Photos by Eric Brady | The Roanoke Times

Trucks drive along Interstate 81 in Botetourt County on Tuesday. A project is in the wings to create climbing lanes for trucks on the interstate in Montgomery County.

Traffic moves along Interstate 81 in Botetourt County on Tuesday. States including Pennsylvania and Tennessee are part of an I-81 coalition.

Virginia's transportation chief says a coalition of states is seeking $300 million in stimulus funds to upgrade rail terminals so truck traffic can be reduced on Interstate 81.

At Hotel Roanoke on Tuesday, Transportation Secretary Pierce Homer told a conference dealing with the I-81 corridor that the federal grant would go toward $2.1 billion in needed improvements.

He says Virginia needs to spend $500 million on rail improvements, such as intermodal freight terminals. The state has spent about $110 million.

Homer said the planned rail infrastructure projects will be "major job generators," adding later that he sees any investment of public funds in such ventures, which involve private company partners, as a purchase of public benefits -- not a giveaway to the private sector.

The state and Norfolk Southern Corp. have decided they want to build one of the intermodal terminals near the eastern Montgomery County community of Elliston.

But Montgomery County has filed a lawsuit in state court to block the project, arguing that the planned public outlay of $25 million for the project violates a constitutional ban on giving public funds to private parties.

The matter awaits a ruling from a Richmond Circuit Court judge, who held a hearing Sept. 21.

Another project in the wings is climbing lanes for trucks on I-81 in Montgomery County.

The Virginia Department of Transportation intends to choose a contractor for that job in the spring. The contractor will be hired both to design and build the lanes, said VDOT spokeswoman Heidi Underwood, who added that construction would likely begin between six months and a year after the state awards the contract.

Homer said members of the coalition besides Virginia include New York, Pennsylvania and Tennessee, which are along the I-81 corridor. He said Alabama, Mississippi and Louisiana are also involved.

Rick Rovegno, a county commissioner from Cumberland County in Pennsylvania who is acting as the coalition executive director, said I-81 is a vital national asset, carrying goods with a value equal to 12 percent of the country's gross domestic product.

Rovegno described members of the 2-year-old I-81 Corridor Coalition as engaged and committed and said the group has launched a Web site.

U.S. Rep. Bob Goodlatte, R-Roanoke County, welcomed the group Monday afternoon to the two-day conference, encouraging members to pursue their regional approach to the corridor's opportunities and challenges.

In an interview afterward, Goodlatte said such coalitions -- including the 16-year-old Interstate 95 commission -- are "absolutely crucial" to the orderly development not only of their specific corridors but to the national transportation plan.

That faces "major challenges, and not all of it is a matter of going to rail," Goodlatte said.

There will remain some transportation needs that only trucks can fulfill -- particularly in so-called "just-in-time" delivery of retail goods that eliminate or reduce the need for warehouse space.

But an integrated rail and highway transportation system -- for both freight and passengers -- is essential to solve the problems of congestion, safety and pollution inherent in the current system.

Those were themes revisited by several speakers Monday, including Phillip Longman, a senior research fellow for the New America Foundation, which describes itself as "a nonprofit, nonpartisan public policy institute."

Longman recently wrote an analysis of what he calls a potential "steel wheel interstate," arguing for adopting both century-old rail transportation solutions -- electric trains and increased passenger service -- as well as newfangled ideas such as using public funding of railroad infrastructure to increase the use of rails.

Like Goodlatte before him, Longman noted that railroads are the only form of transportation that get little to no public subsidy.

Wall Street, he said, has been less interested in investing in upgrading a transportation system that could help solve numerous national problems -- from lowering greenhouse gas emissions to dramatically increasing fuel efficiency in freight transport -- than in subprime mortgages.

Staff writer Cody Lowe and The Associated Press contributed to this report.