The Legislative Fiscal Bureau (LFB) released a memo last week revealing a $94 million increase in the balance of the state’s transportation fund. LFB had originally estimated the 2017-19 biennium-ending fund balance at $8.4 million. However, mainly due to projections of higher fuel tax revenues and lower debt service costs, LFB re-estimated the fund balance at $101.8 million.
Gov. Scott Walker’s budget had estimated the opening transportation balance at $107.6 million, but the new LFB memo re-estimated the opening balance at $145.4 million. According to the memo, the increase of $37.8 million was due primarily to debt service savings, increased motor fuel tax and vehicle registration revenues in the 2015-16 transportation fund.
In addition to the growth in the opening balance, the 2017-19 closing balance is also projected to increase by $55.6 million. Motor vehicle fuel tax revenues are estimated to be $34.1 million higher in the biennium than Walker’s budget assumed, due to projected growth in fuel consumption instead of Walker’s projected decline. Vehicle registration revenue is also projected to be $8.5 million more than expected.
The increase in the closing 2017-19 transportation balance is also due to lower estimated debt service on transportation revenue bonds after the refinancing of some bonds this year. The lower debt service adds $12.1 million to the estimated closing balance.
Altogether, LFB estimated the changes to the opening balance and the projected increase in motor fuel tax revenues and decrease in debt service in the 2017-19 biennium will increase the transportation fund to $101.8 million. After the numbers were released, Walker continued to clash with legislators about how best to approach the remaining $900 million gap in the transportation budget. Walker reiterated his opposition to raising the gas tax, but expressed this week he might be willing to place tolls on the Illinois border as a source of revenue. Assembly Republicans have instead proposed a plan to raise the gas tax with offsetting decreases in income taxes. Senate Republicans have yet to agree on a plan, and Sen. Majority Leader Scott Fitzgerald (R-Juneau) suggested recently that the Senate could take up its own budget outside of the Joint Finance Committee.