So how might we fix all those Scottholes?

As the Wisconsin state budget debate heads toward a conclusion, the toughest choices will be in Transportation. Not just in what to fund at the DOT, whether something should be done to increase the amount of money that's available, and how you may want to do so.

Let's start with where we are. The Legislative Fiscal Bureau said earlier this month that WisDOT would have a little more money to play with under the current transportation system, as people are driving a bit more than expected.

Based on this office's review of motor vehicle fuel tax collections to date for 2018-19, and the economic forecast for fuel consumption for the two years of the 2019-21 biennium, net transportation revenues under current law are expected to be higher by $10.0 million in 2018-19, $7.9 million in 2019-20, and $4.7 million in 2020-21. These additional revenues are entirely attributable to higher projected motor vehicle fuel tax collections in 2018-19 compared to the administration's estimate. Under the administration's estimate, fuel consumption and revenues were projected to increase by 0.4% annually from the 2017-18 level ($1,059.4 million) in each of the three forecast years. Under this reestimate, fuel tax collections are projected to increase by 1.3% in 2018-19 from 2017-18 actuals, and the transportation fund is now projected to have a 2019-21 biennium-opening balance of $97.1 million. Motor vehicle fuel tax collections are then projected to grow by 0.2% 2019-20, and 0.1% in 2020-21.

That’s nice, but it’s still only an increase of $22.6 million. If you look at what Evers’ proposed budget wants to spend in state money for DOT road investments, that’s not going to be nearly enough.

Proposed state-funded DOT increases in Evers budget
State Highway Rehab +$380 million
Zoo Interchange North leg +$50 million
General Transp Aids to Local Govts +$66.2 million
Transit Aids to Local Govts (all) +$31.9 million
Harbor Assistance +$13 million
Discretionary Local Road Grants +$1.9 million
TOTAL INCREASES +$543.0 MILLION

Theoretically, Evers could borrow $520 million to make up this difference, or pray for a massive infrastructure package that gives a ton of money down from DC (STOP LAUGHING!). But neither seems likely nor worthwhile to expect, and unlike the last guy in the Governor's Office, we shouldn't count on it happening to bail us out.

That’s especially true with the borrowing part, since Evers wants to reduce the amount of borrowing from past budgets. $338 million in borrowing is proposed over the 2 years of the budget (down from $402 million in the last budget), and you’d have to add the $520 million on top of that if you didn’t fund it with tax/fee increases. Given that the costs to pay off DOT debt go up by $68.1 million for the 2019-21 budget vs the current one, adding a ton more of debt isn’t a good plan.

So how would we come up with the extra money to pay for these items? Let’s look at what the Legislative Fiscal Bureau has to say about it, and get an idea of what would have to be passed to pay for these added investments.

Annual revenue increase for various DOT options
Gas tax increase of 5 cents/gallon +$174.2 million
Diesel tax increase of 5 cents/gallon +$40.3 million
Resume gas tax indexing (w/no other increase) +$23.0 million
Increase regular registration fee by $10 +$37.3 million
Increase light truck registration fee by $10 +$10.5 million
Increase heavy truck registration fee by 10% +$13.1 million
Increase fee for vehicle titles by $5 +$8.3 million
Increase renewal of driver’s license by $20 +$12.7 million

Now let’s look at what Evers wants to do out of those choices over the next 2 years.

The reason the numbers are smaller in 2019-20 is because many of these items would take a few months after July 1, 2019 to get in place. But even with less than 2 full years of increases, this $623.8 million would cover those proposed increases in DOT funding mentioned earlier.

We also know that the DOT Fund will have another $87.7 million that Evers’ budget didn’t count on. That’s because the Wisconsin GOP voted to continue a transfer of a portion of General Fund money going over the Transportation Fund in their opening mega-motion, which is something Evers wanted to get rid of.

So the gap isn’t as large to cross, but there’s still a lot of Scottholes to patch over these upcoming years, and if you read the recent column from Steven Walters of Wisconsin Eye about what the GOP’s legislative leaders want to do to pay for the roads, both want to come up with something to add to the Transportation Fund. But the question is how that will be done.

Walters says that Senate GOP leader Scott Fitzgerald told him this month that he and his colleagues might go along with Evers’ proposals to raise the title fee and possibly the heavy truck fee. Fitzgerald also said that raising the fees for everyday Wisconsin drivers from its current $75 to $85 might be in order.

After that, Walters says that Fitzgerald also had an idea that would draw on the state’s one-time $1 billion surplus.

For the first time, Fitzgerald also floated this trial-balloon idea: Using part of an extra $753 million in general-fund taxes expected by mid-2021 to pay for one-time fixes to bridges or highways. The Legislature’s budget office recently forecast $753 million more in tax collections by July 1, 2021. Most of it is a one-time windfall resulting from how businesses paid taxes in the wake of the federal Tax Reform Act.

“There’s an important need to rebuild bridges in this state,” Fitzgerald said. ”There’s nothing that says you couldn’t use that one-time money to build bridges in Wisconsin.”

Huh, I thought the same thing when the LFB reported those extra funds a couple of weeks ago (thanks for reading, Fitz!). It also would clear a backlog of other road projects without putting taxpayers on the line for keeping us costs in later years.

?Walters adds that Assembly Speaker Robbin’ Vos wasn't keen on using that one-windfall for roads, and had different plans for coming up with DOT funds.

Vos was cool to that idea, however. “I am very, very reluctant to take money from our general fund … and have it also fund transportation,” said Vos, who prefers a “user-based fee system.” (yet Vos had no problem with JFC restoring the $87 million to transfer from the General Fund in this budget. Odd…)

Vos then floated his own controversial idea: Lay the groundwork in this budget to collect a future “mileage based” annual registration fee. It would require a vehicle’s owner to report how many miles it had been driven in the previous year, which would determine the annual registration fee.

But, Vos added, “I don’t want to have black boxes in peoples’ cars” that automatically report actual miles driven to state officials.

Other than the silly concern over “black boxes in people’s cars” (does Robbin’ want to do this on the “honor system”?), I don’t think a registration fee based on vehicle miles traveled is a bad idea at all. Given that gas mileage continues to improve, it makes the use of the gas tax less of a steady source of income, and this would “level the field” for users of smaller and/or alternate-fuel vehicles who pay the same registration fees, but pay less gas tax over the course of the year than larger, regular gasoline vehicles will (and I say this as a longtime Corolla owner).

Vos and Fitzgerald are both suggesting some big ideas on DOT funding, but they are far apart from each other, and I wouldn’t be surprised to see budget talks stall out between the two GOP-controlled houses over transportation again, like it did in 2017.

There are no Joint Finance Committee meetings scheduled for next week, and there is a lot to hash out between all three sides of this equation (counting Evers). But be prepared for the debate as it happens, because a lot of ideas are sure to come at us with speed over these next few weeks. We need to know what’s affordable, what’s absurd, and what’s partisan game-playing that has no chance of filling the increasing amount of Scottholes in the state. Because you can bet much of the overall context of available funds and what can/cannot be done will be left out of the public discussion.