Walker bypasses gas tax hike, wants $1.3 billion in transportation bonds

By Patrick Marley of the Journal Sentinel

Madison — Gov. Scott Walker isn’t backing an increase in the gas tax and instead wants to rely on $1.3 billion in borrowing to fund transportation projects over the next two years.

Under the Republican governor’s plan, bonding for transportation would rise by about 30%, but the state’s overall borrowing would drop. That’s because Walker is recommending that the state delay construction of buildings that haven’t already gotten initial approval, including for the University of Wisconsin System.

The plan, released Friday to the Milwaukee Journal Sentinel, comes after Walker has spent more than a year calling for finding new long-term solutions for funding transportation.

The plan will allow Walker to tout his opposition to raising taxes as he considers a possible run for president. But the increased reliance on borrowing to fund highways may not go over well with his fellow Republicans who control the Legislature.

“Governor Walker’s goal, as stated multiple times, is to lower the burden on the hardworking taxpayers of the state every year he is in office while continuing to invest in his priorities,” Walker spokeswoman Laurel Patrick said in a written statement. “Governor Walker’s plan holds the line on taxes and fees while making vital investments in our infrastructure.”

Two years ago, Walker and GOP lawmakers approved $2 billion in borrowing — about half of it for buildings and maintenance and about half of it for transportation. Walker’s new plan would provide no new borrowing for buildings and $1.3 billion for transportation, up from $991 million.

Walker doesn’t want new borrowing for buildings because the state has $858 million in existing bonding authority that it can use for planned projects.

Walker will formally introduce his transportation proposal as part of the state budget he presents to lawmakers on Tuesday. Legislators will spend the next few months reshaping it.

Assembly Speaker Robin Vos (R-Rochester) greeted the plan with deep skepticism.

“To continue to just borrow and spend isn’t fiscally responsible,” he said in a statement. “We will certainly be pushing for a permanent fix instead of just more bonding.”

Rep. John Nygren (R-Marinette), co-chairman of the budget-writing Joint Finance Committee, said he was pleased that overall bonding would come down in Walker’s plan, but noted he was seeking a more viable way to fund roads.

“I got elected to solve problems, not push them off, so I want to have the discussion now” on financing highways, he said.

Nygren said he favored a mix of finding new money for transportation, trimming projects and implementing efficiencies. He said he hadn’t determined the best way to get more money for roads.

Sen. Alberta Darling (R-River Hills), the committee’s co-chairwoman, said she would need to see Walker’s overall plan before deciding what level of borrowing she could support. She said she was looking for a sustainable way to fund road projects.

Craig Thompson, executive director of the Transportation Development Association, said his trade group is concerned about the long-term costs of Walker’s plan and wants more details on it.

“Debt service is already one of the fastest growing line items in the transportation budget,” he said.

Roads are funded largely with gas taxes and vehicle registration fees. Paying past debt takes up about 19% of the state money that flows into the transportation fund each year. That percentage would rise under Walker’s plan, though his office did not provide specifics.

His office also did not provide a breakdown of how much of the new bonds would be paid back with transportation money and how much with funds in the state’s main account. Paying back debt from the main account would in the future eat into funds used for schools, health care programs and an array of state services.

Rep. Gordon Hintz (D-Oshkosh), a member of the finance committee, said Walker’s plan was a “political solution” that would create a backlog of building and maintenance projects but not fix transportation funding.

“I thought we were at the point with transportation where the adults were going to come into the room and we were going to recognize a Band-Aid wasn’t going to cut it,” Hintz said.

In a statement, Assembly Minority Leader Peter Barca of Kenosha said Walker was “avoiding his responsibility to taxpayers by once again putting our transportation budget on the state’s credit card.”

A little over a year ago, Walker called for finding a solution to the state’s problems with funding highways at a time when federal aid is uncertain and gas tax collections are stagnant. Observers have raised concerns about relying on gas taxes because drivers are purchasing less fuel as vehicles become more efficient.

Walker at the time told his transportation secretary, Mark Gottlieb, to come up with new funding ideas, and in November Gottlieb recommended hiking taxes and fees by $751 million over two years.

That proposal would have boosted the gas tax by changing how it is calculated; imposed a new, 2.5% fee on vehicle purchases; and placed an additional fee on hybrid and electric vehicles.

The proposal would have initially boosted the gas tax by 5 cents a gallon — from 32.9 cents to 37.9 cents — and paved the way for automatic, inflationary increases in the future. The tax on diesel would have gone up 10 cents per gallon, from 32.9 cents to 42.9 cents.

Walker rejected those proposals.

Walker’s transportation plan would put $623 million toward Milwaukee County’s Zoo Interchange over the next two years, keeping it on track to be completed in 2018. It would also allow work to begin in earnest on the east-west portion of I-94 just past the Marquette Interchange.

Another $36.8 million would be used to complete work on the Hoan Bridge in Milwaukee and the Stillwater Bridge in western Wisconsin.

In addition, he would increase funding by $100 million for other major projects, including the widening of I-39/90 from the Illinois state line to Madison. He is not proposing an increase for the $1.6 billion road maintenance program.

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