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May 08, 2023

Milwaukee streetcar funding gap prompts parking meter hike

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Free rides forever? Milwaukee city leaders now say they may never charge a fare to ride the Hop streetcar. But that doesn't mean you won't pay for it. FOX6 investigators find the city has another plan to plug a $1.4 million operating deficit.

MILWAUKEE - Free rides forever? Milwaukee city leaders now say they may never charge a fare to ride the Hop streetcar. But that doesn't mean you won't pay for it. FOX6 investigators find the city has another plan to plug a $1.4 million operating deficit.

Urban living has its perks, but for Holly Dhein, Milwaukee's modern electric train has not been one of them.

"It takes longer for me to just wait for it and try to get on it than it does just to walk certain places," she said.

Dhein acknowledges that might be different if the city extended the tracks closer to her apartment in Westown, between the Milwaukee River and Interstate 43.

Especially when you consider the price.

"It's also free," she said. "You can't beat free."

Milwaukee Mayor Cavalier Johnson says expanding the streetcar is vital to keeping the city competitive.

Mayor Cavalier Johnson says the streetcar is important to attracting young professionals

"Young professionals want to have these sorts of amenities," Johnson said. "The business communities want to have these sorts of amenities to attract that sort of young talent."

Still, nearly five years after it first opened for passenger service, demand is lagging. In April, the Hop averaged 1,258 riders per day. That's an average of roughly five passengers per mile on a mass transit system that doesn't charge a fare.

"People simply are not riding the Hop, even when it's free," said Mike Nichols, president of a free market research firm called the Badger Institute.

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"It's not a wise use of taxpayer dollars," he said.

The existing, 2-mile loop costs $4.9 million per year to operate.

For 2023, the city cobbled together enough funding from advertising and federal grants to offset about 70-percent of the cost. That still leaves a $1.4 million operating deficit.

The Milwaukee Streetcar operating budget for 2023 includes $2-million in transit assistance funding from the American Rescue Plan Act.

"So that gap, you have to pay for it somehow," said Milwaukee alderman Scott Spiker during budget hearings last fall.

To plug the gap, the Department of Public Works wants downtown visitors to plug more parking meters. In February, DPW unveiled a plan to expand the hours for metered street parking over a wide swath of downtown, including the Deer District, the theater district, Yankee Hill and the Third Ward.

"This will result in a significant increase in revenue," said Tom Woznick, the city's Parking Services Manager.

Instead of paying to park until 6pm Monday through Friday, the plan approved by the Common Council in March will require drivers visiting downtown to plug parking meters until 9pm Monday through Saturday.

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It's a change the city expects to generate hundreds of thousands of dollars in new revenue.

"It might be upwards of a million dollars a year," said Woznick.

Almost enough to offset this year's streetcar funding gap.

"So, you’re taking the parking fund and using it fund the streetcar," Spiker said.

At a finance committee meeting in October 2022, the 13th district alderman tried a different approach. He proposed a $1 million cut in the streetcar's operating budget.

"I floated a rough version of this idea when it was the height of Covid and nobody was riding," he said during a budget hearing.

Last fall, District 13 Alderman Scott Spiker proposed a $1-million cut in the streetcar's operating budget for 2023. The proposal failed in committee, 4-1.

Records obtained by the FOX6 Investigators show Spiker's proposal last fall to slash the streetcar budget by twenty percent put public works administrators on the defensive. They prepared talking points for the Commissioner to follow in hopes of killing the plan.

"It could affect future grants in applying for extensions on the streetcar," Kruschke then testified, "or even possibly affect the current FTA grants that we have already accepted."

The talking points worked. The proposal failed on a 4-1 vote.

"Could we put in fare boxes?" Spiker asked.

The Hop's five existing streetcar vehicles are going on five years old, but they still don't have equipment needed to collect a fare from passengers. Kruschke says ordering the equipment, installing it, and enforcing fare payments costs money, too. In other words, it costs money to collect money.

"Just because we want to charge a citizen," Kruschke said, "doesn't mean we’re going to reap all the rewards."

Even if they did, it's highly unlikely a fare would close the current funding gap.

"Unless we went and charged everyone $100 to ride the streetcar, which is not acceptable for public transportation," he said.

And that raises a fundamental question. Could the streetcar be free, forever?

Kruschke's response is simple.

A plan approved by the Common Council in March 2023 will expand the hours and days during which paid parking is required at more than 4,000 metered spaces downtown. Instead of 8am-6pm weekdays, drivers will have to pay until 9pm both weekdays and Sat

"Yes," he said.

When FOX6 Investigator Bryan Polcyn asked Mayor Johnson the same thing, he didn't say yes.

"Do you envision the streetcar remaining free?" Polcyn asked."Those are conversations we need to have," Johnson answered.But he didn't say no.

"Are those discussions taking place?" Polcyn asked Kruschke."Absolutely," he responded. "Everything's on the table."

City leaders say they hope to keep funding the Hop through federal grants and private advertising, but that will be even harder next year, when Covid relief funds dry up.

"How can we possibly justify a free Hop forever and ever and ever?" Nichols asked.

The Hop streetcar in Milwaukee

However they do it, one thing is clear. There's no such thing as a free ride.

You can still park downtown for free after 6pm, for now. While the Common Council approved the extended meter parking hours back in March, the city has yet to put those changes into effect. A DPW spokesman says they expect to implement the new policy by the end of the 2023.

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