As Wisconsin’s transportation-budget impasse continues into July, the state’s chamber of commerce is calling on lawmakers to consider allowing the design-build method of project delivery for transportation projects and take various other steps meant to reduce regulatory costs.
But the longer state officials go without a budget, the more likely it is that large highway projects will be affected.
Wisconsin Manufacturers & Commerce, a group that serves as the state chamber of commerce and manufacturers’ association, stated in a letter Friday that it continues to think state legislators should consider raising gas taxes and vehicle-registration fees. But since Gov. Scott Walker and various Senate Republicans remain opposed to those options, the chances of getting a revenue increase passed this year are slim, said Jason Culotta, WMC senior director of government relations.
The priority, Culotta said, has now shifted to ensuring that the Wisconsin Department of Transportation starts to operate more efficiently over the next two years. The fight for more revenue, he said, will have to wait for future budgets.
“We’d like to see this budget resolved and behind us,” he said.
WMC’s list of recommendations starts by calling for a repeal of the state’s prevailing-wage laws.
“Wisconsin’s prevailing wage law artificially inflates wages above the market rate for state transportation building projects,” the letter states, repeating an argument often heard by prevailing-wage opponents.
Other cost-saving measures WMC endorsed in the letter include:
- Codifying a regulatory standard set by the Wisconsin Supreme Court in the case of Lake Beulah Management District vs. Village of East Troy. WMC said that change would protect frac-sand mining from “misguided local regulations” and help keep gas prices low;
- concentrating the federal money the state now gets into fewer projects, which WMC says would help prevent burdensome federal regulations from driving up the cost of state and local highway projects;
- reducing the number of engineers employed by the Wisconsin Department of Transportation from 755 to 355. WMC would have the state rely more on private-sector engineers;
- allowing the Wisconsin Department of Transportation to use the design-build delivery system for highway-construction projects. The change would allow the same firm to design and build projects. Proponents of this system argue it would provide contractors with more control of a project right from the get-go, giving them an opportunity to use their practical knowledge to influence a project’s designs;
- codifying WisDOT’s adoption of so-called “practical design” changes to its Facilities Design Manual; and
- coordinating state and federal environmental reviews for highway projects, which WMC argues would reduce regulatory costs.
As for the state’s gas tax, WMC’s letter mentions the group’s already stated support for a five-cent-per-mile increase, as well as a $25 increase to the state’s vehicle-registration fees. The letter also suggests taking the two cent-per-gallon tax now collected for the Petroleum Environmental Cleanup Fund Award program, also known as PECFA, and using it to bolster the transportation budget.
Elsewhere, WMC recommends transferring more money out of the state’s general fund and into the transportation fund, either by increasing the 0.25 percent transfer or transferring part of the sales taxes collected from motor-vehicle sales. Critics of such proposals generally argue that transfers of that sort divert money from schools, heath care and other state priorities.
Lawmakers have been engaged for months in a heated debate over how the state should pay for highway projects in the next two years. The state’s previous budget period officially ran out at the end of June. Until a new plan is in place, the state will operate on what is know as a “base level” of funding, which is far below the amounts usually approved in actual budgets.
A base budget, for one, does not include any new borrowing. This is particularly troubling for road projects that fall under the Wisconsin Department of Transportation’s Southeast Megaprojects program.
A recent memo from the state’s nonpartisan Legislative Fiscal Bureau noted that planned construction lets could be delayed if a new transportation budget isn’t passed soon.
Were a new budget not adopted by the end of this month, for instance, the construction let for a detention pond at Interstate 41’s interchange with North Avenue would most likely be delayed. This contract, expected to cost at least $5 million, is part of the massive Zoo Interchange project.
Similarly, failure to pass a new budget this month could mean a postponement for the Ryan Road Interchange — which is part of the Interstate 94 north-south freeway project.
State Rep. Gordon Hintz, a Democrat from Oshkosh and a member of the state’s budget committee, said the possibility of project delays shows the budget impasse affects more than state government, “but (also) contractors and the building trades,” he said.
WMC and various other business groups are anxious to avoid these sorts of delays, arguing that the state’s transportation system plays an essential role in commerce. In suggesting ways to save money and make the state’s transportation budget stretch further, WMC was responding to a request put forward by Assembly Speaker Robin Vos, R-Rochester.
Vos asked WMC and other business groups to come up with their own suggestions after seeing Assembly Republicans’ proposal to place a per-mile fee on heavy trucks rejected. That plan met its stiffest opposition from GOP lawmakers in the state Senate, who argued the fees could drive up the cost of goods delivered by truck.
Vos responded by calling on various business groups to recommend their own alternative for dealing with the state transportation budget’s projected $1 billion shortfall. Vos’s letter asked for the responses to be submitted by Monday.
“Without new revenue, construction will halt and costs will increase as projects are delayed,” Vos wrote in the letter, which he sent out Wednesday.