Wisconsin Interest
Volume 19, No. 2
July, 2010

Money, money and more money

As stunning as it is to realize the state is about to spend $810 million of money borrowed from your kids to build a middling-speed train to Madison, that figure is just the start.

Take the cost of actually running the trains. The state reckons that if it draws 380,000 passengers and if they pay $44 to $66 per round trip, the train will still lose enough money to need a $7.5 million subsidy annually.

That guess may be low. Nearly all Amtrak lines already lose money. The Milwaukee-to-Chicago trains lose $26 on every passenger, according to figures from the Pew Charitable Trusts’ Subsidy Scope initiative. It’s one of the lower per-ride subsidies on Amtrak.

Assume the trains from Madison can do even that well — dubious, considering it’s a much smaller destination than either Milwaukee or Chicago — and it implies a subsidy of $9.6 million a year.

Then there’s the future. The trip to Madison is part of a grander scheme to extend “high-speed” trains to Minneapolis-St. Paul. They may follow the route of existing Amtrak service, so you’d think it wouldn’t take much to buff up the tracks. But remember, 46 miles of the Madison-Milwaukee service is also over rails now used by Amtrak.

Upgrading just that stretch for the state’s middling-speed trains will cost $286 million. At that rate, that’s about $1.9 billion to fix up tracks all the way to the Twin Cities, assuming everything goes right and the state doesn’t decide to route the trains through Eau Claire instead over tracks that will need a lot more work.

The state also plans to extend trains to Green Bay. There are no passenger trains to Green Bay now and haven’t been for decades. Those tracks, too, will need a lot of costly repair. Those trains will lose money on each passenger, too.

Don’t think that’s the limit: 110 mph won’t do for long. The Midwest High Speed Rail Association already is complaining, justly, that 110 mph is pathetic by world standards. (Steam trains in the 1930s crossed Wisconsin at about that speed.) Going faster means the trains, like nearly every bullet train in the world, will have to run on new exclusive rail lines. Right now, Europeans spend about $40 million to $80 million per mile to build such bullet-train lines.

The low-end number is what engineers used when the Midwest High Speed Rail Association hired a consultant to study what it would cost to build real bullet-train service across the ideal terrain between Chicago and St. Louis. Their estimate: $11.5 billion, for one 305-mile line.

Assume a middle-range figure and truly fast service from Milwaukee to Madison would cost $3.6 billion before inflation. Going to the Twin Cities would be about $15 billion.

This full cost is especially important in light of how the train’s backers are selling it. When two men running for the Republican nomination for governor, Milwaukee County Executive Scott Walker and former congressman Mark Neumann, both said they’d halt the train project, their presumptive Democratic opponent, Milwaukee Mayor Tom Barrett, scolded them.

The state already will have sunk $57 million into the project by inauguration day, Barrett said, so “it would be a huge mistake for us to stop construction.”

The fallacy is plain: If the entire project is a bad bargain, it makes more sense to regard it as a $57 million lesson in prudence than to let it become an $810 million sinkhole. But the good-money-after-bad reasoning misleads people all the time. It’s why lost travelers keep heading the wrong way.

And it is why backers feel it’s so important to get the middling-speed train built: It isn’t just an alternative way to reach Madison. It’s a down payment that will be used to justify a much costlier, much larger network.

• P.M.

 

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