As with all budget proposals, Gov. Scott Walker’s latest would mean different things for you depending on what place you hold in the construction industry.
Here are who some of the winners and losers would be if the plans the governor released Wednesday were eventually adopted by the Legislature without change:
Merit-shop companies and the Associated Builders and Contractors of Wisconsin: Nonunion-contractors and their allies already had a feather in their cap when Walker and most of his fellow Republicans in the state Legislature decided two years ago to eliminate prevailing-wage requirements for local projects. Now the governor has decided to double down on that change by using his latest budget to propose getting rid of the remaining prevailing wages on state-commissioned project.
Separately, the ABC of Wisconsin has been pushing legislation that would prevent governments from requiring project-labor agreements for companies that bid for public contracts. The governor gave those efforts an additional push Wednesday by including the same proposal in his budget.
Depending on whom you talk to, these changes will make it easier for small companies to bid on public projects. The increased competition could also put taxpayers in the winner category.
Unions beg to differ, saying that governments that want to go cheap will end up getting exactly what they pay for. But their arguments have not been finding much of a receptive audience in Madison lately.
Local governments: The debate continues to rage over how the state should pay for major projects like the ongoing reconstruction of Interstate 94 between Milwaukee and the Illinois state line. No matter how that ends, local governments stand to make out with the state aid they would receive under Walker’s proposal.
Counties and municipalities would receive nearly $892.3 million in general transportation aids over the course of the two-year budget, up by roughly $56.9 million from the current budget. Walker’s proposal would also provide $14 million more for local road improvements and about $6 million more for local bridges.
Vertical contractors, union and non-union: Walker has proposed $450 million in new borrowing for his capital budget. That isn’t much compared with what he has put forward in some years. But it’s far more than the amount of new bonding he had originally proposed for the state’s current budget — which was precisely zero. In light of that recent experience, most building contractors are probably happy to take what they can get.
Unions: First it was the state’s adoption of a right-to-work law in early 2015. Then it was the repeal of prevailing wages on local projects.
Now, a failed attempt in the November general election to hand control of the state Senate over to Democrats has given labor organizations fewer sympathetic ears among the Republicans who control the state Legislature. That might make it especially difficult to stop the two parts of the governor’s proposed budget that are likely causing unions the most consternation: the proposed repeal of the remaining prevailing-wage laws and the ban on mandatory PLAs.
Restoration developers: After unsuccessfully trying two years ago to place a $10 million-a-year cap on the state’s approval of historical-renovation tax credits, the governor is back with the same proposal this year. His budget would also require developers to show that their use of the credits had led to the creation of a certain number of jobs.
Developers generally oppose a cap because they believe it will sow uncertainty. They argue that they would become more reluctant to pursue projects if they knew that their requests for credits could be suddenly denied because an arbitrary limit had been reached.
Road builders and SE Wisconsin: The governor’s proposed budget adheres to his pledge to not raise the state’s gas tax or other revenue sources while holding the line on borrowing. The result is the temporary dropping of plans to rebuild a stretch of Interstate 94 west of Milwaukee’s downtown. The $31 million that was to go to that project has been moved over to the ongoing reconstruction of the section of I-94 running and north and south between Milwaukee and Illinois.
But once you consider that hundreds of millions of millions are still needed to complete the I-94 north-south work, the boost the project would get from the budget begins to look paltry. Elsewhere, the governor’s budget would keep the core phases of the $1.7 billion reconstruction of the Zoo Interchange on schedule, even while delaying the completion of a northern leg.
Road builders have long argued that the state’s transportation fund needs to be put on a more “sustainable” footing – usually code for the idea that lawmakers should at least consider raising revenue. The governor at one time seemed half open to the idea, saying he would support a higher gas tax only if it were offset by an equal tax cut elsewhere in the budget. Now, though, he seems to be suggesting that higher gas taxes or registration fees are unacceptable under any circumstances.Follow @TDR_WLJDan