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An Analysis of the Transportation Traffic Jam
The state budget process has slowed down like rush hour traffic
on a busy road. With all sorts of merging ideas, political lane
closures and different drivers, the state legislature is working
diligently to get the budget moving again despite some pretty
The main issue causing our delay is a fairly simple math
problem: the revenue for transportation does not match or exceed
the current expenses and planned projects for the future. As a
result, we must determine if we will increase revenues or
Funding for transportation comes from the state transportation
fund which is funded through the gas tax, vehicle registration
fee revenues (including titling and other related fees) and
other smaller funding programs.
recent years, the state has started borrowing – or bonding – for
projects that exceed our revenue in the transportation fund. We
have borrowed transportation revenue bonds, which are borrowed
on the guarantee of registration fees, and general obligation
bonds, which are borrowed on the guarantee of general purpose
revenues or segregated transportation funds revenues.
Over the last six budgets, we have borrowed nearly $3.7 billion
to pay for road projects. Nearly $2 billion was borrowed for
major highway projects and an additional $811.8 million was
borrowed to pay for the mega projects in southeastern Wisconsin,
not counting the Hoan Bridge project in Milwaukee!
The projects for which we are borrowing are usually major
highway development programs and administrative facility capital
projects (office buildings). The following table demonstrates
our borrowing on the Transportation Fund for the last six
budgets, with a preview of the Governor’s proposed borrowing.
Transportation Fund-Supported Bond
Authorization ($ in Millions)
||Major Highway/Admin Facilities*
||SE Wisconsin Freeway Mega-projects
||Other State Highway Projects
||Freight Rail and Harbor Projects
||Stillwater/Hoan Bridge Projects
*Includes approximately $11.8 million each biennium for
reflect $100.0 million in transit capital bonding approved in
2009-11 and then rescinded in 2011-13.
***Governor's Budget proposal. Chart and data provided by
Legislative Fiscal Bureau - Paper #631
can see, the Governor’s 2015-17 budget recommendations seek to
authorize $1.3 billion in new bonding. This would raise the
already high debt service we are paying to an extremely high
percentage of our transportation fund revenue. Debt service is
the cash that is required to cover the repayment of interest and
principal on a debt.
We are currently paying around 20% of our incoming revenue for
debt service. If we were to borrow another $1.3 billion, we
would be raising our debt service to nearly 22.3% of the fund by
2017, and it would continue to increase.
In other words, nearly 25% of our transportation revenues (gas
taxes, registration fees, etc) would be paying for debt service
within two years. And in two years, we would be crafting another
budget without fixing this problem. If we stop bonding now, we
can freeze our debt service to 18% through 2020.
There are several schools of thought on the transportation
funding issue. There are legislators who want to increase
revenues – increase gas taxes and fees. And there are
legislators who want to decrease expenses – cut programs and
decrease spending. There are others who want to borrow to pay
To increase revenue, we have some options. All of our options
include generating more revenue for the transportation fund by
seeking more from the residents of Wisconsin and those visiting
Five-Cent Increase in the Motor Vehicle Fuel Tax Rate (Gas Tax)
Collect $.359 per gallon rather than $.309 per gallon.
• Estimated revenue to transportation fund would increase by
$151,400,000 in 2015-16 and $167,200,000 in 2016-17.
• Last increase was in April 1, 2006 – when indexing was
• If indexing were still allowed, the current fuel tax rate
would be $.374 per gallon.
• We would have collected $199.1 million more in revenues in
2014-2015 and nearly $1 billion more since indexing was
repealed in 2006.
• Approximately 20% of our fuel consumption is by
non-residents: tourists and truckers traveling through our
Vehicle Registration Fees
Increase the fees for automobiles and light trucks by $10 or
• The current fee is $75 for automobiles, $75-106 for light
trucks depending on weight.
• The last time this fee was raised was January 1, 2008.
• Estimated revenues would increase by:
o $10 increase = $34.7 million in 2015-16 and $46.7 million
o $20 increase = $69.3 million in 2015-16 and $104 million
• Registration fee increases are only paid by Wisconsin
residents, not visitors to our state.
also looked at how our taxes and fees compare to our neighboring
states. Wisconsin has relatively low vehicle registration fees
and gas taxes compared to our neighboring states. Some of those
states have recently increased their gas taxes and/or fees.
To decrease spending, we would have to reduce and delay current
projects, delay future projects and seek significant cost-saving
measures to keep the transportation fund solvent. While we have
not discussed the specific projects that would be reduced or
delayed, this could be an option if we decide to decrease
spending rather than raising revenues.
From my perspective, I feel our priorities for transportation
projects should be in the following order:
General Transportation Aids (GTA) to municipalities,
counties and townships. These funds are distributed
statewide to maintain existing infrastructure. This is my
2. State Rehabilitation Program - Funds spent to improve
current state highways. We should maintain what we have
before we build new roads.
3. Major Projects - New roadways and/or major expansions
such as the Hwy 12 project in Baraboo.
4. Milwaukee Mega Projects – enormous, long-term
infrastructure projects like the Marquette Interchange or
the Zoo Interchange. This is my lowest priority.
I do not
believe that we should continue to borrow money for projects
that we cannot afford. In the long-run, our debt will force us
to increase revenues and decrease projects when we are faced
with a critical problem. I believe that Wisconsin needs to
change our behavior now before we are faced with a massive
spending-problem in the future. We need to stop charging on the
state’s credit card!
In the District
Climb to the top of the World's Largest Letter M!
Last week, along with Department of Tourism Secretary Stephanie
Klett and the Governor’s Council on Tourism, we presented Allen
Schroeder, director of Stonefield Historic Site in Cassville, a
JEM (Joint Effort Marketing) Grant from the Department of
Tourism. The grant was presented to him for the work on the
annual Great River Road Festival. The JEM Grant Program offers
cash and guidance to make a promotion or event come to life. The
grant reimburses Wisconsin non-profit organizations for
qualified advertising costs. We presented the grant at Belmont,
Wisconsin’s first territorial capital. Congratulations, Allen!
We also the had opportunity to climb to the top of the World’s
Largest Letter M in Platteville, WI. It was a long, rainy climb
to the top, but the view was worth it! Thanks to Kathy Kopp,
from the Platteville Chamber of Commerce for being a great
Almost to the top of the Giant M!
Pictured above: Representative Jill Billings,
Representative Travis Tranel. Department of Tourism Secretary
Stephanie Klett and Senator Howard Marklein
We made it to the top! Look at that view!
Pictured above: Ernie Stevens III, Senator
Howard Marklein, Representative Travis Tranel, Scott Krause,
Lola Roeh, Brian Kelsey, Kathy Kopp, Paul Cunningham, Department
of Tourism Secretary Stephanie Klett, Representative Jill
Billings, and James Bolen
Darlington Canoe Fest
It was a beautiful day last Sunday and a great day for the
Darlington Canoe Fest Parade! It was great to see so many
people! I am looking forward to many more parades this summer!
Hope to see you there!
*Senator Marklein is pleased to provide this
legislative E-Update to the constituents of the 17th State
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