Canceling high-speed rail is economic treason
by Robert Kraig
Governor-elect Scott Walker’s ill-advised campaign posture to cancel the high-speed rail project that is already under construction would cost Wisconsin up to 15,000 family supporting jobs and up to $100 million at a time when both jobs and revenue are desperately needed.
Walker got a lot of campaign mileage out of this issue as a supposed example of wasteful government spending, but now that he actually will have to govern, cancelling the project at this stage makes absolutely no sense, even if you believe his arguments against the project.
Walker’s campaign posturing now threatens thousands of construction and permanent jobs, and will cost Wisconsin much more money to cancel than continue. Given the desperate need for jobs in Wisconsin, and the severe fiscal crisis the state faces, cancelling the high speed rail line amounts to economic treason.
Not surprisingly, other governors are already beginning to line up to request the job-creating money for their own states. Governor-elect Andrew Cuomo in New York has already put out a statement asking for the money to create good high-speed rail jobs for New Yorkers.
First, let’s review the jobs that will not be created if Walker cancels the high-speed rail project. If it is cancelled, it will cost Wisconsin an estimated 4,732 construction jobs. In addition, research on the economic impact of high-speed rail concludes that when the full project is completed, including the link from Madison to Minneapolis, that 9,570 permanent jobs will be created.
Governor-elect Walker has defended cancellation of the high-speed rail project on fiscal grounds, but returning the $810 million in federal funding that is paying for construction of the project would actually cost the state a great deal of money. As the money can only be used for high-speed rail, and the project is already underway, Wisconsin would have to pay back the federal government and contractors for work already done.
Policymakers estimate it will cost Wisconsin between $57 million and $100 million to buy out of the project. The maintenance costs Walker railed against in the campaign are substantially lower than this! Walker projected $7.5 million per year during the campaign, but most analysts think it will be much less. If the federal government pays the same percentage of maintenance costs it now pays for the Hiawatha line between Milwaukee and Chicago, the cost to Wisconsin will only by $750,000 per year, which is a tiny fraction of the state transportation budget.
In addition, the City of Milwaukee spent $10 million to buy the blighted Milwaukee site where the high speed trains are being built by Spanish manufacturer Talgo, and has invested an additional $6 million to upgrade the facility. Talgo has made it clear that they are unlikely to stay in Milwaukee if the Wisconsin high speed train project is cancelled. As a result, Milwaukee would lose the anchor manufacturing facility needed to spur re-development of the blighted Tower Automotive/A.O. Smith site on the near north side.
Given the nearly 15,000 construction and permanent jobs that would be created by the federal investment in Wisconsin in high-speed rail, and the high fiscal cost of cancellation, it would be incredibly short-sighted for Governor elect-Walker to follow through on his campaign posture just to provide more red meat for right-wing talk radio audiences. It amounts to economic treason at a time when everyone, regardless of political and ideological perspective, should be working together to bring desperately needed family supporting jobs back to Wisconsin.