Transit dollars: Spend now, pay later?

For several years, $91.5 million in federal aid has been sitting around waiting to be spent on a new mass transit plan for the Milwaukee area. This pool of money has received a lot of publicity lately, some of it from people who find it appalling that Milwaukee has sat on this “free money” for so long without spending it. However, there are strings attached to this “free money” and one of those strings is key: the $91.5 million can only be used for capital expenses. So, in other words, the infrastructure can be built and vehicles bought for whatever transit plan is adopted (with a local match, by the way), but it is up to the local government to fund the new system’s operation. That’s a substantial local expense to take on for the sole reason of using “free money” from the feds.

Intergovernmental revenue is always unreliable. One example is the extensive use of the federal Community Oriented Policing Services (COPS) grants by the Milwaukee Police Department (MPD) during the 90s. MPD used the money to hire more police officers—why wouldn’t they use it for that? It was free money. The city paid the price, however, when the grant money dried up. Milwaukee didn’t want to lose officers, so the city picked up the expense. Now, several years later, the city is lobbying the federal government for a reprisal of the COPS grants in order to again add more police officers.

The most fiscally responsible way to use intergovernmental revenue is for one-time projects. Relying on unreliable money for ongoing expenses leaves a local government financially vulnerable. It would make sense to use the federal transit money for the capital expenses of the construction of a new transit system only if the local government had decided that it was something it would pay to operate anyway.

Obviously, that isn't the case here in Milwaukee because both Mayor Barrett's transit plan and County Executive Walker's transit plan lack detailed operating budgets. The history of attempts to craft a transit plan for Milwaukee indicates our leaders are trying simply to spend available money rather than fund identified and existing capital needs.