Friday, July 7, 2017

Walker's "have Trump bailout DOT" plan a hypocritical, weak-sauce FAIL

Now that I'm back at home, I have some time to discuss our Fair Governor's absurd FAIL of proposed budget deal on transportation funding.

Let's first look at what Scott Walker proposed (and our media dutifully reported on), and I'll explain how this fits into the big picture of the DOT budget, and in past decisions from Walker.
First, we propose reducing transportation fund supported bonding by $200 million in this budget by using an improved transportation fund balance, project cost savings, and other administrative actions. We believe this can be accomplished while continuing to keep projects on schedule.
That's nice, but none of this is information is particularly new- we found out 6 weeks ago that the Transportation Fund would have $145 million to carry over into this budget, and $101 million at the end of it. Walker is simply going to use up the extra money, draining the DOT Fund's balance to near $0 by the end of 2019, "lower costs" by screwing workers, and perform some accounting tricks. There will be no additional repairs to the roads done beyond what's already in the state budget (which is in itself a cut from what was requested by the DOT), and this would likely mean that the budget hole for 2019-21 would actually become bigger, since there's no more money to carry over there.

Walker also mentioned that the state will stop paying off debt from the Petroleum Inspection Fund by the end of 2019, which would allow that money (collected with a 2-cent-a-gallon tax on gas) to be funneled over into the Transportation Fund. That's nice, but a quick look at the Petroleum Inspection Fund shows that this extra money amounts to around $26 million a year, or $52 million for a biennium. That's not going to do much to reduce a state Transportation Fund with a projected deficit of $1 billion for 2019-21, with more needs to pay for after that.

But it's the other part of Walker's "plan" from yesterday that proved that Governor Dropout is all out realistic ideas when it comes to dealing with the state's ability to fix the roads.
Second, approve contingency bonding for the Southeast Freeway Megaproject program.

Interstate 94 North/South, the Zoo Interchange and Interstate 94 East/West are high profile projects in southeastern Wisconsin. We propose contingency bonding that would be linked to additional federal funding for mega projects. Wisconsin is well positioned to qualify for additional federal funding to help support mega projects.
So this not only asks for a bailout from the Trump Administration and GOP Congress is the form of more federal money, it also then asks the Legislature to approve more borrowing if that money were to arrive. In one swoop, this explodes Walker's earlier talking point of "lower borrowing" and makes Walker look absurdly hypocritical when it comes to taking federal money.

Remember, this is the same Scott Walker who turned down guaranteed money from the Obama Administration to expand Medicaid funding (and instead has chosen to make Wisconsin taxpayers shell out billions more out of their own pockets in the last 4 years). This is the same Scott Walker that turned down hundreds of millions of dollars of federal funding for rural broadband and high-speed rail. But now Scotty wants a one-time bailout from DC to pay for road projects to try to get through the 2018 elections, with no guarantee of future funding being available?

And oh yeah, this is the same Scott Walker who said 30 days ago he backed a Constitutional Convention to force Congress to balance its budget and rein in spending. But now Scotty wants the US DOT to give him (aka SPENDING) hundreds of millions of dollars instead of banking it....when banking the money would reduce our deficit and debt. Hell, Scotty himself ordered $45 million in Wisconsin's transportation fund to be banked so things looked better for this year, instead of actually fixing the roads. Did Gov Dropout think this shameless and obvious hypocrisy wouldn't be noticed?

This is enough to make Walker's plan laughable on its face, but even worse was when we found out how they were planning to get their federal bailout. That information came later on Thursday as part of a memo from the Legislative Fiscal Bureau responding to a request from State Rep. Gordon Hintz. Hintz was asking the LFB "What happens to DOT projects if the state budget is delayed?", and the LFB first explained how federal highway funds can be redirected to other states if there are extra funds lying around, due to other projects costing less than expected, or never happening in the first place.
In August of each year, the Federal Highway Administration redistributes states' unused federal obligation authority (the amount of state highway aid available in any given federal fiscal year). In order to be eligible for receipt of these funds in 2017, states must submit a list of projects by July 19 that shows the state's ability to "obligate" any funds received by the end of the federal fiscal year (September 30). DOT indicates that delays in lets due to a delay of budget passage of three months or longer could limit the Department's ability to obligate federal funds, which could make the state ineligible for some federal redistribution in 2017-18.
So actually, Wisconsin is in danger of not being able to use that extra money if they didn't have a budget in place that showed how they would use those extra dollars from DC.

Bad enough, but here comes the part where Walker's bailout request is mentioned, and where the LFB says it is a very bad idea for the Walker Administration to expect to get anything close to the amount that they want for the bailout.
In an analysis provided to this office, DOT officials indicate that the Department may submit a larger-than-typical request for redistribution funds, totalling $341 million, which they indicate could result in a larger amount of redistribution aid received by the state than in past years. If this amount were obtainable, a delay in the passage of the budget would likely limit the state's ability to obligate sufficient state funds to match this federal amount. However, any expectation of a significant increase to the state's share of this federal redistribution funding should be tempered by the following considerations: (a) in past years, regardless of the size of the state's redistribution request, the amount of aid received has been similar to the state's obligation authority as a percentage of the national total (on average, slightly less than 2% of the national total); and (b) the Department's potential $341 million request may include $211 million of project work related to the southeast Wisconsin freeway megaprojects, which would require a minimum state match of $52.8 million. This match would require $41.3 million more in state funding than is included under the Governor's 2017-18 recommendations for this program.
This catch-22 of Walker's DOT proposal relying on more Federal money but being less likely to get that money because they have no state budget and therefore no money to chip into those projects was noted by WKOW's Greg Neumann and (amazingly) a lobbyist for one of the BubbleWorld "no-tax" RW groups holding up the DOT budget- Wisconsin Manufacturers and Commerce.

Even if WisGOP somehow got the budget together in time to send that $341 million request to the US DOT in 11 days? Recent history shows that Wisconsin might get 10% of that.

Wisconsin's amount redistributed US DOT funds
2012 $29.9 million
2013 $32.6 million
2014 $39.5 million
2015 $36.5 million
2016 $30.1 million

So this means our Fair Governor managed to make himself look economically illiterate, hypocritical, and scared yesterday (Walker later melted down on Twitter with a bizarre whiny tweet that included a can of Miller Lite). And given that Legislative Republicans seemed to respond to Walker's empty pose with at best a shrug, and at worst a "go away", you can expect this budget stalemate to continue well beyond the 1 week it already overdue.

And as long as Republicans continue to operate in a Fantasyland where they're more concerned with sucking up to DC lobbyist Grover Norquist and their campaign donors instead of COMING UP WITH THE MONEY TO FIX THE DAMN ROADS, and maybe working with someone outside of their BubbleWorld of Bullshit, this mess will continue.

1 comment:

  1. Updated with a good report from Greg Neumann on Channel 27 in Madison explaining the problem with Walker's Admin asking for more federal money when they don't have the budget in place.