WisDOT to plug budget hole with nearly $210M in federal aid

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The Wisconsin Department of Transportation plans to use about $210 million worth of federal aid to close a budget deficit caused by COVID-19 and spend more on local roads and highway rehabilitation.

The coronavirus pandemic will most likely cause the state’s transportation fund to collect $172 million less at the end of the fiscal year than the department expected before the pandemic. The shortfall is a direct result of many people working from home during the pandemic and changing their plans for travel and vehicle purchases. With relatively few people driving, the state’s collections of revenue from the gas tax and title and registration fees have fallen sharply. 

There is some good news, however. The state now expects to receive $209.9 million from a variety of federal sources. That money will allow WisDOT to cover the deficit in the transportation fund and allocate about $25 million each year to highway rehabilitation and local roads.

That’s according to a deficit and distribution plan the agency submitted to lawmakers last month. The state’s Joint Committee on Finance has until Wednesday to meet and review the plan. Committee members said in late February that they consider it complete and had not scheduled meeting by press time Friday.

WisDOT plans to eliminate the deficit using $186.6 million in aid that Wisconsin will get through a federal COVID-19 relief bill Congress passed last year. Separately, $27 million will come from federal supplemental aid and $50 million through the federal redistribution process, through which the U.S. Department of Transportation allocates unspent money at the end of the fiscal year. That’s $30 million more than the state had predicted it would receive from that source.

The department plans to shuffle some of that federal money into two programs that don’t typically receive federal support. About $25.7 million would go into Wisconsin’s highway rehabilitation program and $25 million into local road aids. The agency expects the transportation fund will be balanced by the end of the fiscal year.

Lawmakers, meanwhile, are now considering Gov. Tony Evers’ latest proposed two-year transportation budget, which also calls for placing a priority on highway repair and local projects.

The budget would put about $565 million into major highway projects, and would increase spending on highway rehabilitation by $66.6 million, an increase of  3% from the current budget. It would also increase state aid to county and local projects by 2%.

To pay for the work, the budget calls for borrowing $555.8 million, which would be up from $326 million in the current budget. No tax or fee increases are proposed. Follow @natebeck9