Tag Archives: Transportation

Lawmaker Floats User Fee for Heavy Trucks

Meh. They are still flailing around for more ways to raise taxes instead of controlling the spending. This one is just a tax on businesses.

MADISON – Wisconsin could break a budget stalemate, avoid toll roads and raise more than $250 million for highways over the next two years by using a little-known approach being floated by a key Republican lawmaker.

Wisconsin would join four other states in placing a per mile fee on the kinds of heavy trucks that do more damage to roads, under the concept offered by a member of the Legislature’s budget committee.

In general, the fee or tax could be implemented cheaply — a sharp contrast to the big investment that would be required to implement the toll roads being considered by Republican lawmakers and Gov. Scott Walker.

Rep. Amy Loudenbeck (R-Clinton) said the approach could be paired with spending cuts to help close a long-term funding gap for the state’s road fund.

“I think this could be part of a broader solution as a revenue generator that’s equitable and sustainable,” she said.

Despite its advantages, Loudenbeck’s proposal faces an uncertain path forward at best. Many lawmakers don’t even know about it and a key industry group is not inclined to back it.

Walker Open to Tolling

Heh.

Gov. Scott Walker said Wednesday that he’d consider highway tolls in Wisconsin if they’re collected from motorists entering the state, particularly from Illinois.

Senate Majority Leader Scott Fitzgerald said separately that a highway tolling plan could be a key part of a broader deal for the state’s next transportation budget — a key area of disagreement among Republican Senate and Assembly lawmakers as they craft a 2017-19 state budget.

That disagreement, combined with divisions on how to address taxes and education spending, has put the two houses at loggerheads and stalled budget talks.

Here’s the thing… I’m not ideologically opposed to tolling. The technology is such that it isn’t a hassle and the notion of the expense of roads being paid for mostly by the people actively using them is fine in concept. The problem is that this doesn’t fix the problem of too much transportation spending. In fact, opening up another revenue source just aggravates the spending problem. If the legislature wants to change the funding system to more heavily shift the burden to tolls and fees, I’m fine with that, but only if the overall spending and taxes stays flat or, preferably, decreases. Otherwise, tolls are just another way to get more money out of Wisconsinites to overspend on transportation.

Walker Rejects Splitting Transportation From Budget

Good.

Gov. Scott Walker and Senate Majority Leader Scott Fitzgerald on Thursday rejected an idea put forward by the Republican leaders of the Legislature’s budget committee to take up transportation funding in a separate bill outside the normal budget process.

Sen. Alberta Darling, R-River Hills, and Rep. John Nygren, R-Marinette, said they support the option, which could extend debate about how to fund transportation beyond the July 1 start of the 2017-19 biennium.

It could also change the political dynamics of how a deal on transportation is reached, allowing minority Democrats who otherwise wouldn’t vote for a majority Republican-authored budget to boost one of the GOP factions on the contentious issue.

Here’s what Speaker Vos and others are up to… they want a tax increase for transportation. They know that they will not get that passed through the Republican caucus and Democrats won’t vote for the budget. So the tax increase is DOA. But if they split off transportation from the rest of the budget, they think that they can cobble together the tax-increasing group of Republicans and just enough Democrats get a tax increase passed.

But beyond political concerns, it does not make any sense to split off transportation from the rest of the budget. The whole purpose of writing a budget is to balance priorities against each other within the confines of limited resources. Splitting off a massive portion for separate consideration obliterates the budgeting process.

A rough road

My column for the West Bend Daily News is online. Here you go:

After weeks of speculation and trial balloons, the Wisconsin Assembly leadership released a plan called “Road to a Flat Tax.” The plan was primarily authored by State Rep. Dale Kooyenga and cobbles together some 30 ideas with the promise of fixing the state’s long-term transportation funding issues and cutting taxes.

It has become fashionable in Washington, and now in Madison, to tackle every issue with these massive omnibus bills that are just complicated and opaque enough to provide politicians cover from contentious political issues. The Road to a Flat Tax plan is no different. It packages some truly terrific and transformative proposals with a few policy and political duds with the hope of convincing legislators to pass the package with the excuse that most of it is good.

Let us start with the great parts of this proposal. The Road to a Flat Tax does just that. It would eliminate the state property tax, as Gov. Walker has proposed, and gradually move Wisconsin to a flat 3.95 percent income tax over the next decade. It does so by eliminating and changing several major tax credits and phasing out four of the five tax brackets. Wisconsin would end up with a fair and flat income tax. Wisconsin’s Republicans are not ambitious enough to eliminate the state income tax like seven other states, but a flat income tax is the next best thing.

The Assembly Republicans’ plan also repeals Wisconsin’s prevailing wage law for state projects, which would save taxpayers at least $300 million per biennium, according to a 2015 study by Wisconsin Taxpayers Alliance. The plan eliminates 180 positions from the Department of Transportation, which does not save any money yet, but gives the department more flexibility to reduce spending in the future. It reduces the state’s minimum markup law as it applies to gasoline (more on that later), lowers the gas tax, imposes a moratorium on roundabouts, imposes a fee on electric and hybrid vehicles and eliminates the ability of local governments to enact new wheel taxes.

Then there is the bad part of the proposal. The Road to a Flat Tax includes an intricate change to the way the state taxes gasoline that results in an overall tax increase. For the first time, the state would impose the state sales tax on gasoline. This is estimated to generate about $600 million in revenue over the biennium. In order to offset some

of that increase, the state would reduce the gas tax by 4.8 cents, thus shaving off $278 million of the increase. It would also change the minimum markup law to a mandatory 3 percent markup instead of the combined 9.18 percent. This would save consumers another roughly $50 million at the pump while cutting into the profits of gasoline retailers and wholesalers.

The end result after all of those changes is that Wisconsinites would see a tax increase of about $330 million per biennium. The increase in funding would be directed to paying down Wisconsin’s debt. Bear in mind, however, that funds that go into the Transportation Fund are fungible. Although the tax increase is allocated to debt reduction, that means that the money that would have been spent on debt service without the tax increase will now be spent on current transportation projects.

The tax increase to be spent on transportation has long been the ambition of Assembly Republican leadership and it at the heart of this proposal. Packaging it with a bevy of other tremendously positive initiatives appears designed to pull the tax increase through a reluctant Republican caucus. Rep. Kooyenga should be commended for advancing so many great ideas. Repealing the state’s prevailing wage law, implementing a flat income tax, eliminating the state property tax, and many other parts of the Road to a Flat Tax would be tremendously beneficial for Wisconsinites. But there is no rational reason, other than for political brinkmanship, to amalgamate all of these ideas into a single “take it or leave it” proposal. The legislature should take up each piece of the Road to a Flat Tax as separate bills and then vote on them based on their merits. Good legislation that would benefit Wisconsinites should not be weighed down by legislation that would not pass on its own.

Toll Roads Coming to Wisconsin?

Maybe.

State Assembly Republicans late this week unveiled their biennial state roads budget proposal. One part of that proposal, according to legislative memos, includes a plan to ask the federal government to ease restrictions that prevent the state from implementing toll roads on major Interstate highways.

In the same proposal, Assembly Republicans call for the state to apply for enrollment in two federal pilot programs to study the costs and benefits of tolling and determine whether any major highways in Wisconsin would be suited for toll roads.

State lawmakers involved in the proposal say they’re far from writing any hard plans into the state’s 2017-19 budget to pursue toll roads in Wisconsin, and it’s not clear if the toll roads proposal will gain enough support among state lawmakers to remain part of the roads budget as talks roll out this spring.

Toll roads seem to get floated every time politicians want more money for roads. It’s kind of a “give us more money or we’ll have to create toll roads!” kind of threat. Although many states have moved to install toll roads to help pay for them, Wisconsinites are culturally opposed to them.

Personally, I don’t mind toll roads. The technology has gotten to the point of making the experience virtually painless and I generally support the notion of shifting the majority of the cost for roads to the people who use them. The gas tax is an indirect way of doing that. Toll roads are a direct way of doing the same thing. Obviously, the government still needs to have a general transportation budget to pay for necessary, but lightly traveled roads. But there are some places where toll roads are quite sensible.

What I oppose is implementing toll roads just to increase transportation spending. If the state want to make I94 between Milwaukee and Madison a toll road and lower transportation taxes accordingly, then fine. If they want to make it a toll road and just increase spending, then no thanks.

Transportation Plan in the Works

It looks like the trial balloons are floating.

Here’s some of what Kooyenga has discussed:

  • Applying the state’s 5% sales tax to gasoline, which could bring in up to 10 cents per gallon at current gasoline prices in the Milwaukee area. Unlike the current flat gas tax, the sales tax on gasoline could rise —  or fall —  as fuel prices go up and down.
  • Eliminating 4 to 5 cents of the state’s 32.9-cent-per-gallon gasoline tax, which would soften the overall tax increase on drivers.
  • Making significant cuts to income taxes as part of a plan to move to a 4% flat tax over many years. “The long-term goal is to say we have a flat tax,” Vos acknowledged.
  • Cutting roughly $300 million of the $500 million in borrowing for roads contained in Walker’s two-year budget bill. That means that over the next two years much of the new money being raised would go for debt reduction rather than for additional road projects — a potential sticking point for road builders who have been seeking more money for highways.
  • Reducing the state-mandated markup on gasoline prices from its current level of 9.18% over the average wholesale price to something lower, such as 3%. That could help shield drivers from cost increases from the new taxes, but this provision will be controversial and likely draw opposition from some Wisconsin retailers such as convenience store chain Kwik Trip.
  • Repealing the state’s minimum wage standards — known as the prevailing wage —  for workers on public works projects such as road and bridge construction.
  • Cutting about 180 Department of Transportation engineers who were added to the department’s payroll in 2013. Their work would likely be picked up by private-sector engineers.
  • Applying to the federal government for permission to place tolls on certain state highways.

Obviously, we need to see the actual plan before spending too much time on it, but there are some good things in here. I like the repeal of prevailing wage, cutting staff, cutting income taxes, etc. I don’t like tax increases or toll roads. What bothers me the most is that except for the prevailing wage proposal, there isn’t anything in here that addresses the causes for high spending. Wisconsin still spends more on roads per mile than comparable states. Why? What about questionable requirements that drive up costs (roundabouts, art work, bike lanes, etc.)? What about wasteful spending on mass transit? Before legislators spend a lot of time trying to figure out how to squeeze more transportation taxes out of Wisconsinites, they need to address the causes of the bloated spending.

But we’ll see… Kooyenga is a smart guy and a solid conservative. I expect that the full plan with have more good than bad.

“More than enough” Money for Transportation

Yep. And since there’s “more than enough,” can we refund the surplus in the form of a tax cut?

Wisconsin Gov. Scott Walker said Monday there is “more than enough revenue” to fund transportation projects without increasing the gas tax or vehicle registration fees.

Reports last week indicated the governor might be willing to consider raising registration fees, but Walker told reporters at the Capitol he doesn’t have “any interest” in doing that. He said he has explicitly stated his opposition to a gas tax hike because lawmakers have raised the possibility.

“I don’t know of anyone in the Legislature who’s talking about vehicle registration fees,” Walker said. “For us, I think there is more than enough revenue out there. I’m willing to work with them.”

Over-engineered and Over Budget

Senator Marklein nails it. The “fix” for the transportation budget isn’t a massive single fix. It is making thousands of smaller decisions in a smarter way.

In fact, most of our county highway commissioners feel that many DOT projects are over-engineered and over-designed, which add significant costs. A bridge project in the town of Sylvan in Richland County is a good example of this issue. The design and oversight costs of this project were 37 percent of the total project cost of $362,094.94. We spent $47,306.48 for design, $15,000.00 for design oversight and $70,000 for construction oversight. The actual construction cost is $229,788.46.

Let’s face it, the roads in southwest Wisconsin are in poor condition. We know that right now, we could spend millions to fix the roads in our communities without a multitude of studies to assess need. Our highway commissioners know where our priorities should be and are poised to recommend projects that will have an immediate, positive impact on our communities and local economies.

Overall, I think there are opportunities in the findings of this audit. We have the opportunity to be more efficient in planning, design and actual construction. We spend an unbelievable amount of money before we ever put a shovel into the ground. While planning is necessary, the amount of planning is unreasonable. The DOT is planning for projects that are 25 years into our future, while we can’t afford the projects that we already have on the books.

This audit also shows us that despite the amount of money and time spent in planning, the DOT hasn’t been taking important factors into consideration as they plan. What good is planning if it is incomplete?

And the MacIver Institute set out to actually show us the bridge that Senator Marklein referenced. It is really hard to look at that bridge and justify why the DOT spent $362k on it.

Digging Into Transportation Spending

The MacIver Institute does the math on Wisconsin’s transportation budget and it isn’t pretty. This comparison jumps out at me.

highwayspending

Much of the debate over the upcoming transportation budget is being framed with some basic assumptions that need to be challenged. The basic argument being used is, “the roads suck and we need more money, so should we borrow it or raise taxes?”

Before we even get to that question, lawmakers need much more visibility on how the DOT is spending money and what their priorities are. The data indicates that Wisconsin spends an metric crap-ton more on transportation than comparable states and has worse roads. Why? Why are we spending money on more expansion at the expense of maintaining the roads we have? How many times has the DOT’s traffic estimates which were used to justify expansion fallen short? (hint: many). What policies are unnecessarily driving up the cost of road work (bidding process, prevailing wage requirements, design requirements, etc.)?

We may get to the point that we need to seriously consider more transportation spending, but we are nowhere near that point yet. The evidence indicates that the DOT has been a poorly run agency that overspends on poor priorities for decades. Until that ship is put right, more money will only encourage more bad behavior.

DOT Halts Study of Highway Expansion

Good. We don’t have the money to do everything. Prioritize, people.

The Wisconsin Department of Transportation has stopped studying a potential expansion of interstate highways from Madison to Wisconsin Dells, a sign the department may be downsizing its road-building ambitions in the face of mounting budget pressure.

The move appears to foreclose any near-term efforts to expand a corridor that carries growing volumes of traffic, much of it tourism-based, from southern Wisconsin and Illinois to Wisconsin Dells and other points north and west.

In February the department said the corridor would experience “significant problems” from traffic congestion if it is not expanded.

Work on environmental studies of the corridor, which began in 2014, ended Friday, according to a statement from the DOT and federal highway officials. The announcement attributed the move “to recent and ongoing re-prioritization of major transportation projects.”

A Transportation Funding Anecdote

From the email:

“Fix Our House First”: A Transportation Funding Anecdote

Transportation funding has become a weighty budget discussion, especially over the past several years.  Elected officials have a duty to uphold the state and federal constitution while being good stewards of every dime deposited into the state’s coffers.  As such, elected leaders are obligated to root out inefficiencies and function as the singular voice for those we represent.   Last session, I had the honor of supporting a number of reform minded bills that would have eliminated or mandated a pause on excessive transportation spending. I supported giving local governments more control over the number of unnecessary roundabouts being built, preventing state taxpayer subsidization of Milwaukee’s streetcar operations, eliminated the costly and burdensome bike path mandate in road construction. I also supported pausing the installation of closed circuit cameras, overhead digital message boards and manually operated railroad crossing arms at interstate on-ramps.  Unfortunately, most of these recommendations didn’t even have the opportunity to receive a vote in the “people’s house”.  This isn’t the half of it.  During my research over the past few months, I have learned that the taxpayer owned Department of Natural Resources (DNR) has been having a detrimental effect on our taxpayer funded transportation system.  Let me provide an anecdote: A round culvert system under a county highway has been flowing water efficiently for decades.  The culvert is deteriorating and must be replaced.  The typical replacement in this type of situation is a rectangular concrete box that allows more water flow than in the past.  This box culvert is lowered into the waterway, paved over the top, and is extremely cost effective.  This solution, though, is no longer good enough for Wisconsin rabbits, squirrels and waterways.  There are new terms, bankful width and ecopath, that have come into vogue.  These terms are exactly what you would expect.  DNR officials are measuring the bank of the waterway on either side of the original culvert and not only requiring a box culvert that extends from bank to bank of the actual waterway, but also including a path for our disenfranchised wildlife to walk through.  This absurdity has gone so far as to require county employees to shovel gravel onto the bottom of the concrete box to give the appearance of a more natural river bottom.  Benefit to the taxpayers?  Zero!  Burden to taxpayers?  Additional excavation and custom box culvert designs to the tune of thousands to tens of thousands of extra dollars per project.  Yes, we have issues with transportation funding in this state, but this example is barely a ripple in the stream.  The real solution does not begin with more revenue from your hard earned tax dollars, but with real leadership from your elected representatives and senators.

Respectfully,

 

Rep. Jesse Kremer

Vos Accepts Reality of Gas Tax Increase

Good. He’s seeing the light.

Assembly Speaker Robin Vos on Wednesday said it’s unlikely that lawmakers will increase the state’s gas tax to help erase a projected $1 billion deficit in funding road projects.

Vos, R-Rochester, and Gov. Scott Walker have been at odds over how to pay for roads, including raising the state’s gas tax.

But at a forum Wednesday, when asked by an audience member if he would raise her gas tax so she could help pay for road fixes, Vos said, “Probably not.” That was a signal that Assembly Republicans would stop calling for Walker to consider the idea.

“If you are a card player, I have a pair of twos, the governor has a straight and I have to draw three of a kind to win. Now it’s not impossible, but I wouldn’t bet on me,” he told an audience at a luncheon hosted by Wispolitics.com.

Shakeup in Walker Administration

This is telling.

Former Superior mayor David Ross has been named Secretary of the Wisconsin Department of Transportation.

Wisconsin Gov. Scott Walker on Tuesday announced that Ross will move to transportation on Jan. 7 from his current job as secretary of the state for the Department of Safety and Professional Services.

Mark Gottlieb, outgoing transportation secretary, offered his resignation to Walker taking effect Jan. 6.

It’s a big jump for Ross, 64. The transportation department is one of the largest state agencies, with 3,500 employees and an annual budget of more than $3.5 billion. The department supports state highways, local roads, railroads, public transit systems, airports, harbors and bicycle and pedestrian facilities. The department also serves 50,000 people each day through the Division of Motor Vehicles and includes the Division of State Patrol which enforces laws and aids motorists throughout the state.

“Dave Ross has been an outstanding leader for our administration at the DSPS since 2011,” Walker said in a prepared statement. “Dave has always looked to improve the way government operates, and I am confident he will bring the same innovative, taxpayer-first approach to the DOT.”

Walker has been firm in that he will not support a tax increase for transportation unless it’s offset by a decrease elsewhere. Gottlieb was apparently firmly in Speaker Vos’ court and was actively pushing for a tax increase and more spending. He was fighting against Walker instead of finding ways to achieve Walker’s goals for transportation. And now Gottlieb is gone and being IMMEDIATELY replaced by a loyal Walker conservative.

This is a positive development for those of us who think that the Department of Transportation still spends too much and that a tax increase should be off the table.

Speaker Vos Accuses Senators of Fear Mongering as He Fear Mongers

Is it “fear mongers” or “fears monger?” Mongers fear? Whatever. This is kind of funny:

Story #1:

“While it’s laudable that Senators Kapenga and Stroebel say they’re relying on their CPA and business experience to analyze what they describe as the transportation fund’s spending problem, they’re deliberately ignoring the other side of the balance sheet in favor of politics and fear mongering,” said Speaker Vos.

Story #2:

“Look at this! Holy cow! I can`t even imagine what it would be like to be sitting in there,” Vos said in the video.

The video released Monday, December 5th shows Vos bouncing along while lying down in a stretcher in the back of Burlington Rescue Squad ambulance. Vos said he rode in the back of the ambulance at the request of his cousin, an EMS worker in Burlington. He said bad roads impact patient care.

So talking about the gas tax increase that Vos wants is fear mongering but a hokey sensational video dramatizing a bumpy ambulance ride is just providing information, right?

Vos Accuses Walker of Being “Disingenuous”

As I mentioned a few days ago, Walker has successfully isolated Vos and the Assembly leadership on the issue of transportation funding, and Speaker Vos is reacting in a predictable fashion.

“We have had multiple caucus discussions on this topic,” Vos told reporters after a WisPolitics luncheon with Assembly Minority Leader Peter Barca, D-Kenosha. “The governor has the luxury of looking in the mirror and having a discussion with himself on any topic, because he doesn’t have to get consensus. He’s the governor. My job as the speaker is to generate consensus among 62 other people, and I think we’ve done that.”

[…]

Vos called that suggestion “disingenuous” on Thursday, arguing that the governor has the ability to direct the Department of Transportation to assemble a proposal that meets specific criteria, while a legislative leader like Vos lacks matching resources.

That’s a bit of a silly claim. If the legislature has the resources to create a budget with tax increases, it sure has the resources to create one without tax increases. At some point, the legislature is going to have to propose, debate, and pass a budget that includes transportation. Is Vos claiming that he lacks the resources for that?

Methinks Vos should take a bit of his own advise in this last quote:

“I think there’s enough blame to go around,” Vos countered. “It’s pretty hard to reach your hand out and say let’s work together while at the same time you’re saying how much you suck.”

Vos Isolated on Transportation Tax Increases

Good.

Assembly Republicans have floated the idea of raising revenues for transportation work to hold down borrowing and avoid project delays, but Fitzgerald noted Thursday that Walker has committed to using his extensive veto powers to block such a move.

“You’ve got to live within the parameters of what he’s already laid out,” Fitzgerald said of Walker, adding that it would be pointless to oppose his own party’s governor. “How’s that productive? You’re going to have to work with the governor.”

One way to resolve the dispute would be to cut other taxes so the gas tax could be increased, he said. But coming up with a way to cut other taxes could prove tricky when state finances are tight.

Vos and the Assembly leadership has been saying that tax increases might be necessary. The Governor has said “no” to any tax increase for roads that isn’t offset by a tax decrease elsewhere. Now the Senate Majority Leader is standing with the Governor. Given that Vos was going to have a very difficult time getting a tax increase passed through the conservative wing of his own caucus anyway, this pretty much kills it. A tax increase will never even make it through the Senate to get to Walker’s desk to veto.

I guess we will have to live within our means – even when it comes to transportation.

Assembly Republicans to Offer Alternative Transportation Plan

Heh.

Vos responded in his letter that he and his Assembly GOP colleagues would oblige. Vos, R-Rochester, also criticized Walker’s plan as too reliant on borrowing and lacking a long-term solution for roads.

 Vos emphasized that large highway expansions in southeast Wisconsin, including of the Zoo Interchange and Interstate 94 in Racine and Kenosha counties, would face an uncertain future under Walker’s plan.

“Under your plan, the unfortunate reality is that these roads may not be done in our lifetime,” Vos wrote.

In Dane County, the Verona Road project would be delayed at least two years under Walker’s plan. The plan would keep on track expansions of I-39/90 in Rock and Dane counties and of Highway 10-441 in the Fox Valley.

Vos said Assembly Republicans will hold hearings to gather input from the public and experts before offering their transportation budget alternative. Lawmakers will begin debating transportation and other areas of the next budget in early 2017.

The timing is interesting. Vos is insistent that raising taxes must be on the table, which means that he intends to propose tax increases. BUT, he’s not going to offer his plan until after the new year – AFTER the elections. If Vos wants a tax increase, he should put it out there before the election so that the voters can weigh in. But, of course, Vos doesn’t want that because he knows that the voters don’t want it.

Walker makes first offer on transportation budget

My column for the West Bend Daily News is online. Here you go:

Gov. Scott Walker released his transportation budget proposal last week and made his position perfectly clear when stating he is “not going to raise the gas tax or other associated fees without a corresponding reduction.” That is a welcome statement to this taxpayer.

The issue Wisconsin is facing in the next budget is the forecasted revenue for the transportation fund falls about a billion dollars short of paying for forecasted expenditures. Whether this happens to a family, business or government, there are only three things one can do when this happens: reprioritize and reduce the forecasted spending, borrow money, or find a way to increase revenue. Walker has taken the last option off the table and attacked the issue with a combination of the first two options.

Walker’s justification for refusing to increase revenue by increasing taxes or fees is simply that despite several years of tax cuts, Wisconsinites are still taxed too much. Walker would rather the government do the heavy lifting of prioritizing and cutting back instead of forcing families to do it to pay higher taxes. The governor is right.

Wisconsin’s gas tax is still among the highest in the nation. According to a fact sheet the governor released, at 32.9 cents per gallon, Wisconsin’s total taxes and fees collected at the pump ranks as the 11th highest in the nation. But that is only part of the story. The same Wisconsinites who pay the gas tax also pay all of the rest of Wisconsin’s tax burden, and it is a heavy burden. Wisconsin still ranks as the fifth highest taxed state according to CNN/Money. As State Sen. Duey Stroebel rightly said in a recent column, “With Wisconsin’s overall tax burden still in the top 10, this is no time to be campaigning for higher taxes.”

Meanwhile, it should be noted Wisconsin spends a ton of money on transportation — more than most states. Wisconsin spends about $3.8 billion per year on highways, which ranks 14th nationally. Total transportation spending, including state and local spending, is 33 percent higher than the national average according to the U.S. Census Bureau.

In other words, despite cries of “poor” from some folks, there is plenty of money for transportation. Yes, the recipients of that spending always want more, but it is the job of the administration to prioritize the spending within the confines of Wisconsinites’ ability and willingness to pay.

That is exactly what Walker’s budget proposal does. Walker’s transportation budget proposal actually increases state funding for maintenance of existing roads and sends more money to local units of government for their transportation needs. He partially pays for those increases by halting, delaying, and slowing down some existing projects including the widening of Verona Road in Madison, expanding Interstate 94 in Racine and Kenosha, and part of the Zoo Interchange.

Walker’s budget proposal also seeks to borrow $500 million, which, according to the governor, is the lowest level of borrowing since the 2001-03 budget. That is still a lot of borrowing, but using debt to fund major projects used for 30 years by future taxpayers, too. The key is to manage debt sensibly.

Walker is taking the correct approach to managing the state’s transportation needs through prioritization and forcing efficiencies instead of turning to the taxpayers for more money. He is also right to shift more spending to maintaining the roads the state has and away from more expansions. Is it perfect? No. It still spends and borrows too much, but it is a very good start.

Wisconsin must make the hard decisions

My column for the West Bend Daily News is online. Here you go:

You have probably read the headlines by now — “State transportation budget faces $1 billion shortfall!” they scream. It is part of the well-financed, orchestrated campaign by the road builders and their supporters to squeeze more taxes out of Wisconsin’s taxpayers in the next budget.

The root of the breathless headlines is a memo from the Legislative Fiscal Bureau that shows the state would fall $939 million short (the headlines round up) if we spend as much in the next budget as we do in the current one. The LFB is a number-crunching body that simply answers the questions posed to it by members of the Legislature. In this case, the question came from Rep. John Nygren, the Republican Assembly co-chairman of the Joint Finance Committee, and he asked the LFB to include two key assumptions.

First, the LFB assumes the state will not use any debt whatsoever. That accounts for more than $855 million of the projected shortfall. The second assumption is that the level of spending matches only the second year of the current budget spending. Wisconsin has a biennial budget and the current transportation budget actually spent a bit more in the first year than the second. That assumption accounts for the remaining $83.3 million of the shortfall. More accurately stated, the LFB memo states the state would fall more than $855 million short if it tried to match transportation spending in the next budget without taking on any debt.

The road builders and their allies, like Nygren, are using this projected shortfall to begin advocating for a tax increase on Wisconsinites. The only way to fill the budget pothole, they contend, is to raise taxes. Nothing could be further from the truth.

The first assumption that needs to be addressed is the one of debt. While paying for things as we go without any debt is admirable for some pieces of the budget, it makes little sense for large capital projects. A good deal of the spending in the transportation budget is slated for massive infrastructure projects, like rebuilding the Zoo Interchange, which will be used for decades. It makes perfect fiscal sense to spread the spending for those projects over those same decades. We will certainly need to debate the appropriate level of overall debt and be prudent in managing the state’s debt service, but some debt is both necessary and sensible.

The second assumption that needs to be torn down is that the state cannot address the alleged shortfall through some policy changes instead of resorting to tax increases. For example, Wisconsin’s prevailing wage laws inflate the cost of construction by mandating the state pay inflated wages for labor instead of being able to pay the local market wage for the same labor. State legislators took the step to repeal the prevailing wage law for local governments last year, but kept them in place for the state. While the actual amount of savings is difficult to estimate, studies show the state could save hundreds of millions of dollars in each budget by simply paying normal market wages for construction projects.

Another example of ways to fill the shortfall without raising taxes rests in the everyday decisions made in designing and planning transportation projects. Gov. Scott Walker cited the example in his letter to Transportation Secretary Mark Gottlieb that the state saved $580 million on the Zoo Interchange through some changes to the design. Imagine if similar design changes were considered on every project.

The final assumption the tax increasers always ignore is that Wisconsin must spend as much or more than it always has. It does not. The fact Wisconsin is a state with high government spending and high taxes is the result of millions of decisions made by Wisconsin politicians for decades. It is a choice. It is also a choice to tax and spend less, like most other states do.

Wisconsin should make the choice to spend less on transportation. The state could make the choice to spend within our means. Would there be consequences? Of course. Some of those consequences may be of no consequence at all. For example, a report from a consortium of environmental groups highlights the fact the $836 million project to expand I-90 between Madison and Illinois was based on 2008 traffic estimates that said the number of cars would increase by 29 percent by 2010 and double by 2013, as compared to a baseline of 2000. In 2012, the number of cars had increased by only 1 percent since 2000, yet the expansion continues apace despite the fact the traffic estimated used to justify it was woefully wrong. This is happening with projects all over Wisconsin. Suspending this one project would save hundreds of millions of dollars.

Repealing the prevailing wage laws for the state, implementing design changes and reconsidering projects that were based on faulty projections would save hundreds of millions of dollars each. That projected shortfall disappears pretty quickly by only plucking the low-hanging fruit highlighted here. Imagine if the smart people in the Legislature actually rolled up their sleeves and put some effort into saving the taxpayers’ money.

Taxing and spending is easy. Discipline and math is hard. Be hard, Wisconsin. Be hard.

Walker Wants Transportation Budget Early

Good. Let’s have time for the debate before the election and well before the next budget.

Gov. Scott Walker has redoubled his resistance to increasing gas taxes or vehicle fees to fund Wisconsin roads, saying near-term spending on large highway expansions instead must be curtailed.

In a letter to Transportation Secretary Mark Gottlieb, Walker also instructed him to submit his agency’s budget request by Sept. 15 instead of Nov. 15 to “allow for a full public discussion.”