Connect with Isthmus:         Newsletters 

Friday, January 30, 2015 |  Madison, WI: 17.0° F  A Few Clouds
The Paper
Share on Google+
What's wrong with high-speed rail
Madison-Milwaukee link would cost taxpayers more than it's worth
on (16) Comments

According to Marc Eisen, opponents of the proposed high-speed rail line between Madison and Milwaukee might understand its price, but not its value (Opinion, "Give Trains a Chance," 9/10/10). Okay, Marc: Let's talk about the value of this project using basic economic concepts - costs, benefits and alternatives.

Start with the transportation alternatives, since people already use these to get from here to Milwaukee. Most of us, of course, just get in our cars and drive east on I-94. You can leave when you want, arrive in an hour and a half, and use five or six gallons of gas (round trip) for an out-of-pocket cost of about $15.

An alternative is Badger Bus. There are a variety of departure points and routes, some that get to Milwaukee in less than two hours. There are also multiple departure times, and, while prices vary, the round trip will likely cost between $35 and $40.

The proposed "high speed" rail option is a bit of a misnomer, since the train will initially average 58 mph. The line would be comparable to Badger Bus in terms of trips per day and travel times, although the train would have fewer pickup points and less route flexibility. The price is also higher, with a round-trip ticket expected to cost about $66.

But these ticket prices cover only a fraction of the costs. Construction funds will be provided by the federal government and ultimately recovered from federal taxpayers. Construction expenses are projected to be $810 million but could top $1 billion, since nearly every commuter rail project ends up costing more than expected.

Once the line is built, operating costs fall on state and local governments. Revenues collected from ticket sales will not cover operating expenses even under optimistic ridership forecasts. Operating the line will therefore add to the state's existing budget deficit, already at record levels. This will crowd out spending on other public services and spur state tax increases.

The overall (federal and state) government subsidy will also be huge - more than $100 per passenger per ride, over and above the ticket price. Badger Bus, in contrast, is a nonsubsidized private enterprise.

Despite these drawbacks, the Madison-Milwaukee line has vocal supporters. They argue that trains reduce energy use, dependence on foreign oil and greenhouse gas emissions. But this planned high-speed line will use diesel fuel, which comes from petroleum.

Meanwhile, a 2010 Berkeley study shows that high-speed lines must run for 71 years (with half the seats occupied) to reduce greenhouse gases by the amount of emissions that are created by constructing the line. High-speed rail can therefore easily increase greenhouse gases, particularly if few commuters switch from driving to trains.

Proponents also claim high-speed rail leads to economic development. Yet the state's rail application projects only 55 permanent new jobs will be created - not a lot of bang for a billion bucks.

And studies find rail projects only help areas receiving funds. For example, there may be new retail shops and restaurants near train stations, but the value of property near tracks almost invariably declines because of noise, pollution and related problems.

Finally, in what may be the least persuasive argument of all, rail advocates tout the benefits of enhanced "connectivity" between Wisconsin's major cities. In an age of instant communication, it's difficult to see how a new rail line that compares unfavorably with existing transport options will lead to increased information flows or other "synergies" that create new business.

Proponents counter that scientists and venture capitalists won't take the bus but would ride a train between Madison and Milwaukee. Even if this doesn't strike you as farfetched, Wisconsin's waitresses, teachers and dairy farmers shouldn't have to pay higher taxes to subsidize the travel of a small number of upper-income workers just so they can avoid a 90-minute drive or the indignity of being seen on a bus.

The interests lobbying for rail subsidies are highly disciplined and well funded. For example, a U.S. Mayor's Report on four planned high-speed train lines was prepared by the Siemens Corp., a contractor and supplier of rail equipment. There is not even a pretense of objectivity in Siemens' report, which promotes the company's products so shamelessly it would make a 1950s tobacco executive blush.

Scott Walker, the Republican candidate for governor, has vowed not to take federal funds if elected, but instead use available funds for road and bridge repair. This isn't, as Marc Eisen suggested, a retreat from previous GOP rail support; it's a better policy choice.

Transportation is critical to economic vitality and our quality of life, but it doesn't make sense to fund an unnecessary rail project that will burden Wisconsin taxpayers for decades to come. Let's hope this is one train that goes off track.

Larry Kaufmann is an economic consultant based in Madison.

Share on Google+
Show 16 Comments

Log in or register to comment

Select a Movie
Select a Theater

Promotions Contact us Privacy Policy Jobs Newsletters RSS
Collapse Photo Bar