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Ohio eyes highway ads to pay for passenger rail

(The Associated Press circulated the following story by Matt Leingang on July 17, 2009.)

COLUMBUS, Ohio — The $10 million that Ohio needs to operate a passenger train service linking its major cities would come from fees that restaurants, hotels and gas stations pay to advertise on blue highway exit signs, according to a preliminary proposal filed with the Federal Rail Administration.

Annual income from Ohio's highway advertising program would help operate Amtrak trains connecting Cleveland, Columbus, Dayton and Cincinnati, the pre-application filed by the Ohio Rail Development Commission says.

About 6 million people live along the 250-mile route from Cleveland to Cincinnati, making it one of the most densely populated corridors without rail service in the Midwest.

The pre-application is the first step taken by Gov. Ted Strickland's administration to secure as much as $400 million in federal stimulus money to buy railcars, build stations and make necessary upgrades on existing freight tracks so that passenger trains traveling up to 79 mph can start running in 2011.

The document also outlines for the first time how Ohio would pay to operate the startup service, estimated at $10 million a year. Ohio's constitution prohibits revenue from the state's 28-cent per gallon gasoline tax from being used on anything other than highway projects.

The train's operating costs for the first three years would be covered by a federal fund for projects that reduce highway traffic and improve air quality, said Scott Varner, spokesman with the Ohio Department of Transportation. Revenue from highway advertising would pick up the costs after that, he said.

Ohio renegotiated its contract with a private company that maintains the signs so that the state would get a slice of the ad revenue, beginning this year, Varner said. The state also will continue looking at other funding options, he said.

President Barack Obama's $787 billion economic recovery package, signed in February, sets aside $8 billion for passenger rail projects in the U.S., something Obama sees as a down payment for a future high-speed network. The first round of funding is expected to be announced this summer. High-speed rail plans in California and the Midwest figure to be front runners.

Ohio's formal application will be filed in September, shortly after Amtrak completes a study on ridership forecasts, revenue and station locations.

Ohio also is seeking $17 million in stimulus money to pay for an environmental study on boosting trains to 110 mph from Cleveland to Cincinnati and on six other routes, including Cleveland to Pittsburgh, Columbus to Chicago, and Cleveland to Toronto.

The only U.S. rail service that meets the Federal Railroad Administration's 110 mph threshold to qualify as high-speed rail is Amtrak's 9-year-old Acela Express route connecting Boston to Washington, D.C.

Monday, July 20, 2009

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