Budget Update

2007-09 Wisconsin Budget Update

The Hamilton Consulting Group

July 2007

Transportation Summary

Kenosha-Racine Milwaukee Commuter Rail Extension Project
Governor – Provide $1,000,000 for grants in 2007-08 for the Kenosha-Racine- Milwaukee commuter rail extension project. The Grants are limited to an amount equal to 50% of the portion of the project cost in excess of the federal aid funding for the project or 25% of the total project cost. In 2005-06, the project received $800,000 to assist in funding preliminary engineering work on the project. This preliminary engineering work has yet to be undertaken because the project has yet to receive Federal Transit Administration approval. The funding under this bill would be used to replace and supplement that $800,000.

Joint Finance – No change to Governor’s provision. [See Paper 777.]

Senate – Provided the Southeastern Wisconsin Regional Transit Authority (RTA) the responsibility to sponsor, develop, construct, and operate a commuter rail transit system connecting the cities of Kenosha, Racine, and Milwaukee. Provided the authority to levy a vehicle rental fee of up to $15 per transaction and to issue up to $50 million in bonds. Also deleted the current law provision that the RTA's report to the Legislature, must include a recommendation as to whether the responsibilities of the authority should be limited to collection and distribution of regional transit funding or should also include operation of transit service. Also, delete the requirement that the RTA's report must recommend whether the RTA should continue in existence. [See Senate 137]

Assembly – Deleted $1,000,000 and provided $800,000 instead for the rail project. Specified that the Committee may approve a request to transfer that amount to the DOT's appropriation but, only if the Legislature has passed and the Governor has signed an act establishing a financing mechanism sufficient to pay all nonfederal costs, including capital and operating costs, for the commuter rail service. Specify that revenue generated by a current-law $2 charge on vehicle rental contracts that was established by 2005 Act 25 to support the costs of a regional transit may not be used for the purposes of lobbying. [See Assembly 157]

General Transportation Aids
Governor – Provided increased funding for general transportation aids as follows: County Aid ($1,855,200 and $3,747,600)and Municipal Aid ($5,836,900 and $11,790,500). Also established a mileage aid rate at $1,937 for calendar year 2008 and $1,976 for calendar year 2009 and thereafter, which represents a 2.0% annual increase to the 2007 rate of $1,899 per mile.

Joint Finance – No change to Governor’s proposal. [See Paper 770]

Senate – Provided increased funding for general transportation aids as follows: County Aid ($468,500 and $1,428,700) and Municipal Aid ($1,473,700 and $4,494,800). Also established the mileage aid rate at $1,956 for calendar year 2008 and $2,015 for calendar year 2009 and thereafter, which represents a 3.0% annual increase to the 2007 rate of $1,899 per mile. [See Senate 135]

Assembly – No change to Governor’s proposal

State Highway Maintenance Funding
Governor – Provided $28,964,000 SEG in 2007-08 and $37,330,300 SEG in 2008-09 for the state highway maintenance and traffic operations program. (2.5 percent annual increase)

Joint Finance – No change

Assembly – No change [See Paper 786]

Senate – No change

State Highway Rehabilitation Funding Maintenance Fund
Governor – Provided a two-year increase of $61 million for highway rehabilitation. (3 percent and 4.1 percent)

Joint Finance – No change [See Paper 787]

Senate – Provided an additional $101 million over Governor/JFC for the state highway rehabilitation program. (9.6 percent and 7 percent) [See Senate 140]

Assembly – Provided an additional $12 million over Governor/JFC for the state highway rehabilitation program, to provide total increases of 4.9% in 2007-08 and 2.2% in 2008-09. [See Assembly 650]

Major Highway Development Funding
Governor – Provided funding increases of $4,475,300 and $9,017,900 in bond revenue for highway development (1.5 percent annually). Overall provided increased revenue bonding authority of $383,963,100 for major highway development projects and administrative facilities.

Joint Finance – No change to Governor’s proposal. [See Paper 788]

Senate – Provided an additional $37 million (SEG) for the major highway development program, to provide total increases of 5.2% in 2007-08 and 6.1% in 2008-09 for the program. Also reduced bonding authority by 439 million and replaced with SEG to maintain the use of revenue bonds at the base level. [See Senate 141]

Assembly – Provided the same funding increase as Governor/JFC, but replaced bond funding with cash (SEG) and reduced bonding authority by a corresponding $39 million amount. [See Assembly 159]

Increased Motor Vehicle Registration
Governor – Proposal would increase transportation revenue by $168 million by increasing:

passenger vehicle registration from $55 to $75

light trucks not more than 4,500 pounds from $48.50 up to $75

trucks not more than 6,000 pounds from $61.50 up to $84

trucks not more than 8,000 pounds from $77.50 to $106

Joint Finance – Voted 8-8 on an Omnibus motion for all papers numbered 760-788 and again for papers numbered 761-767. Neither provision was adopted, so the governor’s proposal stands. [See Paper 764]

Senate – Left the governor’s proposal intact but added a 10 percent increase in registration fees for heavy trucks (over 8,000 pounds), which would add another $27 million in transportation revenue. [See Senate 133]

Assembly – Left the governor’s proposal intact, but also added a fee for heavy trucks (over 8,000 pounds) that would increase the cost of registration for such vehicles by 15% rounded to the nearest whole dollar increasing transportation revenue by $40 million. [See Assembly 154]

Oil Company Assessment
Governor – Proposed a 2.5 percent tax on the gross receipts of an oil supplier to be assessed on the first point of sale. Also contains an anti-pass through provision, which would mandate that the increased cost of the tax could not be passed on to the consumer.

Joint Finance – Democrats and Republicans both offered Omnibus motions on transportation that failed 8-8 leaving the Governor’s position intact. [See Paper 761 and JFC 633]

Senate – Voted to modify the oil company assessment to create a graduated scale of rates at which gross receipts would be assessed, rather than using the governor’s proposed flat 2.5%. This would increase the revenue from the assessment by an estimated $2.8 million in 2007-08 and $0.3 million in 2008-09. The Senate version would increase estimated revenues by $36 million in 2007-08 and decrease estimated revenues by $9.4 million in 2008-09 from the oil company assessment associated with the following modifications to the proposed assessment: (a) the assessment would become applicable on October 1, 2007 rather than January 1, 2008; and (b) extending all the current law exemptions to the motor vehicle fuel tax to the proposed oil company assessment. [See Senate 132]

Increment of Annual Gross Receipts - Oil Company Assessment Rate

$0 to $15,000,000: 0.0%

$15,000,001 to $75,000,000: 0.5%

$75,000,001 to $120,000,000: 1.5%

Over $120,000,000: 3.0%

Assembly – Deleted the provision. [See Assembly 154]

Combined Reporting
Governor – No proposal submitted

Joint Finance – Failed to pass on an 8-8 vote.

Senate – Voted to require corporations that are subject to the state corporate income and franchise tax, and that are engaged in a unitary business, to file a combined report for state income and franchise taxes. ($130 million GPR Revenue) [See Senate 10]

Assembly – No change to Joint Finance. Not included in Assembly budget.

Transfer of Sales Tax on Vehicles and Related Products to Transportation Fund
Governor – No provision.

Joint Finance – No Provision.

Senate: No provision

Assembly – Requires the Department of Revenue to transfer to the Transportation Fund an amount equal to 50 percent of the difference between the amount of vehicle-related sales tax estimated to be generated in the current fiscal year and the amount of such sales tax generated in fiscal year 2008-09, beginning July 1, 2009. [See Assembly 156]

Vehicle Title Fee Increase
Governor – No provision

Joint Finance – No provision

Senate – No provision

Assembly – Voted to increase the standard title fee from $28.50 to $38.50, effective October 1, 2007, or the first day of the third month beginning after publication, whichever is later. This would increase the transportation fund revenue by an estimated $10,800,000 in 2007-08 and $14,300,000 in 2008-09. [See Assembly 155]

Conversion of Appropriations from the General Fund to the Transportation Fund
Governor – Proposed to convert 16 GPR appropriations to transportation fund appropriations and would create two new transportation fund appropriations, one to offset some general fund debt service costs and one to fund a new driver education assistance program in DPI. This would also convert an appropriation for making an annual transfer to the environmental fund (nonpoint pollution account) equal to the amount of revenue generated by the supplemental vehicle title fee from GPR to SEG. Total of $165 million over the biennium shifted from GPR to the Transportation Fund.

Joint Finance – Decreased the total amount of transportation fund revenues used for general fund purposes by $2,483,000 in 2007-08 and $963,400 in 2008-09. This reflects a re-estimate of the supplemental title fee transfer appropriation and the deletion of the Department of Public Instruction appropriation for driver education assistance for eligible pupils. [See Paper 765 and JFC 638]

Senate – Eliminated GPR shifts in the second year. Approved first year conversions of roughly $73 million. [See Senate 134

Assembly – Deleted all GPR cost shifts to the Transportation Fund. [See Assembly 155]

Implementation of Federal Real ID Act
Governor - Provided $9,805,300 and $12,184,000 for the implementation of provisions in the federal Real ID Act related to driver licensing and identification card issuance. Under the federal Real ID Act, federal agencies, beginning after May 10, 2008, will not accept a driver's license or identification card as proof of identity for official purposes (such as passing through airport security) unless the issuing state is in compliance with the Act's provisions.

Joint Finance - Transferred $9,805,300 and $12,184,000 for the implementation provisions of Real ID. Specified that the Department may submit one or more requests to the Committee for up to $9,805,300 and $12,184,000 for further funding if necessary. [See Paper 795]

Senate - No change to Joint Finance.

Assembly - No change to Joint Finance.