Eastern Railroad Discussion > Railroad right-of-way construction question

Do railroads' rights-of-ways' ever get built, or more interestingly, with sections of partially built track (in the sense of number# of parallel tracks, NOT to be confused with abandoned rights-of-ways) for the purpose of fincial benefits?

In the second example, a scenario could be a right-of-way, that is ultimately has two, 50 mile-long, parallel tracks, connecting one junction to another.  However, it contains a short, one-mile long segment, deliberately built with one-track (bottlenecking) lightly-used stretch, categorizing it - ON PAPER - as a single-track main, to avoid tax requirements, etc.

Do railroads ever go to that magnitude of abstraction, when building/altering their blueprints, even with little material wholesale costs?

Matthew



Edited 1 time(s). Last edit at 07/05/20 09:46 by Cumberland.

As I understand it, right-of-ways are acquired by railroads in various ways, for example, by purchase in fee, easement, condemnation, ordinance or adverse possession.  In some states, railroads are considered public utilities and have the right to occupy public streets.  From what I’ve seen, PRR for example commonly acquired a 66’ wide (4 rods wide) right-of-way except where cuts and fills required additional right of way.
The primary consideration in building a line of railroad is the cost of roadbed earthwork, especially at cuts and fills where material removed and installed is intended by design to be net zero.  To maximize length of road, many lines were initially built with one track, sharper curves and timber bridges with the intention of installing a second track, broader curves and iron or steel bridges at a later date.  Some railroad lines built as double track deliberately had single track segments account of the enormous cost of geophysical challenges such as canyons, long tunnels, wide river crossings.  In other cases, such as the Western Maryland, the road built double track bridges in anticipation of a second main track which was never realized.  The cost of construction of a line of railroad is so great and volume of traffic so important to railway economics that it is unlikely that taxation was ever a major route or capacity decision factor.  Hope this helps.
 



Edited 1 time(s). Last edit at 07/05/20 11:42 by AVR3001.

My first question is to Matthew's premise. Is there any proof that a railroad would be taxed differently for a ROW based solely on the number of tracks? Have you found any description in tax code that calculates based on the number of tracks and not some other metric (such as tons carried or gross revenue)? If so, have you found any support for the concept that a railroad would be able to classify an entire 50 mile length of track as "single" because there was a short single track segment within that 50 miles? I am having a problem assuming that premise is true (that railroads are taxed by number of tracks and a single track segment would affect the classification of long double tracks).

As for why a second track was not built where ROW exists I agree with AVR4001. One would need to look at individual circumstances, but the idea that it would be more cost effective to build a single track in certain locations (such as a bridges, viaducts and tunnels) than build a second track.

In the early days of the CSS&SB "South Shore" railroad they had a consistant ROW across northern Indiana but there were several places where two tracks converged to one track or a gauntlet track to cross a bridge or other location where it was simply too expensive to add a second bridge at that time. All of the locations on double track have now been upgraded. I expect the same rang true for other railroads.

Do you have a particular 50 mile double track segment with a short single track segment in mind?

My reason for asking this question was that - in this day in age - there can be so many odd loop holes within our tax code in so many diffent flavors, that businesses can benefit from. That could include railroads. So I was simply asking whether or not railroads ever use techniques, like my example illustrates, and the answer in short is NO. 

The two members whom responded to my thread gave me some really great examples within their threads. Thank you!

Matthew

I would not say that a railroad would not take the tax implications of what they have built in to consideration and make adjustments (such as not build track or structures or remove track or structures) to reduce their tax burdens. Given a choice most businesses will consider where to spend their money based on all factors. The decision not to double track where it would be too expensive to build a wider bridge or viaduct is a cost of business decision. Deciding not to double track because of not wanting to pay more taxes in a particular taxation area would be a similar business decision. As railroads lost money removing improvements from the property may have helped lower their tax burden in some areas. It all depends on the local tax formulas in each jurisdiction.

Property taxes on railroads are limited by federal law so they can be no more than other commercial property taxes in the same jurisdiction. But tax auditors in some areas like to raise valuations as much as they can to raise the amount collected from all taxpayers without "raising taxes" or violating any tax caps in place. The more aggressive tax jurisdictions may find businesses reducing the value of their property - if they cannot simply move away.

So I would not say that taxation has never had an influence over whether or not railroad infrastructure was built or removed. But I would say that there are also other influences.

In New York state, at least, tax valuations most certainly considered track mileage, based on how often I've been told that Conrail had a standing practice of removing any tracks in that state that it could deem surplus so as to not have to pay marginal taxes on them. But it was not a matter of changing a main line from "double track" to "single track with sidings" -- as if there was some sort of mainline status effect.

I don't know what the Commonwealth of Virginia does, but the town I used to live in, and which remains my home terminal for work, used to tax CSX on each linear foot of track....so much for track actively and so much for track in place but not used in the previous year.....it was such a nightmare of accounting that a lot and I do mean a LOT of yard tracks and related structures were removed, to the point that only active track would remain....no space for a surge of business pretty much....

Local taxes are typically based on two items, "land" value and "improvement" value.   So say for a mile of right of way.  The land value has a set dollar amount based on similar properties.   The improvemnt value would be based on what improvements exist, say one track, two tracks, etc. increase the improvement value.   Hence the reason so many buildings are removed from railroad properties as soon as they become surplus, the improvement value increased the tax burden.

I could see where a railroad "may" remove or not build one track in an area with a high tax burden, but if a double track is needed due to traffic volumes, I would not think the railroad would remove the track.

There are a host of ways to reduce tax burdens if the track or a structure is little used, abandoned, or sitting idle which would require a tax appeal at the local, county, or state level.  

I read somewhere that New York imposes the highest taxes on railroads of any other state. 

I suspect that was a driving force in EHH's PSR at CSX contemplating/proposing cutting the double track in NY to single track with passing sidings a couple years ago.  After all, every expense that can be reduced or eliminated is more money for the stock holders is the most important goal of PSR.  Reduced taxes and reduced track maintenance are 'low hanging fruit' for the PSR folks.