Gov. Jim Doyle’s proposed 2003-2005 budget recommendations were of concern to those interested in maintaining Wisconsin’s commercial infrastructure. Doyle was recommending that the state transfer more than $500 million dollars of transportation monies to the general fund to be used to finance other areas of the budget. Doyle proposed to fill the $500 million dollar shortfall and Department of Transportation funding with bonding. Of course, all of these monies would have to be repaid on a later date.
Recently, new developments in the Joint Finance Committee may help remedy this potential problem. The following illustrates just some of the different areas whereby the Joint Finance Committee is recommending alterations to Doyle’s proposed 2003-2005 budget recommendations in the area of transportation:
- Reduce transportation revenue bonding by $480 million as compared to Doyle’s budget recommendation. While bonding is an essential element of WisDOT’s budget, increased reliance on bonding increases the pressure to raise gas taxes and registration fees. Furthermore, such bonding can eventually lead to a scenario where by current bonding is used to pay off old debt.
- Expand WisDOT’s revenue base. Wisconsin is unique in that beyond federal revenues, WisDOT is funded solely through registration fees and gas taxes. The Joint Finance Committee plan added a portion (20 percent) of the sales tax revenues generated from new vehicle sales to the transportation fund in the next biennium. By doing so, you not only add to the revenue base, but you take pressure off the need to increase gas taxes or registration fees.
- Replenishing the transportation fund. Doyle’s budget transferred $530 million from the transportation fund to the general fund to close the state’s $3.2 billion budget shortfall. The Joint Finance Committee plan replenished the transportation fund with $377 million in general obligation bonds. These bonds will be used to prevent the delay of nearly 100 road projects around the Wisconsin and make sure the Marquette Interchange project is completed on time.
These needed alterations to Doyle’s proposed 2003-2005 WisDOT recommendations should be welcomed by all those who view Wisconsin’s roads as the primary means by which goods (and people) are transported in the state. However, we should not forget the importance of keeping segregated fees, which are earmarked for specific projects, separate and distinct from general-purpose revenue. Once monies are lost for important infrastructure projects, it is very difficult to get that money back from the quagmire of state government spending.
Reince R. Priebus can be reached at Michael Best & Friedrich LLP at 262-956-6560 or by email.