Legislature's finance panel ends road-funding impasse with prevailing wage repeal, hybrid vehicle fee

From the Wisconsin state budget series

By Mark Sommerhauser  

How to fund Wisconsin’s roads and bridges, the much-debated question that has delayed passage of the state’s two-year budget, now may be answered by a plan that cuts funding for highway maintenance, hikes fees on hybrid vehicles and ends a minimum-pay requirement for public works projects.

The plan, the contents of which were made public Tuesday night, also trims Gov. Scott Walker’s road-borrowing blueprint and moves the state incrementally closer to collecting highway tolls.

The state Legislature’s budget-writing Joint Finance Committee passed a motion including the plan late Tuesday on a party-line 12-4 vote. It now is on track to advance to the full Legislature as part of a larger budget bill.

The finance committee’s co-chairman, Rep. John Nygren, R-Marinette, said the committee on Wednesday will finish its budget work by taking up a tax plan and a catch-all “wrap-up motion,” the contents of which are not yet known.

That puts lawmakers on the verge of ending the monthslong standoff over the state’s budget and establishing spending levels for state government through June 2019.

There was debate Tuesday on how the transportation budget motion will affect the timeline for highway projects currently under construction.

Nygren said he doesn’t expect the plan to cause additional delays beyond what was proposed in Walker’s budget. He specifically said it would not delay an ongoing expansion of Verona Road in Fitchburg, south of the Beltline. Another local project now underway is rebuilding and expanding Interstate 39-90 from the Madison area to the Illinois state line.

But transportation advocacy and road-building groups question how the plan can avert such delays.

The plan borrows slightly more than $400 million for transportation, compared to Walker’s budget, which borrows $500 million. Relative to Walker’s budget, the plan cuts funding for major highway projects outside southeastern Wisconsin by 15.8 percent, or $106 million.

“It’s hard to understand how you could have a 15 percent cut and have no impact,” said Craig Thompson, director of the Transportation Development Association of Wisconsin.

“I just don’t see any way that you can’t have delays,” said Patrick Goss, director of the Wisconsin Transportation Builders Association.

The plan cuts funding for highway rehabilitation projects, which includes resurfacing and maintenance projects, by about 5 percent, or $82 million, relative to Walker’s budget — and by about $79 million relative to the last budget.

The plan will impose new state registration fees of $100 for electric vehicles and $75 for hybrid vehicles. Walker first publicly acknowledged last month that he and lawmakers were considering the new fee in this budget. Walker, Nygren and other Republican supporters of the move have described it as a matter of fairness, since electric or hybrid vehicle owners pay no, or much less, fuel tax than owners of gas- or diesel-powered vehicles.


Another blow to unions

Repeal of the New Deal-era prevailing wage requirement would mark another historic defeat for Wisconsin labor unions.

Two years ago, GOP lawmakers and Walker partially repealed prevailing wage, the minimum pay requirement for workers on public construction projects, by removing it from projects funded by local governments.

The budget plan would abolish it entirely by removing it from state-funded projects, effective in September 2018. Only projects with federal funding would remain subject to the federal prevailing wage requirement, known as Davis-Bacon.

The budget plan also will enable the state Department of Transportation to further study tolling federal highways in the state, eliminate 200 Wisconsin Department of Transportation positions and limit the ability of local municipalities to restrict certain quarry operations.

Nygren cast the plan as a fiscally responsible approach to the state’s road-funding woes.

“This budget shows you’re not going to make a commitment that you can’t pay for,” Nygren said.

At the same time, Nygren called it “disappointing” that the measure doesn’t reconcile the state’s transportation funding ledger for the long term, as Assembly Republicans sought.

“I’m concerned today where we’re going to be two years from now” when the next budget is crafted, Nygren said.

During Tuesday’s debate, Democratic Rep. Katrina Shankland, of Stevens Point, called the prevailing wage repeal plan an attack on workers. Others said the plan shows Republicans aren’t serious about fixing the state’s long-term transportation funding shortfall.

“There’s no fix in here,” said Sen. Jon Erpenbach, D-Middleton. “Taxing my mom’s Prius isn’t going to do it.”

Earlier in the day, owners of businesses on and near Verona Road told reporters that they fear how prospective delays to the project could affect their bottom lines.

Deirdre Garton, co-owner of Quivey’s Grove, said business at her restaurant has declined by 20 percent in the last year as construction on nearby Verona Road has ramped up.

DOT plans for the project to be done in 2020. If that date is delayed, “we would have to do some major cutbacks in terms of expenses,” Garton said.

Heading into this budget cycle, the state faced a transportation funding gap that, by one measure, was about $1 billion.

To fill part of that gap, Assembly Republicans pushed for new revenue, likely through a gas tax or vehicle fee increase. Senate Republicans and Walker resisted, except for the relatively small amount of revenue expected to be generated by the electric-hybrid fee hike.

Assembly Republicans countered by saying Walker’s proposed level of transportation borrowing must be reduced because, without more revenue, the state can’t afford it.


‘Wrap-up’ still unknown

The “wrap-up motion” set to be taken up Wednesday refers to a grab-bag of legislative odds and ends that, in past years, has been deeply controversial.

Two years ago, as part of the last state budget, such a motion proposed a sweeping curtailment of open-records requirements. Lawmakers quickly removed that provision amid a fierce, bipartisan public backlash.

Nygren said this year’s wrap-up motion will be less extensive.

“There’s really not a lot of issues in there other than technical changes,” Nygren said.

Rep. Gordon Hintz, D-Oshkosh, who sits on the finance committee, has said lobbyists for the state’s rent-to-own industry have boosted lobbying efforts in recent days to convince lawmakers to relax consumer protections on the industry.

Nygren, asked Tuesday about such changes being included in the wrap-up motion, said he generally supports them.