Raleigh, N.C. — The North Carolina Railroad Co. would pay the state annual dividends under a bill that cleared the House Finance Committee Tuesday morning.
The company would pay $15.5 million before July 1 and then pay a portion of its annual profits under the bill. Money from the dividend would be paid toward the state's repair and renovation fund, which goes toward the upkeep of state-owned buildings.
Officials with the railroad said they don't have a problem paying the dividend. The state has invested money in the railroad, and this dividend represents a return on that investment. NCRR President Scott Saylor said his only objection was that the railroad would rather see the money go toward paying for transportation needs.
"It's not an objection, just a statement from the board," Saylor said.
Some committee members objected to the move, saying that money would be diverted from needed railroad projects and do little good in the context of the state repair and renovation budget, where needs total into the billions of dollars.
"This would be a drop in the bucket for the repair and renovation needs we have in this state," said Rep. Deborah Ross, D-Wake.
Under questioning from committee members, Saylor said that several railroad projects might be delayed. Among the likely delayed projects, he said, would be "double tracking" of a line used by freight and passenger trains in downtown Raleigh and improvements to a line between Cary and Morrisville.
Ross said the NCRR is important for helping the state's employers, particular manufacturers, who need to move products to market. Delaying projects, she said, would hamper the company's economic development efforts.
"They'll get done," Rep. Edgar Starnes, R-Caldwell, said of the projects. "We own the railroad, and the state is entitled to get some return on its investment."
Rep. Bill Brawley, R-Mecklenburg, said taking the dividend makes sense. Otherwise, he said, the railroad would simply use the money for economic development as its board of directors saw fit. Rather, he said, the lawmakers should put the money toward more pressing needs.
"For years, it was a slush fund," Brawley said.
Rep. Julia Howard, R-Davie, the bill's sponsor, said the urban areas of the state have long derived a benefit from the railroad. This bill, she said, would benefit the rest of the state.
The measure passed on a voice vote and next goes to the House floor.