3/18/2017, Green Bay Press-Gazette – As the road construction season looms in Wisconsin, so do negotiations on Gov. Scott Walker’s budget proposal for transportation.
The governor unveiled his two-year budget in February and called for spending $6.1 billion on transportation. Counties and municipalities would get an increase in state transportation aid, and major highway projects already underway would remain on schedule.
That’s all good news. However, the state would have to borrow $500 million to get there. In the last two-year budget, Walker proposed $1.3 billion in borrowing and the Legislature knocked that down to $850 million.
While $500 million is a lot less, we take issue with bonding to pay for roads when there are other avenues for funding.
The problem is, Walker is unwilling to travel down that path. He won’t consider an increase in the gas tax or registration fees unless there’s a similar offset in the budget.
Even some Republican legislators are willing to look at hikes in the gas tax and/or registration. Senate Majority Leader Scott Fitzgerald, R-Juneau, recently said he would consider diverting money from the general fund to transportation.
Meanwhile, last summer the Legislative Fiscal Bureau reported the state faced a $939 million gap over the next two years between the highway projects that are planned and the expected revenue.
With the major, ongoing road projects — Zoo Interchange in Milwaukee, Verona Road south of Madison, U.S. 10/441 and Wisconsin 15 in the Fox Cities — and the fact that our interstate system, built in the 1950s and ’60s, is nearing the end of its 50-year lifespan and needs to be rebuilt, we need to find more highway funding.
To do nothing isn’t an option. A Legislative Audit Bureau audit released in January pointed out that only 41 percent of the state highways were in good condition in 2015, down from 53.5 percent in 2010.
Forty-two percent of the roads in Wisconsin are in poor/mediocre condition, compared with 14 percent in Minnesota, according to the U.S. News & World Report. Wisconsin’s road quality ranking was No. 49.
There are some things that the state Legislature should consider to boost transportation fund revenue without resorting to borrowing. We believe that user fees — such as a motor fuel tax and registration fees — are the best way to help pay for road maintenance and construction.
Since 2014 when the state wisely passed a law to prevent raiding the transportation fund, we’re now assured that money raised through user fees will go toward transportation projects. More than $1 billion was removed from the transportation fund from 2001-11 for general fund shortfalls.
Some of the options include:
GAS TAX
At the very least, the state should look to index the gasoline tax to the rate of inflation.
The current rate, 30.9 cents per gallon, was instituted in 2006, when the state ended the practice of automatically indexing the fuel tax. A flat rate doesn’t make sense when other costs, like road construction, are subject to changes in inflation.
The state could also look to increase the fuel tax. A 1-cent increase would bring in about $33 million a year. That would still make us comparable with Michigan, Illinois and Iowa. In fact, Iowa increased its fuel tax 10 cents a gallon in 2015, expecting to bring in $215 million a year.
The state must address the gas tax because vehicles are getting better gas mileage and that cuts into the revenues from this user fee. Plus any reducation in vehicle use will further cut into revenue.
REGISTRATION AND LICENSE FEES
Increase the vehicle registration and driver’s license fees by $1. The Associated Press reported that this would bring in $4.4 million and $1.1 million annually. That’s $5.5 million out of a $6 billion budget, but it’s still worth pursuing.
The state could even look at registration fees based on the value of the vehicle. For example, could that state charge a percentage of the manufacturer suggested retail price of a vehicle to register it? Or factor in the weight of a vehicle?
TOLLS
Tollways are another user tax, however, new tolls are prohibited by law. It would take federal authorization to convert the state’s 875 miles of interstate to tollways.
The revenue generated from them makes it tempting. One DOT study put annual net revenue at $372 million if drivers were charged 4 cents per mile.
DOT AUDIT
The state needs to put some of the DOT audit recommendations into practice. This includes getting at least two bids on all construction contracts, budgeting only projects it can fund and using established performance measure goals for construction and maintenance.
Plus, the state needs to finish projects that are underway, not delay them, before taking on new projects.
The highway funding problem is one Wisconsin has to solve. Even though President Donald Trump promised to rebuild roads, we can’t wait on the federal government to bail us out. Trump’s budget cuts transportation funding, though the Trump administration is said to be putting together a $1 billion infrastructure program.
While no one likes to pay more in fuel taxes or registration fees, everyone likes to drive on good roads and not be stuck in traffic on outdated highways not built to handle the crush of vehicles that use them.
The Legislature needs to get creative in its funding and to consider increasing the fees of those who use the roads.