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Lehigh Gorge Scenic Railway to cease operations NEWSWIRE

By | October 16, 2019

Dispute with community of Jim Thorpe, Pa., over taxes leads to planned shutdown on Nov. 25

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A Lehigh Gorge Scenic Railway train prepares to leave the former Central Railroad of New Jersey station in downtown Jim Thorpe, Pa., on Oct. 24, 2018. The Lehigh Gorge Scenic has announced it will shut down in November.
Scott A. Hartley

PORT CLINTON, Pa. — The Lehigh Gorge Scenic Railway announced it would cease operations in Jim Thorpe, Pa., as of November 25, a response to the borough’s request that the tourist railroad begin paying an amusement tax and a lawsuit seeking back taxes.

The Lehigh Gorge and its sister railroad, the Reading Blue Mountain & Northern, began operating trains out of Jim Thorpe 15 years ago, and owner Andy Muller Jr. indicated in a press release that the company would move the passenger operation elsewhere. The railroad currently offers a 16-mile round trip from Jim Thorpe through Lehigh Gorge State Park. Its schedule through the planned closure date offers with three trips on weekdays and seven on weekend in October, and Friday, Saturday, and Sunday operations in November.

The freight business “is where we make our money,” Muller said in the release. “I have offered passenger excursion rides to local communities as a way of thanking them for support over the years and to educate young and old in the glorious role railroads in this region played in our country’s industrial revolution.

“Since it is clear the mayor and borough council do not care about what we have done over the last 15 years … I have decided to focus our energies on communites that want to work with the railroads. While I feel terrible for our loyal employees, our repeat customers, and Jim Thorpe merchants who have supported our excursion trains, there is no reason to stay where we are not welcome.”

The Times-News of Lehighton, Pa., reports that the borough collects a 5% amusement tax and the Jim Thorpe Area School District collects a 2.5% amusement tax, with those fees generally added to the ticket or admission price. In a lawsuit filed in September, the collection agency for the borough and school district said it seeks $95,971.39 in back taxes for failure to pay the amusement tax in 2016 through 2018.

In Wednesday’s press release, the railroad said “it is not an amusement and will not pay any so-called amusement tax.”

The Lehigh Gorge will issue refunds for those who have already purchased tickets for its Santa Trains, and said that the closure does not affect Reading Blue Mountain & Northern passenger operations from other locations to Jim Thorpe. It plans to announce a new schedule of rides from other communities soon.

25 thoughts on “Lehigh Gorge Scenic Railway to cease operations NEWSWIRE

  1. “If it moves, tax it.” Sadly, that’s a common approach in government these days.
    What government doesn’t realize is, “you’ll get less of whatever is taxed.” And the Lehigh Gorge Scenic Railway is once again proving this to be true.

    To Mr. Rizzo and Attorney Harding, I doubt the RBM&N would allow a competing passenger excursion operator to run on their railroad. That wouldn’t make any sense.

    Finally, I am wondering how a local government can tax the operations of an interstate common carrier?

  2. History will record Muller as one of the great railroaders. His stand against a clueless local government with their hand in his pocket is profound. Ship and travel Reading and Northern! Its the best railroad mile for mile in the nation.

  3. Mr. Miller – that was a rather famous president Ronald Reagan quote. “Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

  4. Mister Miller:

    You didn’t write “Yardbird Blues”, did you? If so, nice job.

    Well, let’s see now … depends on how badly they want to up the ante. They could, for example, formulate an action claiming that by removing the service Muller had adversely impacted the welfare of the local area, thus making it necessary to do some form of expropriation on the RBM&N. I doubt that they could expropriate the entire physical railroad (though such things have happened) but they could certainly become obnoxious enough that RBM&N might agree to allow them trackage rights to run their own excursion trains – at, or not at RBM&N’s expense, depending on the terms of the deal.

    And then selling the resultant right to a private interest – in re Kelo v. City of New London, 545 U.S. 469 (2005), supra.

    The above comments are genetic in nature and do not form the basis for an attorney/client relationship. They do not constitute legal advice. I am not your attorney. The working class and the employing class have nothing in common. Shoes for industry, Comrade.

  5. yearsI have ridden Andy’s RDCs from Pottsville or North Reading to Jim Thorpe twice in the last 3 years with my wife and and another couple each time and we bought lunch and a few trinkets in Jim Thorpe both times. Since Andy just got his new bridge that provides a direct connection to Scranton I’m hoping he’ll start running some of those trains to Scranton instead. If he does I can’t wait to ride them. He could also continue running the Scenic Gorge trains out of Nesquehoning, PA instead of Jim Thorpe.

  6. I think Andy owns the rails all the way down to Lehighton. Auto traffic coming off I476 (Northeastern PA turnpike) has to go right through Lehighton. The Scenic Gorge trains could run out of there as well.

  7. Jimmy The Gent told Spider “Dont take no sh** from nobody” right after Spider told Tommy to “Go *** yourself Tommy”. Then Tommy shot Spider, real funny then real sad in a split second.

  8. Ms. Harding, could you supply a reference to where an active common carrier railroad was appropriated by a local government, as you say such things have happened.

  9. Remember…..
    Politicians are the obnoxious kids in high school who never got over the thrill of being class secretary.

  10. Mr. Moss. There was one incident in Colorado a few years ago, a reverse condemnation done by the local municipality. The exact property was not active but the carrier was. There was (or is, I haven’t been tracking it) that business on the line north of Utica, Ny. There may be others.

    The point is, the local government can, if suitably motivated, make enough of a nuisance of itself to force a settlement.

    If you want further information you have some choices. You can pay me, but I am not in private practice and will not take you on for a client; you can find someone with access to Lexis/Nexis and pay him; you can go and dig it out for yourself. Your local county library should have a reasonably up-to-date law library, maybe even a Lexis/Nexis or Westlaw terminal.

    The above comments are generic in nature and do not form the basis for an attorney/client relationship. They do not constitute legal advice. I am not your attorney. And in this case I mean it when I tell you to find your own [blocked by management] lawyer.

  11. Mr. Pilcher:
    In all fairness–and this comes from a generally anti-taxation Libertarian–to make the argument that you’re not an “entertainment venue” when you have explicitly NAMED the operation “The EnterTRAINment Line” fails the smell test, as well as any shred of common sense. (I had lots of first-hand experience with both the Maryl;and Midland operations that preceded it and the successor EnterTrainment Line.)

    I can see both sides of the argument in many cases, especially for a non-profit museum or preservation line, but when your business model is built around “Wild West robberies, ” dinner trains, “Murder Mystery Trains,” and the like, it is the height of suicidal folly to ignore applicable laws and claim “we’re different.”

    We can argue the fairness or suitability of “entertainment taxes” in general, but if you have a for-profit business model providing entertainment, and such taxes exist, you’d better be paying them, or planning to.

  12. I rode the trains to Jim Thorpe every year for the past 10 years and the trains were always full brining people to Jim Thorpe to spend money and see the many sights. I will miss the fun we had, and hope the boro reconsiders.

  13. Mr, Klass I don’t know where you come up 1.3mm Because it dose not say what the ticket price was or how many sold. But at your amount that is about $ 433.333 a year Now figure in payroll, up keep,equipment, maintenance, and most of all insurance. I don’t think he was making all that much on this operation.

  14. Sounds like there is more to this story than meets the eye. Any politician worth their salt would realize that the lost revenues to other businesses far out pace the tax loss. Maybe another entity wants to run tourist trains out of the town. And maybe that entity is friends with a local politician. Just speculating!

  15. Makes sense to me. Why stay where you aren’t wanted? I suspect Jim Thorpe will shortly find out how much of a boost to the local economy having the scenic train was.

    And Mister Rizzo, I would not be surprised if you are proved to be right.

    The above comments are genetic in nature and do not form the basis for an attorney/client relationship. They do not constitute legal advice. I am not your attorney. Not available in Sectors R and Q.

  16. Someone ran the math and it was something like 33 cents on a $15 ticket. A piddly figure.

    And didn’t this carrier just get a big chunk of taxpayer dollars ($10M?) towards a new $14M bridge that was supposed to allow it to “compete” against the Sunbury line? I guess the gravy is only supposed to flow one way in this bizarre form of Reaganomics?

    And weren’t they out there trying to poach the operating rights of both the North Shore lines and the DL lines out of Scranton from the various government entities that actually owned the rail?

  17. Ms. Harding, if the Colorado line was inactive, especially if it was officially called abandoned by STB, then it would not be applicable to the Jim Thorpe situation. The situation north of Utica on the Adirondack Scenic is on a line owned by New York State, and the tourist line is just a lessee. The locals are not trying to replace the rail operator, they are trying to convert it to a trail. Maybe that is what also happening at Jim Thorpe, where there are also some rail-to-trails.

    I also remember the New London eminent domain case, where developers wanted to take and level modest homes to build upscale homes. It was the case that finally spurred legislators to rein in the worst takings practices.

  18. The former CNJ has mostly become a rail trail from Jim Thorpe (formerly Mauch Chunk) to White Haven. The operating railroad is the former LV except between Glen Onoko and Jim Thorpe where RBMN has returned the former CNJ bridge to service so they can access Jim Thorpe from the West (compass North). The trail shares right of way with the RR on the bridge over the Lehigh River.

    It’s an extraordinarily scenic line in a steep 1000 foot deep gorge. It can also be accessed from White Haven. The feature trip of the Scranton NRHS Convention ran through the Lehigh Gorge to Jim Thorpe.

    There are multiple biking and rafting outfitters that also serve the Lehigh Gorge, which is the Lehigh Gorge State Park.

  19. I was in Jim Thorpe on the 19th. The town was packed. Didn’t have a chance to ride the train because I got there after all the tickets had sold out. That said, there would have been opportunities for additional trips

  20. The tourist trains must not provide much to the economy of Mauch Chunk. Idiocy like this makes me think of the lawsuit the feds have filed against the Durango & SIlverton. I wonder what Silverton’s economy would be like without the railroad? I still say that line should be abandoned and scrapped to teach all of government a lesson. And, there is a judicial precedent on seizing private property via condemnation for “the public good”… I also agree with the railroad about leaving a community where it’s not “welcome”. Such communities should be regarded as “scorched earth” by business and left to the rot which they obviously seek.

  21. “A politician is a statesman who approaches every question with an open mouth.” – Adlai Stevenson. To which I might add, “A politician is a person who approaches every issue with an open mouth and a desire for either a tax or a tariff.”

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