Transit authority shelves regional sales tax plan - Group to explore other ways to finance rail line

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

But the three-county authority did ask the Legislature to put it in charge of running the KRM Commuter Link, a train line that would connect Milwaukee, Racine, Kenosha and the southern suburbs. The trains would connect with Chicago's Metra commuter trains and would provide more local service than Amtrak's faster Hiawatha line.

The KRM line would cost $200 million to build and $11 million a year to operate, down from previous estimates of $237 million and $14.7 million, according to newly revised projections from the Southeastern Wisconsin Regional Planning Commission. Supporters say state and federal aid and fares would cover most expenses, leaving the authority to raise about $5 million a year to cover the remaining operating costs and debt service on bonds issued for capital costs.

Transit authority Chairman Karl Ostby said the expense would be small in comparison with the benefits of the rail line, which business leaders see as a way to link workers to jobs and spur development. A Greater Milwaukee Committee study released Tuesday estimated the train service would boost property values by $7.8 billion and create 71,000 jobs within a half-mile of the route's nine stations.

But authority members tabled their Dec. 18 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 trains. Milwaukee, Racine and Kenosha counties then could levy up to 0.45% more to replace levy support for buses.

Racine Mayor Gary Becker has suggested a 0.25% tax, or 25 cents on a $100 purchase, would be sufficient. Consultant Michael Ley said the 0.05% train tax was rounded up from the 0.0375% needed to raise $5 million a year, and a 0.2% tax would raise enough to replace current property tax support for buses. The 0.45% figure included money for replacing discontinued routes and adding new service, Kenosha Transit chief Len Brandrup said.

Milwaukee County Executive Scott Walker has said he opposes any new taxes. Milwaukee Mayor Tom Barrett has said he won't object to the 0.05% train tax but won't back the 0.45% bus tax. Racine County Executive William McReynolds' appointee, businessman Dave Eberle, also said sales taxes were too divisive.

By law, the authority can't do anything unless six members agree. Greater Milwaukee Committee Executive Director Julia Taylor, representing Gov. Jim Doyle, and Ostby, a Kenosha banker, said unanimous agreement might be needed to persuade the Legislature to act.

With that in mind, the authority put the sales tax option on hold until at least Jan. 30 to explore other possibilities. Among those under discussion are using part 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.

Authority members are trying to win approval in the 2007-'09 state budget to meet a June deadline for applying for federal aid. Missing the deadline would prevent completion of the rail line by 2010, in time to provide an alternative during the main phase of work on rebuilding I-94 between Milwaukee and the Illinois state line.