Delayed budget = delayed DOT work and schools still hurting

While Wisconsin state government is still running despite no official state budget, that doesn’t mean there aren’t problems cropping up. A clear example of that came from this report in Monday’s Milwaukee Journal-Sentinel that said there will be a slowdown on the state’s largest highway project.

As Gov. Scott Walker seeks to speed up work on I-94 south of Milwaukee, his administration is putting the brakes on some of the work for the Zoo Interchange because of a lack of funding…

Last week, the state Department of Transportation pulled back on bids for work on the north leg of the Zoo Interchange for sewers, a pedestrian path, detention pond and noise barrier. The work was expected to cost $8 million to $11 million.

DOT officials did not say how much the delays could push back the overall project, which is supposed to be finished in 2020.

The bidding for projects only happens once a month, which means that the next bids aren’t slated to go out until after Labor Day, and likely later than that, since the whole process would have to start over for these parts of the project. This is a direct consequence of the State Legislature’s inability to pass the state budget by the start of the Fiscal Year on July 1. And if it isn’t passed soon, more delays and uncertainties in funding are going to cause more concerns in Wisconsin.

Let’s start with the problems in fixing the highways. You may recall that this memo got some media attention due to the revelation that the Walker Administration was looking for a $341 million bailout from the Trump Administration to help pay for its highway needs (which I described here), but I want to go into the main topic of the memo, which were potential funding difficulties and delays in projects resulting from the budget not being done on time.

Under 20.002(1) of the statures, if the Legislature does not amend or eliminate existing appropriations on or before July 1 of odd-numbered (base) years, the appropriations from the previous fiscal year would remain in effect in the new fiscal year and all subsequent fiscal years until amended. For the 2017-19 biennium, 2016-17 is the “base year,” and any appropriation, if unamended by the Legislature, will carry forward into that biennium at the 2016-17 appropriation level. Any delay in the passage of the biennial transportation budget for the 2017-19 biennium would mean that the 2016-17 appropriations for state funding (SEG) and federal funding (FED) would be the default funding levels for each state highway improvement program component until the budget is enacted. Also, no base level funding exists for bonding, and, as a result, no base amount of bonding would carry forward and be spent in the event of a delay in the passage of a biennial budget. As a result, no additional bonding authority beyond amounts currently authorized would be available to the state highway program until the biennial budget is enacted.

The is where our problem lies, as the Walker/WisGOP budget only allowed for $15 million in actual cash for the “Southeast Wisconsin Freeway Megaprojects” in 2016-17, and borrowed the rest. So when July 1 hit, that area of the DOT had basically nothing that could be spent until a budget can be passed.


This isn't going to change anytime soon

On a related note, the 2017-18 base funding for other “Major Highway Development” in Wisconsin is less than half what Walker had it set for in the state budget. The LFB said in that early July memo that if the budget was delayed into August, that “lets” (bids for work) for several other highway projects in the state would also be delayed and backlogged. Here’s a list of projects in that category that the LFB previously said could be delayed with less funding (which is in the back of this paper).

I-39/90 between Madison and Illinois
US 10-Hwy 441 (Appleton)
US 18-151/Verona Road (Madison)
Hey 15 (New London)

In addition, Walker’s original budget planned to give an increase of $7 million in aids for local streets and roads in both 2018 and 2019. Local governments are going to be setting their budgets in the next 2-3 months, and are already planning which projects they want to take on. If they can’t count on that $7 million to be there, then they will likely play it safe by cutting back on needed projects. So even if those $7 million are in the finalized budget, many places will not use the extra money until 2019.

The same quandary is hitting numerous school districts around the state right now, less than a month before the first day of classes. Note this story from Onalaska that was in the La Crosse Tribune last week.

The school district recently approved a three-tier staffing plan, Superintendent Fran Finco said, with the top two tiers contingent on whether the Legislature passes Gov. Scott Walker’s recommended increases to per-student state aid. While the district has been able to start filling some positions that don’t rely on increased state support, filling other posts, including an instructional coach, social worker and fifth-grade teacher, won’t start until the budget is passed.

With the first day of school only six weeks away, the longer the Legislature takes to pass the budget, the less time the district will have to advertise, interview and screen candidates for these positions.

“Everything is up in the air,” Finco said. “We don’t know whether there will be additional money. We have to budget as if there won’t be.”

Likely there are other schools making the same choices, being conservative on their hiring and services in case next year’s K-12 school spending doesn’t end up at the level that Walker proposed (an increasing possibility given the plans of GOP legislators to expand vouchers and take the money from public schools).
So that means another year of limitations at Wisconsin’s public schools as the first day draws closer. And all we needed to do was to have legislators DO THEIR JOB AND PASS THE BUDGET ON TIME, and many of these limitations could have been avoided.

These delays and consequences of inaction at the Capitol help to explain why another front of conflict opened up between Senate GOP leader Scott Fitzgerald and Assembly Speaker Robbin’ Vos this week, and it may have the side effect of slowing down the rush to jam through the Fox-con.

Senate Majority Leader Scott Fitzgerald said it’s “more important” to get the state budget done, while Assembly Speaker Robin Vos said he thinks the Foxconn bill should be the priority.

Vos added it would be “ideal” if the budget and Foxconn bills could progress concurrently, but Fitzgerald showed no interest in that approach.

“We’re still focused on: Let’s get the state budget done. Let’s get K-12 their funding numbers. Let’s make sure that everyone knows that we’ve got this under control before we try and jump in with both feet on Foxconn,” Fitzgerald said.

Of course, even Fitz admits that the budget won’t be discussed by the Joint Finance for at least another couple of weeks, and then the document would go to the full Senate and Assembly after that. So we’re likely looking at this thing not being official until around Labor Day at the earliest, which means it’s going to be a moving target for schools and local governments as they try to figure out what to staff and what to fix for next year. And it was completely avoidable.