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<p>[quote user="schlimm"]</p> <p> <blockquote> <div><img src="/TRCCS/Themes/trc/images/icon-quote.gif" /> <strong>Sam1:</strong></div> <div></div> <p>An annual operating deficit of $7.5 million at an average borrowing rate for municipal bonds of 4.75 per cent morphs to $500.1 million over 30 years.  If Wisconsin is on the hook for 10 per cent of the annual operating deficit, its payments would be a minimum of approximately $50.1 million over the same period. I have not adjusted the annual payments for inflation, etc., because I don't have sufficient data to do so.  It is probably fair to say that the annual operating costs will increase due to a multiplicity of factors and, thus, render my estimates conservative.</p> <div style="clear:both;"></div> <p> </p> </blockquote> </p> <p>I follow your numbers but not so sure it is appropriate to assume the operating deficit, whether it is $7.5 mil. or $750 K, would be funded by municipal bonds.  Probably it would come out of state general revenues.  [/quote] </p> <p>The funds to cover the operating deficit ultimately would come out of the state's general fund.  In theory, the state would have to borrow the money from an external source or forgoe other expenditures.  There is an implied finance charge to cover the use of the general funds to cover the expected annual operating deficit.  </p> <p>Ideally, the interest rate would be the weighted average cost of funds for the state, but that number would require a considerable amount of research to get.  Accordingly, I used a national average for tax free funding, which the state probably could organize by setting up an authority to run the trains.      </p>
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