Budget Forces ‘20% Reduction’ In Highway Projects
Budget reduction will raise the final costs of all projects
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.”
*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.”