Walker’s Flip Flop on Highway Deficit

Legislative Republicans aren’t alone in having shifted their views on transportation finance.

Consider the record of Governor Walker, whose ultimatum on gas taxes has stymied all efforts to resolve the highway funding impasse.

The Capital Times last month quoted the Governor as saying there is “more than enough revenue” to fund transportation projects without increasing the gas tax or vehicle registration fees.

Here’s what the Governor had to say on the subject after his 2010 election. He wrote to U.S. Transportation Secretary Ray LaHood:

Wisconsin has significant transportation needs. I believe it is a grave mistake for the federal government to insist on building an unwanted passenger rail system at a time when our roads and bridges are literally crumbling.

Wisconsin’s road needs are well documented. In 2006, the Joint Legislative Committee on Transportation Needs and Finance found an annual $700 million shortfall in transportation funding to keep up with needed repairs and expansions. In 2008, the non-partisan Legislative Fiscal Bureau updated this annual shortfall to well over $1 billion. When local governments were asked to submit transportation projects for approval under the American Recovery and Reinvestment Act (ARRA), they were told they’d be competing for $158.7 million in funds. Wisconsin local governments instead submitted $658.2 million in requests.

Wisconsin’s Transportation Projects Commission recently approved four new major highway projects. These include the I39/90 expansion, the widening of State Highway 38, the reconstruction of US 10/WIS 441, and the expansion of Wisconsin Highway 15. These four projects alone are estimated to cost more than $1.3 billion.

Early in his first term Walker and the Legislature created a blue-ribbon task force to study the issue. It identified a large gap between projected transportation needs and stagnant gas tax revenue. As the Milwaukee Journal Sentinel reported in December 2013:

Gov. Scott Walker wants the next state budget [for 2015-17] to ensure a new sustainable source of funds for Wisconsin’s highways to make up for lagging gas taxes. [T]he Republican governor said he has given state Transportation Secretary Mark Gottlieb a broad mandate to solve the growing problem of paying for state roads, bridges and other infrastructure.

Walker said he hoped to find a breakthrough solution that could lead the nation – something that has eluded his administration over the past three years. He hinted that he might pair that proposal with an overhaul and cuts of income and sales taxes.

“I just think the current system has some real weaknesses in it,” Walker said.

At this point, with the November 2014 election in sight, the Governor’s assessment changed. While Gottlieb responded to his directive with ideas on new revenue, the Walker Administration buried the information until after he defeated Mary Burke. Then, with a run for President in the offing, the Governor rejected all of Gottlieb’s proposals. Instead, his 2015-17 budget included a whopping $1.3 billion in new highway debt, a tacit but clear admission that current law revenue was insufficient.

In the summer of 2016, with upside-down approval ratings for Walker in the Marquette Poll, the same governor who previously called out revenue shortfalls now directed Gottlieb to prepare a 2017-19 budget with no gas tax increase.

For a period of time last year the governor left the door open for new transportation revenue if it were offset by other tax cuts (a goal that could be easily be attained given the overall GOP record on general fund taxes and property taxes.) While Walker subsequently retreated from that linkage, developments this week suggest the concept is back in play. Specifically, according to the Journal Sentinel, “Republicans in charge of the state Assembly on Thursday embraced a proposal by Gov. Scott Walker to drop a proposed income tax cut to free up $200 million that could be used for highways.” The devil’s in the details; whether this signals a short-term compromise that includes Senate Republicans remains to be seen.

On the broader issue of whether significant new dollars — well beyond $200 million — are needed for transportation, Governor Walker told Assembly Republicans last month that if re-elected his future transportation budgets would be similar to his current proposal and would include no gas tax increase.

So, a Governor who spoke in 2010 of “significant transportation needs” and “roads and bridges [that] are literally crumbling” has come full circle, recently telling the Capital Times that transportation revenue under the current law is “more than enough.”