CHICAGO -- Midwestern government officials are pursuing development of a number of advanced mass transit systems costing hundreds of millions of dollars, including high-speed rail lines that would link many of the region's major metropolitan areas.
Public financing is likely to play a role in funding the systems if they are ever built, officials said. But many proponents of individual projects are also exploring the possibility of some private financing for the systems.
Projects currently under consideration are:
* A 285-mile high-speed rail system across Ohio that would link Cincinnati, Columbus, and Cleveland.
* Two high-speed rail systems with Chicago as a hub. A 485-mile system would link Chicago with Minneapolis, with stops in Milwaukee and Madison, Wis.; a second 300-mile system would link Chicago with St. Louis, with stops in Illinois at Joliet, Bloomington, Springfield, and Alton.
* Light-rail systems for the downtown areas of Chicago, Milwaukee, and Minneapolis/St. Paul.
The high-speed rail systems are the most ambitious and costly, with the Ohio system carrying an estimated price tag of $2 billion, according to Robert Chizmar, executive director of the Ohio High Speed Rail Authority.
Like Airports and Seaports
Robert Casey, chairman of the Pittsburg-based High Speed Rail Association, an advocacy group, said some sort of public funding will be necessary to build high-speed rail systems, whether through federal funding or easing restrictions on the use of municipal bonds.
Under a loosening of federal laws in 1988, municipal issuers may issue bonds for high-speed rail systems without requiring that the systems be owned by local governments. A provision of the law requires that 25% of the bonds issued for the projects be subject to the state-by-state volume cap on private-activity bonds.
Mr. Casey's group is backing legislation pending in Congress sponsored by Sen. Bob Graham, D-Fla., that would remove any revenue bonds issued by states for high-speed rail systems on behalf of private developers from a state's private-activity cap.
"We're just asking for the same exemptions that airports and sea-ports enjoy now," Mr. Casey said.
He added that he believes political support for high-speed rail systems is increasing.
"It's better for the environment than building tollways and highways everywhere," he said. "We've gotten to the point in this country where we have paved over just about everything, and the public is reacting by saying 'no more, not in my backyard.' It seems like high-speed rail is a better alternative."
Mr. Casey said the projects would create thousands of construction jobs and help jump start the economies of the Midwestern cities that would be served by the rail systems. He added that the Ohio project is the furthest along in the Midwest.
Last year, Ohio entered into a contract with a private consortium -- the Ohio Railway Organization -- to develop a plan for financing, building, and operating a rail system capable of reaching speeds up to 185 miles per hour. Conventional train systems generally operate at top speeds of about 75 miles per hour.
The consortium, which agreed to spend up to $1.5 million to complete the plan, is expected to present it to the railway authority at the end of the month, according to Mr. Chizmar. The consortium is led by the transportation engineering firm of Parsons, Brinckerhoff, Quade & Douglas Inc.
This latest effort to get a rail system on track in Ohio follows an unsuccessful attempt in 1987 by the Ohio High Speed Rail Authority to use a transition rule under the Tax Reform Act of 1986 to issue $2 billion of tax-exempt bonds and use the arbitrage earnings through the end of 1990 to fund detailed development plans.
That plan, which would have tied the record for the largest tax-exempt bond issue ever, was derailed when the U.S. Treasury Department said in a letter to an Ohio legislator that the bonds could not be tax-exempt since the state did not have any specific plans or timetables detailing when the money raised by the bond issue would be used to build the rail system.
The transition rule expired last year without any bonds being issued.
Wisconsin officials also are enthusiastic about a high-speed rail line that would run through the state linking Chicago and Minneapolis, according to John Hartz, chief of policy analysis and information for the division of planning and budget in the state's Department of Transportation. He that added Gov. Tommy Thompson, a member of Amtrak's board of governors, is "highly interested" in developing rail lines in the state.
Earlier this year, Wisconsin, Illinois, and Minnesota all agreed to fund a $1 million detailed feasibility study on the proposed rail system.
Three Technologies
Mr. Hartz said the study will examine the feasibility of three different technologies:
* an upgrade of existing Amtrak track, allowing conventional "steel-wheel" diesel trains to reach speeds of 125 miles per hour. The estimated cost of the system is $960 million.
* construction of an electrically powered system similar to those in France and Germany, in which trains can reach speeds of 185 miles per hour. The estimated cost of the system is $3 billion.
* development of a highly advanced "magnetic-levitation" system similar to those in Japan that is capable of speeds of 300 miles per hour. High-powered magnets are used to levitate the train and serve as the power source. The estimated cost of the system is $5.57 billion.
Mr. Hartz said the detailed study would examine possible funding methods for the system. He added that a preliminary study indicated tax-exempt bonds would be the least expensive funding method, but that it was too early to say what the final method could be.
Mr. Hartz said the three states are seeking a $500,000 grant from the U.S. Department of Transportation to assist in funding the study, which he said would take about a year to complete once it is started.
Illinois also is seeking federal funding for a feasibility study on an upgrade of the Amtrak line from Chicago to St. Louis to allow for speeds of up to 125 miles per hour.
Jennie Claflin, director of rail passenger operations at the Illinois Department of Transportation, said preliminary estimates show the upgrade would cost about $400 million. She said the proposed system is in the embryoning planning stages at this point.
In Michigan, transportation planners have for now given up on trying to rally support for a high-speed rail system linking Detroit and Chicago.
Bob Kuehne, a planner for the Michigan Department of Transportation, said little interest has been exhibited among political leaders in the state for development of a high-speed rail system that would cost hundreds of millions of dollars.
"Given the condition of the state's finances, there's really no point in pursuing high-speed rail at this time," Mr. Kuehne said. "What we really need to see in this country is a national commitment similar to the one for the interstate highway system."
Mr. Kuehne said the department would seek to repair the current track linking Chicago and Detroit to shave the travel time to less than five hours from the current 5.5 hours. He said that effort would cost about $3 million a year over the next five years.
Light-rail systems also are being considered in Chicago, Milwaukee, and Minneapolis/St. Paul.
The Chicago City Council earlier this year authorized the issuance of up to $300 million of revenue bonds to construct a trolley systems in the downtown area. The bonds would be backed by revenues from a special downtown taxing district.
Greg Longhini, an assistant to the city's planning commissioner, said the city also is pursuing federal and state funds to help fund construction of the system, which he estimated to cost between $600 million and $750 million.
He said he did not know when the bonds might be issued, but that the city can begin collecting taxes from the special district next year.
A preliminary study in Wisconsin suggested that a light-rail system should be developed in central Milwaukee at a cost of $330 million as a way of cutting down central city congestion. The study -- completed earlier this year by the governor's Metro 2020 Policy Board -- envisioned possible expansions of the system into Milwaukee suburbs in the future. Additional feasibility studies are being conducted by the state.
Officials in the Minneapolis/St. Paul area have developed a plan for a $1.9 billion, 123-mile light-rail system to be built over 20 years, but have not yet located any funding sources for the plan. Proponents are lobbying the legislature and federal government for funding, while also pursuing authority to levy some form of local taxes to assist in funding, officials said.
