Thursday, January 26, 2017

DOT Audit double-whammy- Walker/WisGOP overspending AND having roads fall apart!

Overnight, Gov Walker suddenly announced that he couldn’t make taxpayer-funded campaign appearances at several rural schools around the state because he had allegedly come down with a cold. I found that....interesting.

And around 9:15 am, my suspicions were confirmed, and we found out the real reason Gov “Unintimidated” wasn’t feeling well.
The Wisconsin Department of Transportation significantly underestimated the costs of major highway projects and did not do all it could to manage expenses, an audit [from the Legislative Audit Bureau] released Thursday shows.

The DOT underestimated cost estimates for 16 ongoing major highway projects by a total of about $3.1 billion and did not adequately account for the extent to which inflation and unexpected expenses could contribute to cost increases, the audit found.

Costs for 19 completed projects exceeded estimates by $772.5 million, the audit found.
Oops! Sorry about that, taxpayers!

Among the big misses in the $3.1 billion of underestimation was the Highway 41 upgrade between Neenah and De Pere, which was estimated at $430 million in 2003, but whose cost has ballooned to $1.4 BILLION. In addition, Highway 10’s improvements between Appleton and Marshfield more than quadrupled from its 1989 enumeration- going from $125 million to $547.4 million.

There were also exploding costs on projects that had been set aside, planned and started during the 5 years of the Age of Fitzwalkerstan, including the I-39/90 expansion between Madison and the Illinois state line (from $715 million to $1.2 billion), the Verona Road reconstruction on the southwestern edge of Madison ($150 mil to $283.3 million), and Highway 10/441 in Appleton (from $390 mil to $482 mil).

The LAB says most of those overruns happened because the DOT claimed at the time that they could do these jobs for relatively cheap, and didn’t account for contingencies.
At enumeration, DOT did not sufficiently take into account unexpected cost increases on major highway projects. We examined the four projects enumerated in 2011 in order to determine the extent to which estimated costs increased after enumeration, other than as a result of inflation. According to DOT’s semiannual reports, as of August 2016 unexpected costs accounted for:

§$362.5 million of the $485.9 million increase in the cost estimate for the I-39/90 (Madison to Illinois) project, or 74.6 percent;

§$101.0 million of the $133.3 million increase in the cost estimate for the USH 18/151 (Verona Road) project, or 75.8 percent;

§$50.0 million of the $92.0 million increase in the cost estimate for the USH 10/STH 441 (County Trunk Highway CB to USH 10) project, or 54.3 percent; and

§$12.0 million of the $21.0 million increase in the cost estimate for STH 15 (STH 76 to New London) project, or 57.1 percent.
The LAB mentions that underbudgeting for current projects drives up costs in later years, because other projects fall behind schedule, and require a lot more money to fix later on.
Although accurately estimating actual inflation and determining a contingency amount for a project is challenging, DOT should examine previously enumerated projects and determine why those projects increased in cost after enumeration and assess why its cost estimates did not anticipate the total costs of these projects. Knowing this information can help it to determine more-accurate cost estimates of future projects. At enumeration, DOT should provide the Governor and the Legislature with cost estimates that presume the actual inflation associated with projects will likely be higher than CPI-measured inflation and that include more-accurate contingency amounts. Doing so will allow the Governor and the Legislature to know with greater certainty how much projects will cost and will allow DOT to plan future project work that can be completed with program funding that it presumes it will receive in future years.
And while the billions in cost overruns have received the most media attention from this LAB audit, there’s another key part that should be pointed out, which is that Wisconsin’s local and state highways have been deteriorating while Walker and WisGOP have been in power. Sure, the big-cost major projects have allowed the state’s heavily-traveled “backbone” highways to stay relatively up-to-snuff, but everything else has gotten worse since Walker and WisGOP gained control of state government in 2011.

Non-backbone highways in “good” condition
2011 48.5%
2015 35.9%

Non-backbone highways in “fair/poor/worse” condition
2011 21.6%
2015 40.0%

FHWA “Condition of State Highways” 2014
Amount of highways in good condition
Ind. 75.5%
Ohio 75.4%
Mich 73.8%
Ill. 66.1%
Minn 64.6%
U.S. 63.4%
Iowa 55.3%
Wis. 32.2%

Amount of highways “Not Acceptable”
Ohio 0.7%
Ill. 0.9%
Ind. 4.4%
U.S. 5.3%
Mich 6.2%
Wis. 9.1%
Minn 11.6%
Iowa 15.0%

And in contrast to WisGOP’s refusal to raise revenues for its roads, Michigan and Indiana raised their gas taxes at the start of this year, and Iowa raised its tax by 10 cents a gallon in 2015 to help deal with their substandard roads. Minnesota Governor Mark Dayton also wanted to raise that state’s gas tax in 2015, but the combination of Minnesota’s $1 billion + budget surplus and a lack of support in the Legislature ended that idea (although Minnesota’s Corn Growers association just called for a 10-cent-a-gallon increase ).

So the moves in other states mean we are likely going to be even further behind our Midwestern neighbors now and in future years. And that won’t change as long as Governor Walker and the Wisconsin GOP continue to care more about satisfying DC lobbyist Grover Norquist’s “no-tax, no-fee” pledge than the state’s economic competitiveness.

I keep going back to this Wisconsin State Journal cartoon from Phil Hands, and it continues to be true. Maybe this was what Scotty was dreaming of today, as he hid under the covers at the Governor’s Mansion while he was “fighting off his cold.”


  1. PS- Taking a page from the Trump playbook Scotty hides from the media and tweets from under the sheets!

    "Democrat critics ignore the fact that they were in office when Governor and Legislature raided $1.4 billion from the transportation fund."

    Uhh, NO. PUT THAT TALKING POINT DOWN, SCOTTY. To review, folks.

    Money taken from Transportation Fund to Gen Fund 2003-2011 $1.4 billion

    Money borrowed by Gen Fund for DOT Projects 2003-2011 $1.07 billion

    Money borrowed by Gen Fund for DOT Projects 2011-2017 $486 million

    Cash transferred from Gen Fund to Trans Fund 2011-2017 $446 million


  2. You sure called that one, Jake!

    1. Not sure what I called, but it's not like it's exactly hard to figure this one out. Apparently Scotty was so racked up by the cold that he hopped in a plane to DC within 48 hours and hung out with Trump, Reince, and Pence.