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Lawmakers divided on budget’s construction borrowing

By Dan Shaw

In defending his $1.45 billion state construction budget announced this week, Gov. Scott Walker pointed out that it would borrow less than his Democratic predecessor’s last construction budget.

And that’s true. Walker would borrow about $1.17 billion for construction projects over the next two years while Wisconsin’s 2009-11 budget, the last budget former Gov. Jim Doyle helped produce, called for about $1.2 billion in new debt.

Doyle’s earlier budgets, however, relied far less on borrowing than Walker’s proposal. The state’s construction budget called for about $958 million in borrowing in 2007-09, $880 million in 2005-07 and $561 million in 2003-05.

Before the 2009-11 budget, the state hadn’t borrowed more than a billion dollars for construction since the 2001-03 budget, overseen by Doyle’s GOP predecessor Scott McCallum, who borrowed about $1.18 billion for construction.

At the Building Commission meeting Thursday, the governor defended his plans by arguing that the state should take advantage of low interest rates. He said a strong capital budget will help ensure there is a “healthy construction industry in this state.”

But members of his own party think his proposals – Walker also seeks nearly $1 billion in bonding for transportation projects – will saddle Wisconsin with too much debt. State Rep. Dean Kaufert, R-Neenah, said he doubts Republicans will support the amount of borrowing proposed in the governor’s budget when they meet in caucus later this year.

“I’ve been hearing from my colleagues that that number is not going to fly,” Kaufert said in regard to the proposed construction budget.

At the Building Commission hearing earlier this week, Kaufert joined state Rep. Joan Ballweg, R-Markesan, in support of an amendment that would have cut $28 million in borrowing out of the governor’s construction budget. Their motion came in response to the commission’s decision to add a University of Wisconsin Meat Science and Muscle Biology Laboratory to the list of projects it recommended for lawmakers’ approval.

Nearly $23 million of the project’s $43 million cost would come from bonding. Kaufert argued the Building Commission should eliminate a similar amount of proposed borrowing elsewhere.

Two Democrats, state Sen. Fred Risser, D-Madison, and Rep. Gordon Hintz, D-Oshkosh, joined Walker in voting against the amendment. All three argued that the projects on the proposed construction budget are too important to be cut.

Kaufert declined to say Friday which projects he would like removed. He said the biggest savings would come from eliminating a nearly $197 million replacement of the Wisconsin Department of Transportation’s Hill Farms State Office Building Complex on Madison’s west side. He also noted that the construction budget calls for a large amount of state money to go projects that will be owned by nonprofits or other governmental entities.

Something will have to give, however, Kaufert said, to avoid incurring more than a billion dollars in construction debt again.

The total cost of the projects the state would contribute to is $97.3 million. Of that, Walker would have the state pay about $35.6 million.

An example of a project the state would contribute to is a proposed Family Justice Center in Milwaukee, where victims of domestic violence could seek shelter and receive related services. Of the project’s nearly $21.3 million cost, the state would contribute about $10.6 million.

“Unfortunately, we are going to have to wait on some projects,” Kaufert said. “The bonding is really catching some people’s attention.”

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