The Wisconsin Policy Research Institute

If We Only Had a Train

By Deb Jordahl

Ever since state lawmakers rejected a $13 increase in the car rental tax to help fund a commuter rail line in southeast Wisconsin, supporters of the KRM proposal have redoubled efforts to convince us that commuter rail is the answer to Southeastern Wisconsin’s woes.

The Milwaukee Journal Sentinel editorial board chimed in, citing a study by the Public Policy Forum entitled Plugging the income drain: Southeastern Wisconsin income migration trends, 2001-2006. The study reveals a net loss of $1.3 billion in personal income for Southeastern Wisconsin due to people leaving the region from 2001-'06. What seemed to trouble the Journal Sentinel most about the emigration of people from the region was the $105 million in lost tax revenue for local governments. The editorial parrots the Public Policy Forum in recommending stronger ties between Milwaukee and Chicago as the best way to plug the income drain.

According to the study, the six county Chicago region sent $392 million in income to Southeast Wisconsin’s border communities from 2001 to 2006, and they had a higher average income than people moving into the region from other places in Wisconsin. So the theory is if you build the train, they will come in greater numbers, bringing additional property tax revenue and disposable income to the region. But any freshman on the high school debate team could easily point out the flaws with this premise.

First, of the $1.3 billion dollars in personal income lost to the region from 2001 -2006, nearly half a billion dollars went to Wisconsin counties outside the region. Why are people from Southeastern Wisconsin moving to Jefferson, Dodge, Dane and Sheboygan counties? Neither the Journal Sentinel nor the Public Policy Forum had the intellectual curiosity to pursue the question. Could it be that these communities offer lower taxes, safer neighborhoods, higher quality education and greater job opportunities? If so, shouldn’t the train be heading in the other direction?

Second, the study shows only Kenosha and Walworth counties have benefited from the migration out of Chicago. Another study by the Public Policy Forum indicates that smaller cities and older suburban school districts in the region are starting to experience higher drop out rates and lower test scores more typical of the Milwaukee, Racine and Kenosha school districts. With that in mind is there any reason believe a train will encourage Chicago workers to move beyond those border towns to Milwaukee where they will face even higher taxes, abysmal public schools and an escalation of violent crime?

Finally, the so-called "brain drain" of educated younger workers to other states is not nearly as pervasive as the loss of $460 million in personal income from retirees moving to Arizona and Florida. While there’s nothing policy makers can do to make Wisconsin winters more comfortable for seniors, improving the tax climate by lowering the capital gains tax and working to federalize the inheritance tax would do more to keep families together and stop the outflow of retirees and their investment income than a commuter rail line and the tax increases needed to pay for it.

If Southeastern Wisconsin is serious about cutting the loss of income to other counties and states, policy makers and community leaders should focus their energies on improving education and the tax climate in the region.

-November 29, 2007

If We Only Had a Train

Content on this page requires a newer version of Adobe Flash Player.