The Wisconsin Department of Transportation significantly underestimated the costs of major highway projects and did not do all it could to manage expenses, an audit released Thursday shows.
The DOT underestimated cost estimates for 16 ongoing major highway projects by a total of about $3.1 billion and did not adequately account for the extent to which inflation and unexpected expenses could contribute to cost increases, the audit found.
Costs for 19 completed projects exceeded estimates by $772.5 million, the audit found.
Joint Audit Committee co-chair Sen. Robert Cowles, R-Green Bay, called the audit's results "unacceptable."
"Wisconsin taxpayers deserve accurate and complete estimates for their transportation projects. This audit should serve as a resource to tighten up DOT practices so that future cost estimates correctly reflect true costs," Cowles said in a statement.
The department also failed to make use of measures it had developed to help streamline its operations. Doing so could have saved money in recent years, state auditor Joe Chrisman wrote in a letter to the Legislature's audit committee.
"We make recommendations for DOT to use its funds more effectively and improve its management of the state highway program," Chrisman wrote.
The audit comes weeks after the resignation of former DOT Secretary Mark Gottlieb, who was replaced by former Department of Safety and Professional Services Secretary Dave Ross.
Ross said in a statement the audit "provides a roadmap to improved efficiency and transparency at the DOT."
The report also comes amid an ongoing debate among lawmakers and Gov. Scott Walker over how to address a projected $1 billion shortfall in the state's transportation fund.
Walker has pledged to veto any budget that includes a gas tax or vehicle registration fee increase without a corresponding decrease.
"His pledge not to raise taxes, I understand that, I respect that, but how unsafe do you want the roads to be as a result of that? At some point in time the governor has to recognize his responsibility to everyone in the state who uses our roads," said Sen. Jon Erpenbach, D-Middleton, a member of the Legislature's Joint Finance Committee.
Erpenbach said the report gives credence to Assembly Republicans' calls for all options to remain on the table, including a gas tax or vehicle registration fee hike.
"The legislative audit is yet another independent report that illustrates construction delays are driving up costs unnecessarily, our road conditions are only getting worse and a long-term solution is needed. It’s clear Wisconsin is trying to do too much with too little and taxpayers are not getting their money’s worth," Assembly Speaker Robin Vos, R-Rochester, said in a statement.
Assembly Republicans last week called for a $300 million increase in funding offset by corresponding cuts elsewhere. They have not said where they would like to raise that revenue, but Vos acknowledged last week a gas tax hike is unlikely.
"The bottom line is we shouldn’t even be thinking about raising the gas tax or fees until we find every last cost savings at the DOT, and the audit shows we can find more savings. We welcome the opportunity to deliver services taxpayers expect at a price they can afford," said Walker spokesman Tom Evenson in a statement.
Expenditures on state highways increased from $739.7 million to $2.1 billion from fiscal year 1996-97 to fiscal year 2015-16, the audit found. In addition, the percentage of the state's 11,758 miles of state highways rated in good condition declined from 53.5 percent in 2010 to 41 percent in 2015.
The department could have saved millions of dollars by keeping down engineering costs and soliciting more bids for projects, the audit found.
"These findings are a roadmap for improvement," said Joint Audit Committee co-chair Rep. Samantha Kerkman, R-Salem, in a statement. "The potential savings were significant and a missed opportunity. Going forward, the DOT must prioritize giving taxpayers the biggest bang for our transportation buck."
Assembly Majority Leader Jim Steineke, R-Kaukauna, said he believes further cost-savings measures can be found with the help of the audit. However, he added, "all options" should remain on the table to reduce borrowing and delays.
Democrats swiftly blamed the Republican majority for the report's findings.
"Our infrastructure is falling apart before our eyes and the governor has not come up with a plan, nor does it sound like he’s going to come up with a plan to address this long-term," Erpenbach said.
Rep. Gordon Hintz, D-Oshkosh, also on the finance committee, said it's "past due" for the Legislature to pass a sustainable transportation budget.
"Year after year, the Republican majority has paid lip service to our transportation needs while delaying major projects and placing millions on the state’s credit card through bonding. The state cannot afford to continue down this path of uncertainty and fiscal irresponsibility," Hintz said in a statement.
The DOT budget proposal introduced in September would cut funding for state highway programs while providing more money for local roads and existing highways, delay some major projects and authorize $500 million in new bonding. Walker is set to release his 2017-19 budget proposal next month.