• WisBusiness

Friday, March 26, 2010

Economic development follows the whistle of passenger rail


By Tom Still
The Marquette interchange in Milwaukee cost more than $800 million to rebuild between 2004 and 2008, and few people seriously questioned whether that "subsidy" of Wisconsin's highway transportation system would pay for itself many times over.

Milwaukee's Zoo interchange, the mix-master for I-94, I-894 and Highway 45, could cost $2.3 billion to rebuild once work begins in 2012. Again, most people familiar with the volume of statewide commerce passing through that intersection can agree reconstruction is a much-needed investment.

But suggest a relatively tiny $7.5 million per year subsidy for a high-speed rail line that could redefine Wisconsin's connections to Chicago and the Twin Cities, and the same folks who barely blink at billion-dollar concrete projects turn into raging fiscal hawks.

That penny-wise, pound-foolish approach should be questioned. Wisconsin has a chance to build a high-speed rail line, with hard-to-get federal money, that will change the economic destiny of its largest cities and many of its smallest communities. Yet this promising track for economic development is being opposed by those who claim a small state subsidy will somehow break the bank.

Before the political debate gets too overwrought, let's examine the economic reasons why Wisconsin should embrace building a Milwaukee-to-Madison rail line and improving the existing Milwaukee-to-Chicago connection.

The Obama administration announced Jan. 28 that 31 states would share in about $8 billion in stimulus dollars targeted for high-speed rail, with the biggest chunks ($5.5 billion) marked for projects in four states: California, Florida, Illinois and Wisconsin. Unlike most states, Wisconsin received the full amount of its grant request, $810 million for high-speed rail, in part because of the quality of the state's plan and its cohesiveness with neighboring states.

As Tom Hefty and John Torinus Jr. noted in a recent Wisconsin Interest column, Wisconsin ranks 48th among the 50 states in overall federal spending on a per capita basis. While Wisconsin sends $45 million in taxes to Washington each year, only 86 cents of each $1 is returned here. The rail money is an opportunity to change that dismal dynamic.

In other American cities and regions with passenger rail, economic growth has taken place within a short distance of the line and its stations. One recent study noted there are more than 100 "transit-oriented developments" in the United States, mostly within walking distance of passenger rail stations.

In communities such as Brookfield, Oconomowoc and Watertown, which are proposed stops along the Milwaukee-to-Madison route, public and private leaders are hustling to persuade planners to build stations in their towns. Why? They expect a mix of commercial, retail and residential development to follow the trains like a caboose.

Studies in states such as Texas, California, Florida and Ohio have shown passenger rail can help lure tech-based businesses and investment.

That's a sector where Wisconsin is poised to compete. The proposed line to the Twin Cities would tie together the major hubs of the "I-Q Corridor," which extends from Chicago through Wisconsin and into Minnesota. A distance of only 400 miles separates two dynamos of the Midwest economy -- Chicago and Minneapolis/St. Paul. That's a shorter distance than what separates San Diego from the "Silicon Valley" in California. Within the region are some of the nation's leading research universities, federal labs, financial centers, tech companies and talent pools. High-speed rail will help bring them closer together.

It will also help rural Wisconsin, Iowa and Minnesota. There are 15 rural counties with nearly 550,000 people with 50 miles of La Crosse. These people would gain access to Chicago, Milwaukee, Madison, and the Twin Cities with a stop in La Crosse.

The Milwaukee-to-Madison route won't start running until 2013, planners say. It will take that long to rebuild tracks, renovate or build stations, roll out satellite navigation technology to prevent collisions and much more.

In other words, there's ample time to manage operating subsidies, which could appear much smaller in the scheme of things if gasoline prices continue to rise due to global demand for oil.

Virtually every form of transportation in the United States is subsidized to one degree or another, but all offer a return on investment. High-speed rail has the potential to pay for itself in Wisconsin for generations to come. Let's not miss the train.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.

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Comments: 11

At March 26, 2010 at 11:50 PM, Blogger Lupus Solus said...

1. Where will the funding for the $7 million/yr come from?

2. If it is so insignificant, then raise the fares to cover the operating and maintenance costs.

3. Two wrongs don't make a right. If the gas tax isn't covering the costs of road maintenance on the highways and new construction (unlikely but possible), then either raise the gas tax or put the new construction off.

BTW, is any of the gas tax subsidizing transit? If yes, then end it and balance the budget for the road O&M costs.

 
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