Milwaukee Taxpayers on the Hook for Another $25 Million for Downtown Streetcar

By Chris Johnson and Robert Miranda

February 20, 2016

The price to pay for Milwaukee’s downtown streetcar to nowhere just got more expensive.

The city lost in court recently and was notified that Milwaukee taxpayers will have to pay the additional $25 million tab “for utility relocation costs linked to the Milwaukee streetcar project.”
The decision was issued by Milwaukee County Circuit Court Judge William Sosnay, who agreed that the burden to pay for the relocation of utilities for relocating or modifying the streetcar route are not costs the utilities and their ratepayers should pay for.

The proposed downtown streetcar is only 3.1 miles long. It goes from the near east side through downtown to the lake front. The second phase expands to UW-Milwaukee campus, which currently has at least three forms of public transportation (county bus, university bus, and rent-a-bike) to Marquette University, which has the same number of public transportation options as UW-Milwaukee.

Once again, these routes do not include any of Milwaukee’s minority communities, especially African American and Hispanic. In addition, they are not routed to any substantial industrial park for major employment opportunities. 

There has been reference to expanding the streetcar into Bronzeville and the near south side; both areas are experiencing severe gentrification. 

Streetcar Excludes Minority Neighborhoods 

The expansion of the downtown streetcar going up North Avenue to MLK Drive is not, and most definitely will not, by the time they get to Phase II, be inclusive of the African American community, and the south side where the streetcar is slated to go.

Just like in Bronzeville, that part of the south side will be completely gentrified. Any opportunity for minority business interest to capitalize on the downtown streetcar project will be lost once these areas become too expensive.  

As far as the assertion that downtown streetcars are working in other cities and create economic development opportunities, that is completely false. Most cities have experienced severe budget overruns and most looped downtown streetcars are not financially sustainable and drain city budgets. The streetcars that have worked in other cities connect places like the airport to the downtown. This works because of high usage by travelers willing to pay a little more for the convenience of not having to rent a car, hail a cab, or worry about parking.

Determining whether or not taking $47 million dollars from Milwaukee Public Schools (MPS) and Milwaukee Area Technical College (MATC) future projected revenues is “harmful” or not is something the people of Milwaukee need to address. Now that an additional $25 million dollars is added, the stakes have risen substantially.

What many Milwaukee taxpayers do not understand is that there are INCREASED revenues every year from targeted Districts. Every year there are increases in property tax revenues, so the increases would have occurred naturally, as they do every year. Those forgone future revenue increases will NOT go to public education, they will go to the TID that pays for the downtown streetcar. Over the next 19 years public education will not participate in the incremental tax revenue that happens every year before a TID is approved.

The citizens of Milwaukee must face the fact that the downtown streetcar does take an estimated $47 million of future projected revenues out of their children’s public education system to pay for a 3.1 mile streetcar that goes from the east side, to downtown and to the lake and back.

Anyone who says otherwise either does not understand tax incremental financing or is blatantly lying!

It is also worth noting that the $47million of future projected revenues taken out of public education will surely rise after this court decision.

Paying for a downtown streetcar that currently has no guaranteed plans to go into any other communities other than downtown, the east side and the immediate surrounding areas is costly, but to support alderpersons who voted for this streetcar project that does not benefit their constituents and takes projected future revenues out of MPS and MATC, is an injustice, a waste of public resources and foolhardy.

LRB Report on Streetcar TID Finance PDF

Back to top
Back to Minds Eye

Last edited by Tyler Schuster.   Page last modified on February 22, 2016

Legal Information |  Designed and built by Emergency Digital. | Hosted by Steadfast Networks