It’s spring in Wisconsin and that means orange traffic barrels start
sprouting up at the same rate as tulips. While they remind drivers to
slow down to protect road workers, those orange barrels also represent
tax money being spent to fix, re-construct, and maintain our roadways.
As things start to heat up in the 2017-19 state budget process,
transportation funding is at the forefront of many people’s minds.
Wisconsin is home to 115,371 miles of public roads.
You could drive for 1,922 hours at 60 miles per hour and not drive on
the same stretch of pavement! Included in Wisconsin’s public roads are
875 miles of Interstate Freeways and 10,871 miles of State and US-marked
highways. The vast majority, over one hundred thousand miles, are
maintained by the 1,925 counties, cities, villages, and towns in
Construction and road maintenance (plowing, filling potholes, mowing,
etc.) is funded by the state from the transportation fund and local
units of government with property tax money. Wisconsinites value our
transportation infrastructure so highly because nearly every woman, man,
and child in our state uses our roads every day.
In the 2015-17
Wisconsin spent about $5.8 billion on the Department of Transportation
(DOT), making it the fourth highest funded agency in the state trailing
only The Department of Health Services, Public Instruction, and the
University of Wisconsin System. While some of that $5.8 billion is
spent on other forms of transportation such as rails, water, and air,
the vast majority of the budget is spent on roads.
There are three ways Wisconsin funds transportation programs: the state
transportation fund, federal funding, and bond proceeds.
Aside from the outlier
in ‘11-13 that came from vastly increased federal funding,
DOT’s budget increases every year.
The state transportation fund was created in 1977 and gets over half of
its funding from the 32.9 cents per gallon of gas motor vehicle fuel
tax. The idea behind a “gas tax” is that just about everyone who uses
gas is putting it into a vehicle and driving that vehicle on state
roads, so those gas consumers should contribute to fixing,
re-constructing, and maintaining our roads. Even with more
gas-efficient vehicles on the road, we set a new record in 2016 – 3.3
billion gallons of gas sold in Wisconsin.
The other major funding source for the state transportation fund is
vehicle registration fees. Registration fees include a $75 vehicle
registration fee, $69.50 for title transfer fees, $10 for a late
registration renewal fee, $15 for a special license plate issuance fee,
and $3 to $5 for registration/title counter service fees. Wow, that’s a
lot of fees! They account for about 35% of the total funding for DOT.
The remaining 20% of the state transportation fund is from driver
license fees, other motor vehicle fees, railroad ad valorem tax,
aeronautical taxes and fees, miscellaneous revenue, and investment
earnings. The total amount currently in the state transportation fund
is a little more than $1.9 billion.
The money in the state transportation fund was always meant to be ONLY
used for transportation. However, that all changed from 2003-09 when
money from the transportation fund was transferred to the general fund.
For the first time in the state’s history, money that was supposed to be
used specifically for transportation related items was used to pay for
things not remotely related to transportation.
That raid of the transportation fund dropped the fund’s balance by over
a billion dollars. When Governor Walker was elected in 2011, along with
Republican majorities in both houses of the legislature, the commitment
was made to pay back the purloined transportation fund dollars from the
general fund. I am proud to say that the transportation fund has been
made whole again.
The second way that transportation in Wisconsin is funded is by way of
the federal government. The federal government in Washington DC sends
money to Wisconsin and other states to assist in maintaining various
forms of transportation, including roads. Money comes in the form of
highway aid, airport aid, transit aid, and transportation safety aid.
In the 2015-17 state budget, about $1.7 billion of the DOT’s total $5.8
billion budget was from these federal aids.
The final way the state funds transportation is with transportation
bonds. Bonds are long-term loans with permanently set interest rates
and principal payments made to corporations and other governments. The
two types of bonding used by the state to fund transportation are:
transportation revenue bonds and general obligation bonds.
Transportation revenue bonds are
loans that come with a guarantee that the state will
pay back the money from a certain revenue
stream. A general obligation bond
is a loan that the state still backs, but unlike a transportation
revenue bond, it doesn’t guarantee where
the money will come from. The 2015-17 state budget had a little
over $850 million in transportation revenue bonds and general obligation
With the state transportation fund still trying to rebound to its
pre-raid level, the federal government making no guarantees on how much
transportation aid will be issued, and the state not wanting to damage
its credit rating by borrowing more, the question of how the 2017-19
state budget will fund transportation is a loaded question.
While I don’t have all the answers, I do know that efficiencies exist
and I’d like to see us find and utilize all of them before we spend more
Last week was another great win for taxpayers with the Project Labor
Agreement (PLA) Neutrality Law. This ends the practice of requiring
union labor and payments to the unions in government projects. This new
law will help more local small businesses bid for government work which
is a good thing.
We got a big win last session by ending prevailing wage requirements at
the local level. In many instances prevailing wage law required each project to
pay above market labor rates that were different in every county
in the state. This law kept many small businesses from bidding on
government projects because of complex record keeping and inflated labor
rates. Now at the local level, we are getting more competitive prices
for our projects. It’s estimated to save our taxpayers 250 million a
year. I believe this law change will encourage more local labor to be
used, especially in the more rural areas of our state.
I hope to get a full repeal of prevailing wage on state projects yet
I am also circulating a letter to our Republican Congressional
Delegation from republicans in the state legislature to have the feds
law to end federal prevailing wage laws.
Because of the Davis-Bacon law, there are 22 regions in Wisconsin, each
with their own required labor rates based on what unions pay their
members, not on what is actually going on in the labor market - yet
another example of excessive control from Washington DC.
Three-quarters of construction projects in Wisconsin are privately paid
for and have no complicated, overpriced prevailing wage laws required.
Hospitals, gas stations, grocery stores, department stores, private
roads and parking lots, and all
kinds of other buildings that we go into every day are built without the
complex, complicated, out of date Davis-Bacon prevailing wage laws. Did
I say that this depression era law is outdated, complex, complicated,
overpriced, and has to go?
Please get involved by sharing your input and stay tuned to what is to
come in the next couple of months.
The Joint Finance Committee
is starting on individual motions next week
and plans to wrap up by June 8th. The budget hopefully will
be completed by July 1st.
Make it a great day!