Tuesday, November 29, 2016

By the way, our road funding mess still hasn't been resolved

As the new year of 2017 looms, it also means the State of Wisconsin’s 2017-19 budget and its associated deficits are going to have to be discussed and dealt with in the very near future. The worst of which is figuring out a way to close the $880 million gap between revenues available for the Wisconsin Transportation Fund, and meeting the spending plans that were part of the Wisconsin DOT's budget request for the next 2 years.

To that end, Wisconsin political columnist Steven Walters had this report discussing a 27-page pamphlet Assembly Speaker Robbin’ Vos handed out to his fellow Assembly Republicans this Fall. Vos’s document is apparently titled “No Easy Answers”, and deals with a number of “myths” peddled by Governor Walker and others, and compares it to the realities Vos says must be dealt with in the Transportation budget.
Myth No. 1: State highways are “not in bad shape.”

Fact: The U.S. Department of Transportation ranked state highways 47th nationally, with 71 percent of them “poor of mediocre.” The Wisconsin Taxpayer Alliance gave state highways an overall D grade. And, a special state panel created to look at the funding problem warned that, without new revenues, the percentage of state roads rated “poor or worse” will double from 20 percent in 2014 to 42 percent by 2023.
Bottom line, the state has been underfunding these needs for several years, and because we have a Governor who cares more about sucking up to the Kochs and DC oligarchs with his no-tax, no-fee pledges than he does in maintaining the state’s infrastructure, the pattern of underfunding and borrowing funds has continued in increasing levels over the last 6 years. Unless we want our roads to completely fall apart and make us even less desirable for business or tourism than regressive Fitzwalkerstani policies have made it, we need to get this shit fixed.

Speaking of borrowing, that’s another item of discussion in Robbin’s little book.
Myth No. 4: With low interest rates, we should borrow more to maintain and build highways.

Fact: The current two-year state budget borrows a record $910 million, or 13 percent of all Transportation Fund spending of $6.82 billion. If the Legislature approved the state Transportation Department’s proposal to borrow $500 million more by mid-2019, debt-service payments would be about 25 percent of all transportation spending.
A second complication with this is how interest rates have jumped as the possibility and alleged election of Donald Trump became reality, as the yield benchmark 10-year Treasury Bond went from 1.78% to 2.38% from the Friday before the election to last Friday. The 10-year is also 0.8% higher than it was in early September, when many of these budget requests were being put together. That means that debt service on those 10-year bonds is up by 1/3 in a matter of 3 weeks, and 70% in 4 ½ months, and the payback for Gov Walker’s proposed $500 million in borrowing has become much more costly than he planned it to be.

We are already crowding out current and future DOT spending with the borrowing on the books, and it would get much worse if we borrow more in the 2017-19 budget.
Myth No. 5: Let counties, cities, villages and towns enact “local option” taxes to pay for their streets and highways.

Fact: Local-option sales taxes, or the growing practice of local governments approving “wheel taxes”—including $30 just approved by Milwaukee County—do nothing to maintain “state highway and Interstate projects.”
True if you stay skin-deep, but it does reflect a lack of funding going to local road aid programs which are designed to help keep the pressure off of property taxes and other local taxes. If the Legislature would be OK with freeing up local governments to give road taxes, and stopped handcuffing these places with tight property tax limits, allowing this kind of offset could be a justification for having any new money go into state highways and freeways instead of local road aids.

There is one other option out there that could take care of a lot of these problems- a bailout from Uncle Sam in the form of a massive infrastructure program under (gulp) President Trump, who has made noises about wanting such a thing. Obviously, such a plan would have to get through Congress first, and given Trump’s other plans to massively reduce taxes, it makes you wonder where that money will come from (other than massive deficits). But perhaps some of that would be in the form of major federal assistance, which the State of Wisconsin could use instead of having to come up the revenues themselves.

But that’s at least a few months off, and in addition to being ironic (since GOP posers usually don’t like the Feds helping out their budget crises…at least in public), isn’t something that should be counted on as the 2017-19 Transportation Budget is discussed.

Which means the $880 million hole between wants and projected revenues is going to have to be closed somehow, and living in Fantasyland and wishing the problem away isn’t going to do it.


  1. Is this just more (coordinated) noise to set up a pretend deficit that Scotty can "solve" when he runs again in 2018?

    1. I think you're right.

      It's a purpose built crisis - they cut taxes, boosted borrowing and made no changes as the gas tax revenues declined. Now they're standing around trying to look shocked there's a shortage.

      The only question now is where is the hammer falling? I'm thinking the state does away with the rest of its WRS obligation and moves to a very parsimonious self-insurance structure for state employees - administered for a hefty fee by some patron's outfit of course.

    2. Transportation Fund is in a separate area of the budget. Unless they funnel a huge amount of General Fund money (which we don't have), this is a separate budget problem.

      Now what Jeff says may well be part of the way to "fix" the General Fund concerns, especially with revenues falling short again, but that's a different deal than the Transportation Fund deficit Vis is talking about

    3. Given the proper rationalization, I think they could get away with a large transfer of cash from GPR to Transportation. They'd probably even use the argument raised by that other Jeff later in this thread about Jim Doyle raiding transportation to justify it.

      "Hey! Diamond Jim took money from Transportation. Certainly we should be able to put it back!"

      As long as the cash comes from the right pockets of course - teachers, the UW, the DNR, poor people . . . perhaps even Medicaid block grants if Paul Ryan finally gets his way. As long as they take from the scapegoats, there probably won't be much in the way of political consequences.

  2. Adults are in charge now, we'll get it solved. Not like Doyl and the Democrats stealing $1,3 billion when you clowns were in charge.

  3. "The adults are in charge"? These dingbats have been in charge for 6 years and the Transportation Fund deficit has worsened each year. WTF are you talking about, Bagger?


    "Under provisions of the 2013-15 biennial budget (Act 20), the total gain to transportation
    Page 2
    programs will be $413.7 million for the biennium, consisting of $200.0 million in bond principal issued for the Zoo Interchange reconstruction project and $213.7 million in ongoing and one-time transfers from the general fund. [Of the transfers from the general fund, $9.0 million is an estimate of amounts to be transferred under a provision of the disaster damage aid program, based on road disaster costs associated with storms occurring in 2011 in northwest Wisconsin. The total transfer could vary from this amount, depending upon applications submitted by affected governments.

    After several biennia in which there was a net loss to transportation programs associated with fund transfers, budgetary measures adopted in more recent biennia have reversed this loss. With the provisions adopted under Act 20, the 12-year, cumulative total change is a net gain to transportation programs of $313.6 million. "

    And since that was published 2 years ago, we've thrown in around $77 million in cash and borrowed another $175 million in General Fund dollars, so add another $252 million there, to push the total to $565 million RAIDED from schools, medical care, and other everyday needs.

    Why do you run your stupid deplorable mouth on people like me who actually know stuff? This is why you have a dead-end life where you keep repeating disproven garbage and make an ass of yourself outside the Bubble.

    The reason why? Because YOU DON'T HAVE THE SACK TO ADMIT FAILURE AND LEARN. So you keep losing, and take it out on people like me that didn't peak at age 18.