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Report: Compared To Similar Projects, The Hop Streetcar Financing Is Odd

David Wilson
A Hop car turning from Broadway onto St. Paul Avenue Avenue, passing the Milwaukee Public Market.

Since it was first envisioned, there has been controversy over The Hop streetcar in Milwaukee. One of the central concerns has been about its funding: Namely, who’s paying for this and could the money be spent on a more worthy cause?

The Wisconsin Policy Forum is not picking sides in this debate. Rather, their recent report on The Hop’s funding structure is meant to clarify where its funding comes from and how that compares to similar projects in other cities.

Rob Henken is the president of the forum, and Joe Peterangelos is one of its senior researchers and the lead author of On The Right Track?: The Use of TIF for Milwaukee's Streetcar. According to the report, more than half of the money for the first phase of The Hop came from the federal government (54%) and the other half came from local sources. Of that local funding, the majority came from Tax Incremental Financing funds, which can only be used in specific areas for specific kinds of projects. 

This unique funding structure is the result of strict limitations the state of Wisconsin puts on a municipality's ability to levy taxes. These limitations mean the cities and counties, like Milwaukee, require more state aid to operate. 

"The city of Milwaukee receives roughly $225 million every year in shared revenue from the State of Wisconsin. The problem is that, that’s the same exact dollar amount that it was 20-years-ago," says Henken. 

And that, he says, has put a strain on the city's ability to pay for basic services, making projects like The Hop reliant on other funds.

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Joy Powers joined WUWM January 2016 as producer for Lake Effect. Most recently, she was a director and producer for The Afternoon Shift, on WBEZ-fm, Chicago Public Radio.