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Wisconsin at risk of losing $217M in federal transportation money

Traffic passes through Menomonee during rush hour on Interstate 94 on June 27. (Photo by Kevin Harnack)

Traffic passes through Menomonee during rush hour on Interstate 94 on June 27. (Photo by Kevin Harnack)

Wisconsin could be at risk of losing $217 million in budget authority for transportation next year under a provision passed in a 2015 federal highway funding bill.

According to data released by the Federal Highway Administration in early November, Wisconsin is faced with the loss of $217 million in contract authority under a rescission that’s scheduled to take effect on July 1. Section 1438 of the 2015 Fixing America’s Surface Transportation (FAST) Act included a mandated rescission of $7.6 billion for all states.

Wisconsin could effectively be dealt a reduction equivalent to about a quarter of the $890 million it expects to receive in federal highway money in next year’s budget.  The rescission comes after state lawmakers approved a biennial budget earlier this year that puts $484 million more into roads.

A Wisconsin Department of Transportation spokeswoman said the agency is still trying to determine the effect the rescission will have on next year’s transportation budget. The provision will affect contract authority, not actual “spendable funding,” the spokeswoman noted.

“The department is working with (the Federal Highway Administration) to determine the impacts, which we believe will be less than reported,” according to WisDOT. “We also have been in working with our congressional delegation in an effort to repeal this legislation.”

Wisconsin faces the 11th highest rescission nationally. Of all states, Texas has the most money at risk, with$960 million subject to rescission. Illinois, meanwhile, is faced with the fourth-highest loss, one of $452 million. In states such as South Dakota and Nebraska, however, the rescission isn’t expected to top $8 million. Wisconsin’s rescission is being calculated by taking into account its obligated balances as of Sept. 30, according to the Federal Highway Administration. Some federally supported programs, such as those that promote safety, are exempt.

A remedy could be difficult to come by. A bipartisan bill authored by Sen. John Barrasso, R-Wyoming, has so far failed to gain traction. Industry groups and states, however, are urging lawmakers to stop the rescission. A letter from the American Association of State Highway and Transportation Officials warns that if the federal rescission goes forward, it could “virtually wipe out” states’ remaining budget authority for core highway programs.

“It is especially critical to repeal this provision in calendar year 2019 because in the worst-case scenario, states may be forced to deobligate existing projects in order to provide the necessary amount of contract authority to be rescinded,” according to the letter, signed by ASHTO Executive Director Jim Tymon. “If this happens next spring or summer at the peak of the construction season, the impact will be especially devastating.”

Debby Jackson, executive director of the Wisconsin Transportation Development Association, said the state’s risk of losing contract authority comes after a years-long fight over transportation spending in Wisconsin and could cause significant troubles if it takes effect.

“A lot of people worked hard during the last state budget to get more money into the transportation fund to slow the decline of our transportation infrastructure,” she said. “If this rescission of federal contract authority were to happen, it would be a step in the wrong direction.”

About Nate Beck, nbeck@dailyreporter.com

Nate Beck is The Daily Reporter's construction staff writer. He can be reached at (414) 225-1814 (office) or 414-388-5635 (mobile).

One comment

  1. In 2010 the Wisconsin DOT spent 13% of its budget on debt servicing. After eight years of Republican control the figure was 22%. All of those tax cuts were paid for with borrowed money.

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