Boots & Sabers

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0718, 21 Jun 16

Fixing state budget potholes

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

There is a battle brewing over transportation funding in Wisconsin causing fissures between some prominent Republicans. Specifically, Speaker Robin Vos and Gov. Scott Walker are at odds, but both of them are wrong.

Virtually everyone in Wisconsin agrees that maintaining a quality transportation infrastructure is vital to the state. Our economy flows across our roads, rails, waterways and skyways. Constructing and maintaining our transportation infrastructure is a defined responsibility of our government. It is the scope and means of fulfilling that responsibility upon which disagreements arise.

With an election looming and the next state budget debate coming in less than seven months, people are already maneuvering for position. The problem with the state transportation budget, as defined by some, is that the funding cannot keep up with the necessary spending.

The money for state transportation spending comes from a variety of sources. Chief among these sources are the fuel tax and registration fees, which account for 56 percent of all state transportation revenue. Twenty-four percent comes from federal funds, 7 percent comes from general purpose revenue and other funds, and in the most recent budget, 13 percent came from borrowing.

According to the state Department of Transportation, all state transportation revenue, 56 percent of all funds, has only risen by 3.4 percent in constant 2013 dollars since 2006. Over the same period, state transportation appropriations rose by 5.1 percent in constant 2013 dollars. The biggest problem is that the revenue from the fuel tax has been essentially flat for years. The concept of taxing fuel was a good one as it served as a proxy for usage with people who use the transportation system more having to pay more for it. But in an age of fuel-efficient vehicles, electric cars, etc. the fuel tax is a poor proxy for usage. A new taxing mechanism is needed, but there are more fundamental issues that need resolving before determining the optimum funding methodology.

Essentially, the cost of transportation is increasing faster than the revenue that is used to fund it. The state has been patching the problem in the past few budgets by borrowing to fill in the gap. This is where the rub between Walker and Vos comes in.

Vos believes it is poor public stewardship to continue borrowing money to fill in the transportation budget. Such borrowing merely forces future taxpayers to pay for today’s transportation needs with interest. Vos wants to fix transportation funding for good so borrowing is not necessary. Vos’ goal is laudable.

Walker has said that he does not support any additional funding for transportation needs unless an equal amount of money is taken out of the budget elsewhere. He recognizes that despite years of improvement, Wisconsin is still a tax hell. The state still ranks as one of the worst in terms of state and local tax burden (second worst by WalletHub, fourth worst by CNN Money). Walker is insisting the overall budget remain flat and wants the Legislature to prioritize taxing and spending while not increasing the overall tax burden on the taxpayer. Walker’s goal is also laudable.

They are both missing the point. The problem with Wisconsin’s transportation budget is not that there is not enough money. The problem is the state is spending too much.

I wrote about this fact last May when this issue flared up again and it has not changed. A look at the Reason Foundation’s most recent 21st annual highway report shows Wisconsin is spending way more than comparable states.

For example, Wisconsin and Minnesota have almost the same number of highway miles at 11,766 and 11,833, respectively. They also have almost the same number of lane miles. They are both cold-weather states with a major metropolitan area. In terms of total spending on roads, Minnesota spends just over $132,000 per state-controlled mile. Wisconsin spends 72 percent more for a total of almost $227,000 per mile.

Breaking down the numbers is even more interesting. Wisconsin spends 25 percent more on administrative costs, but actually spends 38 percent less on maintenance. The big difference comes with construction. Wisconsin is spending 75 percent more than Minnesota for every new mile of road. In summary, Wisconsin spends a lot more money on administration and construction, but less on maintenance than Minnesota. That is a difference in priorities.

To think of it another way, if Wisconsin just lowered its spending to the same amount per mile as Minnesota and prioritized maintenance over construction, it would save Wisconsin $1.1 billion per year and solve the transportation budget problem overnight while leaving a surplus to return to the taxpayers.

Wisconsin does not have a funding or taxing problem — it has a spending problem. Vos and Walker should look for common ground on reducing spending before locking horns on how to pay for the spending.


0718, 21 June 2016


  1. old baldy


    One reason that gas tax revenue has been flat for years is that the automatic indexing of the tax was removed by the legislature years ago. The funding picture would look a lot different if indexing were still in place.

    Comparing construction costs really needs to be an apples to apples comparison before you can make any claims about the construction costs in MN versus WI. If everything is the same; construction standards, soils, materials, etc. and the two states are still taht far apart then lets find out why. But that information wasn’t provided and it is premature to jump to conclusions.

  2. old baldy

    From the same site ( Reason Foundation 21st report):

    The report summary that shows all states ranked by a variety of criteria, and an overall ranking:

    WI was ranked 15th in cost effectiveness and performance.

    MN was ranked 28th

    Overall WI was ranked 15th. MN was 28th.

    So in the big picture WI is doing a better job than MN.

  3. Owen

    Agreed. I thought about including that part of the discussion in my column, but ran out of space. Wisconsin’s roads are a bit better. We also have less congestion in urban areas and fewer traffic fatalities per capita. So yes, in order to lower how much we spend on transportation infrastructure, we may have to accept marginally lower quality. That needs to be part of the discussion. But I don’t think that anyone could argue that Minnesota’s transportation infrastructure is constricting their economy compared to Wisconsin’s.

    The point of the column was to push back on the notion that we can’t reduce our transportation spending. We can. There will be some consequences that we need to mitigate, but it can be done. And even if we don’t reduce to the level of Minnesota, we can still reduce some. As the debate is being currently framed, it presupposes that we need to increase spending and the debate is only over how much and how to pay for it. I reject that supposition. We need to reduce the spending and then talk about how to fund it.

  4. old baldy


    A couple more comments on this subject.

    County and town roads are also funded through the gas tax. If you are a logger or farmer those local roads are critical to your operation. Recent changes by the legislature to allow larger and heavier trucks and equipment have taken a toll on those roads, yet funding for repair and maintenance that is returned to the locals has dropped. No one in Madison has come up with a viable plan to address the dwindling funds for local road maintenance. I truly believe they don’t care.

    As far as your opinion regarding reducing transportation spending-what are your thoughts? Almost all work from planning, design and construction supervision in WI is competitively bid or done in house by DOT staff. Construction is all competitively bid. Many items in a bid are priced by the whims of the market; steel, cement and asphalt as examples of materials that have seen tremendous fluctuations in price in recent years. How do you control that when you are planning 5-10 years out for construction?

    I don’t disagree that perhaps WI can spend a little less on transportation projects, but just saying it can happen doesn’t make it so. Let’s have some reasonable well thought out ideas.

  5. Calvin and Hobbs

    Owen, where did you find info on “lane miles”? Best info I could find from Federal Highway Administration shows Minnisota with almost 50,ooo more lane miles that Wisconsin.

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