One Alderman’s Quest To Defund The Streetcar

Two The Hop streetcars pass each on E. St. Paul Ave. Photo by Jeramey Jannene.

Alderman Scott Spiker isn’t happy with the state of, or the outlook for, Milwaukee’s streetcar system, The Hop.

Calling it “good money after bad,” he’s asking his colleagues to consider defunding the system.

“You have a loop that goes two miles and no prospect for expanding it,” Spiker said Oct. 16 during a Finance & Personnel Committee budget hearing..

Act 12, the 2023 sales tax legislation, includes restrictions on using property tax revenue to fund the system’s expansion. Spiker said using $4.2 million in parking revenue and $2.7 million in sponsorship and grant revenue to cover the system’s $6.9 million operating cost is irresponsible.

The streetcar, he argued, is “largely a device for transporting the unhoused and the well-heeled.”

But Mayor Cavalier Johnson‘s administration isn’t ready to give up. Department of Public Works Commissioner Jerrel Kruschke said future elections could result in Act 12 being amended or federal support for expansion.

Shutting it down could also trigger a demand from the Federal Transit Administration to return a prorated portion of the nearly $70 million in federal funds that helped build the system.

“That’s a $48 million check we would need to cut tomorrow,” said Kruschke. The city, he added, committed to 25 years of vehicle operation and 40 years of infrastructure maintenance.

But that might not be the biggest issue, he warned.

“If we decided to shut that down, we would basically eliminate ourselves from getting any FTA funding in the future. Period. It’s a black eye,” he said.

Spiker said President Donald Trump and Transportation Secretary Sean Duffy, a former Wisconsin congressman, are no fans of mass transit and might not ask for the money back.

Kruschke said he didn’t believe that was true, noting that the Trump administration previously rescinded a $30 million grant to rebuild N. 6th Street. “Yes, they could claw it back and I assume they would,” he said.

Spiker’s colleagues also didn’t appear swayed by his arguments.

“The Milwaukee streetcar is not a drain on city resources,” said Ald. Peter Burgelis. “It’s a strategic investment that strengthens the downtown economy, it raises property values downtown and it helps reduce the tax burden on homeowners in every area of the city.”

A press release issued after the meeting by Burgelis and leading streetcar advocate Ald. Robert Bauman said property values near the line grew 16.5% last year, outpacing the 15% citywide increase. The stronger growth shifts more of the tax burden to Downtown.

“It’s not a subsidy. It’s a strategy that pays off for the entire city,” said Burgelis.

“It’s about vision. It’s also about hope,” said Ald. Marina Dimtrijevic, who said she’s committed to investing in alternatives to motor vehicles. Kruschke said 40% of system riders, based on a third-party survey, don’t have motor vehicles. “I always want to invest in scooters, bicycle lanes, anything that is not car centric.”

“The streetcar does provide vitality to Downtown,” said Ald. Mark Chambers, Jr. He said he wants it expanded.

Council members Sharlen P. Moore and Milele A. Coggs asked Kruschke and the budget office for more data and to explore ways to make fare collection possible.

“On a small system, it is not effective,” said Kruschke of fare collection. He said the marginal revenue gain would be offset by staffing costs to collect the fare and a less desirable experience. Coggs said DPW should explore ways to use technology to collect fares without staffing.

Coggs, one of the few council members remaining from the system’s 2015 approval, said she supported it based on the belief it would someday extend to Bronzeville.

Spiker wasn’t moved by his colleague’s arguments.

He said the idea that Downtown was thriving because of the streetcar “laughable.”

“The only good argument I hear for keeping it is that if we stop, we’ll owe someone money,” he said.

He encouraged Kruschke to get an answer from the FTA on what repayment would actually be owed and thanked his colleagues for discussing the issue.

For several years, Spiker has made his disdain for the streetcar clear. First elected in 2019, he didn’t get to vote on the system’s creation, but he has voted against studying its expansion and previously supported defunding the line.

Quick takeaways

• The city has hired a new streetcar manager, James Vineau. A dual U.S. and French citizen, Vineau helped build a tram system in Qatar and previously worked for international transit operator RATP Dev.
• The 2026 budget calls for almost $1 million more in streetcar-related revenue. Kruschke said the city would be working more aggressively to yield sponsorship revenue and has seen interest.
• Potawatomi Hotel & Casino continues to be the presenting sponsor as part of a 12-year agreement, $10 million.
• Operating costs are budgeted to grow 18% year over year. The city contracts with Transdev to operate the system.
• The system’s annual ridership is expected to decline year-over-year for the first time since the pandemic, falling from 532,460 (1,455 per day) to 490,000 (1,342). However, the system just recorded its best August and September since the on-set of the pandemic.