Gov. Scott Walker seeks release of $350 million in borrowing for roads

Completion of construction of the Beltline’s Verona Road interchange has been proposed for delay two years due to funding constraints. Gov. Scott Walker is asking Republican lawmakers to release $350 million in bonding to keep projects on schedule.

Gov. Scott Walker urged Republican lawmakers Tuesday to authorize an additional $350 million in borrowing to help pay for road projects that are delayed for lack of funding.

The delays affect two Madison-area projects — expansion of Verona Road south of the Beltline and the widening of Interstate 39-90 from Madison to the Illinois border.

In the 2015-17 budget, lawmakers approved the state borrowing the money but only after additional review by the Joint Finance Committee. The budget also included $500 million in borrowing that was not contingent on additional JFC approval. Walker had originally proposed $1.3 billion in borrowing for road project.

Because the two-year budget only authorized a half-billion dollars in borrowing, the Department of Transportation announced last month it would delay the completion of five major projects:

  • Widening Interstate 39-90 in Dane and Rock counties (completion moved from 2021 to 2023).
  • Widening of Verona Road south of the Beltline and some Beltline work in Dane County (from 2019 to 2021).
  • Highway 10-441 in Outagamie, Calumet and Winnebago counties (from 2019 to 2021).
  • Highway 23 in Sheboygan and Fond du Lac counties (on hold pending court action).
  • Highway 15 in Outagamie County (from 2019 to 2021).

“If we have funding there, those projects go forward,” Walker said. “If they don’t, depending on how much or how little we have depends on how far those projects go going forward.”

Walker spoke to Senate Republicans at their caucus meeting in the Capitol on Tuesday but did not take questions from reporters.

DOT spokeswoman Peg Schmitt said the department is still assessing potential impacts for additional regional state highway rehabilitation projects.

Under the state budget, the first half of the $350 million borrowed would be repaid with general taxes and the other half could be repaid with transportation-related funds such as the gas tax and vehicle registration fees or general fund taxes, according to the nonpartisan Legislative Fiscal Bureau.

Sen. Luther Olsen, R-Ripon, a JFC member, said he’s “dead against” any borrowing that would be repaid with general fund taxes, which pay for K-12 schools, the University of Wisconsin System, technical colleges and other state services.

“I’m not interested in using (general fund tax dollars) when we came up short this last budget,” Olsen said, referring to cuts to UW, state parks and public radio and television, as well as an increase in K-12 school funding that relied on an accounting gimmick to pull funding from a future budget.

A bipartisan study committee recommended in early 2013 a combination of increasing the gas tax by five cents per gallon, changing to a mileage-based vehicle registration fee and other fee increases to address the state’s long-term transportation funding woes, but Republicans haven’t adopted any of those recommendations in two budgets since.

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Democrats have called for a special session to address transportation funding issues. Rep. Robb Kahl, D-Monona, announced Tuesday a proposal to reinstate indexing the gas tax to inflation, which the state discontinued in 2006. He said if indexing hadn’t been eliminated, the gas tax would be 6 cents per gallon higher today.

“We need to stop burdening our children with debt to pay for roads they will personally never drive on,” Kahl said in a statement. “This is a fiscally responsible course of action to help support the long-term funding of our transportation infrastructure, which will in turn help grow Wisconsin’s economy.”

A UW-Whitewater study released Tuesday that was commissioned by the Transportation Development Association of Wisconsin found the two-year delay on four of the five major projects would cost the state $160 million based on inflationary construction cost trends. An updated DOT estimate isn’t due out until February, agency spokeswoman Schmitt said.

The study also estimated the I-39-90 project will have a $1.8 billion economic development impact and create more than 2,000 construction jobs and 1,000 permanent jobs. The Verona Road project will have a $250 million economic development impact and create nearly 500 construction jobs and 150 permanent jobs, the study said.

Walker mentioned the possibility of finding unspecified cost reductions as one alternative to borrowing $350 million.

“We’re willing to work with you in terms of what kind of alternatives there might be,” Walker said. “The long term between now and the next budget we can talk about how to deal with those issues on a long-term basis.”

Walker blamed the state’s transportation funding problems on his predecessor, Gov. Jim Doyle, a Democrat, who transferred money from the transportation fund to shore up the state’s general fund.

According to the fiscal bureau, Doyle took $1.4 billion from the transportation fund to help balance the general fund over four budgets. But he also paid back the transportation fund with general fund-backed bonds, for a net loss to the transportation fund of $375.6 million.

In his three budgets, Walker transferred $450 million from the general fund to the transportation fund, and also borrowed $315 million with money repaid by general taxes, for a net gain to the transportation fund of $390 million since 2003, plus whatever amount is authorized by the JFC.

Walker emphasized that even with the additional $350 million in borrowing, the amount of total borrowing in the two-year budget that began July 1 would still be at the lowest level in more than 20 years.

“We’re in a pretty strong position,” Walker said. “I’m hopeful we can work together on it.”

Joint Finance Committee co-chairpersons Sen. Alberta Darling, R-River Hills, and Rep. John Nygren, R-Marinette, did not respond to a request for comment.

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