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Study finds rail helps drive counties' economic engines

Growing budget challenges that compete with community needs has made an already-delicate juggling act all the more difficult for legislators and other policymakers.

So five counties in central Minnesota turned to University of Minnesota Extension for its ingenuity.

In 2009, the Minnesota Valley Regional Rail Authority (MVRRA), a public entity governed by Carver, Redwood, Renville, Sibley and Yellow Medicine counties, commissioned a team of Extension experts to study the economic impact of 94-miles of rail running from Norwood Young America to Hanley Falls. The stretch passes through prime agricultural land and areas rich with biomass for renewable energy production.

The need for a study evolved when neighboring communities reached a crossroads: Invest in rail upgrades to increase maximum speeds from 10 to 25 mph, or contribute to other pressing needs?

The University was able to step in and provide credible data based on sound research, says Julie Rath, MVRRA administrator. "We needed factual information that could be shared at the state and federal levels with our congressional leaders—that educational piece for decision-makers," she says.

Extension experts put real numbers to the rail's impact in the area. The findings were eye-opening, says Brigid Tuck, Extension community economics educator and co-author of the report. "Without the railroad, we learned that close to 700 full- and part-time jobs would be affected," Tuck says.

In addition, goods shipped by the rail in 2008 contributed to $28 million in labor income and $302 million in additional goods and services, according to the analysis.

The report helped push through a bill in the Minnesota Legislature earlier this year, which prompted the state to contribute $5 million toward the rail upgrade. Proponents reported the decision to invest would lead to increased profitability for shippers, business expansion, and positively affect home values and median incomes.

According to Rath, the report also helped inform the Minnesota Department of Transportation's Comprehensive Statewide Freight and Passenger Rail Plan, which provides guidance for rail initiatives and investments in the state. The plan outlines priority improvements for the next 20 years, including the goal of a high-capacity, high-speed (25 mph minimum) rail system throughout Minnesota.

Citizens of the 16 MVRRA neighboring towns continue to voice support for funding, says Rath. "The closer we get to the communities, the more interest is being sparked to increase shipping speed and make safety improvements," she says.

For more information, visit the Extension Economic Impact Analysis program.

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