Just Fix It Wisconsin
Wisconsin faces nearly $1 billion shortfall on roads 7/27/2016
7/27/2016, Milwaukee Journal Sentinel – The state faces a nearly $1 billion gap over two years on transportation funding — a sum that roiled the debate Wednesday over whether lawmakers should cut projects, raise the gas tax or registration fees, or find a new way to help pay for roads.
Gov. Scott Walker has pledged to not raise the gas tax or registration fees unless corresponding cuts are made elsewhere in the state budget. That would be a difficult task at a time of tight finances.
Walker’s fellow Republicans who control the Legislature are split on the issue, with some siding with Walker and others saying it’s time to raise taxes or fees to inject more money into road projects. Democrats — who hope to take control of the state Senate or narrow the GOP majority in this fall’s elections — generally have supported finding more money for highways.
Lawmakers would need another $939 million over two years to match what they approved in the last state budget, according to the nonpartisan Legislative Fiscal Bureau. They could close all or part of that gap with borrowing, but many Republican lawmakers have said they oppose issuing bonds at the levels they have in recent years because paying them back eats into future budgets.
“We’re basically passing the cost onto our kids and we can’t continue to rely on bonding to solve that $939 million shortfall,” said Rep. John Nygren (R-Marinette), co-chairman of the budget-writing Joint Finance Committee.
In the last budget, Walker and lawmakers approved $850 million in borrowing for roads. It was part of a grudging compromise, and many Republican lawmakers have said they don’t want to rely on that much bonding again.
The final budget didn’t include enough money for all the Department of Transportation’s plans, so projects around the state were delayed, including the expansion of I-39/90 from the Illinois state line to Madison.
The work slowdown put off completion of the projects for a year, and further delays could occur to help shore up the transportation budget in deliberations next year.
The massive Zoo Interchange project has mostly stayed on track, but work on the north leg of the project was put off because of the funding crunch. The future for other projects in southeastern Wisconsin — including the north-south and east-west legs of I-94 — remain unknown.
But the political battle lines are clear.
In a conference call Wednesday, Nygren told reporters it was time to find more money for roads. He said he was open to other ideas, but considered raising the gas tax the best option because it is paid by state residents as well as visitors to Wisconsin. Registration fees, by contrast, are paid only by those who live in the state.
“It’s not necessarily the fiscally conservative position to simply say no and to continue to delay projects and delay growth of our system and capacity in our transportation system that’s going to drive our economy for the next 30 years,” Nygren said.
Walker, meanwhile, reiterated his commitment to prevent a tax increase. He has the final say on any budget and has broad line-item veto powers to prevent tax increases.
“Raising taxes and fees is not the answer,” Walker said in a statement. “Under our administration, we will keep it a priority to live within the means of the hardworking people of Wisconsin.”
He said he would look for cost savings and prioritize projects. Nygren said he, too, supported finding efficiencies to bring down the cost of building roads but believed more revenue would be needed because of the size of the problem.
“Republicans, including Representative Nygren, didn’t even have the courage to support a budget motion that tied the gas tax to inflation and would’ve contributed $3.8 million in additional revenue to our transportation fund. They had the opportunity to fix it a year ago and simply chose not to,” said a statement from Rep. Chris Taylor (D-Madison), who sits on the Joint Finance Committee.
Assembly Minority Leader Peter Barca (D-Kenosha) said in a statement that GOP lawmakers’ internal fight over road funding shows their plans are “unsustainable and irresponsible.” They haven’t kept past promises to adequately invest in infrastructure, he said.
“On this issue, the Republican leadership’s word means nothing,” his statement said.
While some Republicans are distancing themselves from Walker on transportation, others are cheering him on.
“It is time for all Republicans to join Governor Walker and lead on this issue with courageous reforms to improve our state for many generations,” said a statement from Sen. Duey Stroebel (R-Cedarburg). “Republicans have never stood for tax increases before; we cannot start now.”
Walker has told his transportation secretary, Mark Gottlieb, not to ask for revenue increases in the budget request he submits in September. That will give the first glimpse of the types of project delays Walker’s team may be considering, as well as how much borrowing it believes is acceptable.
Also this fall, the Legislative Audit Bureau is slated to release a review of highway funding that is expected to give lawmakers guidance on ways to save money on roads.
Separately, the DOT is conducting a feasibility study on tolling in Wisconsin. Implementing tolling on interstate highways would require federal approval.
Wisconsin’s gas tax is 32.9 cents per gallon, which is in line with its neighbors, according to the fiscal bureau.
To make its comparison, the fiscal bureau calculated the amount of taxes paid in each state when the retail price of gasoline was $2.38 per gallon. (Michigan and Illinois charge the sales tax on gasoline purchases, so the amount of taxes drivers pay at the pump in those states change as the price of gasoline fluctuates.)
At that retail price, the tax was 33 cents in Michigan; 28.6 cents in Minnesota; 30 or 32 cents in Iowa, depending on the type of fuel purchased; and 31.1 or 33.8 cents in Illinois, depending on the type of fuel purchased.
Automobile registration fees are $75 in Wisconsin and $101 in Illinois. Registration fees in the other states are based on the value of the vehicle and other factors, according to the fiscal bureau.
The fiscal bureau broke down the cost per mile for drivers in the five states based on different types of vehicles.
Under one scenario, it compared the cost to operate a new automobile with a list price of $25,000 that gets 22.5 miles per gallon and is driven 16,000 miles in a year. That vehicle would cost 3 cents per mile in Iowa, 2 cents in Illinois, 2.3 cents in Michigan, 3.4 cents in Minnesota and 1.9 cents in Wisconsin.