The state could pay several million dollars less than previously projected to run a planned high-speed rail line between Milwaukee and Madison, based on revised information about the route’s likely revenue and expenses.
But any state or federal money spent on the train line might otherwise go to highways, says a new report obtained by the Journal Sentinel from the nonpartisan Legislative Fiscal Bureau.
Operating costs have played a major role in Governor-elect Scott Walker’s opposition to the route, an extension of Amtrak’s existing Milwaukee-to-Chicago Hiawatha line. Although a federal stimulus grant would cover the $810 million construction cost, Walker has vowed to kill the project to ensure state taxpayers won’t pick up any operating costs.
Walker transition spokesman Cullen Werwie reiterated that stand Friday, saying, “The Madison-to-Milwaukee train is dead.”
In its application for the stimulus money, the state Department of Transportation set operating costs at $16.5 million a year, partly offset by $9 million a year in fare and concession revenue, leaving taxpayers to cover the remaining $7.5 million.
Those estimates, however, were developed in 2009. Since then, some aspects of the project have changed, including:
Ridership: The original estimate was based on projected first-year ridership of 361,400. But that prediction assumed the Madison station would be built at the Dane County Regional Airport. When state officials switched to a downtown site, they boosted the first-year ridership estimate to 476,400.
Consultants didn’t revise their revenue projection to match the ridership projection before outgoing Gov. Jim Doyle froze the project, in the wake of Walker’s election.
But the original estimate of $8.9 million in ticket revenue comes out to an average fare of $24.73. Using that average, the higher ridership projection would boost revenue by $2.8 million, slicing taxpayer support to $4.7 million.
Rising ridership on the Hiawatha has already cut taxpayer support for that line to $5.2 million in the 2009-’10 fiscal year, down from a projected $5.6 million, the Transportation Department says.
Food service: Consultants estimated revenue from food and beverage sales at $110,000 a year, assuming the same kind of snack cart service that now operates on the Hiawatha. Since then, however, state officials have decided to add a bistro car to each train, but they haven’t calculated how much more revenue that would produce.
Costs: The original cost projections were based on the Hiawatha’s current operating costs. Wisconsin and Illinois have a deal with Amtrak to cover those costs, including fuel costs and charges for using Amtrak-owned trains.
But Wisconsin is buying two new trains from Talgo Inc. for the existing line and planned to buy another two trains, plus locomotives, for the extension to Madison.
“The new Talgo equipment is far more fuel-efficient,” and running state-owned trains would insulate Wisconsin from expected increases in Amtrak rental charges, said Kevin Brubaker, deputy director of the pro-rail Environmental Law and Policy Center in Chicago.
On the other hand, the state would be responsible for maintaining the trains, and the costs of a maintenance contract with Talgo could eat up the savings from ending the rental charges, the Transportation Department says in its 2011-’13 budget request.
Meanwhile, the Fiscal Bureau report to state Rep. Jon Richards (D-Milwaukee) addresses a Transportation Department claim that federal aid could cover up to 90% of the cost of the Milwaukee-to-Madison leg, as it does for the Milwaukee-to-Chicago leg.
That’s not extra aid for the train, the report says. It’s a piece of federal aid that already goes to the state.
In some past years, the state covered Hiawatha operating costs with money designated to reduce southeastern Wisconsin traffic congestion and air pollution, said Fred Ammerman, a supervisor in the bureau. In recent years, however, the state has been using part of its highway aid, with federal permission, Ammerman said.
That federal money usually has covered 80% of costs, rising to 90% in years when the train helps travelers avoid freeway construction zones, the report says.
In the federal fiscal year ending Sept. 30, the state’s regular federal highway aid totaled $734 million, not counting earmarks and stimulus grants, Ammerman said. A 90% share of $5.2 million in Hiawatha costs would amount to $4.7 million, or less than 1% of the total. Adding the Milwaukee-to-Madison leg would increase that share to slightly more than 1%.
In other developments:
• In a letter Thursday to President Barack Obama, Walker reiterated his view that Wisconsin should be allowed to use the $810 million for highways. But Obama can’t legally reallocate the money; as Walker has conceded, it would take an act of Congress, and U.S. Rep. Tom Petri, a Fond du Lac Republican, has said that’s unlikely.
• The AFL-CIO lashed out Friday at Walker, Ohio Governor-elect John Kasich and congressional Republicans, saying their opposition to high-speed rail threatens job creation.
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