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Fallout from road-budget impasse could show up in August DOT letting (UPDATE)

If Wisconsin lawmakers don’t soon break their impasse over the state’s road budget, the consequences for major highway projects could start showing up as early as WisDOT’s August bid letting, an industry official is warning.

Yet, even with so gloomy a prospect hanging over their heads, Republican leaders in the Assembly and Senate remained at odds Tuesday over how to pay for road projects in the next two years. A meeting between top GOP officials came to an abrupt end that day without a compromise in sight, prompting Senate Majority Leader Scott Fitzgerald to confess: “I don’t know where to go anymore.”

Wisconsin’s current budget technically expires at the end of this week. Without a new plan in place, the state will revert to what is known as “a base level” of spending.

Kevin Traas, director of transportation policy and finance at the Wisconsin Transportation Builders Association, said the base transportation budget would reduce spending on the state’s Southeast Wisconsin megaprojects to the rather anemic amount of $15 million a year. With the current megaprojects budget running into the hundreds of millions, contractors would not need much time to notice the difference.

“If the whole budget issue is unresolved for a while, that will impact any sort of project lettings in the future for Southeast megaprojects,” Traas said.

Two projects in particular could start seeing consequences as early as August. The Wisconsin Department of Transportation now plans to use a bid letting scheduled for Aug. 8 to enlist contractors for work involved in the reconstruction of the Zoo Interchange west of downtown Milwaukee and of a north-south running section of Interstate 94 between Milwaukee and the Illinois border. The price tag for both projects stretches into the millions.

The contract related to I-94, for instance, calls for the reconstruction of the interstate’s interchange at the Ryan Road Interchange. WisDOT estimates the project’s cost at between $17 million and just under $20 million.

As for the Zoo Interchange-related project, it involves a $5 million-to-$6 million contract to build a detention pond at Interstate 41’s interchange with North Avenue.

Jim Hoffman, president and owner of Black River Falls-based Hoffman Construction, was quick to note that although Southeast megaprojects tend to draw the most attention in transportation debates, the effects of a base-line budget would be felt throughout the state.

Even so, Hoffman said that delays would be preferable to seeing the state load itself up with debt to pay for road projects. That stance puts Hoffman at odds with various GOP lawmakers. Gov. Scott Walker’s proposed budget includes $500 million worth of bonding, and Republicans in the state Senate would take that total up to $850 million.

“Going back to base is bad for everyone,” Hoffman acknowledged, later adding, “You can’t just bond and put it on the credit card because it’s going to decimate the program in the future.”

Even with the threat of a budget debacle looming, some contractors are doing quite well for themselves. Hoffman, for instance, won a $27.7 million contract earlier this month to perform state highway work in St. Croix County.

(See more in this week’s Top Bidders list.)

Traas, for his part, wasn’t ready to call the situation an emergency. He merely said roadbuilders would be more comfortable makings plans for the near future if they knew lawmakers would soon be coming to an agreement on the state’s transportation budget.

“Obviously, we would feel better if the state was on a path toward long-term, sustainable revenues rather than kicking the problem down the road,” he said.

Republican lawmakers, though, had little progress to report after meeting in private with each other on Tuesday.

Assembly Speaker Robin Vos said afterward that he thinks no spending increase for roads is a preferable alternative to the borrowing proposed by Senate Republicans and Gov. Walker.

Senate Majority Leader Scott Fitzgerald responded by calling Vos’s position “laughable.” But Vos says what’s laughable is Fitzgerald saying “it’s our way or the highway.”

Fitzgerald said if the Legislature can’t pass a budget in July, the GOP “will have egg on our faces.”

The Associated Press also contributed to this report.

About Alex Zank, alex.zank@dailyreporter.com

Alex Zank is a construction reporter for The Daily Reporter. He can be reached at 414-225-1820.

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