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Wisconsin will keep only a fraction of the $810 million it won in federal high-speed rail money, while the rest will help fund train lines in California, Florida, Illinois and other states, the U.S. Department of Transportation announced Thursday.

Governor-elect Scott Walker had vowed to kill the planned 110-mph Milwaukee-to-Madison passenger train route that was to be funded with Wisconsin's share of $8 billion in federal stimulus dollars. Ohio Governor-elect John Kasich had issued a similar promise for a planned 79-mph line connecting his state's three largest cities, funded by $400 million in stimulus cash.

Now, almost all of the $1.2 billion from the two projects will be divided among other states. California is the big winner, with up to $624 million, followed by Florida, up to $342.3 million; Washington, up to $161.5 million; and Illinois, up to $42.3 million. Smaller amounts will go to New York, Maine, Massachusetts, Vermont, Missouri, Oregon, North Carolina, Iowa and Indiana.

The announcement from U.S. Transportation Secretary Ray LaHood held out some hope that Wisconsin may not be on the hook for all of the $9 million or so it has already spent on the project, plus more than $5 million in cancellation fees and other contractual commitments. Ohio was allowed to keep $15 million that had been committed for preliminary work, and federal rail officials "will work with these states to determine whether they have already spent money under their contracts that should be reimbursed," the announcement said.

Walker said he talked with LaHood on Thursday morning and was assured that Wisconsin would not have to repay money already spent.

Wisconsin also was allowed to retain up to $2 million to fund unspecified upgrades on Amtrak's existing Milwaukee-to-Chicago Hiawatha line. But that won't cover all of the $19.4 million cost of renovating the train shed at Milwaukee's downtown Amtrak-Greyhound station or the $52 million cost of building a new maintenance base for two newly purchased trains, two projects that would have been paid for out of the $810 million in federal funds.

Outgoing Democratic Gov. Jim Doyle had suggested Walker's stand also would jeopardize a separate $12 million grant for upgrades to a Hiawatha crossing and the Mitchell International Airport station platform, but the federal announcement made no mention of withdrawing that money.

No regrets

In a meeting with reporters in Waukesha, Walker called the decision a "victory" because he sees the rail line as a symbol of excessive government spending.

"That's the decision they've made and we're going to move forward," the Republican governor-elect said.

Even with the federal government paying all construction costs, Walker has said he didn't want state taxpayers to bear any of the operating costs. The state initially estimated those costs at $7.5 million a year, after subtracting fare revenue, but revised ridership estimates could have cut taxpayers' share by $2.8 million. The state also could have used part of its federal highway funds to cover 80% to 90% of the taxpayer share.

The Milwaukee-to-Madison line would have been an extension of the Hiawatha. It eventually could have been extended to the Twin Cities, as part of a Midwestern network of fast, frequent trains.

It was not immediately clear how Thursday's announcement would affect a separate study, led by Minnesota, of how to connect Milwaukee and the Twin Cities by high-speed rail. Most of the 14 options under review in that study run through Madison, although one follows the current route of Amtrak's long-distance Empire Builder and two others run through Fond du Lac, Neenah and Stevens Point.

Doyle called the loss of the high-speed rail funds a "tragic moment for the state of Wisconsin."

"Eight hundred and ten million dollars that would have gone to create thousands of jobs in Wisconsin will now create jobs in other states," Doyle said. "Bogus arguments that this money can be used for roads have been proven false. . . . Together with many others I have worked hard to move Wisconsin into the future. I obviously am deeply saddened to see us take a major step backward."

The state Department of Transportation had projected that rail-related jobs would peak at 4,732 in 2012, counting those in direct construction, at supply companies and in government. Also, 55 permanent jobs would be created to operate and maintain the trains, tracks and stations. Supporters say many more jobs would be created by the project's spinoff impact on the economy.

Lost opportunity

"My congratulations to the workers in California and Florida. As a result of this decision, you will have a merry Christmas," Milwaukee Mayor Tom Barrett said at a news conference. "I'm just sad the same won't happen here in Wisconsin."

The unsuccessful Democratic gubernatorial candidate said Wisconsin taxpayers still would pay $140 million for high-speed rail, applying this state's share of federal income taxes to the $8 billion in stimulus rail spending. But now this state won't get the $810 million return it otherwise would have received on its investment, and nearly all of the Wisconsin tax dollars will go elsewhere, Barrett said.

Barrett joined Ald. Willie Wade in voicing concern about the future of the Talgo Inc. plant in Wade's north side district. The Spanish train manufacturer expects to have 125 workers on board by next year, but has said it could leave in 2012 if the high-speed rail line is canceled.

Talgo has contracts to build two trains for the Hiawatha and two trains for Oregon. It had hoped to build two more trains for the Milwaukee-to-Madison line.

Statements from other elected officials broke down along party lines.

U.S. Rep. F. James Sensenbrenner, a Menomonee Falls Republican, said, "It is to the Wisconsin taxpayers' benefit that they will no longer be required to pick up the additional tab for a high-speed train that the majority of residents will never ride." But Sensenbrenner said it was a mistake to redistribute the money to other states "instead of returning that money to the U.S. Treasury Department and using it to help pay down our deficit, as I've called for in legislation I introduced in Congress."

Madison Mayor Dave Cieslewicz said at a news conference that he tried numerous times to talk to Walker about the train line but got no response. "I was met with a blank wall," he said.

Cieslewicz, a Democrat, said he was willing to have his city put money toward the operating cost of the train, and Dane County Board Chairman Scott McDonell said the county was willing, too. Cieslewicz said he had also asked Barrett about a Milwaukee contribution. Barrett said Cieslewicz was making a good-faith effort to salvage the deal, but Walker wasn't interested.

State Rep. Robin Vos (R-Rochester), an incoming co-chairman of the Legislature's budget-writing Joint Finance Committee, welcomed the federal decision. He said it would allow the state to put more money into other areas that would have a more immediate impact on helping the economy.

U.S. Rep. Gwen Moore, a Milwaukee Democrat, said, "A month before he's even been sworn into to office, Governor-elect Walker has lost good jobs for Wisconsinites."

Countered state Rep. Steve Nass (R-Whitewater): "It's great news that Wisconsin taxpayers won't be fleeced for many decades to come by paying for a liberal pipe-dream in high-speed rail. Unfortunately, the $810 million will now be wasted on high-speed boondoggles in other states."

Lee Bergquist, Patrick Marley and Jason Stein of the Journal Sentinel staff contributed to this report.