Agency expects less fuel, registration revenue
By Todd Richmond
Madison — New projections show Wisconsin’s transportation budget is spiraling toward a $63.5 million deficit by mid-2015, leaving lawmakers groping for how to pay for building and repairing roads across the state over the next two years.
The transportation budget consists mostly of gas tax revenue and vehicle registration fees. It covers highway improvements and maintenance as well as aid to local governments for road work and finances the Division of Motor Vehicles and the State Patrol. Over the past few years legislators have grown more worried about the budget’s solvency as people consume less fuel, resulting in less tax revenue.
Still, Republican Gov. Scott Walker’s 2013-15 budget proposal estimated the budget would finish fiscal year 2015 with a $12.6 million balance.
But new numbers from the nonpartisan Legislative Fiscal Bureau show drivers are expected to buy 276 million fewer gallons of gas and diesel fuel over the biennium than Walker’s administration thought, resulting in a loss of $85.3 million in gas tax revenue.
Vehicle registration revenues also are expected to drop by $5.3 million more than originally estimated, and investment earnings are expected to ring at $5.1 million less. Revenue from a number other sources, such as railroad and aeronautical taxes and fees, is expected to increase, but the bottom line is a $63.5 million hole on June 30, 2015, according to the fiscal bureau.
Lawmakers have known this day was coming for years as people buy more hybrid vehicles and drive less as their disposable income shrinks.
The governor and the Legislature appointed a bipartisan task force in 2011 to study how to pay for the state’s transportation needs. The task force produced a number of recommendations last year, including raising the gas tax 5 cents a gallon, increasing driver’s license fees and creating a new vehicle registration fee based on miles driven.
Republican leaders, including Walker, flat-out rejected raising the gas tax and the rest of the task force’s recommendations haven’t gained any traction. Walker’s budget instead bolsters the transportation budget by shifting $55 million from the state’s general and petroleum inspection budgets. The governor’s spending plan also authorizes $994 million in new borrowing for several road projects, including rebuilding Milwaukee’s Hoan Bridge and Zoo Interchange.
The Legislature’s finance committee is scheduled to review the transportation portion of Walker’s budget Tuesday and will have to decide how to deal with the deficit. The panel could vote to delay projects, increase borrowing, pump tax dollars from other sources into the budget or raise the gas tax.
Bob Delaporte, a spokesman for Sen. Alberta Darling, R-River Hills, a committee co-chairwoman, said he’d have to talk to Darling about the new transportation projections when reached for comment Friday morning. A message left for the other co-chairman, Rep. John Nygren, R-Marinette, at his Capitol office wasn’t returned immediately.
Still, it’s unlikely the committee would raise the gas tax given GOP leadership’s opposition to such a move. More borrowing also looks unlikely. Walker’s overall budget calls for $2.2 billion in borrowing, generating complaints from his fellow Republicans that the spending plan would saddle the state with too much long term debt.
Sen. Luther Olsen, R-Ripon, a finance committee member, suggested cutting $63 million in projects.
“Either we spend less or we raise revenue,” Olsen said. “That’s the way life works. That’s the way any business works. We just can’t keep borrowing money when the revenue’s not going to be there to support the spending we have.”
Assembly Speaker Robin Vos, R-Burlington, said it’s time to reconsider toll roads, an idea he’s long supported. But for now it looks like road projects will be cut, he said.
Walker spokesman Tom Evenson had no immediate comment.
Rep. Robb Kahl, D-Monona, sat on the transportation task force. He blasted Republicans for ignoring the task force’s recommendations and failing to come up with any long-term solutions. Cars only are going to become more efficient, he said, which means less and less gas tax revenue.
“All we’re going to do is cut projects,” Kahl said. “We’re just being so short-sighted simply because we want to be able to go out there at campaign time and say, ‘I lowered taxes and you didn’t notice any changes.’ Well, no. That’s not going to be true.”