Monday, December 5, 2016

The 262 WisGOP solution to the DOT deficit- screw workers!

With tomorrow’s public hearing at the Capitol on the 2017-19 budget request from the Wisconsin Department of Transportation, it’s a good time to examine the picture on the tough choices we have going forward, and to have a heads-up on the regressive and foolish solutions some elected may have to solve this $880 million deficit.

First off, let’s review where we are at. Here’s how the Legislative Fiscal Bureau spelled out the DOT highway spending situation as reflected in the 2017-19 budget request. The LFB also added up the amount of highway spending cuts that had to be made to limit expenses to where they were.
The attached table indicates that the funding for the state highway improvement program totals $2,835.3 million for the 2015-17 biennium. This level of funding is less than the amount that DOT indicated during the 2015-17 budget deliberations was needed to keep the Zoo Interchange project, funded from the southeast Wisconsin freeway megaproject program, and four major highway development projects, funded from the major highway development program, on their projected completion deadlines. As a result, the 2015-17 budget level for these programs will result in delays in these projects, as well as delay some projects in the state highway rehabilitation program.

Under the Department's budget request, funding for the state highway improvement program would total $2,386.0 million. This amount would result in $449.3 million less in total program funding for the state highway improvement program compared to the funding provided in the 2015-17 biennium, which would represent a 15.8% decrease. Given the size of the reduction in funding available under DOT's request for the southeast megaprojects and majors programs as compared to the current biennium, there would be additional delays to currently enumerated projects in these programs, as well as delays in other planned, future projects.
So those are the cuts we are looking at in the DOT’s “no-tax, no-fee” budget request, which was done at Gov Walker’s behest.

TeaBagging State Senators Dewey Stroebel and Chris Kapenga took the opposite approach, and asked the Legislative Fiscal Bureau what kind of gas tax increases we would need to fund DOT needs without having to borrow more. The LFB response was broken down into 2 scenarios- Scenario 1 had all $1.8 billion in DOT needs funded over the next 2 years, and Scenario 2 had the $462 million in borrowing proposed in Governor Walker’s budget replaced by gas tax increases.
Under both scenarios, as shown in the "Increase Transportation Fund Revenue" section of Table 3, the funding gaps would be eliminated by increasing the motor vehicle fuel tax rate. The motor vehicle fuel tax revenue estimates in this memorandum assume an effective date of August 1, 2017. With regard to Scenario 1, increasing the motor vehicle fuel tax rate by 28.1 cents to 59.0 cents per gallon would result in an estimated $1,795.7 million in additional transportation fund revenue in the 2017-19 biennium. Similarly, for Scenario 2, increasing the motor vehicle fuel tax rate by 7.2 cents to 38.1 cents per gallon would result in an estimated $460.1 million in additional transportation fund revenue in the biennium. This estimated revenue would be appropriated to the state highway improvement program to fund these scenarios. Any additional revenue collected beyond the amount required to fund each scenario would accrue to the balance of the transportation fund.
A positive to increasing the gas tax is that the state wouldn’t have to pay another $29 million to pay back the added debt in the 2017-19 budget, as well as the hundreds of millions that it’ll cost to pay back the rest of that debt in future budgets. But suburb Sens. Stroebel and Kapenga are yapping about how there should be NO need for increasing taxes at all, and instead they argued that highway spending should be cut further.
Senator Chris Kapenga (R-Delafield), who requested the memo, said, “As one of the first CPA’s in history elected to the state legislature, I consider it my job to analyze numbers and protect our taxpayers when government comes asking for more of their paycheck. We are already in the highest tier in the nation for the gas tax, and our total transportation revenues have increased every year for the past 20 years. We don’t have a revenue problem; we have a spending problem. That’s where the focus needs to be, which is why I support Governor Walker’s plan, where taxes are not raised.”

“If the #JustTaxIt coalition get their way, Wisconsin’s tax climate will move in the wrong direction,” echoed Senator Duey Stroebel (R-Cedarburg). “Some have accused the Governor of‘drawing a line in the sand.’ If that is their definition of keeping campaign promises and sticking to conservative principles, they have been Madison politicians far too long. Senator Kapenga and I come from the private sector where tough decisions are made daily. Rather than produce dog and pony show social media posts, I hope the #JustTaxIt coalition will soon release their specific plan.”

(Side note- I love how CPAs and “small business owners” think they’re the only people on the earth that understand taxes, spending and budgets. All these people know how to is to game the tax system to lessen revenue, and they don’t have a damn clue about the economic benefits of paying good wages or making government investments. That cluelessness and arrogance probably helps explain why they chose their career paths in the first place).

Well, if it’s spending cuts the suburb boys want, then I say we should cut off any expressway resurfacing or repair for I-94 in Waukesha County as well as stop work on the Zoo Interchange and I-41 and I-43 north of Milwaukee, since those are the projects that residents in their districts will be most affected by. And if state funding of local highway maintenance needs to be cut anywhere in the state, then start in the WOW Counties. Step up or shut up, guys, because many of us are tired of subsiding your wasteful lifestyle in Sprawlville.

Of course, that’s not what these dingbats really want to do. They think they can keep on building and avoid tax increases by getting “savings” via cutting wages of the people who work on the highways, along with cutting the amount of projects. Less projects and less pay, now THAT will grow an economy! (excuse me, I have to slam my head on my desk. )

Yep, that’s the WisGOP Bubble World Wing’s plan- screw workers and unions even more, as outlined by Brookfield State Rep. Rob Hutton in a letter he sent to other GOP legislators today.
With a challenging upcoming biennial budget, which will potentially include significant investments in vertical and horizontal infrastructure, we have to continue giving taxpayers a voice by finding ways to fund projects as cost effectively as possible. Eliminating the prevailing wage requirement on all state funded projects will help accomplish this goal by removing archaic government formulas that artificially raise the cost of construction. This would open up projects to more competition, allowing for different designs and techniques that can be considered at lower costs.

Paired with prevailing wage repeal, I will be introducing legislation to reform project labor agreement (PLA) laws. PLA requirements serve as another barrier to free, open markets that promote competition and the best services for the state. While each PLA law is different, examples of the usual restrictions require a construction project to be awarded only to contractors and sub-contractors that agree to:

·Only hire employees from the local union hiring hall, even if the company has employees who are not members of the union.

·Pay into the union pension fund, even though its employees may never receive a union pension benefit.

·Recognize unions as the representatives of their employees on that job.

·Use the union hall to obtain workers.

·Obey union apprenticeship and work rules.
See, in 262 WisGOP Land, only campaign contributors and the “business-owning class” can join forces as a group to better their situation. You people that actually WORK? You’re on your own, pal.

Keep an eye on all of this going forward, not just the continuation of the War on Workers, but also as to whether the GOPs in the Legislature choose borrowing, taxes, or more potholes as their path over the next two years. And Dems shouldn’t give these guys any cover in trying to solve the problem that WisGOPs have inflicted onto themselves and the state’s motorists.


  1. It all seems too unlikely to believe...GOP going against the road building industry? Sure, they're starting with the underlying unions, that's no surprise, but this seems to be a strange tactic.

    Cutting those things mentioned probably won't actually lower the overall cost of any given project anyway. The construction companies will still just have a healthier profit margin.

    Yet another divide and conquer, all the way down to infrastructure. Surely we'll rue the day we all had to start hating the people slinging iron or pouring concrete...right?...right?!?

    1. Look below. Some suckers will take a ride on the slide all the way down.

      Vos pointed out that gutting prevailing wage would only save around 1.5% anyway, and the lack of wages and economic activity probably depresses revenues so there is little overall change, other than standard of living going down for people who actually work.

      But hey, when did GOPs ever care about improving things for someone who works a real job and has to pay their bills every month? They just kick down at "others" instead

    2. This is where it gets interesting. Vos, as a member of the Republican Party, has never in the past shown any concern of the sort suggested by his rebuttal. So, now what are we to believe...What you say today or what you (didn't) do in the past. Actions speak louder than words...

      Sadly, in the absence of any real debate and false choice, even choosing what appears to be the higher ground here will probably result in something worse down the road (is that the "it doesn't matter, guess I won't vote" cynicism they're trying to sow?).

  2. No Jake, you progressives just want to use opm to pay better wages. I'm sure you aid prevailing wage when you built or up-dated your house. I'll stand with Dale and Duey before a little sniveling bureaucrat that has never done anything but suck off the government tit.

    1. What's wrong with better wages? Other than that, I need a translator for your dead-end, resentful gibberish.

      You know I only print your stuff to clown you, don't ya jeffy? But you're needy enough to keep whining here during the work day

  3. Iowa, another RTW state, also got rid of the prevailing wages, their road building costs per mile are much higher than Wisconsin's!

  4. I applaud Sen Kapenga on his long overdue recognition that the Wisconsin road system is unsustainable in the long run and look forward to his proposal for a transportation system which will not cost more each year.

    A decent question for the CPA Senator: What happens to the cost of debt service when you borrow money without any expectation of it resulting in higher revenue? It's just a backdoor deferred tax or an enforced cut someplace else.

    Is it possible that this is part of a long term strategy to load up on debt service to enforce service cuts down the line? Drown the beast rather than starve it?

    I don't like thinking like that, but it would make sense of some things.