Cost of delaying road projects pegged at $160 million

By Patrick Marley of the Journal Sentinel

Madison— A plan by Gov. Scott Walker’s administration to delay major road projects will cost drivers $160 million or more over two years, according to a projection released Monday by the University of Wisconsin-Whitewater.

The report, paid for by a transportation group, found that inflation will cause $80 million for each year of delay for four major projects. The Department of Transportation announced last week it was delaying those four projects — and one other one — for two years.

The report came as the DOT disclosed Monday it was preparing a second list of projects that would face delays. Those rehabilitation projects are generally lower profile than the costly projects already facing delays.

UW-Whitewater conducted the study for the Transportation Development Association of Wisconsin, which consists of contractors, engineering firms, labor unions, economic development organizations, county highway departments and others.

The department announced last week it was pushing off work for two years for five projects: I-39/90 from the Illinois state line to Madison, Highway 151/Verona Road in Madison, Highway 10/441 in the Fox Valley, Highway 23 between Fond du Lac and Plymouth, and Highway 15 near New London in Outagamie County.

Work on the projects in many cases is underway. The work will continue, but at a slower pace that will delay completion for two years.

UW-Whitewater’s Fiscal and Economic Research Center studied the cost of delays for four of the projects, but not Highway 15. It estimated the delays would add 5% per year to the cost of the projects.

Inflation for the construction industry since 2000 has averaged 5% a year, according to the report. That’s about double the inflation rate over the same period for other products as measured by the Consumer Price Index.

DOT spokeswoman Peg Schmitt said the department plans to release its own estimates on the cost of the delays in February.

Walker and the Legislature’s budget-writing Joint Finance Committee have the ability to tap into an additional $350 million that could mitigate the delays but haven’t done so.

Walker wanted to borrow a record $1.3 billion over two years for transportation, but GOP lawmakers said that was too much. In a compromise, they agreed to borrow $500 million initially as part of the state budget they adopted in July. The department was given the ability to ask for an additional $350 million, which would be released with the approval of the budget committee.

Schmitt said the agency would request $200 million in bonds for the fiscal year that runs through June 30.

The additional bonding would be covered by the state’s general fund, which is made up primarily of income and sales tax receipts and pays for school funding, health care for the poor and an array of programs. Usually, borrowing for highways is covered by the transportation fund, which is made up mostly of collections from the gas tax and vehicle registration fees.

Senate Republicans have expressed reluctance to issue the additional funding.

“I don’t care if they’re building a highway to heaven. I don’t support using (general obligation) bonds to do it,” said Sen. Luther Olsen (R-Ripon), who sits on the budget committee.

But other Republicans, such as Reps. Mike Rohrkaste of Neenah and Dave Murphy of Greenville, are urging the DOT and the committee to issue the bonds so projects such as Highway 10/441 can stay on track.

“We are very disappointed this key project has been delayed after being assured throughout the budget process that this project is a top priority,” Rohrkaste said in a statement.

While the DOT has said the delays will be for two years, they may end up being longer. The DOT’s projection assumes lawmakers will inject new revenue into the transportation system in the years ahead. But legislators for years have struggled with finding ways to put more money toward roads, with Walker and some Republicans who control the Legislature ruling out raising gas taxes or registration fees.

The delays on the five projects will likely have a cascading effect that will push off work on future projects, but the department hasn’t said what those could be.

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