Milwaukee shares link with Chicago
Study says relationship between the two cities is vital to region's
economic growth
By Christopher Placek

The Chicago area brings in positive net income to southeastern
Wisconsin, and the seven-county Milwaukee region would be wise to
exploit its proximity to the Windy City to enhance this region's
economy, a local research organization said.

A study released this month by the Public Policy Forum found the
six-county Chicago region brought in $392 million of personal income
to the Milwaukee area between 2001 and 2006. But people moving out of
the area —primarily to other parts of Wisconsin, Florida and
Arizona—took $1.3 billion with them.

Between 2005 and 2006, the region lost $400.2 million in personal
income—the largest out-migration of income in the last 10 years,
said Ryan Horton, senior researcher at the Public Policy Forum.

Tying the Milwaukee and Chicago regions together through marketing and
infrastructure improvements could develop a growing metropolis and
would help put a plug in southeast Wisconsin's "income drain," Horton
said.

Horton said the Milwaukee region should be concerned with losing
income and the tax revenue it could generate for public services.

"The more of an effort we can make at tying the Milwaukee and Chicago
economies together, the better off it will be for both communities,"
Horton said. "If we can make it easier for people to live in the
Milwaukee region and still work in Chicago and vice versa, the entire
region will be a better place to live and a more attractive investment
for outsiders."

In the seven-county Milwaukee region, only Kenosha and Walworth
counties-which both border Illinois—brought in more income than
they lost between 2005 and 2006. This "Chicago effect," Horton said,
indicates Chicagoans are moving to Wisconsin for a higher quality of
life, but still want to be close to their jobs in Chicago.

William Testa, vice president and director of regional programs in the
economic research department at the Federal Reserve Bank of Chicago,
said Milwaukee and Chicago are two distinct, sprawling regions, and
the changing structure of the two economies indicates the regions are
growing together.

A Milwaukee-Chicago "megalopolis" would indicate, for one, that
households send workers to both cities, Testa said. U.S. Census Bureau
figures from 2000 reported 13,010 people commuted from Milwaukee to
Chicago every day. The reverse trip found 2,911 Chicagoans commuted to
Milwaukee daily.

A larger Milwaukee-Chicago labor market could be appealing to
employers relocating to the region, Testa said.

Area leaders have suggested a Kenosha-Racine-Milwaukee rail line would
bring together the two regions' economies. But funding of the proposed
$200 million line that would link with Chicago's Metra Railroad in
Kenosha has stalled.

Legislators did not approve a $13-a-car rental tax increase that would
have funded part of the project in the 2007-'09 state budget.

While the business community has pushed for the construction of the
line, disputes over funding of other local transportation—such
as the Milwaukee County bus system—has prevented KRM from moving
forward.

Pat O'Brien, executive director of the Milwaukee 7, a regional
economic development group, said he remains hopeful the
Milwaukee-to-Kenosha line will be built because of its long-term
economic benefit.

Testa said the KRM line would benefit both Milwaukee and Chicago,
though other high-speed rail plans of the past might have been ahead
of their time and overly expensive.

"I think generally speaking to look for expanded and cost-effective
linkages will help (Milwaukee and Chicago) share scale and
specialization both need to survive in a global economy," Testa said.

While the KRM line remains in jeopardy, the reconstruction of I-94
between Milwaukee and the state line is more certain. The Wisconsin
Department of Transportation released details this month on its $1.9
billion plan to expand the 35 miles of I-94 from six lanes to eight.

Construction would begin with the Mitchell Interchange in 2009 and the
project would be complete by 2016—the year Chicago hopes to hold
the Summer Olympics. Chicago is one of seven cities vying for Olympic
gold. The International Olympic Committee will pick a host city in
2009.

Pat Ryan, chairman of Chicago 2016, the city's bid committee,
addressed The Greater Milwaukee Committee this month. Leaders in both
cities have suggested Milwaukee could play a part in Chicago's Olympic
plans, from flying visitors in and out of General Mitchell
International Airport to having them stay in Milwaukee hotels.

"To the extent that people can travel with ease between two
communities, it would have a very positive effect," Horton said. "But
if I-94 is under construction and the roads are torn up, then the
economic benefits may be not as great as they could be."