Wisconsin's ongoing transportation budget impasse, explained

By Jessie Opoien, The Capital Times

It's been one week since the start of the Wisconsin fiscal year and the state Legislature hasn't passed a budget. That's due in large part to an ongoing dispute among Republicans over how to close a projected $1 billion deficit in the state's transportation fund. Gov. Scott Walker offered a new deal on Thursday in hopes of breaking the impasse, but resolution still looks to be elusive.

If you haven't followed every twist and turn of the transportation debate, you can catch up here.

What did Walker propose in his budget?

Walker's $76.1 billion budget would allocate about $6.1 billion for transportation funding, including a $40 million increase in general transportation aids to counties and municipalities. The proposal includes $500 million in borrowing — the lowest level of bonding since the 2001-03 budget.

Is that proposal still on the table?

Sort of. The Legislature's Joint Finance Committee, which reviews and revises the governor's proposed spending plan, dropped the transportation proposal from the budget in April, signaling lawmakers would essentially start from scratch. But as the gulf between Assembly and Senate Republicans has widened over how to fund roads, Walker has pointed to his original proposal as an option that strikes a middle ground, sometimes invoking Goldilocks to make his point.

What's the disagreement?

The primary source of disagreement is on whether roads projects should be funded with bonding, new revenue or a combination of the two. Assembly Republicans don't want any new borrowing, and Senate Republicans don't support new revenue. Democrats, in the minority in both houses, have advocated in some cases for new revenue, likely in the form of a gas tax increase. Walker has pledged to veto any budget that raises the gas tax or vehicle registration fees.

What kind of alternatives to the governor's plan have been proposed?

The first alternative came from Assembly Republicans and was drafted by Rep. Dale Kooyenga, R-Brookfield. Kooyenga's plan was a sweeping one that would make adjustments to not only the transportation fund, but the state's tax code, by cutting the state's gas tax and applying a sales tax, reducing the minimum markup on fuel and putting the state on track for a flat 4 percent income tax. Walker and Senate Republicans immediately dubbed it a no-go.

Senate Majority Leader Scott Fitzgerald, R-Juneau, then said Senate Republicans were interested in financing roads projects with some general purpose revenue, upping the amount of bonding in the transportation budget to about $850 million. That level of borrowing earned immediate disapproval from Assembly Republicans.

Rep. Amy Loudenbeck, R-Clinton, then started work on a proposal that would charge a fee per mile driven on heavy semi trucks. The idea got some traction and was briefly seen as a possible way to bridge the gap between the two chambers. But a large coalition of business and automobile groups came out in force against the proposal, and some Senate Republicans backed them up.

Where do things stand now?

The end of the fiscal year has come and gone, which means projects will be funded at the levels enumerated under the current budget until a new one is passed.

Walker and others have warned the longer the stalemate goes on, the more likely ongoing projects will be delayed. He has highlighted in particular the expansions of I-39/90 in Dane and Rock counties, Verona Road on Madison's southwest side, Highway 10/Highway 441 in the Fox Valley and Highway 15 in Outagamie County.

A memo from the nonpartisan Legislative Fiscal Bureau shows that current projects will not see much of an impact unless the standoff continues for several more months.

Hoffman Construction Company, based in Black River Falls, is working on the I-39/90 project. Owner James Hoffman told reporters on-site on Thursday his company will likely not bid on as many Wisconsin projects in the future unless a sustainable funding solution is found for transportation.

"We would maybe in this budget cycle, but in a couple more when 25 cents of every dollar (in the transportation fund) goes to pay the debt, pretty soon there will be no more money left other than just paying that," Hoffman said. "So we see responsible long-term transportation funding as the obligation that the state Legislature and governor ought to come up with a way to fix it."

From the road builders' perspective, that means no new borrowing.

Business and trucking groups have other ideas.

In a letter to Assembly Speaker Robin Vos, R-Rochester, and other Assembly GOP leaders sent Friday, Wisconsin Manufacturers and Commerce senior vice president of government relations Scott Manley offered suggestions the group would support. They included repealing the state prevailing wage, preempting local environmental regulations and implementing cost-saving measures within the Department of Transportation. The group also supports a gas tax of 5 cents per gallon and a vehicle registration fee increase of $25, and transferring more general fund revenue into the transportation fund.

Walker's letter to Fitzgerald and Vos offered to cut the level of bonding down from $500 million to $300 million, approve contingency bonding linked to additional federal funding to keep mega projects in southeastern Wisconsin on track and hold firm to his pledge to not raise gas taxes or vehicle registration fees.

The proposal was met with tepid optimism by Republicans in both houses, but Democrats were quick to pan it, focusing in particular on its reliance on federal funding. Rep. Katrina Shankland, D-Stevens Point, accused Walker of seeking a "federal bailout." Another LFB memo released to Rep. Gordon Hintz, D-Oshkosh, indicates Walker may seek as much as $341 million from the federal government — about 10 times what the state has received on average. But Walker's office has not confirmed that, and all parties involved in negotiations say the numbers are still fluid.