Tuesday, January 09, 2007
KRM sales tax dead, but press on for trains

Just after they propose cutting the sales tax for the train and buses, the Southeastern Wisconsin Regional Transit Authority has decided to scrap the plan for a one-half percent increase in sales taxes to pay for projects that are not needed.

The Southeastern Wisconsin Regional Transit Authority took a step back from a regional sales tax today, leaving questions about how a proposed commuter train line could be financed.

But the authority did ask the Legislature to put it in charge of running the KRM Commuter Link, a 33-mile train line that would connect Milwaukee, Racine, Kenosha and the southern suburbs with 14 round trips each weekday.

Members of the three-county authority decided today not to move forward from their preliminary vote to ask the Legislature to authorize a two-tiered 0.5% sales tax to build and operate the train line and to take public bus systems off the property tax.

In the original proposal, 0.05%, or 5 cents on a $100 purchase, would be used for the KRM Commuter Link, which would cost $237 million to build and $14.7 million a year to operate. Milwaukee, Racine and Kenosha counties then could levy up to 0.45% more, or 45 cents on a $100 purchase, to replace levy support for the buses.

After the sales tax drew political opposition, however, the authority put that option on hold to explore other possibilities. Among those under discussion are using a portion of the 2-cent-a-gallon gas tax that now pays for cleaning up pollution caused by leaking underground fuel tanks, or structuring some sort of tax incremental financing district to take advantage of projected property value increases around train stations.

So a using a tax that pays for environmental protection and cleanup? This makes absolutely no sense. Either they plan on not cleaning up leaking gas tanks, or they plan on raising the tax, or both. So the idea is that we're going to raid that fund, to pay for something completely unrelated. Don't you just love big government?

The second idea is possibly an idea, a TIF. But once again, instead of collecting property taxes today, we'll collect them down the road--which doesn't pay for the project today. Sure, you can bond, but that will create more debt that will have to pay off.

Here is my plan if they really want these trains: If the business community really wants it, let them pay for it. They do all of the talking how it will bring substancial industry and revenue to the area. Put your money where your mouth is. Private enterprises, in partnership with municipalities, do work. Afterall, look at the telco's, the cable co's, and energy co's. They are raking in profits all while spending billions on infrastructure.

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posted by Jon Hayden at 10:25 PM |

Saturday, January 06, 2007
More on the SE Wisconsin commuter train

I stumbled upon this Web site this morning and it looks like there is a group ready to go if there is going to be a referendum for the tax shifting to pay for trains and buses in Southeastern Wisconsin. It is dubbed the Southeastern Wisconsin Coalition for Transit NOW.

Of course it is mostly propaganda about the trains, the economic benefits and everything else under the sun. There were two things that struck me (1) the misinformation on the economic benefits of the train and the project; and (2) the absence of the proposed consolidation of the bus systems. (Sorry no link, because there isn't anything on the site.)

Somehow raising sales taxes for trains increases economic output. I've taken a few economics classes and I still don't understand how--mostly because in reality it doesn't. They use three examples of how spending millions of dollars benefits the communities.

  • HarborPark in Kenosha, WI was 60 acres of lake front property left vacant and blighted after the Chrysler plant closed. The property was assessed at $0. One of the key goals of the HarborPark development was to attract residents that would use Metra for their daily commuting. A over 300 units will be built with
    value of over $100 million. The annual property tax revenues will be about $2.5 million when completed in 2006.
  • Arlington Towne Square in Arlington Heights, IL is one of five developments that are a part of a very recent major downtown redevelopment. In total, $200 million was invested near a new Metra station (Metra service was existing before new station was built). The Arlington Towne Square redevelopment used old housing/commercial real estate that was valued at 2.5 - $3 million and brought in $65,000 annually in property and sales tax. This property was transformed into the $65 million Arlington Towne Square mixed-use tower that includes residential, commercial, retail, underground parking and a theatre. Occupancy is near capacity in 2 years. $1.5 million in annual property and sales tax are realized from the Arlington Towne Square development alone.
  • Fox Island Place in Aurora, IL is a landmark historical hotel that has been renovated into a 110 unit apartment building. It is situated a few blocks from a recently renovated and expanded Metra station. Occupancy is always at full capacity with a waiting list. According to the manager, the biggest selling point of Fox Island Place is their proximity to the Metra station. About half of their tenants choose to not own cars, instead using Metra and other transit services. The manager stated that without the Metra station, occupancy would be cut in half and the historical landmark apartments would not have been developed.

Interesting how this organization pointed out two cities (in Illinois no less) that were already connected with the Metra System in the Chicagoland area. The author doesn't want to point out that the infrastructure was already there--the projects were renovations of train stations that had no new impact on service, or new service.

Also, let's take a look at the taxbase for the two cities and compare them to Kenosha, Racine and Milwaukee. (Based on per-capita income from the U.S. Census.) Take a look at the counties and it gets closer, but a considerable difference

I'm sure I picked the wrong data to look at, but look at discrepencies of the total amount of dollars in the counties. Cook County residents can have a massive train service and still pay significantly less when it comes to transporation compared to any of the Wisconsin counties. Building trains and train stations aren't cheap. Taxpayers in Southeastern Wisconsin cannot afford this project.

And let's not forget about Harbor Park...
This group claims that Harbor Park was built for the Metra. In reality, it was built because something had to be done with the land and the city took the ball and ran with it. It is true that the land of the old American Motors (Not Chrysler) plant was worthless. It was contaminated by toxic waste nearly 20 feet down and the environmental risk of building over it was severe. Kenosha did a great job of redeveloping it, but it wasn't overnight. It took them a decade from when the last AMC smoke stack was demolished in 1988 to roughly 1998 when most of the framework of the Harbor Park was developed.

Metra has been stopping in Kenosha at least since the closure of the AMC plant. Redevelopment wasn't a result of the Metra. Redevelopment was a necessity of downtown Kenosha as teh Village of Pleasant Prairie and Town of Somers exploded outside of city limits. In the 1990s, downtown Kenosha was dead. There were numerous attempts to change the way it worked, but they all failed. They took out the through streets, they put them back in. They put in a worthless trolley system and a massive bus station. All of these were failures, until the redevelopment was finalized.

Throughout the course of Kenosha's downtown redevelopment, there was no rennovation of the Metra station. In fact, it technically isn't a station, rather the northern stop. The "station" is a convenience store that you can purchase snacks, your parking pass for the lot and get some basic information on the Metra service. The train had zero impact on Kenosha's redevelopment process. There isn't anything that connects the train station to the new Harbor Park development.

Their story is full of holes.

And travel time will increase with commuter rail...
On the same page, they list the total time from all of the various stops on the rail line. Last time I wrote about this, I came to these stats for the time for Amtrak:

And with the proposed KRM line:

And let's take a look at the proposed stops along the Wisconsin lakeshore:

My oh my, that is a lot of stops. I am trying to think of where they would put a train station in Somers that is near something useful. The tracks they will use run parallel to Wisconsin 32, aka Sheridan Road. The only logical place I can think of to put this station would be on Hwy E (12th Street). But there is a problem, there is a fire station next to the tracks. Hmm. I suppose one could be put on Hwy A. But that isn't where the population in Somers is. The population is mostly west of Green Bay Road (Wisconsin 31). If someone in Somers wanted to take a train to Chicago, they would be better off driving the 5-10 minutes to Sturtevant and taking the Amtrak. If they want to go north, they have easy access to Interstate 94 and Wisconsin 31.

Now this is where any numbers will look good. This KRM group posted this on their site:

A recent Transit NOW survey of 100 seniors from Caledonia, a potential station site on the KRM Commuter rail line, provides another good example of how commuter rail increases visitor spending in a city. Of 99 seniors surveyed, 100% said that they would take commuter rail. Of those 99, 90% would go to Milwaukee, 42% would go to Kenosha, 17% would go to Chicago, 14% would go to Racine or South Milwaukee. The stated purpose of their trips was 66% shopping, 65% musical shows, 51 % restaurants, 47% theatre, symphony or ballet, 43% would go to museums. These are trips that they would otherwise likely not have made.

Of course seniors are going to use a train. Hell, they are the primary consumer of the bus system in all three counties. Their mobility is limited because of various factors: health, drivers license, money, etc. There are other factors too. Racine buses don't run up in Caledonia, nothing does. The proper question would have been to 100 random people, not seniors. Or, 100 random people age 18-65, people that work for a living.

And what about the buses?
Seriously, this is what matters most. We can argue all we want about the trains, at least we all agree that it is a new tax. The tax shifting for the bus system will result in an increase in total taxes. That is a guarantee. Then the rural residents of Kenosha and Racine Counties will pay for something they don't have access to. Stupid.

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posted by Jon Hayden at 10:47 AM |

Saturday, December 23, 2006
Regional transit authority wants to soak taxpayers some more

Is it a sign of the times, but how stupid to politicians think citizens are? This new transit authority, dubbed Southeastern Wisconsin Regional Transit Authority, wants to increase sales taxes in Kenosha, Racine and Milwaukee counties one half of a percent to fund a commuter train from downtown Milwaukee, to Racine and ending in Kenosha and a new bus system. There possibly could be a stop in the village of St. Francis or South Milwaukee, and to fund a regional bus system. In return, the Milwaukee County Transit System, the Racine City Bus System and the Kenosha City Bus System would become part of this regional authority and its funding would be through this sales tax. This is a horrible idea.

First, do we need train service from downtown Milwaukee to Kenosha? One could argue yes, but for the people in Western Milwaukee County, say Wauwatosa or Hales Corners, the train wouldn't make it out there. You'd have to drive a half-hour to get to the train station. They could make it sooner than by train if they kept going in their car.

This procedes into the next point, by making light rail spurs into the Milwaukee suburbs. This would cost a lot more than the .1 percent they are talking about right now. Pretty soon, we'll have empty light rail trains going around Milwaukee County--while the taxpayers keep paying.

The next argument will be this is a simple extension of the Metra rail that stops in Kenosha. Sure, but it doesn't connect. Once you get off the SE Wisconsin train, you'll have to wait around the Kenosha for the Metra train as they won't be coordinated. If you've taken a good look at Kenosha's train station it is a joke and very unsafe at night. I can attest to this as a Kenosha resident--it is scary at night.

So if the task of the train is to make it easier on people to travel from Milwaukee to Chicago, or Racine to Chicago, or Kenosha to Chicago, we already have the transportation set up by rail. It is called Amtrak.

Commuter rail along the shores of Lake Michigan wouldn't make sense time-wise.

And let's not forget about the buses...
This is where it just gets stupid. The plan calls for the consolidation of the buses in the three counties into a regional transportation system. It would be paid for by the .45 percent increase in the sales tax. The counties, or cities, would "cut the tax" from property tax bills.

There are two glaring issues with this plan. First is the tax shifting. You know damn well that the Milwaukee County Board and the Racine and Kenosha City Council's will not cut the property tax. They will fill the void with something else. Property taxes will not go down with this plan. Tax-shifting is not the same as tax cutting. In the end, taxes will go up. These boards will find other things to do with their tax control. Maybe like portraits of elected officials at the Courthouse?

Secondly, the consolidation means that residents of the rural areas of Racine and Kenosha counties would be paying for a bus system that doesn't reach them. In fact, most buses within these cities don't even cover their cities adequately. The Racine City Bus doesn't go out to Union Grove, Burlington, Waterford or any of the outlying areas. The Kenosha City Bus doesn't cover anything west of I-94. These taxpayers haven't had to pay for a bus system because there would be no need for service out there. Under this plan, they would pay for service that they won't ever get or need.

Three area Legislators, Robin Vos (R-Caledonia), Samathan Kerkman (R-Genoa City), and Scott Gunderson (R-Waterford) have all come out against this plan. Milwaukee County Executive Scott Walker as well. Even UW Critic Steve Nass (R-Whitewater) chimed in on the controversy.

Walker had this to say:

"I oppose an increase in the sales tax to fund the KRM for the same reasons I have opposed raising the sales tax to fund parks, transit, and to theoretically provide property tax relief.”

“First, it will give Milwaukee County the highest sales tax in the state; thus creating a tax island. Second, the state government still has to approve an increase in the sales tax. Since the Governor and the State Legislature are opposed to new taxes, support for a new tax is unlikely.Third, we cannot continue to dig into the pockets of taxpayers every time a new proposal comes along. We must instead be better stewards of our tax dollars."

Vos had this to say:

“Increasing taxes to fund mass transit is just not an option,” said Vos. “Racine County is already taxed to death and citizens shouldn’t have to dip in their wallets again.”

...

“I am not opposed to commuter rail service, but I think people who never ride the system shouldn’t be forced to pay for it,” said Vos.

Kerkman echoed Vos and Walker:

Regardless of whether the tax increase is .0375% or .05%, I oppose the idea completely. The residents of Racine and Kenosha counties are already taxed in excess and I don’t believe that it is in the best interest of the State of Wisconsin to do so. We already have senior citizens leaving the state because of the tax burden of Wisconsin. We should be lowering the sales tax burden instead of increasing it.

Nass, who isn't even going to be effected by the project, criticized it as well.

“The November Election results weren’t about authorizing new and higher taxes in this state. However, many local and state officials seem Hell-bent on wasteful new mass transportation spending financed by bleeding Wisconsin families of more money,” Nass said.

The new proposal needs approval from both the Legislature and Governor Jim Doyle. The State Assembly will be controlled by Republicans during the next session.

“Let me be clear, there should not be one Republican legislator in favor of any tax increase. I will oppose any proposal or budget that contains a tax increase. There will be no acceptable excuse for Republicans compromising with Senate Democrats on raising taxes,” Nass said.

Nass makes a good point on the likelihood of a Republican crossing over and supporting this. All it takes is four Republicans to cross over for any bill. I can already think of a few that would cross over a support a stupid thing like this. Southeast Wisconsin should be on watch for their tax dollars. Hopefully common sense will prevail.

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posted by Jon Hayden at 6:24 PM |

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