Wait, WisDOT has another funding deficit? At least until the dollars from DC get here

With tomorrow being Tax Day, the Legislative Fiscal Bureau has held off on their typical May revenue projections for Wisconsin General Fund until after they are able to see the near-final numbers from returns for the 2020 tax year. But they have been able to give a projection on the state's Transportation Fund, and due to some recent developments, there are some funds that need to be made up for in order to keep the state's road building plans on track.

The Fiscal Bureau starts the report with good news on the Transportation Fund - increased travel and high levels of recent car-buying (reflected in a big jump in title fees) means that the Transportation Fund should be in better shape on June 30 than originally expected.

At the time of the introduction of AB 68/SB 111, the estimated opening balance of the transportation fund for the 2021-23 biennium was estimated to be $0. This 2021-22 opening balance was the result of a February, 2020, deficit/federal funding appropriation adjustment plan for 2020-21 submitted by the Department and approved by the Committee in March, 2021. This joint plan reduced SEG expenditures from the transportation fund by $172.0 million in 2020-21 and replaced most of these reductions with additional federal funding for that year. Subsequently, using the updated estimates of revenues to, and actual expenditures from, the fund for 2020-21, the ending balance for 2020-21 (the 2021-22 opening balance) for the fund is estimated at $35.6 million.

And LFB says that the trend of higher-than-expected travel and gas tax revenues continues for the 2021-23 biennium, resulting in an extra $27.8 million to play with compared to what the Evers Administration projected in February.

The other revenue sources and debt costs for the Transportation Fund basically cancel themselves out, with a small boost to the ultimate number due to debt costs going down. So with more money coming in and debt going down, how do we end up with a deficit of $32.3 million for the next budget?

Because the GOP-run Joint Finance Committee actually raised state tax dollars going into the Transportation Fund, by rejecting Evers' changes, and going back to the base level budget.

AB 68/SB 111 reduced base level funding for the Department from $2,044.5 million to $1,890.6 million in 2019-20 and $1,958.6 million or by -$239.9 million in the 2021-23 biennium. Much of the base level funding reductions were made to the state highway rehabilitation program SEG appropriation, which the Governor replaced with $278.5 million in recommended general obligation bonding. Under the ASA 1/SSA 1, as amended by Committee actions, DOT appropriations and reserves are at $2,005.0 million in 2021-22 and $2,022.2 million in 2022-23 and at $27.3 million in 2021-22 and $27.8 million in 2022-23 for other state agencies appropriated SEG funding from the transportation fund. These appropriation levels are higher by $107.5 million in 2021-22 and $54.5 million in 2022-23 for DOT appropriations and reserves and by $0.06 million in 2021-22 and $0.05 million in 2022-23 for other state agencies compared to AB 68/SB 111.

Here's a look at the highway building side of WisDOT, which is mostly back to that number on the left.

So now we have no borrowing for roads, and more money than we need for Megaprojects for SE Wisconsin. Obviously, this can be changed as the budget moves forward, either by the WisGOP Legislature, or through more funds coming from the Feds via an infrastructure package. Or maybe it's time to look at ways to add more revenues, so we don't have to cut back or borrow more.

This is more an informational item than any kind of budget crisis, because so much can be changed with funding from the Feds or moving around funds from other sources. But it does show that while it's not the Scotthole-filled disaster that Evers inherited, DOT funding is far from secure and needs to be looked at as the help from DC phases down.