A Fiscal Shell Game

If I were a betting man (actually I’m not), I would wager my bottom dollar we will see a transfer of about $500 million from Wisconsin’s general fund into the transportation fund in the proposed state biennial budget some time next month. If it doesn’t actually happen, it will at least be proposed. It’s really a kind of shell game, but when finished, it will mean more money for auto-oriented transit, and nothing for bicycle or pedestrian improvements.

In the last month or so, a number of important documents have been released that “add up” to about a $500 million dollar annual hole to fill in the transportation funding political wish list.

The 10 citizen member Wisconsin Commission on Transportation Finance and Policy was created in the 2011-2013 biennial state budget and charged with the task of making recommendations related to the future of transportation finance in Wisconsin, with a particular eye to developing policy changes and financing options to balance projected transportation needs with revenues over the next 10 years. The Commission found:

• The current transportation funding system will not keep up with maintenance costs or capacity improvements and we have been deferring maintenance for decades.
• Over the next ten years, the funding gap varies between $2 billion and $18 billion, depending on whether we let our roads and bridges continue to deteriorate or if we maintain what we have and build increased capacity for growth.
• The Commission’s preliminary recommendation is to increase the gas tax by 5 cents per gallon and raise vehicle registration and license fees to generate about $479 million a year.

While touring Colgan Air Services in La Crosse Thursday, Governor Scott Walker told reporters that he opposes increasing the gas tax and fees to solve fill the funding gap.

“If you look back at the money that was taken out of previous budgets for the transportation fund, there’s about, the last estimate from the state budget office, about $135 million,” Walker said. “That, if they were to over time between what we did last budget and what we do in the future, if we could pay that back, it’d be about $135 million, that would be a starting point there. There might be some other alternative, but I think in terms of a gas tax, that’s really a non starter.”

Gov. Walker is also on record as stating he does not want funding shortfalls to delay the Zoo Interchange reconstruction or other Mega Projects. ”I’d be inclined to like to see that stay on schedule,” Walker said last November of work on the Zoo Interchange. “The question becomes, how can you do that, balancing out the resources that are available without delaying other projects around the state of Wisconsin?”

Apparently the Democrats agree according to Democrat Senator Jennifer Shilling. While traveling with Walker in La Crosse she said, “The commission has identified about a $6-8 billion deficit (editor’s note: actually $2 billion to $18 billion) in the next 10 years in the transportation fund,” Shilling said. “But, I don’t’ think right now there is an appetite in the legislature to go ahead with a gas tax.”

Given everybody wants to keep the mega projects on track without raising gas taxes, fees or borrowing more (also a non-starter with current leadership), and we have this huge shortfall, we are going to have to come up with an additional minimum of $600 to $800 million a year from somewhere else. If we assume the Dept. of Revenue’s growth projections are accurate, we will get an additional $1.5 billion from increases in tax revenue over the next two years plus the $342 million dollar surplus we ended the 2011-2012 biennium with. Together those round that up to $2 billion. I doubt it all would go to transportation though. Since the Governor already stated a $135 million transfer from the general fund to transportation is the starting point, and the Commission is recommending an increase in the budget of $479 million, I’m gonna round up again and bet we see a $500 million dollar transfer from the general fund into our transportation budget.

Remember in my previous post on the budget I pointed out WisDOT as already suggested we shift around $12 million in federal funds for bikes to highway projects. Quote from the Departments Budget Request for the Transportation Alternatives Program (P. 185):

“The requested program consolidation would result in a net decrease in federal funding allocated for making local grants of $6,249,900 in 2013-14 and $6,152,400 in 2014-15.”

There is an additional $1.8 million reduction in Congestion Mitigation Air Quality Program funds, which are also a big source of money for bike/ped projects in the non-attainment areas like SE Wisconsin and Dane County.

I’m gonna get a bit more cynical now and bet that we see legislators propose a state constitutional amendment making it illegal to shift money the other way, from the transportation to the general fund.

It is such a shame that nobody seems to be listening to the Commission’s main point, that we need to find a permanent fix to our transportation funding system. I would argue we also need to change our priorities from moving vehicles to moving people in the most efficient and cost effective manner. That alone could save us billions over the next ten years.

Why is all this relative to bicycles? I think it serves to remind us that to the lay person, this fiscal shell game seems crazy and the amount of money we are talking about for bicycles is a drop in the bucket. The transfer of funds from the general fund also speaks to that old argument that people who ride bicycles don’t pay for roads because we are not burning gas when we ride. I’ve debunked that myth a few times in previous posts, but this transfer of general funds further makes the point that cars don’t pay for what they use either, and even if you don’t drive a car, you still pay for highways.

Rest assured that even with all this money being hypothetically thrown around, the Bike Fed will be fighting behind the scenes to at least restore the $12-$14 million proposed shift in federal bike/ped funds to highways. As I recently reported, bicycles get such a slim piece of the transportation funding pie, but have such a big economic impact on Wisconsin, the budget should leave us whole if not give us a small increase. There are people from both parties in Madison who understand this. They are not in the majority of either party, but they are in the Capitol, and we will work with them to try to ensure our drop stays in the bucket.

Anybody want to make book on my bets?

This story was originally published by the Bicycle Federation of Wisconsin.