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6/23/2008
Pay attention Fox Valley. KRM is coming.

Though many of Jo’s readers hail from the Fox Valley, I write today about an issue that is very Southeastern Wisconsin – the KRM rail project. Be not complacent … rumblings can be heard of connecting rail lines from Milwaukee to Madison, into the Fox Valley and on to Minneapolis so the politics of rail transport are something we should all pay attention to.

KRM, the proposed rail project connecting Kenosha, Racine and Milwaukee, would end at the Kenosha METRA station, where people could then take a separate train into Chicago. Somehow, this rail line plan manages to do something no other major rail line in the nation has done – ignore the major airport in the area. (Well, they are planning a shuttle bus that you can wait for when it is 10 degrees outside, but this is not my idea of an actual airport stop.)

There is some $90 million in federal designated transit money that has been floating around Milwaukee for years. While various projects have been proposed for that money, the powers that be have decided the KRM line is the way to go. The only issue thus far has been how exactly to pay for the ongoing operational costs of the KRM line.

A regional transit authority was formed, and authorized a $2 per transaction tax on rental cars to simply study the issue. Those unelected individuals took $650,000 of tax money and illegally hired lobbyists to lobby the Wisconsin legislature to raise taxes for more transit funding. Yes, that’s the truth, a tax to fund lobbyists to convince our legislators to raise our taxes some more.

For the program to be successful the fare must be low enough to encourage people to ride the train. As proposed, the train is scheduled to run 14 times a day on weekdays, half that on weekends and holidays, and with a fare in the $4 to $5 range. The grandiose project is expected to run at an 83% loss on an estimated ridership of 1,400,000 annually.

By the way folks, could you ever imagine getting financing for a private project that was proposed to run at an 83% loss? You would get laughed out of whatever bank you had the guts to walk into. However, in government, running a project at an 83% loss will get widespread support.

So funding the shortfall has become the sticky issue. A new sales tax was quickly shot down. The idea that keeps getting pushed is another increase of that rental car tax. This time they want to increase that $2 tax to $13 per rental car transaction (!) to pay lobbyists to increase our taxes some more. There are three major problems with that proposal: Inflation is not considered, economic downturns in the rental car industry are not considered, and this turkey is going to need more than an 83% subsidy.

What the rail advocates are not telling you is that the 83% projected loss in not nearly enough. You see in order to make that revenue projection they first need to make that ridership projection.

Already a train runs between Milwaukee and Chicago with a stops at Mitchell Field and Racine (Sturtevant actually). The Amtrak Hiawatha, generally considered a very successful route, has an annual ridership of about 500,000. The KRM advocates are projecting the KRM line to run 2.8 times the ridership of the Hiawatha line. I’ll put it another way. In order to meet its ridership and revenue projections the proposed KRM rail line must maintain an average ridership of 320 passengers per train.

A 320 per train passenger average will need to be maintained on every train on each of the 84 trips per week in order to meet revenue projections and run at an estimated 83% loss. That, my friends, is ridiculous. The short answer is that the projected 83% loss is not nearly dire enough. They’ll need more money to run this thing than that $13 per rental car tax.

And then there is the dirty little secret about this whole project. The advocates know the money they are asking for is not nearly enough to run this project and they really don’t care. After all, once that initial investment is made they will have the leverage they need to increase other taxes to pay for this ridiculously expensive project.

Pay attention now Fox Valley. This is where you come into the picture. After they get this ridiculous money sucking black hole of a project up and running in Southeastern Wisconsin, they’ll be coming your way. Looking for money from taxpayers all over the state. That big sucking sound you hear is money being sucked out of your wallet to pay for a train nobody wants to ride.

Fred Dooley blogs regularly at Real Debate Wisconsin.

COMMENTS

Fred does a tremendous service by alerting us to this monstrosity. Government always cries poor - that it doesn't have the enough money for vital services - but they always have revenues available to throw at this nonsense.

Brian Heyer (Mon Jun 23 07:45:42 2008)

Here is an article I did on my blog the North Shore Exponent discussing the real life problems of what could happen with KRM.

Kyle Maichle (Wed Jun 25 14:17:04 2008)

I admit that I don't know the details about this particular project, but I would encourage an open mind about running at an 83% "loss." The state, counties, and cities put many millions of dollars a year into building new roads. By Fred's accounting, all of these roads run at a 100% "loss" since no one using them pays a dime WHEN they use them. Trains and other forms of mass transit should be thought of as simply alternative forms of transportation spending, not businesses that are required to turn a profit. Perhaps with the price of oil and gas skyrocketing, people would welcome the opportunity to spend some tax dollars for a means (other than the almighty freeway) to get to and from Milwaukee and Chicago.

Ron Peck (Thu Jun 26 22:47:57 2008)

It was really nice recently not having to drive through Chicago to pick my son up at Amtrak's Chicago station. Milwaukee would be even better. East Coast rail was so convenient and well used.

M Boveroux (Fri Jun 27 11:58:50 2008)

Over 20 years ago my daughter rode France's bullet train from the French alps to Paris and back. The train traveled at 300 mph. Were we to have similar trains in the Midwest, we could connect Detroit, Chicago, Milwaukee, Madison, and Minneapolis thus truly creating a significant economic corridor bringing jobs to all areas. It is obvious that air travel alone is not the answer to an ever crowded sky. If done properly, these could be money makers not tax drainers. Like tax supported public television, if the economics warrant, the system should pay for itself. To build any system without linking the major airports would be a very poor investment.

Rick Hood (Sun Jun 29 08:24:54 2008)

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