According to the Milwaukee Journal Sentinel, the Legislature's Joint Finance Committee in Madison agreed to accept President Obama's $822 million of federal stimulus dollars for a high-speed rail project that conjoins the three major cities of Chicago, Milwaukee, and Madison.
The project, however, has elicited the criticisms of two Republican candidates for governor, Scott Walker and Mark Neumann. Walker believes that Wisconsin should return the money. He likens it to someone winning an expensive sports car in a raffle, but couldn't afford the high-risk insurance that comes with it. Neumann added that we're spending money on something we're not going to use, and it won't create sustainable jobs. Barrett, the only democrat candidate in the governor's race, stood side by side with Governor Doyle promoting it as an accomplishment evidenced only by the power of partnerships.
The first criticism of high speed rail is undoubtedly the cost. Obama is using $8 billion from the American Recovery and Reinvestment Act to fund high speed rail projects that consist of 13 corridors spanning across 31 states. The project is massive and massively expensive.
The second criticism is timing. Currently, our national deficit is a record high of $14 trillion and is projected to be as high as $20 trillion by 2015. Wisconsin's budget is not much better at a record deficit of $6 billion. Local conservative politicians like Scott Walker find it problematic to support high speed rail when it necessitates new operational costs on taxpayers. In other words, if high speed rail cannot be self-sustaining, then we have no business accepting $800 million of taxpayer money.
The third criticism, and likely the most scathing, is the tax implication. Admittedly, high speed rail is not self-sustaining - it never has been. Borrowing from Walker's analogy, imagine winning a Lamborghini Reventon (featured on the left) in a raffle. The car's cost is upward around $1.6 million, which is okay since you didn't pay for it, right? Well, someone is.
The reality, however, is that a Lamborghini is very expensive to maintain. What happens when you need a new transmission or something as simple as an oil change? Truth be told, an oil change on a Lamborghini will cost you about $5,000 each visit, which will occur every 3,000 miles. And a new transmission will cost you in the neighborhood of $50,000. As we can see, even a free Lamborghini will eventually put you in the poor house.
The same principle applies with high speed rail. The operational costs of a rail line are projected to be about $8 million per year, which means the state government will need to raise additional revenue to fund the expense. The revenue will come in the form of either a new tax or the escalation of an older tax like perhaps a gas tax. As with all expenditures, we have to ask ourselves is it worth the taxes?
This leads us to the final criticism, which is that high speed rail loses money on an annual basis. Amtrak, for instance, has lost an average of $500 million a year since the time of its inception in 1971. And this doesn't include the 2.3 billion dollar lifeline it received from Congress back in 1998 and 1999.
Why does high speed rail lose money? The simple answer is because the low ridership cannot offset the initial building expenses and operational costs. In fact, the low ridership makes high speed rail about 3 times less cost-effective than highways. The argument, from critics, is that highways cost less, offer more choice, provide more destination opportunities, and include more privacy during travel than rail. At what point, they would argue, do we need high speed rail when highways are the better bargain?
Part of the problem for high speed rail is the passenger ticket cost, which is estimated to be from $33 to $40 one-way from Milwaukee to Madison. If that sounds like an expensive deterrent, how about a one-way route from Milwaukee that falls about 6 miles short of downtown Madison? Yes, this would mean that passengers would need to get a taxi or shuttle-bus both to and fro the Dane County Airport with every visit to downtown Madison.
Expensive ticket pricing, taxi-hopping, reduced traveling flexibility, and increased taxes will make high speed rail a difficult sell during tough times, unless of course, it is rammed down our throats by a single-party legislature. To be fair, proponents of high speed rail point to the fact that building it will produce jobs, make Milwaukee more attractive to do business, and make the community more vibrant (whatever that means). And so I will address this "if you build it, a justification will come" approach in my next paper.