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Gridlock raises worries about transportation spending

By Dan Shaw 

Crews rebuild the median along Interstate 94 on March 27 in Milwaukee. State officials are trying to determine what will happen to Wisconsin’s transportation budget if Congress fails to pass a new transportation bill by the end of September, when the current transportation bill will expire. (Staff file photo by Kevin Harnack)

Crews rebuild the median along Interstate 94 on March 27 in Milwaukee. State officials are trying to determine what will happen to Wisconsin’s transportation budget if Congress fails to pass a new transportation bill by the end of September, when the current transportation bill will expire. (File photo by Kevin Harnack)

State officials are trying to ascertain how much money Wisconsin would lose for roads, bridges and similar structures if Congress fails to approve a new transportation bill by the time the current one expires next year.

Worries about money have arisen almost every time a similar expiration date has approached, said Paul Hammer, Wisconsin Department of Transportation director of policy, budget and finance. But the gridlock among federal lawmakers amid the recent government shutdown and their inability to pass an agriculture bill has many people thinking the threat of a cut in transportation spending is greater than usual this time around, he said.

Perhaps most worrisome to Hammer, he said, is that most federal lawmakers’ attention seems to be drawn to matters other than transportation. After returning from the winter recess that starts this month, federal legislators almost immediately will have to avoid another looming shutdown in January, he said, and then they will have to raise the country’s debt ceiling in February.

The debates over those matters might leave little time for highways and bridges, Hammer said.

“Everybody knows we’ve got problems,” he said. “Everyone knows revenues aren’t increasing. But there isn’t a lot of debate. Nobody is talking about it now.”

Clock is ticking

The current transportation bill, named Moving Ahead for Progress in the 21st Century, is scheduled to expire at the end of September. Unless Congress approves a replacement, the federal highway trust fund, which helps pay for large portions of state and local road projects in Wisconsin and across the country, will be insolvent by 2015, the Congressional Budget Office has warned.

Some states already have tried to a put number on what such an eventuality could mean for their transportation budgets. Kentucky’s transportation secretary, for instance, has estimated his state would lose $650 million in 2015 for roads and highway maintenance, according to the Associated Press.

Wisconsin receives about $840 million annually from the federal government for highways, safety improvements, maintenance, public transportation and similar things, Hammer said. Most of that money comes in the form of reimbursements for completed work. The state typically receives about 45 percent of the money used on a project, whereas local governments often get as much as 80 percent.

Unlike their counterparts elsewhere, though, Wisconsin officials have not put a number on what the highway trust fund’s insolvency would mean for the state’s transportation budget, Hammer said. The lack of a forecast, he said, stems in part from Congress’ giving no indication of how great of a reduction, if any, states should expect.

Much of the money that has flowed into the fund in the past has come from the federal gas and diesel taxes, and Hammer said he has no reason to believe lawmakers would redirect that revenue.

Cutting off transfers?

But the gas and diesel taxes that do not concern Hammer were last raised in 1993, and since then construction costs and maintenance needs have increased steadily. To pay for projects whose costs have consistently outstripped revenues, Congress has taken nearly $55 billion from the federal general fund and put the money toward transportation.

The big question now, said Kevin Traas, director of transportation policy and finance for the Wisconsin Transportation Builders Association, is whether concerns about government overspending will make lawmakers reluctant to approve future transfers. If they stop, the money coming out of the highway trust fund stands to be reduced by about $15 billion a year, resulting in a 30 percent decrease in federal transportation spending by 2024, according to the Congressional Budget Office.

“There’s not a lot of options out there, especially if the powers that be in Washington are concerned that $55 billion in transfers adds to the deficit,” Traas said. “There hasn’t been a lot to be optimistic about this session of Congress.”

But a spokesman for U.S. Rep. Tom Petri, a Republican who represents east-central Wisconsin, said federal lawmakers might be getting too little credit. Lee Brooks said Petri, who is the chairman of the Transportation and Infrastructure Subcommittee’s Highway and Transit Subcommittee, is aware of the looming insolvency of the highway trust fund and is reviewing possible remedies.

Brooks said it is too early to say what the next transportation bill might include.

“We hope to have something to the House by mid- to late summer,” he said.

Traas, though, said he has not heard of many proposals that would shore up the highway trust fund and win wide support among federal lawmakers.

On Tuesday, U.S. Rep. Earl Blumenauer, D-Oregon, put out a news release calling for the federal gas tax to be increased from 18.4 to 33.4 cents a gallon during the next few years. Blumenauer also recommended that fuel taxes eventually be phased out in favor of a tax collected in accordance with the number of miles drivers travel the roads, something his home state is testing out.

Traas, though, said he has seen enough similar proposals come and go to be skeptical of Blumenauer’s chances of having his passed.

“There was a whole bunch of national study commissions done in 2007 and 2008 to come up with a way to replenish the highway trust fund,” Traas said. “But you still got to get it through Congress. And that hasn’t worked so well.”

Local tolls?

If federal lawmakers fail to provide more money for transportation, the least they could do, Traas said, is give states additional means of making up the loss on their own. He said the Wisconsin Transportation Builders Association is lobbying Congress to lift a longstanding ban on the collection of tolls on highways that were built with federal assistance.

But even if Traas and his colleagues were successful, they would have to convince state lawmakers that toll roads are needed.

Much like their counterparts in Washington, D.C., though, legislators in Madison have been reluctant to make the public pay more for roads. The state gas tax for years had been indexed to increase annually in accordance with inflation, but lawmakers brought that practice to an end in 2006, leaving the rate at 32.9 cents a gallon.

Yet, amid all the pessimism about lawmakers’ ability to act, there is at least one source of hope, Hammer said. For all those who think Congress is dysfunctional, he said, there are others who think lawmakers are eager to repair the damage done to their reputations during the government shutdown.

Hammer said he would like to be optimistic but is obliged to prepare for the worst.

“From a budget office standpoint, we are always worried,” he said. “We are worried about it happening because that is our job.”

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