CINCINNATI — After initially removing elements needed for the city's proposed sale of the Cincinnati Southern Railway from House Bill 23, the sale could be back on the table once more as the bill heads to Governor Mike DeWine.
Trustees voted unanimously in November 2022 to sell the Cincinnati Southern Railway to Norfolk Southern for around $1.6 billion, but that deal could not be done without changes to state law. The law currently demands the funds be spent paying off debts, but trustees wanted to put the money into an infrastructure trust for existing maintenance on streets, bridges, parks and more.
House Bill 23, which outlines the state's transportation budget, originally included language that would allow the money to be used for infrastructure maintenance, but as of March 15, Cincinnati Mayor Aftab Pureval said the bill was expected to be passed without that language.
Now, a new amendment crafted by a House committee put that language back in just before the Ohio House voted to pass the bill.
As a result, if DeWine signs HB 23 into law, the City of Cincinnati can sell Cincinnati Southern Railway if the sale is approved by local voters. The amendment says the sale would have to appear on the ballots for "either the date of the primary or the general election in 2023 or 2024."
But, if the sale fails to pass local voters' support, HB 23 will prohibit Cincinnati Southern Railway trustees from putting the issue on a ballot again without authorization from the General Assembly.
Cincinnati is the only municipality in the U.S. to own an interstate railroad. It has been leased by Norfolk Southern since 1981.
Trustees' initially decided Norfolk Southern would buy the railway from the city, but that transaction has been shaky since a Norfolk Southern train was at the center of a Feb. 3 fiery derailment in East Palestine, Ohio that released hazardous materials into the area's ground and waterways.
"Personally, I do not believe it would be in our best interest to work with an organization like this until more research has been done how these events unfolded, how damaging the environment the quality of living is," said Jack Cunningham, a Cincinnati resident who spoke at a Cincinnati budget and finance committee meeting in February.
However, in 1987, Norfolk Southern and the Cincinnati Southern Railway agreed to extend the lease through 2026. In 2021, that lease was again extended to 2051, meaning if Cincinnati sells the railway, whichever company purchases it will have to maintain the lease to Norfolk Southern.
The sale was planned to be for around $1.6 billion. Currently, the city makes around $25 million annually from the railroad.
Not everyone has been in favor of the railway sale, arguing that keeping the railway could be a bigger asset to Cincinnati overall.
"It's been a great producing asset," Flynn said. "The railroad is probably a better, safer bet than taking the sale proceeds and investing it in the stock market."
