Sunday, January 12, 2014

Walker plans to fill Transportation Fund with...$200 registration fee?

Good to see a discussion of Transportation funding find its way into an in-depth article from the Journal-Sentinel's Patrick Marley. And while it's buried near the end of the article, I'm going to bring this bit of news up to the front.
The transportation fund will start the next two-year budget cycle with a deficit of about $750 million. That is because the governor and lawmakers relied on one-time funding — much of it borrowed — to help pay for the Zoo Interchange and the north-south portion of I-94 in southeastern Wisconsin.

About $600 million more will be needed from mid-2015 to mid-2017 to pay for those two projects alone.
When you combine it to the $725 million structural deficit we're in for the General Fund, it now means the state is facing overall budget deficits near $1.5 billion with the next budget that have to be filled. So much for the idea that the budget is "balanced" under Walker and WisGOP.

So how did we get here? A look at the LFB's rundown of the Transportation Fund shows that there is over $250 million being transferred from the General Fund and Petroleum Inspection Fund for this current budget, and that can't be counted on to continue. And of course, if this transfer from the General Fund DOES continue, then it blows up the General Fund deficit even higher, so good luck trying to do further income tax cuts when the budget already isn't balanced, Governor.

In addition, the 2013-'15 Walker/WisGOP budget borrows nearly $1 billion for transportation projects, with those debts having to be repaid in future years. $200 million of that will be on the Zoo Interchange project, and it's not like that project will go away on July 1, 2015, so that'll have to continue to be paid for. It's nice that this administration believes in paying for some infrastructure needs (who says they're not Keynesian? The Road Builders sure don't), but you do have to pay for these things in some way.

Well, how do we close this Transportation Fund deficit? Marley talked with DOT Secretary Mark Gottlieb, and the Secretary fleshed out some trial balloons that discuss how a second Walker term might finance some of these projects, including some of the ideas mentioned in the State's Transportation Finance and Policy Commission.
Lawmakers have rejected new funding sources for roads in recent years, but Gottlieb said they are becoming more aware of the need to invest in infrastructure.

"I detect much more willingness in general to discuss this issue because there's a growing recognition of what those needs are (for transportation)," he said....

Funding roads with new revenue would face steep challenges. In a recent interview, Assembly Speaker Robin Vos (R-Rochester) was cool to the idea of raising the gas tax or implementing new vehicle fees, even if they were part of a measure that reduced the overall tax burden.

Instead, Vos wants the state to start tolling on highways.

"I have consistently been a supporter of tolling," Vos said. "As people drive, they should pay. It makes perfect sense."
So the Assembly's GOP leader wants us to be like the FIBs and toll, eh? Of course, to do so, you'd need to build new lanes on the highways (aka "HOT" lanes, where you pay to get access to them), because current federal law doesn't allow a toll-free state like Wisconsin to put tolls on existing lanes (we'd have to give back a lot of federal highway funds, and because it's not passenger rail, the Walker folks won't dare do that).

So what do you think about the issue, Governor? Gottlieb is quoted in the article as saying he'll ask Walker for the TFPC's request of $6.8 billion in additional funds over the next 10 years. But the way they plan to pay for it appears to mostly involve trust in the magical thinking of most supply-siders that somehow the revenue will just be there.
Walker in the past has embraced hot lanes, but Gottlieb ruled the idea out for now because he said there are no road projects under consideration where they would be feasible. Installing the infrastructure for the tolled lanes would be costly and traffic levels would not be at a level where enough drivers would choose to use them, Gottlieb said.

Gottlieb declined to weigh in on other specific funding ideas. In its report, the commission backed raising the gas tax by 5 cents, to 37.9 cents per gallon; charging drivers 1.02 cents per mile they drive; and increasing registration fees for commercial vehicles by 73%.

The Department of Transportation will host forums around the state this spring to get the public's input on transportation revenue to help him refine his recommendations to Walker, he said.
And don't count on increased driving to raise gas tax revenues for the fund, especially when US PIRG's recent reports show the Madison and Milwaukee areas to have the 2nd and 3rd largest DECLINES in vehicle miles driven per capita.

So with gas usage not going up, the only option outside of tolling hot lanes and raising the gas tax becomes raising registration fees for vehicles to nearly $200 (using the Marley's article's estimate of $120 per typical driver to bring in the $680 million a year in revenue). Good luck selling that one, guys.

If Sec. Gottlieb and Gov. Walker's staff are searching for ideas that won't be DOA with rational voters, they are more than welcome to read what I had to say on the subject a couple of weeks ago. Not that I think they'll follow any of these suggestions (too realistic to sell on talk radio), but maybe someone whose administration doesn't want the state to go bankrupt could give it a listen.

Keep your eyes peeled on this issue, it's probably more important to our state's economic future than any ALEC-based "tax reform". And if the Burke and Vinehout campaigns are smart, they'll hammer Walker for putting this state deeper in the hole for its many transportation needs.


  1. Here's where $200 million of Zoo Interchange funding can come from. In cash, not debt.

    ...and that is but one reason why having Kathleen Vinehout for Governor would be a staggeringly good idea.

  2. Well, if this administration insists on not raising taxes, you can forget about paying cash for the Zoo Interchange project.

    And thank you Geoff, for proving who the real fiscal conservative is for 2014- and it ain't Walker

    1. He won't raise taxes, just users fees or whatevwer semantic smokescreen he thinks will be ignored, denied or forgotten.

  3. What you forgot is that Wanker repurposed federal trans money to "balance" the budget.

    1. They generally don't count federal money as part of the Transportation Fund (it's part of paying for projects, but not part of the fund itself).

      That being said, it is interesting that Walker never complains about "uncertainty" over the amount of future federal highway funds like he does with Obamacare and expanded Medicaid. And the highway bill ends at the end of 2014.