EAST TEXAS-- The Texas State Railroad in Rusk has been struggling to stay afloat for years because of money problems.

But city officials in Palestine and Rusk are trying to come up with money to keep it open.

It's considered a historical landmark in the State of Texas.

The Texas State Railroad that runs between the City of Palestine and the City of Rusk.

But for years it has been loosing millions of dollars.

State lawmakers passed legislation for $2 million in state funds to be used to keep the train on the tracks.

But that didn't come through as expected.

Texas State Railroad President Steve Presley said, "Now we come to find out as it was past it was different from what we understood."

Rusk and Palestine officials say the Texas State Railroad impacts their economy and they cant afford to lose it.

So both cities are trying to loan $500 thousand each in money they have to come up with.

City of Rusk Mayor Angela Raiborn said, "What were sort of looking at is using some of our half cent sales tax money that is for the sole purpose of economic development."

And the City of Palestine officials say they will use money from city reserves.

Presley said, "When the council looked at it they felt it was a good use of those funds because it was a loan, it's not a gift and we'll get that money back."

In a 2006 study, it found that having the train open to the public rakes in nearly 6 million dollars and produces about 157 jobs between both Anderson and Cherokee counties.

Bob Goldsberry with the Rusk Chamber of Commerce said, "Thats good for fuel purchases, restaurants, hotels, gift shops any kind of purchase they would make thats where that 5.9 million came from."

City officials say this is a short term way to keep the the Texas State Railroad rolling.

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