Passenger rail expansion in Alabama could bring at least $4.9 billion in economic impact, JSU study says

Anniston Amtrak

Amtrak's Crescent Line arrive at the Anniston station last week. 

The city of Anniston has long hoped its location along an Amtrak rail line would bring an economic lift. A recent study by JSU researchers suggests an expansion of passenger rail travel in Alabama could deliver that boost, though it might be a long time coming.

And the arrival of COVID-19 this spring, not long after the study’s authors presented their report, could throw some obstacles on the track.

The study was conducted by the Center for Economic Development and Business Research at the request of the Southern Rail Commission, an organization that promotes public and private rail interests in the South. The findings were presented to the commission at its December 2019 meeting.

The project is divided up into three separate phases: one connecting Birmingham to Montgomery, one connecting Montgomery to Mobile and one that would improve the existing line that runs through Anniston on its way from Birmingham to Atlanta.

The projects would support anywhere from 31,339 to 39,103 jobs, according to the study They are estimated to have an economic impact of anywhere between $4.9 billion to $5.7 billion to the state and cost a total of nearly $1.4 billion. 

According to Benjamin Boozer, an associate professor of finance at JSU who helped prepare the study, that economic impact analysis is measured over a period of “at least 20 years or so from beginning construction, through the construction phase, and implementation of the service.” 

Boozer said the study looks at both anticipated resources for construction and the number of users expected along various sections of the railway.

“These input numbers are showing initial economic activity that would otherwise not occur without development of the project,” Boozer said.

The basis of an economic impact study involves how spending leads to more spending, Boozer said, a phenomenon known as the multiplier effect.

“Initial spending leads to suppliers and other vendors providing goods and services, while the jobs and resulting economic activity support higher levels of household income that are put back into the economy within various levels of consumption,” he explained.

Toby Bennington, Anniston’s city planner and a member of the Southern Rail Commission, said that a lot of travel connectivity needs to be fulfilled beyond automobile travel, and that the study is a “planning tool and information tool for the future.”

“There are state and local commitments that would have to be made, but the intent of this study is to show what the potential impact would be if passenger rail was expanded in the state of Alabama,” Bennington said.

Bennington noted that bulk of the funding typically comes from the Federal Railroad Administration, through grants and appropriations made by Congress. In May, the Federal Railroad Administration awarded a $5.45 million grant to the Southern Rail Commission to restore a passenger rail service between New Orleans and Mobile.

“Anniston is located along a major interstate corridor and typically, within the feasibility studies that were done, rail expansion and the utilization of right-of-way is typically connected to interstate corridors or swaths of land areas for enough right-of-way,” Bennington said.

The railway expansion would present an opportunity for more people to visit the city of Anniston. Bennington touts the touristic value of the city of Anniston, calling it a “very viable, eco-tourism stop,” that brings a lot of people into the area. 

“We have obviously the Coldwater Mountain bike trails, which are very popular in nature by virtue because it draws in people from all over the country,” he said. “You have to look at the proximity to Mount Cheaha, from a tourist standpoint. You’ve got mountain bike trails that are being constructed out of McClellan.”

Asked if the data from the study is still reliable, Bennington replied, “The numbers are valid because if you look at the year out and the build out, it’s anywhere from a 25, 30-year build out.”

Jennifer Green, the JSU director of the Center for Economic Development and Business Research, had a different answer.

“It would be reliable on a ‘normal operative year,’” Green said. “So, no, you are not gonna see the impacts that this study estimated. It’s all based on those ridership projections that were done at the time of the feasibility studies.”

Boozer, on the other hand, explained that while economic impact studies are projections, he is confident with the accuracy of the study.

“That resulting economic impact will be very consistent with actual values,” Boozer said.