Rail Bonds on the Bubble

The Alaska Railroad faces a big budget cut from the U.S. Senate that could potentially put railroad bonds in jeopardy,  news reports say.

The Senate passed a national transportation bill last week that would cut $30 million from the Alaska Railroad, according to McClatchy Newspapers.

Railroad chief executive Chris Aadnesen told McClatchy the reduction would put its bonds in harms way but he said that would be avoided at all costs.

Aadnesen said that in a worst-case scenario, cuts could trim its work force by one-third.

The bill would end the railroad’s eligibility for transit funding, according to McClatchy.

The railroad, owned by the state of Alaska, has issued $165 million of bonds backed by federal transit grants.

President Obama has urged the House to accept the Senate bill, which passed with bipartisan support.

The House version doesn’t slash funding for the railroad, but it ties spending to drilling in the Arctic National Wildlife Refuge and off the East Coast, according to the news service.

Both of Alaska’s U.S. senators, Mark Begich and Lisa Murkowski, voted for the bill.

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Transportation industry Alaska Washington
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