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While city of Milwaukee officials seem interested in expanding the downtown Milwaukee streetcar further after opening a new lakefront line this month, they haven’t yet found a way to pay for it.
The city years ago approved plans to build new streetcar track toward the downtown convention center, and along Prospect and Farwell avenues past Brady Street. Those concepts, and further expansions to Bronzeville and Walker’s Point, were dealt a major setback by state officials in July.
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Streetcar supporters argue expansions to more destinations such as Fiserv Forum, and into neighborhoods beyond downtown, will add more value to a system with an economic and transportation impact limited by its relatively short route.
“Everyone acknowledged that a 2.1 mile starter system would not generate the level of benefits that we felt were achievable with a system that covered all of downtown,” said Ald. Robert Bauman, whose district includes downtown.
That vision was further undercut when state legislators took away the Milwaukee's main source of money for streetcar construction. That spending constraint is in the Wisconsin law approved in July that let Milwaukee approve a sales tax to fill its budget deficits in the coming years.
That left Milwaukee officials with a new and still unanswered problem if they want to expand beyond the current 2.1-mile downtown loop and the new spur to the lakefront. That lakefront line begins Sunday-only passenger service on Oct. 29, and in April is to begin offering daily trips.
The Common Council in July ordered the Department of Public Works to seek federal grants to expand the streetcar system. But without a new source of local construction money, such an application faces an uphill battle while competing against other national projects for limited transit grant dollars.
“I’m not aware of them,” Ald. Robert Bauman said of new proposals for funding the streetcar. “A lot of it runs in my district, that’s true, but this is really a citywide infrastructure project that impacts the entire city through the tax base of downtown. So I would hope the mayor has a position on this as far as creative funding sources.”
Mayor Cavalier Johnson’s spokesman Jeff Fleming in a Tuesday emailed statement said “the future of the streetcar, including funding discussions, will likely rise on the list of priorities in the months ahead.” Fleming said the administration is currently finalizing the 2024 city budget and is engaged in the discussions at the state level over public funding for American Family Field that would keep the Brewers in Milwaukee.
Milwaukee’s Public Works Department continues to explore an application to federal officials for money to expand the streetcar. An update on those efforts was to be provided to aldermen this month, but Bauman said he delayed the hearing because DPW officials are still looking at the process.
Bauman, besides representing the downtown area where the current streetcar line is located, is chairman of the city’s Public Works Committee. He has supported expansions of the system and sponsored the July city resolution to pursue federal grants for them.
The city of Milwaukee historically has used tax incremental financing, or TIF, districts to cover the local share of streetcar construction costs. Those districts let the city dedicate new property taxes from developments to specific projects, including the streetcar.
The city tapped TIF districts and federal grants to pay for the streetcar’s initial route, the lakefront line, and approved TIF money to extend the streetcar north along Vel R. Phillips Avenue to the convention center and Fiserv Forum. That extension likely would’ve been built if any of the city’s four federal grant applications between 2016 and 2022 were successful.
But after the passage of the state sales tax law in July, TIF is no longer an option for the streetcar.
It’s a form of tax spending. As such, using TIF districts to pay for the streetcar is now forbidden.
Milwaukee Ald. Scott Spiker, who has voted against expansions of the system, said the state action “annihilated” that funding source. He spoke about the prospects of streetcar expansion during an Oct. 5 Milwaukee budget hearing.
“Expansions don’t look like they’re going to happen on the horizon,” Spiker said. “I know there’s going to be optimistic things about happy things on the horizon where they could (happen), but for the near term maybe more than that it doesn’t seem like it’s going to happen.”
Extending the streetcar between the downtown Intermodal Station and the Baird Center on West Wisconsin Avenue would cost $33 million, according to 2022 city estimates. The federal grant program Milwaukee officials are now exploring would cover up to 70% of the cost of expansions. That means the city must raise about $10 million without using tax money for that expansion alone.
The one funding alternative floated thus far was by Ald. Marina Dimitrijevic during a June hearing about the planned applications for federal construction grants. She inquired about a program the city of Cincinnati has used to raise money for its streetcar.
Under that program, property owners who received a property tax break from Cincinnati, agree to gift 15% of that money back to the city. Cincinnati officials then spend that money on affordable housing and streetcar projects.
Milwaukee hasn’t historically had a program like that. However, the Common Council in 2021 did approve a resolution asking the developers of the Couture high-rise to give a $100,000 gift to a private fund as a condition of receiving city TIF money. That requirement was intended to work around a prohibition on that fund receiving any tax money.
Milwaukee Department of Public Works commissioner Jerrel Kruschke on Wednesday hosted media on a preview tour of the new lakefront line of the downtown streetcar system.