AL: Alabama officials unconcerned over Amtrak funding arrangement as project moves toward July start

Alabama’s long-awaited return to Gulf Coast passenger rail is picking up steam with construction already underway in downtown Mobile, and Amtrak’s “Mardi Gras Service” on track for a summer debut.

For the first time in nearly 20 years, Mobile and New Orleans will soon be connected by Amtrak service.

But even as the tracks are laid and a new train stop is being built, questions still linger over how the train’s operations will be funded—and Alabama’s role in that equation.

The City of Mobile has committed to its portion of a three-year, $3 million commitment and so has the Alabama State Port Authority. But in Montgomery, no money was earmarked out of this year’s General Fund to support the project.

Officials say it’s nothing to be concerned about. The project and the strategy to pay for it, they say, have not changed.

“From our point, nothing has changed as far as the funding goes,” said Dale Liesch, spokesperson for Mobile Mayor Sandy Stimpson’s office. “Basically, the governor’s office has given us assurance they are maintaining the commitment to give us $1 million.”

As proposed, the train’s operations will be supported by three government entities – the State of Alabama, the Alabama Port Authority, and the Mobile City Council. It’s an arrangement unique to Alabama, with Mississippi and Louisiana state governments picking up the entirety of their state’s tabs.

Gina Maiola, a spokesperson for Alabama Gov. Kay Ivey, said that negotiations about a $1 million commitment remain ongoing. The details and possible funding options, she said, are being reviewed and considered.

City’s commitment
The Mardi Gras Service, once it begins sometime in July, will be a twice-daily Amtrak route connecting Mobile and New Orleans for the first time in nearly 20 years. The route includes four coastal Mississippi stops in Pascagoula, Biloxi, Gulfport and Bay St. Louis.

The Mobile City Council is the only local government along the route to commit financial resources toward the initial start-up of the route.

“We are counting on the state contributing something and we still have faith in the governor that she will do that and accommodate it,” said Mobile City Councilman Josh Woods.

He, like the rest of the council, voted last August to dedicate $3.048 million over three years to support the operations of the Gulf Coast route. The total bill for the city is likely to be around $1 million, spread out over three years, as long as the port and the state legislature commit to the funding.

“We would like the state to be on board,” Councilman Ben Reynolds said. “We have the governor’s word. She hasn’t let us down that I can recall during my tenure. That’s a pretty good commitment.”

The city’s commitment occurred following some tense meetings leading up to the Aug. 6, 2024, vote. Some council members raised concerns over having city taxpayers pay for a service while other cities were not asked to do the same.

The council’s vote in support of the commitment ends after three years and encourages Amtrak and the Southern Rail Commission – a passenger rail advocacy group established by Congress in the 1980s – to seek future funding elsewhere.

“My vote was really relying on the fact that we’ve told Amtrak, and it’s also in the agreement, that they cannot solicit us for extended service after three years,” Woods said. “They will have to look for other funding sources after year three. I didn’t want us to sign up and be on the hook for infinity especially when Louisiana and Mississippi, their individual state (governments), were stepping up.”

The three years will include some political changes including a new mayor of Mobile later this year, and a new governor after the 2026 election.

Reynolds that no matter what is owed by the city, it’s only an obligation that lasts for only three years.

“By us agreeing to the Amtrak deal, we’ve committed ourselves to that deal,” Reynolds said. “There will have to be efforts to keep the various partners involved with us. The good thing is the deal is limited to three years. Whatever our exposure is for three years, that will be it.”

State’s expectations
Knox Ross, chairman of the SRC, said the Mississippi and Louisiana commitments are finalized. He said Mississippi committed federal congestion mitigation money toward its $3 million commitment, while Louisiana state officials dipped into their General Fund to pay for their $3 million requirement.

Ross said there were no expectations that Alabama state officials, during this spring legislation session, would add a $1 million earmark for the project within the state budget. The legislature’s session has three days remaining.

He also said there had been no lobbying efforts to secure the funding this year.

“We didn’t have any expectation that any state will commit more than they need to do until we get it up and running and that we have something to sell to them,” Ross said, referring to operating commitments that will be needed once the train begins rolling.

David Clark, president & CEO with Visit Mobile, said the first payments from the local and state governments along the Gulf Coat route are not due until after the first year of the train’s operations. That would likely mean the first installments on the matching funds of a federal Restoration & Enhancement (R&E) grant will not be due until summer 2026.

Alabama, in years past, opposed the Amtrak coastal project largely because of concerns by the Port Authority over passenger trains blocking freight trains that are a crucial part of their business.

The opposition led to a high-profile lawsuit before the U.S. Surface Transportation Board, pitting Amtrak against the Port Authority and the two freight operators along the route – CSX and Norfolk Southern.

An agreement reached in 2022 ended the friction, even though some Mobile council members expressed concerns over having to pay for the project’s operations.

City and state officials warmed up to the project after the Federal Railroad Administration released a $178.4 million Consolidated Rail Infrastructure and Safety Improvements (CRISI) grant to improve rail infrastructure along the Gulf Coast. Of that, $72 million going toward rail infrastructure improvements in Alabama, most of which will at least indirectly benefit the Port of Mobile.

Stimpson, last summer, called the CRISI grant a “game changer” for Mobile.

A financial commitment from the federal government, under the Biden Administration, toward the new I-10 Mobile River Bridge and Bayway project, also helped influence the council’s support.

Start date possibility
There is no date set for the first train to roll, though officials anticipate it happening likely in July or into August.

Clark said the project’s start depends on the completion of the train stop and rail project in downtown Mobile, adjacent to Cooper Riverside Park. He said that SRC commissioners have internally discussed the potential for a July 15 to Aug. 1 start date. Clark also said they likely want to avoid running the train on Aug. 29, which would be the 20th anniversary of Hurricane Katrina’s landfall on the Gulf Coast.

The powerful storm destroyed portions of the rail line in 2005, ceasing regular Amtrak operations along it. Before the storm, Amtrak Sunset Limited connected the Gulf Coast by offering a long-distance service from Jacksonville, Fla., to Los Angeles.

The train’s fares are also not yet set, though Ross said he anticipates more details rolling out later this month. The train’s name, “Mardi Gras Service,” was announced on April 24.

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