments after Sept. 11 -- but that's about it.
"We recognize the state's financial problem,'' Casellini said.
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