Walker's and WisGOP's refusal to take train, broadband money still costing Wisconsinites

Tomorrow, the Wisconsin Joint Finance Committee will discuss several items that go over how to use certain sources of money to deal with new initiatives and reallocations of a few funds. Two of these items involve certain infrastructure improvements that should remind us how a couple of foolish stunts in the opening months of the Walker Administration continue to hurt us to this day.

The first item has to do with the state’s initiative to expand broadband access, particularly in rural areas. The Public Service Commission oversees the grant, and they are looking for more support in doing those duties. As the Legislative Fiscal Bureau notes, Governor Evers’ first budget included a big boost in funding for the program, even if it wasn’t everything Tony wanted.

In [the 2019-21 State Budget], the Governor had recommended $74.6 million in increased grant funding, which would have included: (a) $50.4 million in general purpose revenues (GPR) in a new biennial appropriation, with $20 million GPR as annual base funding; (b) $24.2 million in federal e-rate funds transferred on a one-time basis from DOA in the biennium. Changes by the Committee deleted proposed GPR funding and instead transferred $22 million to the USF from federal e-rate funds each year, but only on a one-time basis in the 2019-21 biennium. These funds are in addition to unencumbered amounts from other USF SEG appropriations, which are transferred to broadband expansion grants for use the following year. PSC is provided at least $2 million each year from the USF, should transfers not reach that amount, for which PSC can make assessments to ensure a minimum grant funding level each year.

Even though the GOP-led Joint Finance Committee turned down Evers’ big ask of $50 mil, the $25 million we will grab from the Universal Service Fund to expand broadband next year is more than the total of $20.2 million for broadband that was set aside during Scott Walker’s entire tenure in office. And most of that $20 million under Walker was only set aside in Scotty’s last 2 years, as he desperately tried to make people forget how far behind we were.

This is where I remind you that the Walker Administration turned down $23 million back in 2011 to expand broadband to underserved areas, because God Forbid we would take any of Barack Obama’s stimulus money to get our economy moving and our infrastructure into the 21st Century.

The LFB says that over the 6 years the broadband expansion program has been around, it has received grant applications asking for more than 3 times the money that was made available between 2013 and 2019. Because the number of applications and funds for broadband expansion grants have gone up and will go up further under the newly-expanded program, the Evers Administration and the PSC are asking for another person to handle these duties. The idea is that if this new staffer allows grant applications to be processed faster, the sooner broadband will be up and running in more parts of the state.

PSC staff argue an additional 1.0 position remains necessary to adequately complete all tasks associated with grant management, including: (a) monitoring activities under open grants; and (b) drafting grant amendments to address changes in projects. PSC staff contend additional grant oversight is needed to maintain sufficient fiscal controls of grant expenditures. PSC staff also note the number of grants awarded each cycle has generally increased, particularly as additional funds have been appropriated to the program. Although grant awards have not yet been made for the 2019- 21 biennium, Commission staff expect that the total amount of awards will be larger, and the complexity of projects will be higher, as remaining unserved or underserved areas likely require relatively larger allocations of funding to establish broadband infrastructure.

PSC staff report grants typically have a two-year execution period, with extensions possible for good cause. Reimbursement and closing may take additional time. As such, grants awarded throughout the 2019-21 biennium will likely be open into the 2021-23 biennium, and perhaps as late as the beginning of the 2023-25 biennium.

Let’s see if the GOPs on Joint Finance try to hold this up, or monkey with the money in some other fashion that tries to hamstring the build-out of infrastructure that is necessary for communities to compete as we go into 2020.

There’s also another item that deals with an upgrade that could have been done by the Walker Administration several years ago – the purchase of more Amtrak train cars between Milwaukee and Chicago. This would be done by using money that has been already set aside to improve rail infrastructure and vehicles.

As shown in the table below, of the $89,000,000 in total bonding appropriated for passenger rail development projects, $78,904,300 has been approved for use in prior action by the Committee, including: (a) $10,000,000 for renovation of the Milwaukee Intermodal Station and (b) $68,904,300 for costs related to the purchase and delivery of two passenger rail car sets from Talgo and subsequent settlement. Of the bonding amounts approved by the Committee, the Department has expended only $67,430,200, including: (a) $8,021,300 on the renovation of the Milwaukee Amtrak station, including train shed improvements, and (b) $59,408,900 on costs associated with the Talgo contract and settlement. Accordingly, $21,569,800 in existing passenger rail bonding remains unissued. Use of the $21,569,800 in unissued bonding authority requires the approval of the Joint Finance Committee. In addition, $25,000,000 SEG amount appropriated under Act 9 (not shown in the table) is available for the purposes of the passenger rail development program and does not require approval from the Joint Committee on Finance.

The rail cars are needed, as the Hiawatha line between Milwaukee and Chicago continues to grow, resulted in crowded conditions in aging rail cars. Buying the new train sets would add seating capacity, and WisDOT also says the new train sets could save money in the long run through efficiency and less need for maintenance and other repairs.

Ridership on the Hiawatha line grew from 809,785 during the 2015 fiscal year to 880,227 in 2019, representing a 8.7% ridership increase over that period and a 2.1% annual average rate of growth. According to DOT, ridership growth during this period contributed to an increase in the number of trains experiencing near-capacity or over-capacity conditions during peak travel hours. The Hiawatha line currently experiences standing room only conditions on an average of 19 trains per month, mostly on weekdays. In peak summer months, some trains operate with more than 50 standees, which can pose safety concerns. The overcrowding experienced on the Hiawatha will require DOT and Amtrak to add a 7th coach car to all train consists by 2021-22 to accommodate these passengers which would generate additional costs in excess of the current Amtrak contract. The procurement of the new equipment associated with this request would eliminate the need for the addition of the 7th coach cars and NPCUs because the new cars would cumulatively provide 60-67 additional passenger seats.

The Department indicates in its request that the current equipment in use for the Hiawatha service is costly to operate and maintain because of its age. The Horizon coaches, Amfleet coaches and NPCUs are expected to require maintenance overhauls in the next five years in order to maintain a state of good repair. Given the equipment age and multiple overhaul cycles already performed for both the NPCUs and the coach cars, DOT states that these components are at, or past, a point where the life cycle cost of maintaining the assets is higher than the cost of replacing them, thereby placing them outside the definition of “state of good repair” as established in Federal code. In addition, because the old Horizon coaches and NPCUs would be replaced with new single-level coach and cab-coach cars, operating and maintenance cost savings for the Hiawatha service would be substantial. Analyzed over a 20-year study period, Quandel Consultants, LLC performed a benefit-cost analysis to support DOT's federal grant application for the Next Gen equipment acquisition project. The Quandel study estimates that the operating and maintenance cost savings of procuring the Next Gen equipment equates to $27.70 million in benefits, discounted at a seven percent rate. This benefit figure does not include fuel savings or emissions reductions that would result from having Next Gen cab-coach cars that weigh 91 tons less than the current NPCUs and Next Gen coach cars that weigh 25 tons less than the Amtrak Horizon coaches.

Seems like a no-brainer to take the new train sets, but how to pay for it? As you see above, the current state budget added another $25 million in cash for passenger rail, but the LFB notes that the money has been targeted for another Milwaukee project that would make it easier to have more trips on the Hiawatha each day.

Under [the 2019-21 State Budget], DOT was provided $25,000,000 in SEG funding for passenger rail development that does not require JFC approval. On October 14, 2019, the Department applied for a $26.0 million federal grant from the FRA to construct a bypass in Milwaukee's Muskego Yard that would route freight trains away from the downtown Milwaukee train station and involve signal, bridge and track upgrades. The Muskego Yard project is one component of a larger, multi-year project to increase the frequency of Hiawatha service between Milwaukee and Chicago. If awarded, the grant would require a $20.0 million state funding match and $8.0 million in funding from Amtrak. Because the Muskego railyard is largely privately owned by Canadian Pacific, most of the project costs would likely not be bond eligible. As a result, DOT would likely need to provide the federal funding match from the $25.0 million SEG appropriation.

So the question is whether to use some of the $25 mil in cash on the new railroad cars, and not borrow for it, or to borrow the money for the rail cars, and set aside the cash in case the grant for the freight train bypass goes through. It also could lead to some interesting insight.

Of course, both of these topics would have been taken care of long ago IF SCOTT WALKER WOULD HAVE JUST TAKEN THE STIMULUS MONEY FROM THE OBAMA ADMINISTRATION 8 ½ YEARS AGO. But noooo, Koch's boy had to try to spite the Black Man in the White House because…it would have made the economy too good for Obama re-election chances in 2012?

Never forget how the inactions of Governor Dropout and the rest of the ALEC Crew continue left us behind on joining the 2010s for infrastructure, and how much more we have to spend now to try to catch up. Tomorrow’s Joint Finance Committee meeting should remind us all as to how clueless and short-sighted today’s GOP is, and why they can’t be allowed to govern anything significant for a long while.