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Rail's $5 Billion Potential For Alabama

April 15, 2020

Alabama Could See $5 Billion Boon From More Passenger Rail: SRC

Expanding passenger-rail service in Alabama could inject nearly $5 billion into the state's economy and put nearly 31,000 Alabamans to work building it during the next 15 years, and once in operation the three proposed segments could generate anywhere from $102 million to nearly $900 million annually from increased travel and tourism, according to a new economic analysis for the Southern Rail Commission.

In the study carried out by Alabama's Jacksonville State University, researchers took a closer look at existing feasibility studies for rail services connecting Birmingham, Montgomery and Mobile while also evaluating the study for high-speed rail from Atlanta, GA to Birmingham. The study accounts for potential economic gains from tourism, construction, operations and other investments, all of which combine to create benefits to the entire state.

Building on modeling work carried out for SRC by the University of Southern Mississippi's Trent Lott Center, the new analysis examined what the three segments -- Birmingham to Montgomery, Montgomery to Mobile and, eventually, Atlanta to Birmingham -- might generate for the state's economy as they phase in.

The low-end estimate, which assumed minimal operations revenue for the service and a 1% increase in travel and tourism, would support 657 jobs related to operating the trains and serving the needs of new travelers: 156 on the first segment between Birmingham and Montgomery, 245 later on when Montgomery to Mobile comes together, and then 256 when the third and final segment is in operation.

The high-end estimate presumed stronger ridership and tourism increases of anywhere from 17% to 24%, depending on the segment, and supports some 8,421 jobs.

“As a follow up to the great work done by the USM on the economic impact related to the restart of passenger rail service along the Gulf Coast, it was professionally rewarding to conduct this assessment for the state of Alabama,” said Jennifer Green, who is Director of the Center for Economic Development and Business Research at Jacksonville State.