Cincinnati May Sell One of the US’s Last Publicly Owned Rail Lines to Norfolk Southern
Elected officials in Cincinnati are considering a lucrative deal with rail executives that would sell one of the last publicly owned stretches of rail line in the US to Norfolk Southern, the company behind the disastrous train derailment in Ohio last winter.
Cincinnati is the only city in America to own interstate rail tracks — yet is considering selling one of the country's last rail lines to Norfolk Southern rail. (Elijah Nouvelage / Bloomberg via Getty Images)
Next month, the company behind an Ohio train derailment that triggered a toxic inferno and national scandal could close a lucrative deal: at the urging of elected officials and company executives, the state’s third-largest city could sell railroad giant Norfolk Southern more than three hundred miles of track — one of the last publicly owned stretches of rail line in America.
Earlier this year, on February 3, a Norfolk Southern train derailed in East Palestine, and the company subsequently released a plume of dangerous chemicals over the small town.
The fiery catastrophe spurred calls for a national crackdown on rail monopolies that have slashed their workforces to pad profits and enrich investors, while opposing new safety regulations on trains transporting hazardous materials.
While no crackdown has occurred, the cloud of the disaster looms over a November ballot measure in Cincinnati, Ohio, asking voters to approve the sale of the city’s publicly owned rail line to Norfolk Southern, which has been operating on the tracks since the nineteenth century.
As part of the city’s deal with Norfolk Southern, the rail company agreed to fund third-party campaigns to persuade voters to approve the sale in November. Now, voters are being bombarded with ads and mailers that argue ceding control of the railroad would be a win for residents — by providing a tax-free source of funding for infrastructure projects — without naming the buyer.
“Public ownership gives you control, it’s an inherently flexible ownership form,” said Thomas Hanna, the founder and president of the Institute for a Democratic Economy and Society and an expert on public ownership. “It allows you as a community to make certain decisions about what you would like to use the asset for — and what you would like to not use the asset for. There’s a lot of debate about what the railroad is worth in financial terms, but I think we have to consider what the railroad is worth in a larger perspective.”
Cincinnati is the only city in America to own interstate rail tracks, and the publicly owned line that runs to Chattanooga is a rare stretch amid a national freight rail system that is almost exclusively privately owned and operated.
The proposed sale would abdicate the city’s ability to use the right of way as it pleases, slamming the door on future possibilities like securing better terms during lease renegotiations, running passenger trains along the line, or using the associated rights of way as a conduit for broadband or renewable energy infrastructure.
Voters from across the political spectrum question whether a one-time payment of $1.6 billion is worth relinquishing such a valuable asset — 337 miles of track, signals, tunnels, and other infrastructure, as well as 9,500 acres of right of way. If the sale goes through, the revenue would be put into a trust fund, and the investment’s returns would be used to fund infrastructure improvements for the city.
Ohio’s US senators, J. D. Vance (R) and Sherrod Brown (D), have vocally criticized Norfolk Southern’s response to the East Palestine derailment and proposed bipartisan rail safety legislation, the Railway Safety Act, to more strictly regulate the rail industry in the wake of the disaster. But neither has weighed in for or against the proposed Cincinnati sale.
“This decision will be made by the voters of Cincinnati,” Vance said in a statement to the Lever. “I’m doing all that I can in Washington to ensure our rail system is as safe as possible, regardless of who owns it. We do that by passing the Railway Safety Act.”
Brown’s office did not provide comment for this story.
But safety concerns loom over the sale, so much so that the Ohio affiliate of one of the state’s largest rail unions has come out against it.
“It was our organization that saw Norfolk Southern’s wrongdoing in East Palestine and quite frankly, still don’t trust them,” said Clyde Whitaker, Ohio state legislative director for the Sheet Metal, Air, Rail Transportation Union transportation division (SMART TD), a major rail union whose Ohio affiliate is opposing the sale. “Why are we not addressing the East Palestine issue? There’s such a push for this sale — and just look at how much money that Norfolk Southern has spent to defeat the rail safety bill that Sens. Vance and Brown put in the Senate. [Norfolk Southern] doesn’t care about safety.”
“They’re Trying to Scare Us”
In 1869, facing a loss of commercial activity along the Ohio River as freight rail rerouted shipping away from the city, Cincinnati voted to approve $10 million in municipal bonds to finance construction of a railroad.
More than a decade later, soon after the tracks were completed, Norfolk Southern began operating on it through twenty-five-year leases with the city, overseen by a municipal railway board of trustees appointed by the mayor. Norfolk Southern currently pays the city about $25 million a year under its lease terms.
Now, city officials want to shed the asset and invest the proceeds from the sale, using the returns to finance repairs to the city’s streets, parks, bridges, and other public infrastructure.
Last fall, Norfolk Southern and the board of trustees of the Cincinnati Southern Railway penned a purchase agreement for the rail infrastructure and rights of way. The deal was approved by the federal Surface Transportation Board, which regulates rail commerce, in September.
But it’s up to Cincinnati voters themselves to decide whether the city should sell; the issue will be on the ballot in November.
Even though it’s an off-year election, turnout may be high since Ohio residents will also be voting on a constitutional amendment to establish the right to an abortion.
City officials are overwhelmingly boosting the sale; all but one member of the city council, made up of eight Democrats and one Republican, voted in August to endorse the sale.
“There has never been a more important time for our city to get out of the rail business,” Cincinnati mayor Aftab Pureval (D) said about the sale in March. “No longer would our future be tied to the unpredictable and risky rail industry.”
Pureval has been featured in digital ads from Building Cincinnati’s Future, a political action committee supporting the ballot measure campaign to approve the proposed railroad sale.
“We have a big opportunity to upgrade fire stations to save lives, fix city roads, and improve parks and playgrounds,” Pureval says in one ad. “By selling this old freight railway, we will have the money to fix all that. Vote ‘yes.’”
Building Cincinnati’s Future hasn’t disclosed its spending or donors yet; its first campaign finance filing deadline is later this month.
The rail unions are split on the transaction. The railroad industry, which crisscrosses state lines and is dominated by a few major companies, is federally regulated, and union contracts are negotiated at the national level. That means the day-to-day operations of the track likely wouldn’t be affected by a sale in the short term.
The executive committee of the Ohio state board of the Brotherhood of Locomotive Engineers and Trainmen, a Teamsters affiliate that previously opposed the transaction, has now come out in favor of the sale. The union represents more than twenty-five hundred active and retired railworkers in Ohio.
“Our board was vocally critical of the sale during the lame-duck period of the 134th General Assembly,” the executive board said in an October 6 press release. But the union changed its position after conversations with lawmakers, labor leaders, and regulators, according to the release. The executive board said it is now endorsing the sale, in part because of the supposed financial benefit to the city.
SMART TD and Railroad Workers United, a reform caucus of workers from different rail unions across the country, remain staunchly opposed to the sale.
Railroad companies are “worshiping the shareholders and the profit margins and they’re not thinking of the future,” said Matt Weaver, a railworker and steering committee member of Railroad Workers United, which supports national public ownership of rail. Private rail companies and their investors “look at the months’ numbers, not the decades’ numbers,” he added.
In Cincinnati, conservative and progressive voters alike are skeptical of the deal, in part because they are concerned about corruption on the city council and don’t trust that the resulting investment trust will be properly managed. In 2020, the FBI arrested three Cincinnati city councilors on corruption charges; one served prison time, one is awaiting sentencing, and the third was just sentenced to sixteen months in federal prison.
Members of local groups formed to oppose privatizing the tracks told the Lever they don’t trust city officials’ claims about the proposed sale, nor that the revenue would be invested in the best interests of the city.
“The railway board members have gotten in cahoots with Norfolk Southern to sell our railroad,” former state representative Tom Brinkman (R) told the Lever, referring to the Cincinnati Southern Railway, the mayoral-appointed board that oversees the railroad. “They were supposed to be on the board looking out for the citizens’ best interests, not Norfolk Southern’s best interests. These guys are all in cahoots.”
Critics also say that the city is giving Norfolk Southern an unfairly sweet deal.
Adam Koehler, a Republican and real estate developer who previously ran for Cincinnati mayor and for a seat in the state house but was defeated both times, thinks the city is overestimating the potential returns from the investment trust fund and could instead negotiate a higher price on the lease to bring in more revenue.
“What it all boils down to is you’re selling an asset that’s going up in value, even if, as [the city] says, they will make a little bit more than they are making on the lease right now,” Koehler told the Lever. City officials are “trying to scare us and pretend like rail is going to go away. This track has been around for 170 years. It’s not going away.”
“I Don’t Like Norfolk Southern Any More Than You”
Even though Norfolk Southern has been using the tracks for more than a century, opponents of the sale see the East Palestine incident — for which the company is facing fifty-eight criminal charges from the Ohio attorney general — as a reason to vote no.
Micah Niemeier-Walsh, an environmental and industrial hygienist with the National Institute for Occupational Safety and Health, said that when she has been canvassing voters to oppose the sale, mentioning the company’s name and history will often sway peoples’ opinions.
“As soon I say, ‘Do you know it’s Norfolk Southern, the company responsible for East Palestine?’ Everyone immediately goes, ‘Oh no, we don’t want that, that’s a bad idea,’” she said.
Niemeier-Walsh is the chief steward of the local affiliate of the federal employees union, the American Federation of Government Employees, and was one of fourteen labor delegates out of thirty on the Cincinnati American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) labor council who voted in August to oppose the deal.
On October 4, the labor council retracted its endorsement of the sale, instead adopting a neutral position.
“There were too many open questions in their mind,” said Cincinnati AFL-CIO executive secretary Brian Griffin. “The city has not yet clearly shared or answered the questions that many have.”
Under its deal with the city, Norfolk Southern agreed to “undertake all efforts it deems reasonable to support the Cincinnati voter approval” and “pay all costs related to its supporting efforts for obtaining the Cincinnati voter approval.”
Meanwhile, city officials have referenced the East Palestine derailment in order to push the sale. Their argument: Why would Cincinnati want to control an asset that comes with the financial risk of something like the East Palestine derailment, which has cost Norfolk Southern a billion dollars so far in clean up costs and lost revenue?
“I don’t trust future mayors or council members any more than any of you,” Pureval, the mayor, said at a recent council meeting. “I don’t like Norfolk Southern any more than you.”
But he warned voters in an interview with the local outlet Cincinnati CityBeat, “We could be on the hook for liability if something like [East Palestine] happened here.”
That argument was repeated by the Brotherhood Of Locomotive Engineers and Trainmen union’s Ohio executive committee in its endorsement of the sale. The city “could potentially be exposed to liability if something were to occur on the trackage,” the executive board said in its statement. “The sale of the railway eliminates this exposure.”
The mayor and union are wrong on the liability issue, according to city lawyers. A spokesperson for the city’s legal department told the Lever that under the current lease between Norfolk Southern and the railway board, “Norfolk Southern is required to pay for all claims against the [board] as a result of Norfolk Southern’s operation or maintenance” of the line.
Experts say Pureval’s warnings about the city’s liability is a common — and potentially misguided — argument for privatization.
“The idea is that if you take it off the state balance sheet, the state or the public is somehow not paying for it,” said Melanie Brusseler, a senior researcher at the ownership-focused think tank Common Wealth. “[That argument] is pretty facetious on the face of it. So often these infrastructures, because they’re so vitally necessary and capital intensive, even if they’re removed from state ownership, there’s still always going to be a structural role for the state in supporting it.”
The federal government, for example, frequently invests public money in upgrades to rail infrastructure. This summer, the Department of Transportation announced $570 million in grants under the bipartisan infrastructure law for construction to improve safety at rail crossings. The intersections of roads and tracks have become more dangerous as rail companies cut workforce costs by running longer trains — which means they are blocking crossings for longer periods of time, creating safety risks for first responders and schoolchildren.
“American People Often Vote Down Privatizations”
Cincinnati’s push to sell its railroad bucks recent trends. The freight railroad industry’s shift to “precision scheduled railroading” — a corporate strategy aimed at efficiency, which in practice has meant running longer trains with slimmer workforces and less attention to safety — has reintroduced discussions about nationalizing the railroads, as President Woodrow Wilson did for a three-year period starting in 1917.
As recently as 2019, freight rail was reportedly the most profitable industry in America, after profit margins for the largest firms nearly tripled over the past two decades. Instead of using those profits to invest in infrastructure, rail companies slashed their workforces by nearly 30 percent and saw derailments tick up. Profits were returned to investors in the form of stock buybacks. After years of worsening service and railworkers raising concerns about safety risks and exhaustion among the workforce, the threat of a national rail strike last fall (blocked by Congress and President Joe Biden) pushed the plight of America’s rail infrastructure into the spotlight.
Nationalization could also be a way to electrify railroads and replace freight-hauling trucks, both key to transitioning away from fossil fuels, because rail companies have so far been unwilling to make the costly investments necessary to finance such a shift.
In January 2023, the United Electrical, Radio, and Machine Workers of America (UE) union endorsed the nationalization of rail. Thousands of the union’s members manufacture locomotives, and the organization has proposed, through its Green Locomotive Project, to electrify the rail system.
“You need long-term capital investment to get the conversion of the rail industry off diesel fuel,” UE general president Carl Rosen told the Lever. “And the railroads just won’t do it.”
It’s not just that railroads have proven unwilling to invest in an energy transition; their profits have increased as freight loads fall.
“It helps them earn high profits — they don’t have to run as many trains or keep as many people working, and they make more money by cutting down the amount of freight traveling by rail,” said Rosen. “Which is exactly the opposite of what we need as a society — we need rail to be replacing trucks, not freight hauling to be displaced to trucks.”
In addition to electrifying locomotives and diverting freight shipments, retaining public control of rail lines could enable passenger rail construction and expansion — also key to reducing fossil fuel consumption.
“This asset sale runs contrary to a lot of what is happening with rail transit around the country,” said Hanna of the Institute for a Democratic Economy and Society. He pointed to Virginia, where in 2021 the state purchased 223 miles of track and 386 miles of rights of way to expand passenger service.
If Cincinnati wanted to someday run passenger trains along the route in question, the possibility could be foreclosed by a sale to Norfolk Southern. Hanna suggested other possible uses for the rights of way associated with the rail line: as communities struggle to build renewable energy infrastructure and transmission lines in the face of local opposition, owning the 340-mile route could make it easier for the government to build energy projects on the land.
“I obviously have no crystal ball, but the American people often vote down privatizations when they come to the ballot box,” said Hanna. “Selling off a valuable public asset is usually not very popular.”