20.7.11

PENNY-WISE, POUND-FOOLISH.  The Wisconsin legislature appropriates money for upgrades to the Hiawatha service.
Wisconsin taxpayers could wind up paying more to keep existing passenger train service from Milwaukee to Chicago than they would have paid to run new high-speed rail service from Milwaukee to Madison, according to a Journal Sentinel analysis of state figures.

The Legislature's budget committee voted 12-2 Tuesday to spend $31.6 million in mostly borrowed state money on Amtrak's Milwaukee-to-Chicago Hiawatha line, costs that could have been paid largely by an $810 million federal grant that would have extended the Hiawatha to Madison.

But Tuesday's vote doesn't cover all the spending that will be needed to keep running the Hiawatha, a growing service that carried nearly 800,000 passengers last year.

State transportation officials have estimated they would need millions more for locomotives, signals and a new maintenance base, even without expanding service beyond the current seven daily round trips.

And, like the spending approved Tuesday, all or most of those new costs would have been covered by the federal grant spurned by Gov. Scott Walker last year. That's because the Milwaukee-to-Madison service would have operated as an extension of the Hiawatha, as part of a larger plan to connect Chicago to the Twin Cities and other Midwestern destinations with fast, frequent trains.

Taken together, state taxpayers' share of the Hiawatha capital costs that would have been covered by the federal grant could total as much as $99 million, significantly more than the $30 million they would have paid for 20 years of operating costs on the Milwaukee-to-Madison segment, as estimated by former Democratic Gov. Jim Doyle's administration.

Walker had cited those operating costs as his main reason for opposing the 110-mph extension. Federal money would have paid all of its capital costs. And that doesn't count the other potential benefits that high-speed rail supporters have cited from the Milwaukee-to-Madison line, such as jobs, economic development, expanded tax base and improved freight rail tracks.

Conversely, high-speed rail opponents contend the Milwaukee-to-Madison extension could have cost taxpayers more than budgeted, even though the $810 million grant included a cushion of more than $150 million to cover inflation and unexpected cost overruns. They have questioned estimates on ridership, revenue and operating costs, as well as projections for economic development and job creation.

That debate played out Tuesday in the Legislature's Joint Finance Committee, as Democrats backed the passenger rail measure but said it showed that the Republican governor's decision to cancel the high-speed rail line had cost the state thousands of construction jobs, lower service levels and - in the short term, at least - money. They pointed to an estimate from the Legislature's nonpartisan budget office that found that the federal funds would have covered at least $22.4 million of the additional costs approved by the panel Tuesday.
The legislature is on the hook for more money for a number of reasons, some political, some self-inflicted. In anticipation of the stimulus money for the Madison extension, the state department of transportation previously committed money for four fixed-formation Talgo trains that will replace the existing variable-formation Horizon and Amfleet consists on the line.  The maintenance base and train upkeep will therefore be for orphan trains, the nearest copies of which are in the Pacific Northwest.  Those trains are still under construction, although there are cost overruns and logistical difficulties.
Train cars: Under Doyle, the state borrowed $47.5 million for its no-bid contract with Spanish train manufacturer Talgo Inc. to build two 14-car train sets to replace aging Amtrak-owned passenger cars on the Hiawatha line. Spare parts and design changes - such as adding wireless Internet service for passengers and improving sight lines for the crew - could boost the cost by $3.6 million, plus another $6.9 million to pay a British consulting company to oversee manufacturing.

After using $800,000 from lower-than-expected fuel costs, the committee agreed to borrow the remaining $9.7 million. Doyle's former transportation secretary, Frank Busalacchi, has said the $810 million federal grant would have covered those costs. Current state and federal transportation officials disagree with Busalacchi, although the Legislative Fiscal Bureau found the federal aid might have covered some of the consulting contract with British-owned Interfleet Technology Inc.

Maintenance bases: The state's contract with Talgo requires it to provide a maintenance base for the company to service the trains it builds. State officials have already spent $3.2 million to retrofit Talgo's plant in the Century City complex as a temporary maintenance base, and equipping that base will cost another $8.5 million. All sides agree the federal grant would have paid that $11.7 million, which the panel agreed to borrow.

But the north side plant, formerly home to Tower Automotive, can only be used as a maintenance base for three years, because of restrictions imposed by the freight railroad that owns the tracks connecting it to the downtown Amtrak-Greyhound station, the fiscal bureau said. Earlier this year, state officials asked the federal government to cover $48.1 million of the $60.1 million cost of turning the Talgo plant into a permanent base, plus $27.6 million for track upgrades.

With that request rejected, state officials now seek to build a permanent base closer to the station, Newson said. He said the new base would cost "much less than $60 million" but declined to predict a new price range.
It's probably asking too much to propose a maintenance base at Oconomowoc or Brookfield, where the trains could load passengers for Glenview and Chicago with a minimum of deadheading. Some faster running times west of Milwaukee and through Milwaukee would be required, though, otherwise Waukesha County residents have a shorter travel time driving to the airport station.

It's probably asking too much to make transportation funding decisions on the basis of benefits and costs rather than out of political pique.
There's plenty of blame to go around for the fact that Wisconsin taxpayers - and not the feds - will be paying $31.6 million on the Milwaukee-Chicago Hiawatha rail line. But in the end, it's the political games played by both sides that are to blame - games that should take a back seat when it comes to such issues.

Gov. Scott Walker started this mess when he unwisely shot down a federal grant for passenger rail service from Milwaukee to Madison that also would have covered a hefty chunk of the money for the Hiawatha work.

In fact, a Journal Sentinel analysis found that Wisconsin taxpayers could end up paying more to keep existing passenger train service from Milwaukee to Chicago than they would have paid to run new high-speed rail service from Milwaukee to Madison.

Turning down the grant was a big mistake - the funding could have paid for upgrading fast rail from Chicago to Madison as part of a Midwest rail network to keep the region more economically competitive with other parts of the country - and could have brought more jobs to Wisconsin.

On its face, rail transportation is not a conservative or liberal issue. Former Gov. Tommy Thompson, for example, was a huge rail backer. It's an issue that should be decided by objective factors involving need, cost and technology.
Objective factors? That takes all the fun out of it.

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