Investment is Critical to a Strong Economy

By Carey Bretsch

Good, reliable transportation to rural areas is paramount to the viability and livability of small towns. Under the leadership of Gov. Dennis Daugaard, South Dakota aggressively pursued a widespread rehabilitation of state railroads, particularly those serving rural areas of the state.

The recently completed Phase 2 rehabilitation of the Mitchell to Rapid City Railroad (MRCII), upgraded a 42.6-mile section of track between Chamberlain and Presho. This project is an extension of a previous project that reconstructed 61.6 miles of railroad from Mitchell to Chamberlain. Together, the two railroad projects cost over $55 million and generated over $90 million in additional private construction.

Most areas served by the MRCII are farming communities that have seen a reduction in job availability with increased mechanization of farming operations. All counties impacted by the MRCII project have seen population decreases in the past 20 years as job opportunities become more scarce.

Railroads are an attraction for new businesses in rural areas. Transportation is one of the most important location considerations for new businesses, along with other infrastructure such as sewer, water and power. Many of the types of businesses that generally locate in rural areas must be able to move raw products in and move processed products out, and railroads are a cost-effective means of moving large volumes great distances.

But there are other benefits to the MRCII. Construction produced an estimated 130,000 hours for labor. Private investment totalling about $90 million brought projects to the area that contributed an estimated 80 construction jobs, 10 to 12 full-time jobs and many parttime positions.

New grain facilities that were located along the railroad’s access areas had a dramatic impact on the economy. Grain prices increased an estimated 10 to 30 cents per bushel because of a reduction in transportation costs. Along the length of this railroad, that accounts for up to $20 million in additional annual revenue paid directly to the producers.

Transportation investment is critical to a strong economy. Highways, bridges, railroads, transit and other modes will keep the country and economy moving. The areas of the country with the best and leastexpensive infrastructure will be the most attractive to manufacturing and other industries. State and local investments need to be made in infrastructure to create jobs and keep rural areas strong and competitive. PB