There were a lot of numbers bandied about today about just what it would mean if Scott Walker permanently killed the high-speed rail project.
First of course, are the job loss numbers. At a time when unemployment is high and working families are in desperate need of work, killing the train project would take 5,500 construction jobs off the table, according to Scott Bauer at the AP.
And what about the cost? Here’s one way a CFO or business leader would look at the numbers. According to both Bauer and Larry Sandler and Patrick Marley at the Milwaukee Journal Sentinel, the state is obligated to repay about $100 million in costs if the project does not go forward.
Scott Walker has said he opposes the line because he does not believe the state can afford the operational costs. But as the Journal Sentinel has previously reported, the actual operational cost could be as low as $750,000 per year, not the millions Scott Walker has claimed.
Walker therefore is essentially killing a project to save $750,000 per year in operational costs even though killing the project will cost the state $100 million.
Businesses have no problem spending money to save money. But many of them have a general threshold: If on any project you can’t save or grow enough in two years to recoup the initial investment, that’s a deal breaker. It’s called calculating the return on investment (ROI) and in the current recession, some businesses have tightened it even further, and are unwilling to spend on any projects that cannot make back the ROI in a year, or even six months.
So how does the simple ROI look in the case of killing high-speed rail? In strictly business terms, it’s not pretty.
Walker is making a decision that few CFOs would agree with if they were crunching the numbers for their own companies. Here’s why: It will take more than 133 years for the state to break even if Scott Walker kills the project. ($100 million divided by $750,000).
That doesn’t assume interest costs, if the repayment has to be financed. The state doesn’t have $100 million laying around, though it could loan itself the money from the transportation fund — though there’s plenty of drawbacks there. A CFO would call that opportunity cost too high. On the other hand, if Walker has to finance the repayment through conventional means, the repayment cost could more than double when the interest is added in over 15 years. That would mean it would take more than 200 years to break even on the deal.
That simple math also doesn’t include the human costs: Thousands of jobs shipped to other states.
The state couldn’t raid the transportation fund to pay back the $100 million that has already been spent on the Madison to Milwaukee passenger rail line, because if memory serves me, Scott Walker promised he wouldn’t allow raiding of the transportation fund if he were elected governor.
Walker is in a no win everywhere he looks. I guess that is why he disappeared into his dick cheney cubby hole.
It is funny that most people think that the $810 or $822 million (according to the WIDOT website) that is earmarked for the rail is ‘free’ money. Where do you think that money came from, most likely a printing press but that is money that has come from the taxpayers of this state and every other state. You talk about creating jobs, making it easier to do business around the state with the train, what about expanding the I39 corridor in Janesville, it is horrible, what about using part of the money to make the necessary upgrades to the rail line for frieght. Have you driven to Monona Terrace, getting there is a pain, having to take a taxi to go anywhere outside of the rotundra is going to add cost. Why would I spend between $22 to $39 for a trip that I can do for less than $10 in gas. If I wanted to stop in Johnsons Creek to lunch on the way, on the train I can’t. If I wanted to stop at the outlet mall there, on the train I can’t. Where do they get the 330,000 riders when Badger Coach doesn’t have that per year (and it is cheaper). I could say that just about anything about the ridership because you have no valid data to back it up. Why not say there will be over 1/2 a million riders on an annual basis, doesn’t that sound better. Until someone provides me solid data to back up the claims, jobs, business, and ridership, I will remain convinced this is a horrible thing for the state of Wisconsin.
Honestly, it’s a case we’re in too deep to stop it now. If we stop it, we’re going to eliminate jobs that were brought here months and ages ago for the train. If we stop it, we’re getting actually rid of jobs that are tangible right now at this very moment. I don’t see how by destroying actual jobs here and now is going to make us ‘open’ for business. Walker shouldn’t have made the promise, Ohio can risk stopping it but Wisconsin can’t because if it does we will undoubtedly, lose the jobs that are already here.
I don’t want to spend my tax dollars on millions of dollars of lawyers just to have no results and have people who are working losing their jobs. The fact is, blocking the train will have negative repercussions right now since they already had jobs in Wisconsin since earlier this year. Walker will be breaking his promises either way, so he should do a smart move and say there is nothing he can do without it damaging the infrastructure or our economy. (Which is undeniably true.)
That may well be true. In which case, Jim Doyle should get jail time. His day before the election move to sign all the documents will stand as both a shrewd political move to make life difficult for governor-elect Walker, but also absolutely spitting in the face of Wisconsin voters and citizens. I’m struggling to describe it without foul language – it was just plain shameful.
We can argue about whether it was right or wrong, but Walker took a very bold and unambiguous position against the train. The people elected him at least to some degree, because of it. He’s in a tough spot right now and I’m not going to feel any sympathy towards him for it – he mad his bed. Sure there was plenty of other things going on, but for independent voters, the election was as much a referendum on the train as any other issue.
Cementing his legacy – Doyle sure did. Just proved one final time that he doesn’t feel any need to listen to voters or anyone else – that always felt he could just do whatever he wants.
And T. – gotta ask. I assume you’re in favor then, of continuing all the Bush income tax cuts? Because that rational – that we’re already far enough down the road, “in too deep” would seem to apply just the same. We’ve been living with the lower rates for long enough, that not renewing them is raising taxes when everyone can least afford them.
Absolutely. I’m all for keeping the Bush income tax cuts however it should be raised for the upper class and the big businesses.
We should focus more on helping on smaller businesses getting ready to get off the ground, smaller businesses struggling, and the people who are having a hard time slowly slipping into the lower class, Once we get back up on our feet as a nation, I feel it will be all right to raise taxes again if needed. Right now though? Absolutely not, out of the question.
I think what Doyle did was extremely shifty, but I mean it was in motion even before Walker said anything about stopping the train. We were in too deep then even then because jobs were already in place, if you can understand.
I don’t grant that premise – I don’t know how many jobs were in place (or are now) or how much money had/has been spent. Do you have any real, honest & trustworthy numbers to go on? We hear all kinds of stuff thrown out there, but what is really the situation? Somebody damn well better know – and it should be reported. Of course it seems like in any project this size, using government funds, nobody really knows. When a private company has a large project contracted out with many vendors, you can bet there is somebody who could tell you exactly how much money has been paid out at any point in time.
I’ve actually seen some people saying that $100 million has already been spent. I feel pretty confident in saying that if that is indeed true, that much as been spent already right now, then the total project is going to blow so far past $800 million it won’t be funny. I mean think about it? Is anything resembling 1/8th of the project completed? Which raises other issues I’ve never really seen addressed either. Who is responsible for cost overruns?
Anyway – maybe a ton of people were already hired, maybe a lot of the work was already contracted before last week, maybe not. Rushing it through the day before the election in order to guarantee it was awful.
It’s mostly because Doyle if you looked at what he was doing behind the scenes instead of actually staying on the election and only that, you could see that he was putting it into motion at least even before Walker or Neumann said they were going to stop the train. Was it sort of shifty? Of course, I agree it absolutely is.
I have to find the article honestly that says Doyle hired them really early on, or was making movements to because I have read it. This is kind of why a lot of people from out of state that I’ve talked to, realized how we’re kind of irrational about this, it was rolling at least before Walker and Neumann, just not at the speed we are now.
I’m absolutely not justifying what Doyle did though by any means, that was a shifty and low move no matter what side you are on. If it was Doyle who was running this year instead of Barrett, I would have likely went for an independent since I really do not like how he operates. However, it’s like the case of the wars were in that going on – we can’t exactly just stop it without thinking at this point, without it having negative repercussions and I believe Jim Doyle should at at the very least be held accountable for his actions.
OU812
You might want to take a look at the IRS deductible amount for automobile travel – it is currently .50/mile. This is supposed to cover the cost of gas and maintenance on your car to drive one mile. So a better approximation of the real cost of your supposedly hassle free round way car trip from Madison to Johnson Creek (using Mapquest mileage) would be $34.72. If you were traveling from Milwaukee to Johnson Creek for that lunch it would be 45.95 miles using Mapquest which works out to an estimated real cost of $45.95 for round trip car transportation. If you add these together you can see that roundtrip Madison to Milwaukee by car is costing you $80.67.
In terms of Monona Terrace being a hassle, I don’t agree at all. I’m a Madison resident and find the access to Monona Terrace and other downtown locations by bus or car to be extremely easy. Adding the train to the mix makes multi-modal integration all that easier for improved efficiency, reduced gas consumption and better opportunities for transportation to new and existing jobs.
This is what real economic development is all about. Walker’s idea of economic development is paying back his road builder contributors by insisting on shifting the money for the trains to roads, as opposed to compact development with trains. I’d suggest that he take a trip around the world and see the high speed trains in Europe, Japan, China and now starting to be planned for Brazil and Russia. So much for being leaders of the world!
Moron… This is what government employees give themselves. If yo live in Milwaukee and want to get to downtown Madison, you are not taking a stupid car speed train for $36 one way. Rtaher, jump in your car for $5.
Do you really think it costs $5 to go from Mke to MSN? And if so, how much does a drive to Chicago cost?
The problem is that the Wisconsin wing of hate radio will not allow him to stop it…..
Sorry I meant the right wing hat radio in Wi will not allow him to let it keep going. They only care about hatred and ideology not the state or the real world.
Ok i am not getting something. I am not the biggest Doyle supporter BUT he is the governor(elected twice) and he does support high speed rail. Hence him applying for a grant, and getting a grant to put in high speed rail and then implementing it is not shady.
I do think he played politics with this decision though. AGAIN, who in the capital does not play politics? He is juts better at it than most. He signed the deal the day before the election to get the republicans to ramp up their rhetoric, then put it on hold the day after to ee if the republicans would put their money where their mouth is(or as we say where I grew up “SH*T or get off the pot”).
He knew and THEY KNEW they could not stop the train without major consequences. Walker and the rest wanted the train to go through so they could whine about it. Now its up to them, do we pay 100 million as taxpayers and give up the thousands of jobs or do we do the right thing and keep it going.
I have always said that republicans should have to actually live in the world they advocate for, here is their chance.
Remember that part of the reason we qualified for the funding was because of all of the work that former Republican Governor Tommy Thompson did on the train in the past. We were among the states that were closest to “shovel ready” with our project because of the foresight of Tommy and the leadership that Doyle demonstrated on seeking funding. Even Walker voted for the train when he was in state government.
I for one was disgusted by Tommy Thompson’s political flip flopping and Walker’s total hypocrisy on the train all in an effort to gin up tea party support. The two of them deserve to join McCain in the doghouse as hypocritical flip floppers.
The real reason it is hated so much by some Wisconsinites is because it connects the intellectual centers of Milwaukee – Madison – Chicago (and eventually Minneapolis) and not their provincial little towns or right wing suburban enclaves filled with auto loving drones. It reflects a lack of vision and a total acquiescence to the tea party belief in no public investment – everyone for themselves.
Which is a further indictment of the decision process then. Why should the fact that a former governor being a fan of trains have anything whatsoever to do with deciding whether $800 million on a Milwaukee to Madison train was a good use of taxpayers? I’m not being argumentative – why should that be considered for a second? Shouldn’t the requirement for this and any other project be “what will help the most people or help people who most need it?”
And shovel ready? Really? I guess that word just doesn’t mean what I think it means. The money was awarded January 28th. So almost 11 months. Honest question – has ground been broken yet?
Your last paragraph? That’s just a bunch of baloney.
Honestly a reason why I want a train is because sometimes, I don’t want my eyes on the road. I don’t want people speeding ahead of it me and cutting in front of me stressing me out. I want to relax to a degree, and more importantly – there probably will be a bathroom on it. Which sounds like a hilarious reason, but sometimes you just got to take a pee and going on the highway doesn’t constantly have that kind of commodity.
I know, terrible and shallow reasoning, but there you go.
Probably would a bar cart as well. I;ve taken the Chicago metro during cocktail hour–fun commute.
Absolutely. Plus I imagine there will be even places to sleep on it too if you need a little nap from working or even a cart to eat or drink. This is a partial reason why I want to have a train, it would be pretty helpful overall and reasonable at that. My grandparents told me how they used to travel on the train and how neat it was on that very sense, I only went on a train once sadly to say and that was one of the last time Green Bay had a train in the city that we could genuinely ride on as he went up north when I was little.
I don’t mind driving for clients if it’s say to Freedom, Seymour or even up north but I think to major cities like Milwaukee, Madison, Chicago, or Minneapolis that should be opened up as a chance.