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UW-Milwaukee - Center for Economic Development

Policy Research Report Abstract

Out of Service: The Impact of Transit Cuts on Access to Jobs in Metropolitan Milwaukee, October 2008, by Joel Rast

Executive Summary

For the past eight years, public transit in the Milwaukee metropolitan area has been in a state of retrenchment. Lacking dedicated local funding sources and facing escalating operating costs, both of the region's main transit providers—Milwaukee County Transit System (MCTS) and Waukesha Metro Transit—have responded with a series of service reductions that reduced total bus route miles by nearly 20 percent between 2001 and 2007. Analysts expect that even more drastic reductions will be required during the next several years if new revenue sources are not identified.

This study examines the impact of these recent transit service reductions on economic development in the 4-county Milwaukee region (Milwaukee, Ozaukee, Waukesha, and Washington counties). We do so specifically by examining how access to job locations in the region has been affected by cutbacks in regional transit service. We find that 1,713 fewer employers were located within walking distance of a bus stop in 2007 than in 2001. The percentage of employers in the 4-county region located within walking distance of a transit stop decreased from 63 percent to 55 percent during the same period. Finally, we estimate that, at a minimum, 40,507 jobs became inaccessible by transit between 2001 and 2007 due to transit service cuts.

This study also considers the impact of potential future service reductions on job accessibility in the region. Using a projected bus route structure for the year 2010 developed by the Southeastern Wisconsin Regional Planning Commission (SEWRPC) and MCTS, we find that the number of job locations served by transit could fall by an additional 4,125 employers from 2007 to 2010 if current budgetary trends continue. This would reduce the percentage of employers in the 4-county region accessible by transit from 63 percent in 2001 to 45 percent in 2010. We estimate that at least 101,066 jobs in locations formerly accessible by transit would become inaccessible under this scenario. Such an outcome would be disastrous for the regional economy. Transit-dependent workers would be unable to reach many job locations. Poverty and unemployment would likely increase, and employers would face an increasingly constricted labor market.

Reversing this downward spiral will most likely require a dedicated local funding source for public transit. Currently, local funding for both MCTS and Waukesha Metro Transit comes from a county property tax levy under which transit competes with other county-run services during each budget cycle for a share of property tax revenues. This arrangement, particularly for a large transit system like MCTS, is highly unusual. With few exceptions, major metropolitan transit systems in the U.S. are funded through dedicated sources, the most common of which is a regional sales tax.

This study's principal policy recommendation is that both Milwaukee and Waukesha counties should follow the examples of other metropolitan areas around the country and implement a county sales tax to provide a dedicated source of funding for public transit. However, we qualify this recommendation in two ways. First, the sales tax should be modified to make it less regressive. We urge policymakers to carefully examine sales tax rebate programs in states such as Washington and Wyoming and to create a similar offset mechanism for low-income residents of Milwaukee and Waukesha counties. Second, a sales tax to fund transit should be linked to property tax relief. That is, property taxes should be lowered by the amount of the current property tax levy used to support public transit.

The choices are clear. We can maintain the status quo, avoid making tough decisions, and allow public transit to further deteriorate, perhaps to the point where it is beyond rescue. However, this scenario would be disastrous, not simply for the thousands of residents who depend on transit, but for the regional economy. We can do better than that. State and local policymakers should act now to follow the examples of other forward-looking regions around the country and create a regional transit system that can propel us into the 21st century. Our economic welfare depends on it.


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