Hintz shows there's no highway money left under Scotty's shell game

Just ahead of tomorrow’s debate, Dem Assembly Leader Gordon Hintz has produced an LFB memo that lays out the ways Scott Walker and his DOT spokespeople (hi, Christian Schneider!) have deceived and covered up just how bad things are when it comes to paying for Wisconsin highway projects.

First of all, Walker’s WisDOT was claiming that they had saved a ton of money with lower-than-expected bids (aka “let savings”). But the LFB says the problem is that the current State Budget already counted on saving a lot of money for 2017-19, and cut funding accordingly.

DOT indicates it has realized $167.7 million in savings during the 2016-17 through 2018-19 period (to date). However, of this amount, $130.4 million of these Page 4 savings were already accounted for by the Legislature in establishing the program funding levels under 2017 Act 59. Therefore, while the $130.4 million in project savings did occur, over the three-year period no additional projects will be funded associated with these savings. Rather, these savings were used to reduce the funding levels needed under Act 59 necessary to fund the same level of program work over the three-year period. As a result, only $37.3 million ($167.7 million - $130.4 million) in program savings are available for advancement of project work in the biennium.

Even worse, the LFB notes that contract costs have come in $19.4 millon above budgeted amounts for the first 3 months of this Fiscal Year, and 2018’s savings total fell more than $11 million short of that goal. Which means that there won’t be the same level of savings to squeeze out when the next budget starts.

The same situation exists for the $70 million that Walker claimed was saved on I-39/90 south of Madison last month. Much of that money never existed in the first place, and unlike what Walker claimed at that press event, the project isn't going any faster than expected.

The Department indicates that it has advanced $70.0 million in major highway development project work on the I-39/90 project between Janesville and Edgerton in the 2017-19 biennium. Although DOT indicates it has realized $77.7 million in major highway development savings during the 2016-17 through 2018-19 period, the program's funding was reduced in 2017-19 during biennial budget deliberations to reflect $48.2 million of these anticipated savings in the biennium. Therefore, it appears that DOT could fund about $29.5 million of the $70.0 million advancement on the I-39/90 project using these the remainder of these savings (as reflected in Table 2, $77.7 million savings - $48.2 million in savings reflected in Act 59). It may be that the remaining $40.5 million required to fund such a schedule advancement ($70.0 million advancement - $29.5 million available) is explained by DOT's comparison of "base budget" project schedules to schedule of those projects Page 5 as funded. The Department also notes that the overall completion date of the mainline portion of the I-39/90 project (excluding the "beltline" interchange in the Dane County) remains late 2021.

Nice try Scotty, but not only do you have to find another $40 mil to pay for I-39/90 between Janesville and Edgerton by June 30, you dishonestly tried to claim those few miles meant the whole project was being sped up when it is not.

On the other side, the Walker Administration is also trying to claim that adding money internally to a project’s budget means savings later when spending comes in less than that amount. The problem is that the LFB says this extra money was never set aside in the State Budget in the first place, so it can’t be “saved.”

Of the $246 million figure referenced by the administration, it appears that the remaining $78.3 million ($246 million - $167.7 million) reflects the Department's reasoning that the "above base" funding level provided under Act 59 (and subsequent budget adjustments) may be used to advance projects as compared to a "base budget" project schedule. However, as discussed earlier, the Act 59 funding level establishes the baseline SHR and major highway development project schedules for the biennium and the use of these funds reflects the level of project work expected to be completed in the biennium.

One place that the state has been helped out in its DOT budget problems is through extra money coming down from DC. Not just in its heavy swapping of federal money for state funding to pay for highway projects last year (as I noted yesterday), but also in redistribution aid, where left-over money from other projects around the country got sent back to Wisconsin.

Subsequent to the passage of Act 59, additional federal funds have been made available to the state highway program. In June, 2018, under a s. 13.10 action, the Joint Committee on Finance approved supplemental program funding of $6.8 million for the SHR program due to the availability of additional federal highway aid in 2017-18. More recently, in August, 2018, DOT received $90.8 million in annual redistribution of federal highway aid (the state's share of any remaining federal highway moneys in federal fiscal year 2018).
Because the state had already budgeted $43.9 million of this amount in its state highway programs during the 2017-19 budget process, $46.9 million of this amount remains and is available to fund additional state highway project costs in 2018-19.

Bottom line- LFB says that most of the “extra money” WisDOT has to play with for highway funding isn’t nearly as much as the $246 million that Walker and WisGOP have been claiming.

Actual “play money”, WisDOT highways 2017-19
State highway savings not budgeted $37.3 million
Federal redistribution $53.7 million
MINUS $40.5 million to pay for new I-39/90 work
TOTAL “PLAY MONEY” $50.5 million

Oh, and LFB notes that the upgrading of several previously smaller, local roads near Foxconn isn’t accounted for in the project highway budget. The $134 million that the Walker Administration decided to dump into that project with no public discussion is on top of the $252 million being spent to upgrade I-94 near Foxconn, and Walker claimed it would come from that $50.5 million in play money.

Since there isn’t enough to take care of all the Foxconn work, it means at least $83 million is going to be cut elsewhere in the state over the next 9 months and/or not be available for when we need even more money for 2019-21. Hintz said that the Governor’s deceptions and foolishness on road funding has to end.

“If Governor Walker worked as hard at fixing our transportation funding crisis as he does covering it up through financial shell games, we may be in a different position today. Transportation used to be a priority that state leaders of both parties invested in because everyone understood the importance of good roads to our economy. No amount of excuses or deception is going to hide the consequences of Governor Walker’s transportation mismanagement. As Governor Walker faces the political fight of his life, his credibility on transportation funding is in worse shape than Wisconsin’s crumbling roads. It appears they just made up numbers.”

“If it wasn’t clear by now, as long as Governor Walker is in office we will never fix our transportation funding crisis. Every day, Wisconsinites drive on the 6th worst roads in the nation; facing extended delays, risking their safety and damage to their vehicles. No matter how many times the Governor holds a roadside press conference, he cannot change the fact that we’re postponing projects and spending nearly double the amount of revenue on debt service as when he took office in 2011 (a number that grew in 2018). This is the perfect representation of a governor more concerned with his political future than getting the job done.”

And as we found out today with a 4th former Walker Cabinet member criticizing Walker to be “politics first, reality second”, this type of flailing incompetence is the hallmark of a Grifter Governor who’s never tried to be responsible in dealing with the state’s problems.