March 14, 2021
For all the drama over road funding in the budget two years ago, it’s shocking how far into the background that transportation has faded this time around.
Gov. Evers’ proposed budget cuts overall funding to the Department of Transportation by $250 million. He wants to spend a grand total of $6.6 billion compared to $6.4 billion last time around. This would have been unthinkable in 2019.
It’s worth taking a quick trip down memory lane to revisit how emotional politicians and special interest groups got over road funding during the last budget debate. They howled about the need for a major gas tax hike to boost transportation fund revenue to fix Wisconsin supposedly crumbling infrastructure.
Gov. Evers signaled his indebtedness to the roadbuilders for helping to get him elected by appointing their chief lobbyist, Craig Thompson, to lead the Wisconsin Department of Transportation. Thompson and Evers quickly organized a conference to determine the best way to raise taxes and fees on Wisconsin drivers.
The conference was well attended by lawmakers, local officials, and lobbyists. They agreed to try for a 5.5-cent-per-gallon gas tax hike, automatic annual gas tax increases tied to inflation, and increasing registration fees for all vehicles by $25. The League of Wisconsin Municipalities even suggested a city, county, or regional sales tax just for roads.
.@WisconsinDOT Task Force will consider “dizzying” number of tax and fee hike options on Monday. Some, like the @LeagueWIMunis couldn’t wait to pitch their own ideas on where to raise taxes next. #WIright #justfixit pic.twitter.com/NutmSF0j5o
— MacIver News Service (@NewsMacIver) February 1, 2019
In the end, lawmakers agreed to increasing title fees by $95 and registration fees by $10. The gas tax debate seemed destined to reemerge at a future budget.
When COVID hit Wisconsin, Gov. Evers shut down the economy and the transportation fund took a big hit. The state expected to collect $1.99 billion in gas tax, title fees, annual registrations, and other fees during FY20. Instead, it brought in $1.90 billion. That’s 4.5% less than expected.
Regardless, DOT did a great job meeting its goals for road conditions over the past two years. The governor wanted 95% of state bridges and 90% of the state’s backbone highways in fair condition or better. The DOT got 97.2% of bridges and 98.3% of state backbone highways in fair condition or better by the end of 2019.
Special interests fought hard last budget claiming that “fair” condition roads is not good enough, but it’s still the standard for the next two years in Evers’ budget. Even more surprising, no one is talking about a gas tax hike for the 2021-23 state budget.
Despite Evers’ plan to cut DOT’s budget, road funding still goes up – if only a little. The four main road funding programs in the state budget are: the state highway rehabilitation program, major projects, mega projects, and local general transportation aid (GTA). All but the mega projects will see a small increase in funding.
State Highway Rehabilitation Program
The state highway rehabilitation program focuses on maintaining the roads and bridges we already have. It includes resurfacing and reconstruction work.
Evers wants to increase funding to this program by $48.2 million or 2.49% over two years. State Highway Rehabilitation got $1.94 billion in the 2019-21 budget. Evers’ proposal is for $1.99 billion.
Major Projects
Major projects involve building brand new roads or significantly altering existing ones. The Transportation Project Commission (TPC), which includes the governor, the DOT secretary, lawmakers, and members of the public, picks what projects get greenlighted. There are currently ten major projects throughout the state.
Gov. Evers wants to increase funding for the majors by $1.5 million or 0.26% over two years. The majors got $564.2 million in the last budget. Evers’ proposal is for $565.7 million.
Mega Projects
Mega Projects are major projects that cost over $500 million and receive federal funding. In Wisconsin, all the megas are in the southeastern part of the state. There are currently two under construction: the I-94 North-South Freeway and the Zoo Interchange. These projects are both winding down.
The I-94 project will be complete next year and has $20.6 million in costs remaining. The Zoo Interchange will be done in 2024, but still has $206.2 million in costs remaining. The expenditure schedule has the state spending $105.2 million in FY22 and $54.8 million in FY23.
In total, Gov. Evers plans to spend $82 million on the Megas. That’s $144.4 million less than the last budget (-63.8%). It’s also half of what the project managers planned to spend during the next two years.
General Transportation Aids
Communities receive GTAs either based on their transportation expenses or the total number of road miles they’re responsible for. The aid amount in 2021 was about 16.8% of expenses or $2,628 per mile. Communities that don’t spend much on roads opt for the mileage-based rate. Transportation expenses, as a label, are deceptive because they include things like traffic cops and electric bills for street lights.
Gov. Evers wants to increase GTAs by $30.6 million over the biennium, a total increase of 4%. There was $1.01 billion for GTAs in the last budget, and Evers proposal would spend $1.04 billion.
Bonding
Borrowing to pay for road projects was the unforgivable sin during the last budget debate. Fiscal responsibility demanded we pay for major and mega projects in cash up front, fueling calls for a gas tax and fee hike. That philosophy is now, apparently, passé.
Overall, Evers wants to bond for $555.8 million for transportation. That’s the highest level since 2017, three budgets ago. There was $326 million in bonding in the last budget.
Debt Service
Paying back those bonds becomes another controversial issue. When the special interests wanted a gas tax hike, they argued that 19% of transportation revenue was going towards debt service. They never said what would be an acceptable level.
Debt service dropped in the last budget from $371.1 million in FY19 to $254.3 million in FY20 and $286 million in FY21. Evers wants to spend $260.2 million in FY22 and $263.7 million in FY23.
Transit
Mass transportation would get a boost in Evers’ budget. He wants to increase transit aids by $3.5 million (2.5%) and provide $20 million in transit capital improvement grants. He also wants to increase paratransit aids by $128,700 and specialized transit assistance by $69,200.
Initial Reaction from Lawmakers
The Wisconsin Counties Association held a roundtable with legislative leaders on Mar. 3rd. The general consensus was that transportation needs more funding, but this isn’t the year to do it. Speaker Vos said there’s no reason to increase transit funding right now, since the COVID shutdowns have drastically decreased demand. He also says a gas tax is not the answer, especially since the Biden Administration wants to shift away from gasoline fueled vehicles.