Tuesday, October 6, 2015

Wisconsin road delays, lack of funding shouldn't surprise

You may have heard that Wisconsin highway needs are getting backlogged, and that there is concern over how to fix that problem. Well, we got an updated look at that yesterday, and Patrick Marley of the Milwaukee Journal-Sentinel gave a decent summary of where things stand in this article from yesterday.

To start, the article reminds us of the needs that are being set aside in the near future, including some major reconstruction and expansion work on Wisconsin’s busiest freeways.
The [D]epartment [of Transportation] announced last week it was pushing off work for two years for five projects: I-39/90 from the Illinois state line to Madison, Highway 151/Verona Road in Madison, Highway 10/441 in the Fox Valley, Highway 23 between Fond du Lac and Plymouth, and Highway 15 near New London in Outagamie County.

Work on the projects in many cases is underway. The work will continue, but at a slower pace that will delay completion for two years.
So the Wisconsin Transportation Development Association (aka the Road Builders) got the University of Wisconsin-Whitewater to do a study on the state’s infrastructure needs and its costs. Here’s the passage that has gotten a lot of attention in recent days, where a price tag was put on the costs of inaction.
Wisconsin construction inflation has averaged around 5% a year since 2000, while the CPI has increased on average at a rate less than half of that.

To put this into perspective, what a dollar could buy in construction materials and services in 2000 costs almost $2 today. On the consumer side, it would take around $1.40 to buy the same $1 worth of goods and services as in 2000.

Accordingly, construction inflation has a significant impact on the state transportation budget and the cost of specific projects. Consider the four Major Highway Projects currently facing a delay of two years or more—I-39/90 Madison to Beloit, Verona Road in Madison, STH 23 from Plymouth to Fond du Lac and USH 10/441 in the Fox Valley. The cost to complete these projects is $1.76 billion so any delay is not simply “hitting the pause button.”

Looking at average annual construction inflation over the last fifteen years and the remaining amount to be spent on these projects, TDA estimates each year of delay could increase the total cost of the projects by $80 million.
Obviously, pushing these projects back by 2 years = $160 million.

In the 2015-17, the State Legislature reduced Gov Walker’s plans to borrow $1.3 billion for state highways and related projects in the 2015-17, knocking that figure down to $500 million guaranteed, with another $350 million that could be released if approved by the Legislature’s Joint Finance Committee. Interestingly today, Walker asked Senate Republicans to allow that $350 million in new borrowing to go through, in order to reduce some of the backlog. But a concern with that is not only the extra debt, but that the $350 million would be borrowed with the General Fund, and not the Transportation Fund. This type of General Fund borrowing for DOT work has become more common since 2009, which is why the General Fund has paid hundreds of millions of dollars more into the Transportation Fund than Jim Doyle ever “raided” to pay for schools in the early 2000s (so take that GOP talking point and shove it up your ass).

But what can we do to stop these projects from being delayed, but also not have to borrow for it? Well, let’s go back to the 2015-17 budget request by the Department of Transportation and use that information from there. You may remember this budget request, as it featured a number of recommendations to raise taxes and fees to pay for projects, but was buried by the Walker Administration until after the November 2014 elections.

Based on that request, an increase of 5 cents a gallon on gasoline and 10 cents a gallon on diesel would have raised $358 million itself over the next 2 years- enough to remove the need for the Joint Finance Committee to approve the extra borrowing.

Another item in that request was the “new car tax”, identified as “a fee for new passenger vehicles….calculated at 2.5 percent of the manufacturer’s suggested base retail price (MSRP), exclusive of destination charges.” This option would raise $378 million, but keep the annual registration fee for these vehicles at $75 each.

There was another item in the DOT budget request that would have boosted the current transfer of 0.25% of General Fund taxes to the Transportation Fund up to 1.0%. Using the finalized amounts in the signed state budget, this would have raised $114 million in year 1 of the budget and $118 million in year 2, for a total of $232 million. But that option went out the window due to subpar revenues that have resulted from years of Walker/WisGOP tax cuts. Remember, this budget cut $250 million to the UW System, barely gave any increase at all to K-12 schooling, and has $1.1 billion in lapses built into it to artificially reach “balance,” so there wasn’t more money that could be sent out of the General Fund to pay for transportation needs.

As frequently seems to happen in Republican administrations in both DC and in statehouses, the inability to admit that revenues are a needed factor in government operations is coming back to bite in the long term. Striking a “no-tax” pose for Grover Norquist, the Koch Brothers, and the dopes who vote in GOP primaries are now leaving the state in a major hole, and not taking action will cost even more in both up-front costs, and in added debt.

And things for the upcoming years don’t look any better, because as Marley pointed out yesterday in the J-S, there is no guarantee that future needed actions will be taken.
While the DOT has said the delays will be for two years, they may end up being longer. The DOT's projection assumes lawmakers will inject new revenue into the transportation system in the years ahead. But legislators for years have struggled with finding ways to put more money toward roads, with Walker and some Republicans who control the Legislature ruling out raising gas taxes or registration fees.

The delays on the five projects will likely have a cascading effect that will push off work on future projects, but the department hasn't said what those could be.
Hmmm, seems like to me a simple bump in the gas tax or some other minor fee modification would take care of a lot of these concerns, as the increased revenues would come in year after year.

But why would the Fitzwalkerstanis ever do the sensible thing when they can pose for holy pictures with RW Bubble-Worlders and leave heavier lifting to the Dems when they get back into power in the coming years? After all, we all know that “responsible governing” thing is a liberal plot. So the WisGOPs think they can keep kicking the can down the (pothole-filled) road and hope you won’t notice their poser-driven negligence until it’s far too late.


  1. Unfortunately the gerrymandered districts will keep the GOP in power for far too long. They will use budgeting tricks and lies to keep kicking the can down the road as long as they can. If/when a Democrat does get elected to fix their f'ck up it may only be for one term because too many people will complain that "he/she raised my taxes."

    A few months ago the Borowitz Report in the New Yorker (May 12, 2015) had a story about how the world was endangered by a strain of "fact resistant humans", it was intended as satire, it will probably turn out to be true.

  2. Today, in other WIGOP short-sighted idiocy:
    "Today, Rep. Adam Jarchow (R-Balsam Lake) introduced LRB 3257/1 which would eliminate 70 of the 102 new auditor positions created at the Department of Revenue (DOR). We recently learned that, in the last biennium, the State collected $71 Million more than the Legislative Fiscal Bureau (Fiscal Bureau) projected. As a result, we will start the 2015-16 biennium with $71 Million more than anticipated a few months ago when the budget was signed into law. It was our understanding that Fiscal Bureau projects each additional auditor position will result in an additional $1 Million in revenue over the biennium. Thus, as a result of the unanticipated $71 million in revenue, at least 70 of the new auditor positions are not necessary."

    This one hurts my head, but thought you'd get a kick out of it.
    Hey, the hole at the end of last yr was slightly less deep than we thought it would be! Guess that means we don't need to staff DOR going forward!! We won't ever need to collect taxes again!! (?)

    1. I saw that too. This is the same dickhead who wanted to ban the Audit Bureau.

      Not only is his comment dead wrong, becausr the LFB hasn't changed revenue estimates for the next 2 years, and assumes slower growth may keep those numbers the same, even with the extra $71 mil to start with. There's one other problem

      THE BUDGET RELIES ON THAT EXTRA REVENUE FROM AUDITORS IN ORDER TO BALANCE. You get rid of them, you have to repair the budget due to the lower revenues.

      That's impeachably ignorant, and hopefully the Dems have someone in Polk Co to hammer that bum next Fall.