Steven Walters
The State of Politics

Budget Forces ‘20% Reduction’ In Highway Projects

Budget reduction will raise the final costs of all projects

By - Sep 14th, 2015 12:23 pm
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I-94 Construction.

I-94 Construction.

Just as the kids got out of school, and your summer got really busy, Capitol politicians were deadlocked over how to pay for future highway and bridge projects. Raise the gas tax? Raise the $75 car/light truck registration fee? Borrow another $1.3 billion? None of the above?

So, because streets and highways are something we all depend on, and many of us track gas prices daily, you may wonder how that big fight turned out. Time for an update.

The good news: The 30.9 cents per gallon state gas tax, unchanged since 2006, isn’t going up. And the $75 you pay annually to register a vehicle, last raised in 2008, will also stay the same.

And, legislators rejected Gov. Scott Walker’s request to borrow $1.3 billion over the next two years to keep highway projects on schedule. Instead, legislators approved borrowing $500 million more and – if the Legislature’s Joint Finance Committee (JFC) agrees – borrowing up to an additional $350 million.

The bad news: The $800-million reduction in borrowing sought by the governor – without any increase in taxes or fees –  equal a “20% reduction in the state highway program” overall, state Transportation Secretary Mark Gottlieb said in a WisconsinEye interview.

Specifically, Gottlieb added, there will a 33% reduction in work on “major” state highway projects and a 5% drop in roadway preservation programs statewide.

Those delays will ultimately raise the final costs of all projects, since construction-related costs have gone up by 40% since 2006, Gottlieb added.

He also said legislative leaders told the state Transportation Department to not request any of the additional $350 million in borrowing that can only be authorized by JFC. That means DOT won’t have any additional money to spend in the 2016 construction season, Gottlieb said.

All the unknowns are unsettling, Gottlieb added.“We are an agency that, by necessity, plans very far in advance. The uncertainty of not knowing, ‘Are we going to get that money? Or, if we get it, how of much of it are we getting, and when are we going to get it?’ That does create a [planning] challenge.”

Specifically, Gottlieb said:

*Rebuilding the east-west leg of the Zoo Freeway intersection west of Milwaukee – the busiest intersection in the state with 350,000 vehicles per day – will be finished on schedule by 2018.

*But there is no money budgeted through mid-2017 to rebuild the “north leg” of that project, which runs from North Avenue to Burleigh Street. If funded in the next budget cycle, the earliest that section could be rebuilt is 2020, Gottlieb estimated.

*There is “no funding” – and no formal approval – to begin widening I94 between 16th Street and 70th Street in Milwaukee, which runs past Miller Park. If that project is both approved and funded in the next budget, Gottlieb doubted that it could be completed before 2020 or 2021.

*Failure to resolve the funding deadlock translates into at least a two-year delay in widening I90/39 between Madison and Beloit, Gottlieb added. The earliest that project could be complete is 2022, Gottlieb estimated.

*Rebuilding state Highway 441 near Appleton also faces a new two-year delay.

But, in an another WisconsinEye interview, Assembly Speaker Robin Vos said it was Senate Republicans – and not Assembly leaders – who told the Transportation Department to not yet seek approval to borrow any of the additional $350 million.

Senate Republicans are leery of sliding further into debt to pay for highways. This year, 18% of all state transportation taxes and fees will go to pay off debt. About $990 million was borrowed in the two-year budget that ended on July 31.

Vos said it’s unfortunate that Senate Republicans are not ready to approve any new debt, because two-year delays “will increase the costs.” JFC should meet soon to approve the additional $200 million in potential debt authorized for this budget year, Vos added.

Interviewed with Vos, Assembly Democratic Leader Peter Barca noted that Democrats tried to reinstate “indexing” the 30.9-cent gas tax, which adjusted that tax every year for inflation. Ending indexing in 2006 cost the Transportation Fund “close to $1 billion” in lost revenue, Barca said.

“Infrastructure is taking a huge hit,” Barca warned. “And infrastructure is one of the key elements that can tell you what kind of economic development you’re going to have over the next decade.”

Steven Walters is a senior producer for the nonprofit WisconsinEye public affairs channel. Contact him at stevenscwalters@gmail.com

11 thoughts on “The State of Politics: Budget Forces ‘20% Reduction’ In Highway Projects”

  1. Ian says:

    Heres an idea, how about we put a moratorium on widening highways which residents don’t need or want? Boom! Problem solved.

  2. Big Al says:

    The DOT better figure out the new normal fast – come up with traffic solutions other than widening the highway, because the taxpayers and legislature won’t pay for it. For starters, here’s a time-tested solution:

    https://en.wikipedia.org/wiki/Transit_bus

  3. Beer Baron says:

    Tear down 794 and halt all Zoo Interchange work. Look for ending the freeway where the interchange is now and turning it into a boulevard. That would be a great start!

  4. M says:

    Strong Town’s Chuck Marohn says this road-maintenance problem everywhere is a result of a nationwide Ponzi Scheme. We build roads and freeways we can never possibly afford to maintain.
    http://www.strongtowns.org/journal/2015/9/9/the-ponzi-scheme-in-action-1

    Also, powerful road builders’ lobbies push for ever more highways, while local street repairs depend on city budgets that are stretched too thin. We need completely different approaches to all this–and politicians who are not so influenced by lobbyists and can think about the big picture.

  5. mbradleyc says:

    The problem is they tried to do everything all at once. The Zoo wasn’t supposed to get started before they finished 94 South to the state line. Then they added 794 and the Hoan to the workload. So now it will just take a little longer, but it will all get done.

  6. Michael says:

    The “it will cost more” argument is a bit suspect. Yes, those particular projects will cost more due to inflation, material costs etc. However… there are always more projects. When they finish these they aren’t going to throw their hands up and so “okay we are done” for the next 50 years.

    Highway construction and maintenance should be viewed less as a capital investment and more as expense. In this way, by cutting back for a few years you are indeed saving money.

  7. Paul says:

    Peter Barca complains that the Republicans stopping the automatic gas tax increase has cost the transportation fund close to one billion dollars, isn’t that about the same amount Doyle raided from the transportation fund. Never heard him complain about that.

  8. Todd Spangler says:

    There are similar — actually worse — issues in Missouri, which has a fuel tax of only 17 cents/gallon. An effort to raise the tax failed earlier in the year. Many bridges are in poor condition, with more likely to be closed in the coming years. It would seem that the public has come to take good roads and bridges for granted. http://www.stltoday.com/news/local/govt-and-politics/no-money-to-repair-missouri-s-bridges-can-mean-closures/article_506bbf36-6a5d-5cb5-a466-44729570e420.html

  9. Tom D says:

    Paul (post 7):

    Doyle repaid most of the money he raided, and Walker returned all of the rest (PLUS another $313.6 million).

    None of the repayments (including the added $313.6 million) came from driver “user fees”—things like fuel taxes and DMV fees. All of the repaid money (and the added $313.6 million) came from either “general funds” (income and sales taxes), or Wall Street borrowing repaid from “general funds”.

    Don’t believe me? Then see this two-page letter and the detailed chart on its 3rd page:

    http://legis.wisconsin.gov/lfb/publications/miscellaneous/documents/2014_10_13%20wileg%20bl%20jwt.pdf

  10. Dave Reid says:

    @Paul To be correct it was Doyle and the Dems that repealed the gas tax indexing. Not sure if Barca was onboard with that or not at the time.

  11. Jake says:

    Fiscally responsible conservative?

    Can’t even figure out how to pay back the road lobby that financed them!

    WI Republicans are a failure and a disgrace.

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