Wisconsin Commuter Rail Shows Perils of Transit Funding

A commuter rail line linking Milwaukee, Racine, Kenosha and other Wisconsin suburbs is apparently dead now the that Southeastern (WI) Regional Transit Authority has been dismantled. Supporters of the rail project lamented its fall. According to the Milwaukee (WI) Journal Sentinel (25 July 2011):

“I would hope that, in a different political and economic climate, this would come back,” RTA Chairman Karl Ostby said.

RTA member Julia Taylor agreed, saying, “It’s a day of disappointment. The needs of transit are not going to go away. The needs of transit are stronger than ever. We didn’t get there today, but there’s always tomorrow.”

The transit authority was terminated (along with three others) because of state legislation deauthorizing multicounty transit agencies in the 2010 legislative session. Opponents questioned the financial viability of the transit agencies as well as their rationale. (See also this article in the Journal-Sentinel on the broader debate on transit and public spending.)

What I find more interesting is how the sources of funding for transit agencies, and KRM rail line in particular, have embedded uncertainty in transit (and transportation) decisionmaking by making investments and spending inherently political. Again, according to the Journal-Sentinel:

“The three-county body was planning the $284 million KRM and would have run the rail line. Plans had called for a 33-mile rail line with 15 round trips each weekday.

“Unlike Amtrak’s Milwaukee-to-Chicago Hiawatha line, the KRM would have provided city-to-suburb and suburb-to-suburb service for commuters, students and shoppers. Passengers could have transferred to Chicago-area Metra trains at the Kenosha station.

“Planners projected federal aid would have covered most construction and operating costs, with the rest coming from fares and a rental car fee of up to $18 a car.

“But the Federal Transit Administration has held off for more than a year on approving the RTA’s request to start preliminary engineering on the KRM. Federal officials have told regional planners they were unlikely to support a new rail line until the Milwaukee County Transit System was financially secure.”

In other words, the proposed rail line depended largely, if not exclusively, on non-user/beneficiary revenues–local taxes and federal (taxes) funding. This makes the rail line’s funding, and future, inherently political.

More importantly, the inability and implied unwillingness of users or direct beneficiaries to pay for transit improvements, such as the KRM commuter rail line, calls into question its anticipated benefits more generally. Fares have to be so deeply discounted to entice riders onto transit that direct-user travel benefits must be minimal.

Transit’s future depends on creating sustainable revenue sources (as I have argued elsewhere), rooted in the value they create explicitly (and transparently) recognized by users. Financial and operational sustainability depends on the primary beneficiaries–usually riders, nearby businesses, and property owners–recognizing the value and stepping up to the plate to pay for it.

And, this is true for all transportation projects: roads, buses, rails and others.

For more on the KRM commuter rail line, check out Tom Rubin and Bob Poole’s Frequently Asked Questions published in 2008.