DM&E update: National Taxpayers Union opposes loan
DM&E claim that "55 of 56" communities are onboard is untrue. National Taxpayer's Union says, "Federally-Backed Loan Is Gravy Train for One Railroad Company, Great Risk for Millions of Taxpayers."
Politics makes strange bedfellows, as do proposed billion-dollar government subsidized loans.
Republicans like Sens. John Thune (SD) and Norm Coleman (MN) and Rep. Gil Gutknecht (MN-1) support it. So do Democrats like Sen. Tim Johnson and Rep. Stephanie Herseth, both of South Dakota.
But Democrats like Sen. Mark Dayton (MN), former Vice President Walter Mondale, former Sen. Tom Daschle and Gutknecht's challenger, Tim Walz, oppose it.
The DM&E lists dozens of chambers of commerce as its "Partners in Progress", yet the Rochester (MN) Area Chamber of Commerce is vehemently against it.
As proponents and opponents of the proposed DM&E expansion line up, traditional political dividing lines are being thrown away. Liberals like Dayton and Mondale are not used to finding themselves on the same side of an issue with the Minnesota Taxpayers League and the National Taxpayers Union, yet all are opposed to the $2.3 billion loan the railroad is trying to wrangle from the federal government.
The National Taxpayers Union has only recently joined the growing list of opponents, which includes the Mayo Clinic, the City of Rochester, Olmsted County (MN), political luminaries, environmental groups, local politicians and ordinary citizens. It is rumored that even media mogul Ted Turner may get involved, as the planned route apparently crosses property he owns in Wyoming.
Still, DM&E CEO Kevin Schieffer seems confident, arguing that "55 of 56" communities along the way support the project. Yet two of the claimed 55 do not have legally binding agreements. The agreement between Brookings (SD) and the railroad is currently suspended pending the outcome of a referendum in November, and the agreement with Mankato, while signed by the city, has not been countersigned by the railroad, apparently due to a disagreement over a city veto clause in the contract.
A further complication is that the railroad is considering an alternate route that bypasses Mankato but cuts a swath through rural Blue Earth County. That's because in order to get right-of-way through the city for the number of coal trains it proposes, the DM&E would have to come to terms with the Union Pacific to add another set of tracks.
The UP is already hauling coal out of the Powder River Basin, which makes it a direct competitor. Vox Verax and Minnesota Monitor have received inside information that suggests the UP wants $90 million from the DM&E, plus a per-train charge, in order to expand the Mankato in-town route for the DM&E's coal trains. This could make the alternate Blue Earth County route more cost effective for the DM&E.
At the moment all parties are waiting to hear from the Federal Railroad Administration about whether it will give the go-ahead to the proposed $2.3 billion loan. That decision should come within 90 days. After that, whether the FRA gives its blessing or not, is anybody's guess. The process has already gone on for eight years. It may not be totally resolved for another eight years to come.
Resources:
Politics makes strange bedfellows, as do proposed billion-dollar government subsidized loans.
Republicans like Sens. John Thune (SD) and Norm Coleman (MN) and Rep. Gil Gutknecht (MN-1) support it. So do Democrats like Sen. Tim Johnson and Rep. Stephanie Herseth, both of South Dakota.
But Democrats like Sen. Mark Dayton (MN), former Vice President Walter Mondale, former Sen. Tom Daschle and Gutknecht's challenger, Tim Walz, oppose it.
The DM&E lists dozens of chambers of commerce as its "Partners in Progress", yet the Rochester (MN) Area Chamber of Commerce is vehemently against it.
As proponents and opponents of the proposed DM&E expansion line up, traditional political dividing lines are being thrown away. Liberals like Dayton and Mondale are not used to finding themselves on the same side of an issue with the Minnesota Taxpayers League and the National Taxpayers Union, yet all are opposed to the $2.3 billion loan the railroad is trying to wrangle from the federal government.
The National Taxpayers Union has only recently joined the growing list of opponents, which includes the Mayo Clinic, the City of Rochester, Olmsted County (MN), political luminaries, environmental groups, local politicians and ordinary citizens. It is rumored that even media mogul Ted Turner may get involved, as the planned route apparently crosses property he owns in Wyoming.
Still, DM&E CEO Kevin Schieffer seems confident, arguing that "55 of 56" communities along the way support the project. Yet two of the claimed 55 do not have legally binding agreements. The agreement between Brookings (SD) and the railroad is currently suspended pending the outcome of a referendum in November, and the agreement with Mankato, while signed by the city, has not been countersigned by the railroad, apparently due to a disagreement over a city veto clause in the contract.
A further complication is that the railroad is considering an alternate route that bypasses Mankato but cuts a swath through rural Blue Earth County. That's because in order to get right-of-way through the city for the number of coal trains it proposes, the DM&E would have to come to terms with the Union Pacific to add another set of tracks.
The UP is already hauling coal out of the Powder River Basin, which makes it a direct competitor. Vox Verax and Minnesota Monitor have received inside information that suggests the UP wants $90 million from the DM&E, plus a per-train charge, in order to expand the Mankato in-town route for the DM&E's coal trains. This could make the alternate Blue Earth County route more cost effective for the DM&E.
At the moment all parties are waiting to hear from the Federal Railroad Administration about whether it will give the go-ahead to the proposed $2.3 billion loan. That decision should come within 90 days. After that, whether the FRA gives its blessing or not, is anybody's guess. The process has already gone on for eight years. It may not be totally resolved for another eight years to come.
Resources:
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