The State Legislature revived Cincinnati city officials’ attempt to sell a city-owned rail line to Norfolk Southern, the same company that caused the toxic disaster in East Palestine, which stalled last month,
City leaders announced a plan to sell the rail line that runs to Chattanooga, Tennessee, to Norfolk Southern at the end of last year for $1.6 billion. However, that deal could not be done without changes to state law.
The Ferguson Act, which governs the city-owned railroad, currently mandates that the city use all sales proceeds to settle debts. The Cincinnati Southern Railway Board wants the Ferguson Act to say that the city can spend the money on current infrastructure projects instead.
Earlier this month, the Ohio House approved the $12.6 billion transportation budget with the board’s request; however, modifications made by Senate Republicans would rescind that and keep the law as it is. So long as the money went toward paying off debt, Cincinnati could still sell the railroad.
“Removing debt service safeguards in exchange for broad unspecified potential capital projects creates concerns regarding risk, dwindling reserves to pay for debt service, and the possibility of leaving taxpayers with the bill,” Senate GOP spokesman John Fortney told The Ohio Star.
On Tuesday, a conference committee restored the language allowing the city to use the funds from the sale of the railroad to Norfolk Southern on current infrastructure projects with a few changes.
The committee-approved text must clearly name Norfolk Southern as the purchaser, place restrictions on the amount of principal that may be held in a trust that will be administered by the Cincinnati Southern Railway Board of Trustees, and permit the board to only put the sale matter before voters once, in 2023 or 2024. The city can’t sell the railroad without the consent of the voters.
According to Cincinnati Mayor Aftab Pureval, the sale is a “top priority” that will “improve the lives of Cincinnatians.”
“I’m committed to working alongside the General Assembly to pass the required legislation that allows the referendum for voters to decide. There has never been a more important time for our city to get out of the rail business. Selling now gives us local control over our assets in an investment trust for generations to come. No longer would our future be tied to the unpredictable and risky rail industry,” Pureval said in a statement.
Following a hazardous train disaster in East Palestine, council members have raised concerns regarding the sale to Norfolk Southern. The state is currently suing the company to ensure it pays for the cleanup and environmental damage caused by the derailment. Earlier this month, another Norfolk Southern train also derailed in Springfield, and a Norfolk Southern conductor died due to a train collision with a dump truck in Cleveland.
Liz Keating, the only Republican on the city council questioned if the city should halt the sale in the wake of the incident.
“Given the issues going on in East Palestine, is the sale, the purchase of this railroad, still a top priority? Does (Norfolk Southern) have all the resources available to continue on with this sale?” Keating said.
Democratic council member Mark Jeffreys has also been vocal with questions about the sale, saying he wants more information about the deal before endorsing it.
“We need to make sure that it’s safe, whether it’s sold or it’s leased,” Jefferys said.
The House and Senate will each vote on the new version of the bill this week. If it passes, Governor Mike DeWine must sign it by Friday.
The ballot text would need to be provided to the Hamilton County Board of Elections 90 days beforehand, or by August 9, if the sale were to appear on the ballot in the 2023 general election on November 7th.
– – –
Hannah Poling is a lead reporter at The Ohio Star and The Star News Network. Follow Hannah on Twitter @HannahPoling1. Email tips to [email protected]
