Just Fix It Wisconsin

Looming crisis: Stagnant state transportation funding leaves municipal roads in trouble 7/24/2016

7/24/2016, La Crosse Tribune – Mike Hesse knows the roads of Farmington, La Crosse County’s largest town at 76 square miles, like he knows his farm, which has been in his family for a century. He has to know them. Hesse is in his sixth term as Farmington town chairman, and making sure the town’s 40 miles of roadway are taken care of is a big part of his job.

Farmington’s roads include the route between West Salem and Mindoro that runs over Phillips Ridge through the historic Mindoro Cut, the second deepest such cut made by hand in the Western Hemisphere. Further east, Wanlass Road runs across Wanlass Hill, the highest point in the county (the broadcasting tower for the county’s emergency service providers sits atop that hill).

Some town roads only serve a few homes or even a single farm. Syverson Road, for example, is a steep, 12-foot-wide, quarter-mile-long thoroughfare near Wanlass Road that seems more like a driveway than a road, serving only two homes and ending in one resident’s yard, where chickens, dogs and other barnyard animals roam. The entrance to Syverson Road off Hwy. EE is at such a sharp angle that most vehicles couldn’t negotiate a right turn onto the road and can only make a right turn out.

With a newspaper reporter riding shotgun, Hesse is taking a town road tour on a steamy afternoon. The aim is to provide a concrete perspective on an issue gaining a lot of traction: Wisconsin’s crumbling transportation infrastructure. With 40 miles of town road to keep up, much of it thinly paved and some of it dirt and gravel, it’s a tall order for the town to do the routine maintenance needed to get the maximum life out of these roads, let alone rebuild them when they’ve reached the end of their road. For Hesse, it’s a matter of inadequate funding from the state and no other funding options, and the state’s other 1,200 some town chairs are in the same predicament.

With a recent American Society of Civil Engineers study ranking Wisconsin 48th among the states in terms of road condition, groups representing the state’s towns, villages, cities, counties and the business community are pressing Gov. Scott Walker and state legislators to provide more state transportation funding for maintenance and improvement of county and municipal roads and bridges. Leading the charge is the Transportation Development Association of Wisconsin, an advocacy organization that has been around since 1971 and in the past year has rolled out a campaign called Just Fix It.

“It’s one part of many parts of just continuing to demonstrate how these unmet needs are affecting people in every part of the state,” TDA Executive Director Craig Thompson said of the campaign. “It’s finally getting to the point where this isn’t a tomorrow problem, it’s a today problem.”

Road work ahead

Hesse steers his pickup north onto Radcliffe Road, which runs past county-owned forest land between Hwy. Q and Lockington Road on the county’s northern border. The ride on Radcliffe Road is a bit rough, but not as bad as it can get. It’s a dirt road and has to be graded every six weeks or so to smooth it out, with the interval between gradings depending a lot on weather. It hadn’t been too long since the last grading, so ruts and holes were minimal.

A couple recently bought a lot on Radcliffe Road to build a home, the road’s first residence, but Hesse said there are about a dozen homes on Lockington Road that use Radcliffe Road as the most direct route to Burr Oak or to get to Melrose-Mindoro High School in Melrose. So the town has to keep that road in as good a condition as a dirt road can be.

Dirt roads used to be quite common in the county, Hesse deadpans, “until the dawn of the automobile.”

The difficulty of keeping Farmington’s roads in good shape, though, is no joking matter for Hesse, and it keeps getting harder. It used to be that Farmington could spend about $130,000 per year on road maintenance, according to Hesse, and state budgets would offer increases in local road aids (a share of state gas tax and vehicle registration fees) of anywhere from $25 per mile to $100 per mile.

For the past decade, Hesse said, local road aids from the state essentially have been flat, and the town has had to cut way back on road maintenance spending, averaging about $80,000 per year. This year, a big chunk of that $80,000 had to be diverted to major transportation projects, so only one Farmington road is going to get chip sealed this summer. Regular chip sealing, which involves putting down a thin layer of fine gravel and liquid asphalt over a paved road, extends road life. It’s especially important on the roughly nine miles of town road that are basically gravel with a half-inch double chip-seal layer over the top.

Between paying the town’s share of improvements on Hwy. C as part of a Hwy. 108/Hwy. C road swap and a rebuilding of Davis Creek Road (last rebuilt 50 years ago) to serve an enclave of a couple dozen homes, Farmington this year will have to borrow about $400,000 for road work and use about $280,000 from the town’s fund balance. To be clear, the fund balance is not surplus money; it’s the money available to pay bills, and letting a fund balance get too low can result in a lower credit rating.

A lot of roads and infrastructure in Farmington need updating. In May, Hesse noted, a farmer needed to get a large piece of equipment across a bridge-like culvert structure on Schultz Road, near Skoy Coulee Road, but the narrow culvert had angle-iron railings on each side. The farmer couldn’t get his rig across the bridge, so he cut the railing off one side and dumped it off the side of the road. The farmer later reinstalled the railings, but what’s really needed is a new, wider culvert that meets today’s safety standards, including a flex-beam guardrail that would be lower so it wouldn’t have to be cut to get across.

Hesse estimated it would cost the town $20,000 to $25,000 to put in a new culvert, this to basically serve two farms. “We can’t afford to replace that,” Hesse said.

To try to keep pace with road maintenance needs, municipalities also can go to the voters for an override of state-imposed property tax levy limits. For towns with a population of less than 2,500, going to the voters can be as simple as holding a vote of citizens at a town meeting instead of doing a referendum. That’s what the town of Farmington did last November, with voters approving $50,000 in additional property taxes every year, though Hesse said the additional revenue won’t necessarily all be available for road work.

Even with the voter-approved levy boost, Hesse has a hard time imagining how the town can hope to keep up with road maintenance, let alone rebuilding roads as they reach the end of their useful lives, without a lot more funding from the state. That’s why he’s a strong supporter of the Just Fix It campaign. “We’re sort of banding together with everyone else to speak as one voice,” he said.

Tough all over

Farmington, of course, is not alone in coming up short on funds for road work. Municipalities and counties all have been dealing with flat-lined state road aids, and municipalities are further hamstrung for funding by state limits on their property tax levies.

Hesse noted that while the state’s 1,200 towns are responsible for maintaining 54 percent of the state’s road mileage, they only get 5 percent of the revenue from the state’s gas tax and vehicle registration fees.

Villages and cities also are feeling pinched for road funding, and La Crosse County Highway Commissioner Ron Chamberlain said the situation is even more difficult for urban municipalities because they have to deal with the aging water and sewer infrastructure buried under the streets, too.

“I don’t know of any city that isn’t struggling with trying to meet the needs of their infrastructure. The entire system is underfunded,” Chamberlain said, “and it’s only going to get worse.”

La Crosse County has identified $90 million in needed road projects (outside of routine maintenance), including $68 million in projects that should be done in the next five years that have no source of funding, said Chamberlain, who starred in a nearly hour-long Wisconsin Eye video special last year that dug into transportation funding issues in the county.

Local road aids as a percentage of the state transportation have shrunk dramatically, according to a report by the Wisconsin Taxpayers Alliance. Local aids accounted for 39.5 percent of state transportation funding in 2000, but by 2013 that had dipped to 29.6 percent. Meanwhile, the percentage going to state highway projects rose from 45.9 percent to 48.8 percent.

Remarkably, the percentage of the state transportation budget going to debt service more than tripled in that same span. In 2000, debt service accounted for 4.4 percent. By 2010 that had risen to 7.2 percent and by 2013 it had nearly doubled again to 13.8 percent.

Even the state is having trouble keeping up with infrastructure needs. Senate Minority Leader Jennifer Shilling, D-La Crosse, said a recent survey of the 72 county highway commissioners found that, at the current rate, each mile of county road construction performed today won’t be constructed for another 196 years and up to $82 million in highway maintenance statewide will be delayed one year because of inadequate funding from the state. That includes 32 projects in La Crosse, Vernon, Monroe, Jackson and Trempealeau counties.

“It’s really coming to a head now because we have not done a good job in the last two or three budget cycles setting aside money into the transportation fund for road maintenance and replacement,” Shilling said.

Basically, an increased emphasis on bonding for road projects means the cost of interest is leaving less for both state and local road projects. For Chamberlain and La Crosse County Administrator Steve O’Malley — and many others — that seems to be an unsustainable proposition that could easily spiral out of control.

The county has been borrowing money, too, to help pay for its road work, but the La Crosse County Board recently approved a long-term debt plan that calls for cutting $300,000 per year for four years in the amount of road work bonding. Under the plan, bonding for county highway work in 2020 would be $1.2 million, half what it is for 2016.

“We can’t borrow our way out of this. None of us are that comfortable with borrowing for roads,” O’Malley said. “Just kicking it down the road isn’t helping it any.”

Bad for business

A big part of the reason the Just Fix It campaign has been gaining traction is support from the business sector and the recognition that roads in poor condition hinder economic development and increase the cost of doing business.

At a panel discussion on transportation funding in Onalaska in May, a Kwik Trip representative said the company has to do more frequent replacement of tires, axles and suspension parts because of rough roads. And that would be an issue for any business that puts vehicles on the road, not to mention the average motorist.

And aging bridges that must have lower posted weight limits because of structural safety concerns can make for difficulties in routing large trucks. In Farmington, for example, a bridge on Hwy. D has a 70,000 posted weight limit, which means Swiss Valley Farms trucks loaded with bleu cheese made at the Mindoro plant can’t use that route to get to Holmen and La Crosse, and large milk trucks can’t use Hwy. D to get to the plant.

One indication that the business community is getting behind the idea of more investment in transportation infrastructure came last fall. Jason Culotta, the director of tax and transportation policy for business advocacy group Wisconsin Manufacturers & Commerce, wrote an opinion piece calling for the state to stop leaning on borrowing so much while advocating an increase in spending on roads and bridges.

Culotta acknowledged that shifting money from the state’s general fund to pay for road work is not a workable solution. Instead, an increase in revenue is needed, and he noted that a vehicle registration fee increase of $25 (from $75 to $100) would raise an additional $87 million annually. Also, he wrote, a 5-cent bump in the gas tax would generate $160 million more per year.

“It’s easy to see why seven states have boosted the gas tax since January: other options aren’t as viable,” Culotta concluded. “If Wisconsin is to address its substantial transportation needs, we will be forced to consider a similar revenue increase — probably in the next budget.”

Hope for change

With support from local governments and the business community and a rash of newspaper editorials in recent months urging support, the TDA’s Thompson sees a glimmer of hope for some progress on the transportation funding issue.

“There’s more and more leaders in both parties in both houses (of the Wisconsin Legislature) that are stepping up and saying ‘We do have to do something,’” Thompson said. “It definitely makes us feel there is a greater understanding of just how important this issue is and the impact it is having on the state’s economy.”

While Wisconsin’s gas tax — at 30.9 cents per gallon — is among the nation’s top 10 highest, WMC is far from alone in arguing a gas tax increase might have to be part of the solution to the transportation funding crisis, possibly in conjunction with a registration fee increase.

Looking at combined gas taxes and registration fees, Wisconsin is well below neighboring states, according to a recent joint statement put out by leaders of the Wisconsin Counties Association, the Wisconsin Towns Association and the League of Wisconsin Municipalities. Gas taxes and registration fees cost the average Wisconsin driver $23 per month, the statement said, while it’s $42 in Minnesota, $41 in Iowa and $34 in Michigan.

For O’Malley, it makes the most sense to turn to gas taxes and registration fees as a source of increased funding for roads because the people who pay those taxes and fees are the people who use the roads. “We don’t believe property taxes ought to be the thing we rely on,” O’Malley said. “This should be paid for by the users, and this generation should be the one to stop up and solve the problem.”

Ray Ebert, a conservative county board member from West Salem, often differs with O’Malley on fiscal issues, but he said he probably wouldn’t have any problem with a gas tax increase for better roads. The advantage Ebert sees in a gas tax bump over a registration fee increase is visitors who drive in Wisconsin will pay a bigger share of the road costs that way. “I’m not the sharpest cheese on the cracker, but I’d like to get some of that foreign money,” he said.

People outside of government and business seem to be taking notice of the transportation funding issue. State Rep. Steve Doyle, D-Onalaska, said results of a survey this spring in his newsletter indicate people do see road conditions as a problem and have a willingness to pay to fix them. “There were very few people who said don’t do anything,” Doyle said. “People want us to deal with this issue, and they want us to work together.”

Shilling said when she was recently pouring coffee at the Vernon County dairy breakfast, she had at least four people bring up transportation funding, which was striking to her considering dairy breakfast chatter usually doesn’t get too issue oriented. “There are some real concerns,” she said. “This is really coming to a head, and I think this Just Fix It campaign is trying to be a third-party validator.”

Both Shilling and Doyle said all options ought to be on the table when the Legislature starts working on a budget in January. Possible sources of additional revenue that have been floated in addition to gas tax and fee hikes including going back to indexing the gas tax to inflation, toll roads, exempting local spending on roads from the state levy limit, allowing use of sales tax money for roads or even adding a special sales tax for road work.

The governor has indicated he favors a shift in funding from state highway projects to give more to rural roads, but Walker is not proposing any increase in transportation funding. In fact, Walker has directed department heads to bring forward budgets with no spending increases. The budget to be proposed by Transportation Secretary Mark Gottlieb, whose 2015-17 budget called for about $750 million in new taxes and fees, does not propose any revenue increases, which he acknowledged could mean delays on major projects.

In a recently published column, Walker said his next state budget would focus on transportation “safety and maintenance.” He also said the new budget would not rely on “huge amounts of new borrowing,” pointing out that the most recent budget had the “lowest level of overall borrowing in at least 20 years.”

Walker had proposed borrowing $1.3 billion over two years for road spending, but the Legislature pared that back to $850 million.

Walker’s column also made plain that a gas tax or registration fee hike would be a hard sell for him. “During the 2014 campaign, I made it clear I would not support a gas tax increase or a vehicle registration increase without a corresponding decrease in other state taxes,” he wrote. “I will not raise the overall tax burden on the hardworking people of Wisconsin.”

Walker’s position worries Shilling. “My concern is the governor has kind of put himself in a box on this. There needs to be some wiggle room,” Shilling said. “All options need to be on the table. We have to have bipartisan cooperation to find a long-term solution.”

But fellow Republicans aren’t all necessarily on the same page as Walker. Assembly Speaker Robin Vos, R-Rochester, recently told Wisconsin Public Television that he “fundamentally disagrees” with Walker on the transportation budget issue.

“I don’t intend to pass a state budget that doesn’t actually fix this problem,” Vos said during a taping of WPT’s “Here and Now” program. “I just disagree fundamentally with Gov. Walker’s assumption that we can kick the can down the road, push decisions onto a future legislature, which will end up being more expensive and potentially not in the interest of taxpayers.”

The position taken by Vos makes Doyle guardedly optimistic about the prospects for some progress on transportation funding. “I think that something is going to happen,” Doyle said. But, he added, “I don’t think it’s going to be enough. I don’t think it’s going to make everybody happy.”