State Budget: Transportation

The governor’s recommended transportation budget did not include tax or fee increases to help balance the Department of Transportation (DOT) budget. Overall, the governor’s transportation budget recommended providing $6.4 billion to build and maintain transportation projects and relied on $1.3 billion in new bonding to fund transportation projects. His proposal also included $836.1 million over the biennium for major highway projects, such as the Zoo Interchange, Stillwater Bridge and Hoan Bridge.

More specifically, the governor recommended total funding for the Major Highway Program of $836.1 million, an increase of $108.4 million over the 2013-2015 funding levels. The governor stated that this would keep the widening of I-39/90 between Madison and the Illinois border on schedule.

For the State Highway Rehabilitation Program, the governor recommended total funding for rehabilitation projects of over $1.6 billion – largely maintaining current program funding levels. The governor recommended providing $623.2 million for the Zoo Interchange to ensure the project remains on schedule for the 2018 completion date. In addition, the governor proposed to delay the I-94 North/South project between Milwaukee and the Illinois border for one year and enumerate the I-94 East/West Project to allow DOT to begin substantive work.

The governor recommended $36.8 million for bridge projects over the biennium for the completion of the Stillwater and Hoan bridge projects. Of this funding, $20 million was to be provided to the Stillwater Bridge project and $16.8 million to the Hoan Bridge project.

Joint Committee on Finance (JFC) modified the DOT budget to reduce the level of bonding from the governor’s recommended $1.3 billion in new bonding to $500 million, and allows an additional $350 million in general obligation bonds to be issued upon approval by JFC. This $350 million in contingent bonding could be used for either major highway development or state highway rehabilitation projects. JFC can approve no more than $200 million in additional bonding in 2015-16.

Overall, the net effect of the committee changes, compared to the governor’s recommendations, include a $200 million reduction to the Zoo Interchange project, which would delay the north leg, a $350 million reduction to the Major Highway Program and a $100 million reduction to State Highway Rehabilitation Program.

According to the Legislative Fiscal Bureau, under the committee’s action, 20.6 percent of transportation fund revenues will be dedicated to debt service in 2016-17. Under the governor’s recommendation, 22.3 percent of transportation fund revenues would have been dedicated to debt service. By comparison, debt service was 7 percent of transportation fund revenues in 2001-02.

In addition, JFC made the following changes to the DOT budget:

Freight Rail Preservation Program: Provide $35 million in bonding, compared to the governor’s recommendation of $43 million in bonding.

Harbor Assistance Program: Provide $14 million in total funding over the biennium.

State Highway Program Audit: Request a performance evaluation audit of the state highway program. Included in this audit will be an evaluation of the state’s traffic forecasting methodologies, an evaluation of the state’s factors to select the timing and scope of state highway improvements and an audit of the state’s bidding practices related to the state highway program, among other issues.