While other states prosper, Minnesota is losing out on tens of millions of railroad dollars as the state Legislature fails to pass funding that would unlock federal money to support projects such as Northern Lights Express, said a regional rail official based in Duluth.

Federal rail dollars require up to 40% matching funds from the state in order to even apply, meaning projects such as the proposed Twin Ports-to-Twin Cities passenger rail service, known as NLX, languish despite shovel-ready status.

“It’s foolish for Minnesota to not compete for this funding,” John Ongaro said. “Those are our tax dollars, some of that money, and we’re not bringing it back to Minnesota. Other states are getting Minnesota tax dollars to build their railroads.”

Ongaro was appointed by each of the state’s past two governors to the nine-state Midwest Interstate Passenger Rail Commission. He’s also the intergovernmental relations director for St. Louis County.

He spoke to the News Tribune on Monday about the $550 million NLX, and why the 12-year-old project has stalled since clearing environmental standards in 2018.

“Even if you’re not enamored with passenger rail, because it runs on freight tracks in this country, you’re benefiting freight when you give grants to improve tracks, railroad crossings and the vast majority of these projects,” Ongaro said.

The rail commission Ongaro serves on exists to bolster passenger rail throughout the region. He explained that Chicago acts as the hub, with rail lines reaching out in all other directions.

The plan to fund NLX appeared to be gaining steam late last year, when Amtrak announced its interest in being the operator and the Legislature conducted a field hearing about the project on the University of Minnesota Duluth campus.

But neither the Minnesota Senate nor Gov. Tim Walz included funding for NLX in their bonding proposals. The house bonding bill, which featured several provisions aimed at railroad projects, failed to pass by a three-fifths supermajority.

Rep. Mary Murphy, DFL-Hermantown, chair of the House Capital Investment Division, is a proponent of NLX. She declined to talk “at this time” for this story.

During December’s field hearing in Duluth, she called on legislators to “seize the moment.”

“People want options; people need options,” she said about the proposed passenger rail between the Duluth Depot and Target Field in Minneapolis, with stops in between, including Superior.

Ongaro said Murphy and other lawmakers are busy meeting in ad hoc fashion to come up with a palatable bonding proposal that can be voted on during a possible one-day special session in July. Lawmakers are likely to get together to vote on Walz’s peacetime emergency authority, which has been in place for months since the arrival of the COVID-19 pandemic.

Any bonding bill would have to be amenable to all parties prior to that day since a protracted special session is unlikely, Ongaro said.

Frank Loetterle, a rail projects manager for the Minnesota Department of Transportation, said progress on NLX is out of his agency’s hands.

“Folks up in Duluth,” he said, “they have to carry the ball right now as far as getting funding.”

That’s been difficult since March, said Bob Manzoline, executive director for the St. Louis and Lake Counties Regional Railroad Authority.

“Everything kind of lost its momentum with COVID,” Manzoline said. “People just aren’t gathering anymore. It’s all being done by email. … We’re not meeting with state reps any more. We’d typically done that once or twice (per session) to talk about projects.”

Statewide priority right now, it seems, is adding a third main line in BNSF’s Northtown Yard in Minneapolis, where the proposed NLX route would join with scores of passenger and freight trains.

“It’s one of the biggest choke points in the entire country,” Ongaro said. “Freight trains, dozens of passenger trains all converge at that one point, and unless we have a third track built in there to bypass that choke point, some trains will be held up to an hour just sitting there waiting.”

Ongaro noted one Minnesota project that was granted federal money so far in 2020, a joint project with South Dakota that will bolster track in southwest Minnesota.

But his point remains the same. As the federal government doles out roughly $500 million annually in recent years to rail projects, Minnesota is mostly being left out for not having the state backing to show that it’s serious about its projects.

“Minnesota taxpayers are sending money to Washington, D.C.,” Ongaro said. “And instead of coming back, it’s all going to 35 or so other states that have been consistently receiving funding from annual grants from the Federal Railroad Administration.”