Why Not Fund Ohio's 3-C Turtle Train with Video Slots?

Why Not Fund Ohio's 3-C Turtle Train with Video Slots?

Strickland's Policy Switch on Slots Would Let Rail Passengers Spin Their Wheels Too

by John Michael Spinelli

June 21, 2009

COLUMBUS, OHIO: The Great State of Ohio has failed four times over nearly two decades to convince its voters to allow casino gaming interests to set up shop inside its borders. From former Republican Gov. George Voinovich to today's Democratic Gov. Ted Strickland, the mantra of one chief executive after another has been that gambling is a bad idea that would make the poor poorer, unlock the door to criminals and crime and enrich gaming interests at the expense of state coffers, which would be hard pressed to fund services to combat the social ills opponents of gambling say would be unleashed if the Satan of sin is allowed to run wild here.

Yet despite the moral hazards opponents of gambling predict would happen if slot machines or casino-style gambling were to come to a state already surrounded by states that allow them, the announcement last week by Strickland's budget mavens that Ohio's next budget, which by law starts July 1, has a $3.2 billion hole in it, has caused the good Governor, who has long opposed gaming and gambling, to turn the other cheek by signaling he is ready to permit the state's seven horse racing tracks to add video slot machines to their operations. Unable to resist the lure of maybe as much as $765 million coming to the aid of future budgets, by holding his nose on the ascent of maybe 14,000 one-armed bandits into Ohio's frantic search for public revenues, Strickland can no longer backtrack now that the slot machine proposal is out of the barn.

While the topic of video slot machines has percolated throughout Buckeyeville for a while, the question that sounds like a joke but which might be one practical way to fund Strickland's proposal to spend millions the state doesn't have on a slow train to the past that would chug diagonally from Cincinnati to Cleveland over more than six hours is to replace passenger seats with video slot machines. Doing so would be a perfect passenger-rail user fee, one that would allow those riding the rails to spin their wheels and have their losses fund the slow train to the past, whose need and ridership are simple but important questions state transportation leaders cannot answer with certainly but only with estimates that will only lead to real jaw-dropping if and when any real bids are let and returned.

This kind of user fee, which Washington is smiling on more and more as once dependable road and bridge funding sources like the Highway Trust Fund go broke as driver's drive less and fewer gas taxes are collected, would also liberate the rest of Ohio's taxpayers, who don't live along the corridor and who won't be using the train for various reasons, from funding the $1 billion-plus plan for a train that will only average 57-mph and will take until 2025 to be fully realized as out-dated plans project.

While it sounds like a joke to spend so much one-time federal stimulus money on a train loaded with slots, the idea was raised in all seriousness by one railroad historical society that said Strickland should do just that. One person who attended the meeting and contacted SOA, said the Ohio-only train could have the on-board slots so that the revenues would stay in the state. How would an intercity or interstate train handle slot business when traveling through states that don't permit gambling? Simple, just turn off the power to them while the train is in that state.

For such a sky-high price tag, Ohio's train to the past would be slow. Over the projected six hours or more it would take paying passengers to traverse the approximately 250 miles between Cincinnati and Cleveland, they could spin their wheels while the train spun it's steel wheels. If Lady Luck wasn't riding with them, so much the better for Ohio coffers.

Desperate times call for desperate measures, and desperate times have come to Ohio. If a Methodist minister like Strickland who has long viewed gambling as a secular revenue trap and a Biblical moral hazard can reverse course on it, maybe it's not such a far-fetched joke to think that locomotives running on steel wheels can also have scores of other kinds of spinning wheels on it, too.

John Michael Spinelli is a Certified Economic Development Financing Professional, business and travel writer and former credentialed Ohio Statehouse political reporter. He is registered to lobby in Ohio and is the Director of Ohio Operations for Tubular Rail Inc. Spinelli on Assignment is syndicated by Newstex.com, can be followed on Twitter @OhioNewsBureau and available for subscription to Kindle owners. To send a news tip or make comment, email ohionewsbureau@gmail.com

Tubular Rail, the Valley of Death and Helping a Hurt Ohio

Tubular Rail, the Valley of Death and Helping a Hurt Ohio

"Trackless Train" Company Wins State Support for Ohio Supply Chain in Bid for DOE Energy Funds

TR technology as Cool as "Making a Rock Float."

by John Michael Spinelli

June 2, 2009

COLUMBUS, OHIO: Officials from Tubular Rail, the "trackless train" company from Texas, had reason to smile last week. After eights months of seeking an audience with Gov. Ted Strickland's development staff to introduce them to the company's patented technology that reorganizes the essential elements of conventional railroads by eliminating the need for tracks or bridges, a letter of general support from Ohio was issued that signaled state officials are ready to help the company build an Ohio supply chain for both its transformational prototype and for the next generation of trains it believes will become the fourth transportation industry, after trains, cars and planes, that promises to become a new standard for America and the world.

With the understanding that "a significant portion of the components for both the demonstration and commercial system can be sourced in Ohio," StevenSchoeny, Director, Strategic Business Investment Division, affixed his name to a letter than informed company officials that "the Ohio Department of Development is prepared to work with Tubular Rail and your suppliers in Ohio to take advantage of Ohio's economic development programs to build your supply chain capacity."

The announcement Monday by General Motors that it was entering bankruptcy court where it will reinvent itself in a final turnaround effort to remain a viable auto-manufacturer in the U.S, makes the hunt for new jobs that much more compelling. Ohio has everything to gain and nothing to lose from taking an interest in the birth and development of a new industry, as Tubular Rail thinks of itself.

Combining GM's announcement yesterday that its future reorganization plans will cost Ohio another 1,000 jobs with Tuesday's announcement by NCR that it will relocate its headquarters from Dayton to Georgia, taking about 1,300 jobs with it, and adding it to the dour backdrop that more than 300,000 jobs have been lost on the watch of Gov. Ted Strickland, elected in 2006 on the campaign promise to turnaround Ohio, solidifies the expectation that the state's unemployment, now above 10 percent, will continue to tick upwards.

And now that John Kasich, a former Ohio Congressman and investment banker, has declared he will challenge Strickland in 2010 and whose campaign slogan is "A New Way, A New Day," the race is on to see which man can best restore jobs and prosperity to a once mighty industrial state bobbing in a sea of red ink.

GM's bitter-sweet news makes Ohio's rough road to recover even rougher. The Hobson's Choice now, exacerbated by an imploding economy that has triggered a range war in Columbus over how to balance the budget by the next fiscal year, which starts June 11, pits Democrats, who want to fill a current and growing budget gap with billions in one-time stimulus funds, and Senate Republicans, who are ready to wield a big ax and lop off even more state-funded programs, better syncing future state expenditures with expected shrinking revenues.

Amid this economic turmoil in Ohio, Tubular Rail has submitted an application to the federal Dept. of Energy, Advanced Research Projects Agency - Energy, which is offering up to $20 million per project for new energy ideas that are so "transformational" they will "disrupt the status quo" so much that a new industry standard will emerge.

From the DOE grant guidelines: "Often, a technology is considered transformational when it so outperforms current approaches that it causes an industry to shift its technology base to the new technology. The Nation needs transformational energy-related technologies to overcome the threats posed by climate change and energy security, arising from its reliance on traditional uses of fossil fuels and the dominant use of oil in transportation."

With their Ohio letter in hand, company officials added the Buckeye State to the list of team members located in Texas and Ohio that it hopes will catch the eye of DOE grant staff.
If Tubular Rail is passed through to the next round of the , when a full 150-page application will be completed,

"This project effectively creates a 'fourth form' of transportation, one that will have the impact today that the locomotive, Model T and Kitty Hawk had in their day," according to Robert Pulliam, inventor of TR technology and president of the company.

Pulliam, born and raised in Detroit but now residing in Houston, Texas, said the two mile prototype system will be proof-positive that a new "Green" industry addressing Green House Gas emissions, oil imports, infrastructure costs and job creation is upon us.

Tubular Rail's goal, according to Pulliam, is to build a transportation system that reduces the cost of installation and the affect of infrastructure impact, yet achieves the energy efficiencies inherent in steel railway systems.

Pulliam said the "Pecos Project" will be a full-scale operating system to test and prove all components, reconfiguring the essential functional elements of the rail-bed and train. It reverses orientation of steel rail and steel wheel by ingeniously putting the rails on the car and propulsion on the supports or O-Ring stanchions.

The stated goal of the program is to take an "immature technology that promises to make a large impact on the ARPA-E Mission areas...and develop it beyond the 'valley of death' that prevents many transformational new technologies from becoming a market reality."

As stated in its grant guidelines, DOE's goal is to provide funding such that a company like Tubular Rail, which already has preliminary engineering and patents in hand, can overcome the later phase of the "valley of death" by funding the technology (component, system, hardware, software, or other) that must be matured to the point that it can transition into industrial development and deployment.

The Thayer School of Engineering at Dartmouth College, which performed work for Tubular Rail, contrasted and compared TR technology with current convention railroad technology. "We strongly believe in the spirit of Tubular Rail and would like to see the project receive funding soon," theThayer report concluded. It added, "An improvement upon conventional technology is necessary because existing technologies for high-speed and urban transit are expensive, difficult to build through populated areas, and more environmentally unfriendly. In summary the basic advantages of Tubular are an initial investment 54 percent less than the competition,operations 450 percent more efficient than conventional technology and emits 35 percent less CO2 than other forms of transportation." Simply put,Thayer said "Tubular Rail is a viable option for the future of the rail industry".

What does all this mean for Ohio? Jobs, jobs, jobs. Ohio, by agreeing to have its name added to TR's list of potential partners, puts itself in a prime position to seize the day on the birth and development of a new transportation industry. Although TR's prototype will be built in Texas, Ohio can still be home to another Wright Brother's Kitty Hawk moment, TR's 1st commercial passenger.

With daily announcements of job losses battering the spirit of state leaders, workers, their family and friends and the communities they live in, any lift Tubular Rail can give to the Birthplace of Aviation should befacilitated no matter the cost. But helping TR out means state leaders and the citizenry at large need to re-think how they think about rail. Locomotive engines guided by tracks in the ground have been around for a long time. But the new paradigm, as invented by Mr. Pulliam, takes those relationships apart and puts them back together differently, but uses readily available technologies.

Frank Sonzala, a TR board member from San Antonio who is also a proven entrepreneur and patent holder, says the simple concept behind the company's game-changing technology is tantamount to "making a rock float." With Ohio sinking like a rock, it's letter of support is one small step for a state sinking beneath the waves of the Great Recession, but one giant step for Tubular Rail.

John Michael Spinelli is a Certified Economic Development Financing Professional, business and travel writer and former credentialed Ohio Statehouse political reporter. He is registered to lobby in Ohio and is the Director of Ohio Operations for Tubular Rail Inc. To send a tip or comment, email ohionewsbureau@gmail.com