Does the legislature have a sustainable plan for transportation? 5/28/2019
5/23/19, InBusiness Blog – Wisconsin, like other states, has grappled with how to fund transportation for more than a decade.
Earlier this year, the governor put forward a plan that would begin to address some of Wisconsin’s most urgent transportation challenges and cost the average motorist less than $4 a month.
For this small monthly fee:
- More than 200 vital state highway rehabilitation projects around the state will start sooner.
- Local governments will receive increased funding to support local roads and transit services.
- Wisconsin will complete the Zoo Interchange and invest in other important modernization and safety projects, including Highway 23 and I-39/90, with limited use of bonding.
- Debt service as a percentage of transportation revenue will decline significantly over the next decade, meaning more of the user fees Wisconsinites pay — like the gas tax and vehicle registration fee — will go toward better roads.
- State highway conditions will stabilize.
Polling shows the public supports paying the additional user fee if it means road conditions improve. In a recent poll conducted by Public Opinion Strategies and released by the Association of Wisconsin Tourism Attractions, nearly six out of 10 voters said they are willing to pay an extra $4 a month to create an immediate solution to fix the roads.
At the heart of the governor’s proposal is an 8-cent-per-gallon gas tax increase.
Since 2013, 30 states have increased or adjusted taxes on motor fuel to support needed transportation investment. Why is the gas tax, which was first collected 100 years ago in Oregon, still the workhorse of transportation funding?
It comes down to three main reasons:
- It is a user fee. The more your drive, the more your pay. This concept of equity has been core to road funding since the first toll roads in America during the late 1700s. In addition, many states, like Wisconsin, limit in their states’ constitutions how these user fees can be spent — for transportation in Wisconsin, and specifically for highways in some other states.
- It’s predictable. While increases in fuel efficiency or alternatively fueled vehicles will eventually drive the need to transition to another user-fee based system, like road user charges or electronic tolling, today and for the next 10 years, the gas tax will, if adjusted, provide a reliable funding base. This doesn’t mean that Wisconsin should not diversify its transportation-funding portfolio or look beyond the next 10 years.
- It’s efficient. A relatively small gas tax increase can generate significant revenue and be implemented quickly. In addition, the cost to collect motor fuel taxes is less than 1 percent.
The gas tax is not the “next big thing,” and, in fact, it may play no role in transportation funding in 2040. Who knows? But today when our roads are crumbling? Today, the gas tax can get the job done.
Some in the legislature aren’t in favor of a gas tax increase. Fine.
However, in the same poll, more than 50 percent of voters said roads have gotten worse over the last five years. Given current funding levels, it is a safe bet road conditions will deteriorate notably over the next five years.
If they reject the current proposal, the legislature needs to come up with an alternative plan to fund essential transportation investment or explain why the more than 200 state highway rehabilitation projects won’t happen anytime soon.
So, the obvious question everyone has for the legislature is: What’s YOUR plan?