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Transportation MI Research

April 16, 2018 | By Bill Osmulski

Gas Tax Debate: Round 2

Average Wisconsin Driver Could Pay $375 More Annually For State To Maximize Federal Stimulus

It seems whenever we talk about transportation infrastructure in Wisconsin lately, we’re really debating a gas tax increase. It’s a heated debate to say the least. One side believes the state needs more transportation funding. The other side believes transportation officials need to be better stewards of the funding they have now.

This debate is credited with tying up the budget process all last summer. When the 2017-19 state budget finally passed in September, the gas tax debate appeared to go dormant. Then came President Donald Trump’s first State of the Union address on Tuesday, Jan 30.

Trump’s $1.5 Trillion Plan

Some conservatives have called Donald Trump the most conservative president since Reagan, despite rumors of a forthcoming fiscally liberal agenda. Talk of a trillion-dollar infrastructure/stimulus plan was particularly concerning. After all, less than 10 years ago President Obama dumped a trillion dollars into his stimulus program that was supposed to fix our “crumbling” infrastructure while reinvigorating the economy. It did neither.

When Trump unveiled his infrastructure plan at his Jan. 30 State of the Union Address, it wasn’t $1 trillion – it was $1.5 trillion. However, unlike Obama, Trump’s plan doesn’t rely on federal funding. Instead, he plays to a common weakness in state and local politicians. They can never leave money on the table.

And so, out of the $1.5 trillion, Trump only intends to spend $200 billion from the federal treasury. States and local governments will put up $800 billion to get their piece of it. That means a 20/80 federal-local split. Usually it’s the other way around.

In order to get that $400 million in federal money, Wisconsin would have to increase annual transportation funding by $1.6 billion.

By the way, the 20-80 cost sharing will only apply to new funding under Trump’s infrastructure plan. The 80-20 split will still apply for current funding programs.

The full plan was released on Feb. 12, and conservative groups are generally okay with it. They point out that it’s a ten-year plan, so the annual federal commitment is $20 billion – a drop in the bucket by federal budget standards.

Ultimately, the infrastructure plan is more about deregulation than it is about federal funding. It would place limits on legal challenges, apply a 150-day timeline for the federal permitting process, and take the ambiguity out of environmental impact requirements.

“We built the Empire State Building in just 1 year—is it not a disgrace that it can now take 10 years just to get a permit approved for a simple road?” President Trump asked during his first State of the Union Address.

Walker and the Gas Tax

Despite the promise held by such reforms, state politicians remain fixated on the idea of more federal funding for roads.

Governor Walker made it clear during the budget debate that he would not even consider raising the state’s gas tax unless taxes were cut by an equal amount in another part of the budget. He maintains that position today, but just two days after the president’s address, made it look like he was wavering.

That Thursday morning reporters asked Walker if he would consider raising the gas tax to capture those additional federal funds. He restated his position, and then began speculating on hypotheticals.

He said he hopes congress changes the president’s cost sharing proposal to the more standard 80-20 federal-state split.

If that were the case, Walker said, “I’m willing to look at ways to add to our revenue in the transportation budget as long as we have a net neutral or really a net reduction for the overall burden to the taxpayers in this state. If we could cut taxes, income taxes or other taxes, we could look at revenues in the future, particularly if it helped us leverage federal dollars.”

Not surprisingly, the resulting headlines and Facebook posts read, “Walker Open to Gas Tax Increase.”

DOT Saves Millions

Meanwhile, Wisconsin Department of Transportation Secretary Dave Ross is working hard to prove Wisconsin doesn’t need any new funding for roads. Ross came into his position in early 2017 amidst a devastating audit of the state highway program. It found the department was wasting hundreds of millions of dollars simply due to waste, fraud, and abuse.

The Reason Foundation’s most recent Annual Highway Report also found evidence of waste in Wisconsin. In 2015, the state dropped 10 spots in its rankings, from 28 to 38, because road quality was going down while spending per mile was going up.

When Sec. Ross took over, he wanted a chance to put safeguards and efficiencies in place, to see how far current funding could go. So far, he’s providing plenty of evidence that the state is doing just fine without a gas tax hike. In August, the DOT announced it had saved $46.7 million since Ross took over due to lower than expected construction costs and let savings.

Then, the same morning that Walker was musing over a gas tax hike, Ross announced his department had saved $22.1 million over the previous six months from negotiating better contracts with vendors and reduced project estimates. DOT plans to put it towards the I-39/90 North-South expansion, pushing up its completion date by a full year.

The Mega Project Money Hole

No sooner had DOT announced its plans for the surplus than three Milwaukee area lawmakers said it should go towards a mega project in Milwaukee.

Mega projects, by definition, cost over $500 million, and tend to be in southeastern Wisconsin. They usually involve replacing aging infrastructure in the interstate highway system that’s over 60 years old.

The main projects include the Marquette Interchange (which is complete), the Zoo Interchange (in progress), the I-94 north south expansion (approved in Foxconn deal) and the I-94 east west expansion (which will connect the Zoo and Marquette Interchanges).

Sen. Alberta Darling, Rep. Dale Kooyenga, and Rep. Joe Sanfelippo held a press conference that same Thursday morning, announcing their bill that would put the DOT’s savings towards starting the I-94 east west expansion. The environmental study for that project was halted in 2016, after costing $27.2 million. It is estimated to cost $5.5 million to complete. The lawmakers said if the state doesn’t start the project soon, it will have to start the study over from scratch.

Not everyone in the Capitol was happy those lawmakers were pushing the project. Perhaps it’s because the mega projects are a key factor in the gas tax debate because of their enormous expense. If the DOT is able to make progress on them with current funding levels, it undermines the need for a higher gas tax. That is the most likely reason why the Legislature forbade the DOT from working on the north leg of the Zoo Interchange in the 2017-19 budget.

In 2020, the DOT plans on spending about 40 percent of its highway budget on the megas, but from 2021-2023, megas are projected to only make up about 7 percent of the total highway budget.

The timing of the mega projects is also important in the gas tax debate. These projects are a once-in-a-lifetime investment that the state is trying to tackle all at the same time. That means transportation spending is at a temporarily high level. In 2020, the DOT plans on spending about 40 percent of its highway budget on the megas. Fortunately, these projects will not go on forever. After 2020, their costs start to drop off rapidly. From 2021-2023, megas are projected to only make up about seven percent of the total highway budget. This means if you’re going to make the case for a gas tax hike, you’d better do it while project costs are temporally high to lock in that higher funding level.

However, the road builders’ reaction to the I-94 east west announcement suggests they’re starting to lose hope on a gas tax hike. The Transportation Builders Association registered in favor of the bill. Perhaps they’re at the point where they’ll take whatever they can get. That bill, by the way, didn’t get far before the session ended.

Crumbling Narratives

Ultimately the case for increasing road funding is dependent on the public accepting three principles. One – that the state’s roads are in terrible condition. Two – that the state is responsible for maintaining those roads. Three – that the state can’t maintain those roads without more money. Throughout the budget debate, the MacIver Institute investigated each of those assumptions, and found they don’t hold up to much scrutiny.

First of all, when it comes to the overall quality of Wisconsin’s roads, there are no easy answers. There are three different methods to rate pavement conditions and every county gets to decide which one to use, which means there’s no consistency in the results. Additionally, the audit found that the DOT will disregard any data samples it believes does not represent the overall condition of the road – something unique to Wisconsin. When these results are compiled into statistics and reports, there’s so much room left open for interpretation that both sides in the funding debate can craft a message to suit their purposes.

Even then, the conclusions can be subject to different perspectives. For example, looking at the Reason Foundation’s Feb. 2018 highway report, you could say, “Wisconsin’s roads are terrible; Our rural arterial roads are ranked 44th in the country.” But you could also say, “Wisconsin’s roads are in great shape; only 3.31 percent of our rural arterial roads are in poor condition.” (It turns out rural arterial roads throughout the country are in such good shape, it doesn’t take much to drop to the bottom of the rankings.)

Then there’s the question of which roads the state is actually responsible for maintaining. Those arguing for more funding benefited from the misperception that the state is responsible for all of them. That’s not true. There are 115,371 miles of road in Wisconsin, and the state is responsible for 11,746 miles – that’s 10 percent. Local governments are responsible for other 103,625 miles using their own budgets. Cities like Milwaukee have put road funding low on their list of priorities and it shows. On the other hand, Washington County has a plan to maintain all its roads through prioritization, and Marquette County’s innovative maintenance strategies have produced the best local roads in the state with some of the lowest levels of state assistance. Unless the state decides to completely take over responsibility for local roads from local governments, raising the state gas tax or fees won’t help local roads. Our report on Milwaukee’s roads highlights this inconvenient truth.

Finally, there is the argument that the state cannot maintain its roads without more funding. This narrative started the summer before Gov. Walker even proposed a budget. Using some funky budget math, gas tax advocates created a false narrative that the state had a billion-dollar deficit in its transportation fund. The MacIver Institute reported that the deficit was completely hypothetical and only existed on paper using the controversial base-line budgeting system. The Legislature just passed a zero-based budgeting bill, which means they won’t be able to create that narrative again.

Going back to the Reason Foundation’s report, which uses information for 2015, Wisconsin dropped 10 places in the overall ranking specifically because “per mile spending increased even as mileage in poor condition (on urban and rural Interstates) worsened.” In other words, spending more money did not lead to better roads in Wisconsin.

The state audit of the highway system released in January 2017 offers some insight into why that might be. Wisconsin tripled its highway funding from 1997 to 2015, but DOT officials were consistently failing to budget that money appropriately. (Ironically the Wisconsin State Journal continually cites that study as evidence that Wisconsin needs to spend even more money on roads).

And so when Sec. Dave Ross took over the agency the same month that audit came out, he made reforms and efficiencies his top priority. He said the DOT didn’t need any additional funding. All he wanted was time to put his changes in place. After only one year, he’s been able to bring down the cost of road projects by $69.2 million while keeping every active project on schedule.

Of course, some advocates consider any potential project that is not immediately approved to be “delayed.” That is false. DOT policy requires contract managers to space projects out in order to increase competitiveness during the bidding process. When that doesn’t happen, the audit pointed out costs increased because DOT projects were essentially competing against each other to hire construction companies.

Gas tax advocates also claim that transportation bonding proves Wisconsin doesn’t have enough money for roads. They ignore research that shows transportation bonding is considered one of the best funding strategies throughout the country.

Tolling’s On The Table

Understandably, advocates of raising the gas tax don’t want to debate whether there’s a need for more road funding. They present it as a forgone conclusion. And so, if they can’t raise the gas tax, what about tolling?

In the past, tolling has not been considered a feasible option in Wisconsin. The federal government had to grant special permission to set up tolling, and they did not often approve requests. In fact, Gov. Walker vetoed an item in the current budget that would spend $2.5 million on a tolling study for that very reason. However, President Trump’s infrastructure plan would make it much easier for states to set up toll roads.

Senate Majority Leader Scott Fitzgerald, Assembly Speaker Robin Vos, and Assembly Minority Leader Gordon Hintz recently told the Wisconsin Counties Association they love the idea. They said it could help Wisconsin come up with the matching funds for Trump’s infrastructure plan.

This proves two points. First, that the counties are interested in the state taking responsibility for maintaining their roads – or else these state lawmakers wouldn’t be pandering on this issue. Secondly, Trump’s calculation is spot on. Politicians can never leave money on the table, even if it’s a terrible deal. The media is cheering them on.

JR Ross of Wispolitics.com talked about the tolling question on Wisconsin Eye: “If you’re Wisconsin and you have Republicans in charge, how do you raise additional revenues for transportation to attract that money?” He did not ask if they should.

As Fitzgerald said at the Counties’ forum, “We’re not going to do it with a nickel or a ten-cent gas tax increase.” He’s right.

Another Math Problem

To break down the president’s proposal, $200 billion over 10 years means $20 billion a year will be available to the states.

In 2015, Wisconsin received $800 million in federal aid for highways, or 2 percent of the total amount available. (Wisconsin spent a total of $2.5 billion on highways that year.) DOT officials confirmed to the MacIver Institute that Wisconsin typically receives 2 percent of whatever’s available from the feds.

If Wisconsin were to get 2 percent of the $20 billion available, that would come out to $400 million a year. Of course, remember there’s a cost sharing requirement of 20/80. So in order to get that $400 million, Wisconsin would have to increase annual transportation funding by $1.6 billion.

So, again, Fitzgerald is correct. Every penny increase in the gas tax raises $33.8 million in revenue, according to DOT officials. And so to get $1.6 billion, you would need to raise the gas tax by 47 cents a gallon, assuming that would not change people’s driving habits.

No conservative is going to agree to a $1.6 billion tax increase to get in on a bad deal with the feds. Tolling might be easier to obscure than a gas tax increase, but even then, consider this. There are about 4.25 million licensed drivers in Wisconsin. If you increase transportation funding by $1.6 billion, the average driver would be paying over $375 more a year in taxes or tolling or whatever else you can come up with. To be clear, that’s a $375 increase per “driver,” not “household.”

No elected official would ever be able to hide or shift that cost enough to avoid harsh rebuke. In other words, forget about that federal funding, but don’t expect that means the end of the state’s transportation funding debate. Round 2 is only getting started.

March 14, 2018 | By Bill Osmulski

How Secretary Dave Ross Changed The Work Culture At DOT

MADISON, Wis. – Saving the state highway program $69.2 million over the past year might make Wisconsin Department of Transportation Secretary Dave Ross and his team happy, but it’s not something they’re going to get excited about – not unless it’s part of a permanent trend.

Ross and his team came onboard last January after the DOT’s former secretary, Mark Gottlieb, resigned in disgrace. The Legislative Audit Bureau released a report that month documenting systematic waste, fraud and abuse throughout the state highway program that resulted in current projects running billions of dollars over budget.

Ross realized these problems were years in the making and their causes were firmly entrenched in the DOT bureaucracy. But he wasn’t about to write off the people who worked at the DOT. He believed they just needed the opportunity and motivation to unleash their potential. That’s why from day one, he emphasized culture change. That meant asking tough questions – a lot of them.

Does it really cost that much? Are you paying for more than you need? Have you set your priorities properly? Is the money going to the right place? Are you properly using the infrastructure you have today before you tear it up and build new?

“We had a lot of people, who have left meetings with us feeling kind of beaten down, because of the questions they were asked, but they had never been asked those questions before,” Deputy Sec. Bob Seitz explained to MacIver News Service.

Previously, design staff got promoted by working on more expensive projects. Now DOT employees compete for bonuses based on finding cost savings.

At the same time, the new secretary changed the incentive structure at the DOT. Previously, design staff got promoted by working on more expensive projects, which only encouraged them to make projects expensive. Now DOT employees compete for bonuses based on finding cost savings.

Asking tough questions and incentivizing efficiency paid off – fast. Almost overnight, the DOT became a fount of innovation, as evidenced by $69.2 million in savings in just one year.

Engineers were designing simple bridge modifications, instead of always demolishing and rebuilding them. Budget staff were consolidating federal funding, to limit the number of projects subject to federal prevailing wage and other costly add-ons. Resurfacing projects became replacement-in-kind rather than building everything bigger and expanding its footprint.

“We’re finding there were a lot of people at DOT that wanted to be challenged, and we’ve challenged those people, and they’re coming through in a fantastic way,” Seitz said.

While he was stressing efficiencies and savings, Ross tried to convince the Legislature to not increase his funding in the state budget. That request seemed ridiculous to many lawmakers, who wanted more projects in their districts, even if that meant raising the gas tax. Ross and his team argued that would undermine everything they were trying to accomplish. They argued another big reason the agency hadn’t been efficient was because it didn’t have to be.

According to Seitz, the DOT had historically been a popular agency, and “one of the prices that we pay as taxpayers for having a popular agency is that people give it more money rather than look at how the money’s spent.”

In the end, the Legislature still increased the DOT’s funding, but without the gas tax hike. Lawmakers also passed a series of reforms that allowed the DOT to be more flexible in designing and managing projects.

“…these are not transitory changes. These are permanent changes at DOT,” said DOT Deputy Secretary Bob Seitz.

In order to make sure the DOT’s new organizational culture stays in place long after Sec. Ross leaves, Gov. Walker sent the inspector general to help make it official.

“We take these reforms on a one-off basis sometimes. So, why are we doing this in this case? And we fix it in that case. And then he comes through and making sure that the policy change is done in writing and locked in, so these are not transitory changes. These are permanent changes at DOT,” Seitz said.

February 13, 2018 | By Bill Osmulski

#JustFixIt Campaign in Washington County Funds Roads Without A Gas Tax Increase

[West Bend, Wisc...] Washington County thinks it can fund all its highway improvements over the next 32 years without an increase in the gas tax or raising other taxes and fees. The plan is simple: make transportation infrastructure a top priority in its budget.

Washington County’s “just fix it” road initiative makes road repairs a priority – not making higher taxes the priority.

That is the cornerstone of the county’s 2050 Transportation Network Sustainability Plan, which officials are promoting through the #JustFixIt campaign.

Rather than just complain about the amount of federal or state government funding for local roads, the county is proactively moving forward “to achieve a financially sustainable transportation network for Washington County.”

“Washington County is leading the way to #JustFixIt by putting forth a plan which would 100% fund the maintenance, resurfacing and reconstruction of all county highways for the next three decades,” said County Administrator Joshua Schoemann. “I believe this plan will serve as a model across the State, further demonstrating how setting priorities can result in solutions to maximize the use of every taxpayer dollar we receive and meeting the expectations for essential government services.”

Schoemann has raised some eyebrows by branding this plan “#JustFitIt.” The Transportation Development Association has been using that same hashtag in its campaign to raise the state’s gas tax. Schoemann told MacIver News his version will “just fix it” by making road repairs a priority – not by making higher taxes the priority. Washington County started this process by taking a long hard look at itself.

“We went through a ranking of priorities and then we rank every program against those priorities,” Schoemann said. “There have been literally dozens that we’ve eliminated or given over to nonprofits, saving hundreds of thousands of dollars.”

That will go a long way towards Washington County’s #JustFixIt campaign.

Washington County is responsible for 186 miles of highway. It estimates improvement and maintenance will cost $143 million over the next 32 years, including adjustments for inflation. If the county adopts the 2050 Transportation Network Sustainability Plan, officials predict it will ultimately result in a $9 million surplus.

The county currently budgets $3 million a year on road work from its 0.5 percent sales tax collections. The county estimates it will be able to increase that by 3 percent a year until at least 2030, and after that reduces it to 1 percent. The plan also assumes that state aid will remain stagnant at $490,000 each biennium throughout the 32-year plan.

Other funds are expected to become available along the way to further offset costs. For example, the county currently has a $2 million economic development fund that ends in 2022. At that point, any remaining funds could be redirected towards road work.

All the major road reconstruction projects are front loaded into the first 11 years of the plan. That’s meant to take advantage of the current low borrowing rates and the political climate in Wisconsin that’s led to the elimination of prevailing wage and efforts to reform state wet lands regulations.

The $9 million surplus will be spent along the way. The highway department plans to use it to build 3 roundabouts and reconstruct 6 bridges over the next 32 years.

The Public Works Committee approved the plan on Jan 24. The county will take it up on February 13th.

Schoemann said the county board is excited about the plan, but his colleagues in other counties are more skeptical.

“The feedback I’ve received is ‘well you might have figured it out, but the rest of us haven’t or can’t or what have you,’” Schoemann said.

Washington County wouldn’t be the only county to figure out how to fund road repairs without a tax hike. Marquette County has managed to maintain the best roads in the state through prioritization just within its highway budget. That’s resulted in 99 percent of Marquette’s county highways being in fair or better condition. Incredibly, the county receives almost the smallest amount in state aid of any Wisconsin county.

By reprioritizing the entire county budget, Schoemann expects even better results in Washington County. He believes if Washington County can #JustFixIt through making road maintenance a genuine budget priority, there’s nothing standing in the way of other local governments adopting the same solution.

February 13, 2017 | By Bill Osmulski

How Much Local Road Repairs Cost

#WISDOTwasted – Believe or not, a little goes a long way with road funding. We called cities throughout southern Wisconsin to see how much they typically pay for road maintenance. When it costs $27 to fix a pothole, $150,000 to repave a mile of residential street, and $1 million to completely reconstruct a mile of residential street – suddenly $200,000 to build a mile long bike path becomes a significant financial decision.

September 12, 2017 | By M. D. Kittle

Late Legislative Motion Would Create New Transportation Bureaucracy

[Madison, Wis…] Legislation that changes the makeup up of the state’s transportation advisory commission would create an expanded bureaucracy sympathetic to hiking gas taxes and vehicle fees, critics of the proposal charge.

Last week, the Republican-controlled Joint Finance Committee passed an omnibus motion on transportation finance, including a measure that would modify membership to the Transportation Projects Commission and provide hundreds of thousands of dollars to fund new positions.

More so, the legislation would require the state Department of Transportation to adopt the long-range planning recommendations made by the TPC, to “the extent permitted by federal and state law.”

Sen. Steve Nass does not support the TPC language in the omnibus motion, said Mike Mikalsen, spokesman for the Whitewater Republican.

“He clearly thinks this particular change is to thwart the governor,” he said. “If you look at the changes to the TPC and then look at the failure of the Joint Finance Committee to incorporate significant DOT reforms, from the Assembly position they are not looking to reform the DOT but spend more.”

Assembly GOP leadership pushed for hikes to the state’s gas tax and vehicle fees, and other sources of new revenue to feed Wisconsin’s disputed $1 billion transportation budget shortfall. They warned the state could not longer borrow its way to a long-term transportation fix. Assembly Republicans expressed disappointment that the JFC budget mainly stuck to Walker’s transportation initiatives, including more than $400 million in bonding and no tax or fee increases.

Rep. John Nygren (R-Marinette), co-chair of the Joint Finance Committee, said the budget bill is workable for now. “You live to fight another day,” he told MacIver News last week. But the “conversation is far from over,” Nygren tweeted, “and I’m looking forward to continuing to advocate for a dedicated and sustainable solution.”

Nygren on Budget: "The Money Belongs to the People of Wisconsin"

Could the solution begin with a reconfigured Transportation Projects Commission?

Senate Majority Leader Scott Fitzgerald told reporters Tuesday evening that he feels good about the reforms to the Transportation Projects Commission.

“I have only had positive feedback from members on TPC reforms,” the Juneau Republican said. “Compared to what the TPC is now, which is completely dysfunctional, this makes a lot of sense.”

The motion reduces from three to two the number of public members appointed by the governor to the commission. The Assembly and Senate would each name three legislators, down from five, and the Legislature would appoint four members of the public. The measure specifies that either the secretary of the DOT or the Department of Administration would be appointed as non-voting members, as determined by the governor. Currently, the commission is served by five senators, five representatives, three public members appointed by the governor, the secretary of the DOT, and the governor, who chairs the panel.

The proposal also would initially create three new positions and a commission director. TPC staff would include an engineer, legal counsel, and financial auditor. An appropriation of $150,000 in 2017-19 would fund the “initial costs associated with the Director position,” according to the omnibus motion.

Another $550,000 in general purpose revenue funds would cover as many as four additional positions “determined necessary by the TPC in consultation with the Director.” The money also would pay for supplies and services approved by the commission.

TPC staff would review DOT financial records to assure the transactions are “legal and proper.” And the staff would annually evaluate the Department of Transportation based on goals and performance measures established by the TPC.

The commission is charged with reviewing major highway project candidates and it recommends to the governor and the Legislature projects to be “enumerated” for inclusion in the two-year state budget.

An expanded TPC would be required to consider the denumeration of projects that are at least 10 years old. The proposal would require the TPC to submit a report to the governor and the Legislature “describing the short-term and long-term impacts of each DOT biennial budget request on state and local roads.” It would do the same review on the governor’s proposed budget.

Fitzgerald said the changes were necessary, especially in light of an audit earlier this year that “demonstrated that the TPC had zero handle or control over budget timelines and interaction with the feds. That’s why when the Speaker (Rep. Robin Vos) and I sat down to kind of map out what that might look like I felt really good about the outcome of the TPC reform.”

“I think it’s going to work and function and that’s what we’re looking for,” he added.

The Joint Finance Committee didn’t take up many of the transportation reforms authored by a group of fiscal hawks. Those reforms included different practices for completing projects, streamlining the bidding, designing and building process to save taxpayers money.

“You have to look at the TPC changes in context,” Mikalsen said. “Assembly leadership prevented certain other reforms from being included in the budget, delaying prevailing wage until September of next year. That’s a whole other construction season.”

Fitzgerald said he wasn’t ready to give on the prevailing wage timeline. He said there needs to be a “grace period” in the implementation of prevailing wage-free state construction projects, as there was in the last reform to Wisconsin’s antiquated prevailing wage law in 2015.

The Senate aide said the TPC modifications represent a small piece of the overall $6.072 million transportation package, something Nass hopes the governor will veto.

The governor’s office declined to comment on vetoes until the legislative process is completed.

Kit Beyer, spokeswoman for Speaker Robin Vos, said the Rochester Republican supports the changes to the commission “in order to add a level of accountability and oversight to the Department of Transportation and highway projects.”

Looking For Votes

Fitzgerald said the Senate is “working toward hitting the floor” Friday morning to take up the overdue state budget – two days after the Assembly is expected to vote on the two-year spending plan.

Does he have the votes? Not yet.

“Hopefully we’ll have a minimum of 17 votes to be able to take the vote up and run with it,” the majority leader said.

“We’re still working on pulling those votes together right now,” he added, counting 15 Senate Republicans in the support column.

Fitzgerald said it’s hard to nail down the concerns of reluctant caucus members, that there are a “wide range of items” in the budget that are sticking points with some Republicans.

April 27, 2017 | By Bill Osmulski

A Thousand Miles of Crumbling Roads in Milwaukee

[Milwaukee] There’s no getting around the fact Milwaukee’s roads are in terrible condition, but there’s nothing the state can do to change that. Solving the problem depends entirely on the local city government making road maintenance and improvement a priority.

The city government bears the sole responsibility for maintaining 987 out of 1,273 miles of roads in Milwaukee. It cannot use any state or federal aid to maintain or improve those roads.

Out of a total budget of $1.5 billion, the City of Milwaukee budgeted a mere $16 million for Local Streets and High Impact Streets in 2017. That will address only 30 miles of city streets this year. At that rate, it will take Milwaukee 30 years to get to all the 987 miles it’s responsible for.

Meanwhile in Madison, lawmakers are calling for more local aids, seemingly unaware that even if they increase funding, it won’t do local governments much good. The City of Milwaukee can only use that aid on 286 miles (22 percent) of its roads. And even then, it is limited on what it can spend that money on. For example, Local Road Improvement Program funds can’t be used for routine maintenance like filling potholes and sealing cracks. General Transportation Aids can be applied to a wider range of projects, but it is merely meant to “partially offset” costs to local government.

That means, the ultimate responsibility for local roads lies with local government. It doesn’t matter what state lawmakers decide to do with transportation, roads in cities like Milwaukee will stay in terrible condition until the local government decides to make road improvement a priority.

September 5, 2017 | MacIver News Service

JFC Approves Transportation Budget

No Gas Tax Or Gas Vehicle Registration Fee Increase, Prevailing Wage Repeal Included, Bonding Down, Two Major Projects Delayed And Tolling To Be Studied

[Madison, Wis…] The Joint Committee on Finance finally approved a transportation budget Tuesday night – and by doing so removed the biggest roadblock in passing the 2017-2019 Wisconsin State Budget.

The final product to come out of JFC closely resembles Gov. Scott Walker’s proposed transportation budget that he presented almost seven months ago. It also satisfies his requirement of not raising the gas tax or registration fee on gas vehicles.

However, JFC’s version creates a new $100 fee for electric vehicles and a $75 fee for hybrids. Owners of electric and hybrid vehicles would pay this new fee on top of the existing $75 registration fee. Walker recently said he was okay with such an electric/hybrid fee because these vehicles use public roads but don’t contribute enough to the road fund. This item is expected to raise $8.4 million over the biennium.

Gov. Walker originally proposed spending $1.701 billion for the State Highway Rehabilitation Program, $670 million for the Major Highway Development Program and $122 million for the Southeast Wisconsin Freeway Megaprojects Program.

JFC on Tuesday approved $1.619 billion for the State Highway Rehabilitation Program, a 4.8% decline from the Governor’s original proposal. JFC approved $563.7 million for the Major Highway Development Program, down 15.87% from Walker. And while JFC approved $353.6 million for the Southeast Wisconsin Freeway Megaprojects Program, a substantial 189% increase compared to the Governor, there is a caveat. Approximately $252 million of the $353 million in the Megaprojects Program approved by Finance has been earmarked for one project – the I-94 North-South Corridor Project that was approved earlier in the day during the debate on the massive Foxconn project. If you take out the Foxconn $252 million for comparison, JFC approved $101 million for the Southeast Wisconsin Megaprojects Program, a 17% decrease compared to Gov. Walker.

One of the most contentious issues throughout the transportation debate was over bonding. Walker’s original budget included $500 million in new road bonds. Assembly Republicans have generally been opposed to any new bonding without additional revenue increases or new revenue sources to help pay for it. They have argued that the state borrows too much for roads and that we should adopt a pay-as-you-go approach to transportation funding. In the end, JFC approved $402 million in new bonds, approximately 18% less than Walker. That is the lowest amount of new road bonding since the 2003-05 budget and the $252 million for Foxconn road building is included in the $410 million total.

While JFC approved new funding for the I-94 North-South Corridor Project, the committee decided to hit the brakes on two other important projects in southeastern Wisconsin. JFC included language in their motion that specifically prohibits any sort of funding for the north leg of the Milwaukee Zoo Interchange project during this 2017-2019 biennium. The north leg is the unfinished part of the massive Zoo Interchange project that has been under construction for years. The provision also explicitly prohibits the Department of Transportation from using savings from contract negotiations to fund the north leg of the Zoo project. The Finance Committee also did not appropriate any money for the I-94 East-West expansion between the Zoo and Marquette Interchanges, effectively preventing any work on this critically important project for at least two years.

JFC Co-Chair Rep. John Nygren (R-Marinette) explained to reporters, “This budget shows you’re not going to make a commitment that you can’t pay for, and that’s the bottom line. If we don’t have the resources to fund the east-west or the north leg of the Zoo, then we shouldn’t be making that commitment.”

There are also several items in the JFC transportation motion that attempt to satisfy the need of fiscal conservatives to find taxpayer savings from within the DOT. One provision included in the omnibus motion requires DOT to eliminate 200 positions over the biennium, many of them currently vacant according to the Legislative Fiscal Bureau, saving $13 million annually. Another provision would require the department to sell $4 million worth of land it holds and transfer the proceeds directly to the transportation fund.

Walker’s proposal to eliminate the prevailing wage in state building and highway projects made it into the final version, a big victory for fiscal conservatives in the Senate. The effective date of this provision was moved back to September 1, 2018, however. For an idea of the potential taxpayer savings, conservatives point to a study released by the nonpartisan Wisconsin Taxpayers Alliance that found state and local governments could have saved as much as $300 million on vertical construction projects in 2014 if there was no prevailing wage requirement. Remember, too, the story we did on the water towers in the village of Grafton.

JFC also approved language that addresses a concern expressed by Sen. Duey Stroebel (R-Saukville) and was the subject of a story that we wrote about earlier this year. It has to do with the rebuilding of Janesville Road in Waukesha County. The 1.2 mile stretch of Janesville Road that was rebuilt with local funds cost approximately $6 million to complete while the 1.2 mile stretch of Janesville Road, the exact same road, that was rebuilt with federal dollars cost almost $8 million. While Sen. Stroebel wants to direct the DOT to save money on local projects by swapping Surface Transportation Program (STP) funds with federal funds from the state highway program, the language in the transportation motion only requires the DOT to study this idea of federal/state aid swap and report back to the Finance Committee. Then there’s “Replace-In-Kind” alternatives for highway development plans that require the DOT to show what the project would cost without bike lanes, extra vehicle lanes, and by making other design changes. An item sure to be noticed in Mayor Barrett’s office is a provision that would prevent the City of Milwaukee from shifting expenses from its streetcar onto TIFs, the county, or the state.

All property owners in the state have scored an important win in the Finance motion, while certain property owners appear to have lost some ground. The motion contains language that prohibits local governments from condemning private property in order to build recreational trails, pedestrian ways, or bike paths. The motion also includes language that requires a railroad to go through extra steps before it acquires private land through the condemnation process.

The setback has to do with the regulation of quarries. The Joint Finance transportation motion has over five pages on the local regulation of quarries. While we are still researching and analyzing the language, it appears to change substantially the way local units of government can regulate these businesses. As we find out more about this provision, we will immediately pass it along to you.

Not everything in the JFC motion will likely get the governor’s approval. The Legislature is trying to limit the governor’s influence on the Transportation Projects Commission (TPC). This commission is responsible for recommending which major and mega highway projects should be built, so there’s a lot at stake. The JFC plan takes away one of the governor’s appointments and creates four new public positions appointed by the Legislature. The motion also creates three new independent staff positions to support the TPC, thereby creating a whole new bureaucracy that will only grow with time.

The approval of a transportation budget by Joint Finance does not mean the transportation funding debate has been put to rest for good. Nygren told reporters, “We’re not going to come up with a long term solution for transportation, that’s disappointing. But you live to fight another day. You don’t get everything you want.”

July 11, 2017 | MacIver News Service

ChartSmart: Transportation Showdown

Transportation funding seems to be everyone’s line in the sand in the budget debate. Governor Walker has said he will not allow any tax or fee increases into the budget – while Assembly Republicans say it is impossible to maintain current levels of bonding and insist tax or fee increases are the only solution.

Governor Walker’s proposal increases overall funding to the DOT by $359 million, or 6.4 percent. However, it also includes a $289 million decrease to the State Highway Improvement Program. That amount would come out of the Southeast Mega Projects, but Walker says it would not impact the timeline for projects currently under construction. His proposal includes $500 million in bonding – the lowest since 2001-03 – and no tax or fee increases.

Senate Republicans are generally on board with Walker’s plan, but Assembly Republicans reject even Walker’s reduced level of bonding. They point to projections that 22 cents of every dollar in the transportation fund will soon be going to debt service. Although they’ve stated they want to lower bonding and raise new revenues, details have been sparse. However, Speaker Vos has suggested a $300 million increase in revenues could be acceptable.

Governor Walker offered a deal last week that would lower bonding another $200 million. The deal would also approve contingency bonding for the Megaprojects that would be linked to additional federal funding. That deal apparently fell flat with Assembly Republicans – and negotiations are once again stalled.

Although it could still be a while before the Joint Committee on Finance takes up the transportation budget, here are some charts we’ve put together at the MacIver Institute exploring this complicated and contentious topic.

August 2, 2017 | By Bill Osmulski

DOT Saves $46.7 Million On Road Project Bids

[Madison, Wisc...] Decreased construction costs and effective bidding are helping the Wisconsin Department of Transportation get its highway projects ahead of schedule, while at the same time providing budget relief, according to DOT Secretary Dave Ross.

On Tuesday, the department released its August report on major and mega projects to the Transportation Projects Commission (TPC). There are currently 15 major and 2 mega enumerated projects.

Last fiscal year, the DOT saved $46.7 million on the majors from let savings, which means vendor bids came in lower than expected. That was due, in part, to lower construction costs. The Wisconsin Construction Cost Index dropped 5.3 percent last year. On top of those lower costs, bidding has also become more competitive recently.

"There's less work especially on the majors, so that meant a lot more competition for those jobs," Jeff Gust, Wisconsin state highway program director told MacIver News. "Everyone's sharpening their pencils."

That $46.7 million in savings allowed it to start work on US Highway 10/441 ahead of schedule. Gust said it was a project that could be completed quickly with maximum benefit to the public.

Since Ross took over, the department has adopted new accounting methods. Before, project costs included reserve funds allocated for a project, but were oftentimes left unused. That inflated the perceived cost of projects. Since eliminating that practice, project cost estimates have dropped by $214 million. Ross said that is merely an accounting change made for the sake of transparency.

"These estimate changes do not make any additional funds available for current spending, but instead only adjust the total cost to complete each individual Majors project," Ross wrote in the report.

The DOT still has $13.1 million left from the let savings. It intends to use those funds to leverage more federal matching dollars later this year.

Altogether, the DOT's current cost estimates are $49 million less than what Governor Walker's budget proposal allots.

July 20, 2017 | By Tyler Brandt, M.D. Kittle, & Matt Tragesser

MacIver Institute Analysis Finds Almost $2 Billion In Wasteful Transportation Spending

[Madison, Wis…] There’s a lot of back and forth in Wisconsin’s transportation funding fight.

The “revenue enhancer” faction will tell you that a $1 billion transportation budget shortfall – a figure that has been disputed – needs to be filled like potholes with more taxpayer cash. They insist on gas taxes, vehicle fees, something, anything to deliver a “long-term solution” to the Badger State’s transpo needs. Bonding is bad, very bad, they say, tantamount to a drunken spender on a credit card bender.

But the band of bonding brothers and sisters say the tax-hike camp is taking taxpayers for a bumpy ambulance ride. They just say no to the notion of gas tax increases and fee hikes. More so, they argue that before the Legislature and the governor ask taxpayers to shoulder more of the burden for the state’s roads and bridges, particularly in an era of budget surpluses, the pols should first get a handle on a troubled Department of Transportation that has wasted billions of tax dollars.

Fine, the enhancers fire back. But there isn’t nearly enough in DOT waste and inefficiencies to fill the funding gap for all of those crumbling roads and cash suck southeast Wisconsin “Mega Projects,” they declare.

Isn’t there?

The MacIver Institute has dug into the numbers, taken a deeper dive into DOT projects that are at the very least questionable, if not an outright waste of taxpayer money, and administrative failures that have added substantial and unnecessary costs. We found nearly $2 billion in wasteful Wisconsin projects and practices – $1,965,882,239 to be precise.

As conservative lawmakers weigh gas tax hikes, vehicle fee uppers, tolls, heavy truck taxes, hefty borrowing, even trading income tax cuts for transportation funding, we urge them to revisit the DOT projects and practices that are unnecessarily costing taxpayers hundreds of millions of dollars.

Here is the list, in no particular order. Find more examples or submit your DOT wasteful project suggestions on Twitter using the hashtag #WISDOTwasted, or send them directly to us using this form.

1) Bublr Stations in West Allis, Shorewood and Wauwatosa – $2 million TOTAL $400,000 LOCAL SHARE

Given the supposed shortfall in the transportation fund for road projects, is it a good idea to spend this transportation money on a bike project?

2) Milwaukee Bike Rack Program – $680,000 TOTAL $130,000 LOCAL SHARE

Milwaukee is expanding its bike rack program, at a cost of $680k. Local taxpayers would pay $130k. Nothing says fixing bad roads like bike racks.

3) Failed Goals – $191.9 million TOTAL WASTE

Anyone who’s ever been on a diet knows you have to set goals – and follow them – if you want to shed pounds or maintain a healthy weight. If the DOT’s performance measurement goals were a diet plan, that plan would be built on Chocodiles and saturated fat sandwiches. A legislative audit earlier this year showed DOT staff routinely disregarded established procedures designed to manage and improve operations. From fiscal year 2009-10 to 2014-15, the agency could have saved $191.9 million, or an average of $32 million per year, if its total costs during the construction phase of the state highway projects had not exceeded annual performance measurement goals.

4) Design-Build Savings

Wisconsin is missing out on untold hundreds of millions of dollars in savings by sticking with the old design-bid-build approach to transportation projects – like Chicago Bears fans stick to their failing team. Like Bears fans, the DOT has grown accustomed to losing, but it’s the taxpayer on the hook for the agency’s failure to recognize the huge cost savings to be had in the design-build approach. The practice integrates the standard activities involved in transportation projects under a single contract. The Texas Department of Transportation, for instance, reported its best-value design-build proposals usually come in 15 to 20 percent below the engineer’s estimates, according to a Texas A&M Transportation Institute Study. And design-build projects in the study typically were completed from three to 10 months early, another big cost savings. Twenty percent on a $1 billion project is a Packers-over-the-Bears-style win for Wisconsin taxpayers.

5) Root River Parkway/Greendale Bike Trail – $1 million TOTAL $200,000 LOCAL SHARE

New bike trail for $1 million with locals on the hook for $200k. Root River parkway is a secluded place with minimal traffic where cyclists happily bike on the roads. Why spend an extra million from taxpayers when cyclists already have a safe route?

6) West Allis Cross-Town Connector – $3 million TOTAL $600,000 LOCAL SHARE

The City of West Allis’ latest boondoggle is a $3 million dollar bike plan to build a Cross-Town Connector. It will include bike roundabouts, a bike bridge, new paths, and on-street lanes. The path is being built because the Department of Natural Resources believes the route will reduce congestion and pollution in the city of Milwaukee caused by more West Allis residents commuting to work. In the DNR’s world, it’s Bike to Work Day every day.

7) Roundabout Driving Training Videos – $30,000

The DOT spent $30,000 on videos explaining to drivers how to guide their cars through roundabouts. Wisconsinites hate roundabouts like injustice, so an instructional video on roundabouts is like a handbook on headaches. Nobody wants one, so why would they want to read about it? Here’s a video for the DOT: “Dude, Where’s My Tax Money?”

8) DOT Bid Failures – $44,700,000

The DOT lost $44.7 million by failing to solicit more than one bid for 363 of its construction contracts between January 2006 and December 2015. Had each of those projects received just one more bid, DOT would have saved $4.5 million per year from ’06-’15, according to an audit of the agency. So much for competition. So much for taxpayer savings.

9) A Bridge Too Near – $3.6 Million

A $3.6 million pedestrian bridge was constructed in West Allis even though there is a bridge with pedestrian access just two minutes away. Is it too much to ask citizens to walk an extra block and a half? Isn’t Big Government trying to make us exercise more? Is two minutes worth $3.6 million?

10) Otter Exhibit – $12.4 million

The DOT offered the Milwaukee County Zoo $8 million when it took 700 parking spaces away for the zoo-interchange project. Of the $8 million, only $2 million would be needed to build a new lot. The Zoo instead sued the DOT and got $12.7 million. It used the extra $10 million taken from the transportation fund for a welcome center and otter exhibit. Really Zoo? You otter be kidding us.

11) Poynette & Portage Rest Stops – $22 million TOTAL, $2.2 million STATE PORTION

In 2010, two of the nicest rest stops in the country were constructed in Poynette and Portage. The old rest stops were torn down and replaced due to overcrowding. Not only did DOT expand the rest stops to be the largest in the state, the agency designed the buildings with ornate Frank Lloyd Wright architecture. The place has the aura of an architectural shrine, but in reality aren’t these rest stops really just restrooms? Does $22 million to pee (excuse our language) seem a bit much?

12) Starkweather Creek Bike Path – $312,000 LAWSUIT

The City of Madison put a bike/pedestrian bridge in front of McDonald’s. The bridge crippled business and forced the restaurant to move down the street. McDonald’s sued the city and won $312,000.

The bridge was built for safety reasons because there have been a few instances of people getting killed trying to cross the street. A couple years after the bridge was built a person was crossing at street level and was struck and killed by a car, yet again. Local residents and businesses were interviewed and most said nobody uses the bridge because it is out of their way. You will find a number of Madison/Dane County bike transportation projects on this list. The DOT and Dane County are literally committing highway robbery, pilfering taxpayer cash from highway priorities to pay for bicycle routes and bridges.

13) Cannonball Bike Path, Bridge, and Roundabout – $3.6 million TOTAL, $720,000 LOCAL SHARE

The Cannonball Path features the state’s first bike roundabout. The path also includes 4.5 miles of trail, a bike tunnel, and a bike bridge. It will cost $3.6 million to feed Madison’s bike addiction when roads around the state are said to be strapped for cash.

14) Use Public Feedback – $2.3 million

Public feedback is generally a good thing, unless you are a super-sensitive college student who cannot function outside a safe space. The DOT has its own safe space; it simply ignores criticism. Sometimes the public asks the DOT not to do projects because those projects would have adverse effects on nearby communities. The DOT often goes ahead with projects anyway, according to the legislative audit.

15) U.S. 41 Build Out – $6 million

For the U.S. 41 freeway project in Brown County, there are 24 roundabouts being constructed in just a 14-mile stretch. The project also includes the planting of 30,400 plants and shrubs as well as 4,100 trees. A cost estimate puts the roundabouts at about $6 million. That’s got to have taxpayers feel like they’re going in circles.

16) Siren, WI Roundabout – $3.5 million

The DOT ripped up a perfectly serviceable intersection north of Siren, and replaced it with a roundabout. Why the DOT would waste $3.5 million to put a roundabout in a village of 806 people is hard to understand.

17) Polk County Roundabout – $1.5 million

The DOT replaced a faultless intersection with a roundabout north of Amery, a sparsely populated area. Yet again we see the DOT ripping up intersections in small towns and replacing them with roundabouts, at nearly no one’s insistence.

18) Wrightstown Bridge – $632,000

Citizens of Wrightstown (population 2,827) are getting a new bridge to replace an old, deficient one across the Fox River. The bridge may have been necessary, but what about the pedestrian, bicycle, and snowmobile accommodations? The bike path alone is an extra $500,000 to $632,000.

19) Eau Claire Water Street Bridge – $316,000

The new Water Street Bridge in Eau Claire includes bike lanes, pedestrian accommodations, decorative lighting, decorative concrete on the piers and abutments, decorative railings, designs etched into the columns, pedestals at the light locations, arched mask walls at pier locations, antiqued concrete, outside concrete beam painting, and scenic overlooks. This bridge gives new meaning to the expression “bells and whistles.”

20) Baraboo Bypass – $200 million

A new bypass was constructed around Baraboo just east of Mirror Lake State Park. But U.S. 12 already is a perfectly serviceable highway, covering the same route as the bypass. Oh, and Baraboo is the only town along the bypass. MacIver went out during rush hour traffic and found that barely anyone uses it. Bypasses are proving to be the most costly and the most wasteful projects that the DOT has been approving in recent years.

21) West Waukesha Bypass – $50 million

A four-lane thoroughfare spanning Waukesha between Interstate-94 and Highway 59 is being constructed for $50 million. Some 550 locals signed a petition opposing the bypass in 2011 and 2012. And yet the transportation money train rolls on.

22) Lower Yahara River Trail – $10.5 million TOTAL, $2.1 million LOCAL SHARE

The largest bike bridge in all of Wisconsin is being constructed in Dane County. The 2.5-mile trail will include more than a mile of bridges and boardwalk. The trail itself will include an innovative “floating boardwalk”, rest stops, observation areas, and a fishing pier. Again, the bicycle capital of Wisconsin is costing taxpayers big money.

23) Capital City Trail Extension – $1.8 million TOTAL $360,000 LOCAL SHARE

This bike path will become the state’s largest once completed. However, one mile of this proposed bike path will cost $1.8 million, which is significantly higher than the usual $200,000. That’s $341 per foot.

24) West Towne Path: High Point Road to Junction Road – $3.6 million TOTAL $720,000 LOCAL SHARE

A half-mile bike path in the City of Madison is set to be completed in 2018, at a cost of $3.6 million. Part of the expense is a $1 million bike underpass that is much costlier than DOT’s averages for similar projects. How much money could we save if we stop giving Dane County bike funding?

25) Ice Age Junction Path – $2.5 million TOTAL $500,000 LOCAL SHARE

Two miles of bike path are set to be completed in the city of Madison in 2018-19, costing $2.5 million. This project includes up to nine bridges and underpasses, which seems excessive considering the amount of bike routes already existing in the city.

26) St. Croix Crossing – $650 million TOTAL $285 million STATE PORTION

The Minnesota Department of Transportation and Wisconsin DOT collaborated to build a new bridge crossing the St. Croix river between Houlton and Stillwater, Minn. A new bridge seems necessary but over-engineering puts the project into question.

The new bridge is a state-of-the-art “extradosed” bridge, only the second of its kind built in the nation, despite low traffic counts and an existing bridge 15 minutes south. Also, the old bridge was not torn down, but remodeled and designed to be a bike/pedestrian crossing with rest areas and viewing platforms. The old bridge is now part of a 4.5 mile bike-loop which also connects around the new bridge.

Another part of the cost was a $1.7 million communication contract to hire a PR manager with the sole task of drumming up support for the bridge. Selling the taxpayer on a massively expensive bridge doesn’t come cheap. What’s more, the $650 million bridge costs more than it would to fix all of the 1,149 structurally deficient bridges in Minnesota. Priorities.

27) Wisconsin Highway 67 – $28 million

In Oconomowoc there was a large build-out of roads, a highway overpass, civilian paths, bike lanes, and much more as a result of Pabst Farms plans to build a regional outdoor shopping mall. The original plans for the mall failed, meaning there wouldn’t be any major increases in traffic, making the highway build wasteful.

28) St. Croix County Bike Path Plan – $33.2 million

First of all, Wow! $33.2 million for a bike path. Think about that for a moment. The plan includes 69 projects in this rural county. Supporters claim a head-scratching return on investment of $9 for every public dollar spent. That claim is based on a North Carolina Outer Banks case study. Makes sense. St. Croix County is, of course, exactly like North Carolina’s Outer Banks. The thinking by project promoters: Well, if it could happen there, it could happen here. Hey, it worked for Sinatra in New York, New York. The bike path plan is just that, a plan. So we didn’t add the price tag to our list of wasteful projects. But we’ve all seen this movie before. St. Croix County isn’t going to come up with the full $33.2 million. Local government officials will have their hands out, expecting state and federal taxpayers to pick up much of the tab for the bike path.

29) Hidden Valley Bridge – $360,000

The Hidden Valley Bridge was built in Sylvan, a hamlet with a population of 543 people. Over one-third of construction costs went toward design and supervision.

30) Lake Butte Des Morts – $54 million

This bridge boasts an extravagant design, including nine bridge structures and aesthetic earth, fire, and water murals on the columns. The build also includes pedestrian, bike, and fishing accommodations. Why spend money on murals that only the fish can see? Sound fishy?

31) Janesville Road – $1,913,739

Two identical segments of Janesville Road in Muskego were recently reconstructed, one using federal dollars and the other using solely local transportation dollars. The mile-long segment completed with local dollars cost $6,280,000, while the mile-long segment completed with federal dollars cost $8,193,739. There’s a wrong turn in here somewhere. This $1,913,739 difference shows how federal regulation of road projects drives up costs. A bill originally proposed by Sen. Duey Stroebel and Rep. Rob Brooks, both Republicans from Saukville, would “swap” a portion of federal funds within transportation programs with existing state transportation dollars, removing “burdensome, expensive and ineffectual federal regulations.

32) Buffalo-Winona Great River State Trail Connector – $3-4 Million TOTAL, $1,320,000 LOCAL

A bike trail in a rural, sparsely populated area between Winona, Minn., and the outskirts of La Crosse was constructed. The project cost between $3 million and $4 million with the master plan connecting Winona to Madison. Again, if the priority is roads, why is $4 million for a bike trail part of the budget?

33) Lake County Trail Underpass – $227,000

A pedestrian tunnel is being constructed under WIS 67 at Oconomowoc parkway as a result of expected increased traffic from a proposed regional outdoor shopping mall. The original Pabst Farms shopping mall plans failed and there will no be significant increases in traffic, making the tunnel a waste. Another bad transportation bet. More so, there are plenty of bicycle trails in Waukesha County. Is it the government’s job to tie together an elaborate bike trail system or is it to maintain roads and public safety? If budgets are about priorities, it looks like the pushers of this project took a wrong turn.

34) Wolf River Bridge – $14 million

In the little town of Winneconne, a bridge will be constructed next to a 75-year-old draw bridge. The draw bridge has been determined to be safe for travel by the DOT, but the national bridge inventory has identified it as deficient based on its own ratings. The new project calls for two fishing piers on each side of the river and a trail for snowmobiles on one side of the bridge that will serve just 2,400 citizens. DOT’s motto: While building the unnecessary, why not add a few perks.

35) Vilas County ATV Trail – $330,000

Vilas County could have constructed an ATV trail with an original bid total of $180,000, but prevailing wage artificially pushed the cost up to $330,000 for the same exact project. The county went on with the project despite the inflated cost. That’s Exhibit A on why prevailing wage reform has been so critical to taxpayers.

36) State Roundabouts – $10 million

Forty roundabouts are planned to be constructed in the state within the next four years. These roundabouts will total over $10 million. That bears repeating: $10 million in roundabouts. That’s a dizzying figure for something so despised.

37) La Crosse North/South Corridor – $143 million

The DOT has been obsessed with building a road through the La Crosse River marsh for decades. The initial proposal was dubbed the “North/South Corridor” and would have paved a four-lane highway through the marsh from near Interstate-90 to the city’s downtown. The price tag recently jumped to $143 million after the DOT audit found the department had low-balled cost estimates.

After La Crosse voters overwhelmingly rejected the DOT’s North/South Corridor plan in a referendum in 1998, by a two-thirds vote, the DOT has returned to the idea. In recent years the department has identified a number of alternatives to the rejected plan. While DOT struggles to fund other projects that are underway throughout the state, it seems insistent on spending $143 million it doesn’t have on a project in La Crosse that nobody seems to want.

38) 17th Street Lift Bridge – $14 million TOTAL, $3 million-plus LOCAL SHARE

Yes, this 60-year-old bridge in Two Rivers was found to be suffering from structural deterioration. But the city administrator acknowledges that a relatively new, four-lane Wisconsin Highway 42 bridge, just five blocks to the north “could handle all vehicular traffic crossing the East Twin River.” Still, the council “and many local residents” got behind the “lift bridge or no bridge at all” project “in order to maintain a vital vehicular, bike and pedestrian link from our downtown to the City’s east side and Lake Michigan beach.” The rest of the taxpayers in every other part of the state – and the federal taxpayers around the country who chipped in $8 million – might not have felt the same passion to build this bridge too near. But, then again, they didn’t have a choice in the matter.

39) Enforce Engineering Delivery Cost Index Prices – $6.6 million TOTAL

For the past 20 years, the DOT has spent considerable effort determining what engineering work should cost for state projects. It recalculates this every year. This should improve engineering efficiency – that is when staff doesn’t ignore the report.

40) Prevailing Wage Savings

This one’s on the Legislature. Ending Wisconsin’s antiquated and costly prevailing wage law should have been done a long time ago. Case in point, Vilas County, which could have constructed an ATV trail with an original bid total of $180,000, but prevailing wage artificially pushed the cost up to $330,000 for the same project. The county went on with the project despite the inflated cost. That’s Exhibit A on why prevailing wage reform has been so critical to taxpayers. Here’s Exhibit B: As DOT’s Freeway Service Teams can change your flat tire, fuel you up when you run out of gas, open your door when you lock your keys inside, and even tow you to the dealer. What’s next, discounts on motels and Disney travel packages?

42) New Stop Light Designs – $57.5 million TOTAL

Given the choice between two equally effective options to solve a problem, the least expensive option is usually the road most traveled. That’s not how Wisconsin’s DOT rolls. New traffic signal poles, called “monotubes,” cost between $250,000 and $275,000 per intersection. The old “trombone style” intersections cost between $200,000 and $225,000. So naturally, the DOT goes for the more expensive “monotube” style. So far it has installed over 1,100 of them.

43) Rebar Usage in Road Construction – $30 million TOTAL

For many of its road and bridge projects, DOT used a stainless steel rebar instead of an epoxy coated rebar. Using the stainless steel rebar cost far more and does not offer the same high life expectancy as the epoxy coated rebar. Just what every taxpayer and consumer wants: A product that costs more and does less.

44) DOT Added Staff – $10 million TOTAL

DOT added 180 engineering positions in the 2015-2017 state budget. These new positions cost nearly $10 million per year in salaries. The figure jumps when considering health and retirement benefits. Great! More engineers to forget to include inflation in the cost of road projects while never forgetting the DOT’s great love affair with roundabouts. You’ve heard the old joke? How many engineers does it take to waste hundreds of millions of dollars in taxpayer money? A: Apparently 180 more.

45) Resurface with oil and stone mix – $??? TOTAL

The public works director in Montello told the MacIver News Service he uses oil and stone instead of asphalt whenever possible to resurface the city’s roads. It makes for a bumpy ride for bicyclists and skateboarders, but it makes for a serviceable road at a fraction of the cost. He can do a mile for $9,000 compared to $80,000 for asphalt.

Total Cost to Wisconsin: $1,671,320,239

Total Local Cost: $294,262,000

Total Overall Cost : $1,965,882,239

March 2, 2017 | By Bill Osmulski

Does Wisconsin Really Have A Billion-Dollar Transportation Deficit?

A billion-dollar shortfall in the next transportation budget started the debate about raising Wisconsin’s gas tax, which was so explosive, no one seemingly had the time to confirm there is a billion-dollar shortfall. If they had, the current debate might not be centered on the gas tax, but instead on how we fund roads in the first place, because there’s only a shortfall if you change the way Wisconsin funds transportation.

The current 2015-2017 state budget spends $2.8 billion on highways, and $855 million of that comes from bonding. That means about 30 percent of everything Wisconsin spends on roads is borrowed, and there are those who believe the state should not be borrowing at all to pay for roads. That was the cover story for a peculiar request the Legislative Fiscal Bureau received last summer.

Even though the DOT was about to submit a new budget request in less than two months, Fiscal Bureau was asked to project what the DOT’s budget would look like under an unlikely set of circumstances. The request wanted the Fiscal Bureau to omit all bonding under a cost-to-continue scenario. The result was a $939 million difference between the current budget and the next.

The billion-dollar transportation deficit was born.

That number started the narrative that Wisconsin has a transportation funding crisis. It didn’t matter that two months later the DOT presented its actual budget request that included spending projections, revenue estimates, current federal funding commitments, and existing bonding. That request also indicated there would be a shortfall, but at $449 million, it was less than half of the previous projection. When Governor Walker presented his budget proposal, he included $500 million in new transportation bonding to fill that gap, which would be the lowest amount since the 2001-2003 budget. It would also mean no delays on major projects currently underway.

Still, the fabricated billion-dollar deficit dominates coverage of the transportation budget, and it continues to frame the debate over the gas tax. Framing the transportation debate this way benefits those who want to raise the gas tax. However, they will still readily point to bonding as an underlying concern.

“It is more conservative to pay for projects today than it is to borrow the money and make our children pay the price. But for far too long under Democratic and Republican leadership, the state has relied too heavily on bonding. According to the Legislative Fiscal Bureau, Wisconsin will spend roughly 20 cents on every transportation dollar on debt service for this fiscal year,” Vos said in a September 15, 2016 press release.

The Walker Administration, on the other hand, argues that transportation bonding is no different than taking out a mortgage for your house. The idea is you spread out the expense over the amount time you plan to use it.

Bonding is the one of the most common ways states fund transportation projects. There are only five states that don’t use transportation bonds at all. The American Association of State Highway and Transportation Officials (AASHTO) released a report in November that found bonding to be one of the most successful approaches to transportation funding and finance.

Meanwhile, heavy reliance on fuel taxes is considered one of the least successful approaches to transportation funding according to AASHTO. In fact, many experts say fuel taxes are becoming obsolete as people drive less and cars become more fuel efficient. Even the supporters of raising the gas tax in Wisconsin admit it’s not a perfect solution.

“Even though a lot of conversations have been about the gas tax being a declining revenue source or a dying revenue source long term, there are limitations to every different option that’s out there,” Representative John Nygren, Co-chair of the Joint Committee on Finance, told the Milwaukee Press Club at a luncheon on January 11th.

When it comes to options, Wisconsin has 19 different sources of revenue for its Transportation Fund. That’s more than any other state in the country, according to AASHTO. These include aircraft registration fees, airline property tax, drivers and vehicle records fees, driver’s license and state ID card fees, fines for truck size and weight violations, fuel tax, general funds, interest income, outdoor advertising revenues, oversize/overweight truck permit fees, passenger rail station sponsorship, passenger vehicle fees, petroleum inspection fund revenues, property sales, railroad property taxes, state rental vehicles fees, taxes on alternative fuels, taxes on aviation fuels, and truck registration fees. This is expected to bring in a total of $3.5 billion over the next biennium. When it comes to user fees specifically, Wisconsin’s collections of user fees per lane mile are comparable to its neighbors.

However, when we compare total highway spending (including administrative and debt service costs) per lane mile to road quality, we see that Wisconsin spends more for poorer quality roads. The state is clearly not getting a good deal on its roadwork, and it begs the question why? Fortunately, lawmakers sensed something was not right at DOT and ordered an audit last year.

That audit came back in January 2017, and it was, in a word, devastating. The auditors found the DOT regularly breaks state law in budgeting, negotiating, communicating, and managing contracts. Among these statutory violations: the department does not always solicit bids from more than one vendor, it does not spread out solicitations throughout the year, it does not post required information on its website, its cost estimates to the governor are incomplete, and it skips steps in the evaluation process for selecting projects. These practices manifest themselves through an inescapable reality: the cost of major projects tends to double after the DOT gets approval from the governor and legislature to proceed. The auditors looked at 16 current highway projects and found they are over-budget by $3.1 billion.

Assembly Speaker Robin Vos said the audit indicates the state isn’t spending enough on transportation.

“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,” he said in a release.

When the Joint Audit Committee held a hearing about the DOT on February 21, 2017, Rep. Nygren described the audit as “the tip of the spear” in the transportation funding debate. However, after acknowledging the need for reforms, he, too, claimed the audit suggests the need for even more transportation funding.

“Could it also be interpreted that because costs are not being estimated appropriately, that the actual projected shortfall that we’ve discuss of about a billion dollars is actually underestimated?” he asked the auditors. They answered that was outside the scope of their investigation.

Senator Chris Kapenga responded that “giving them more money would just absolutely be the wrong thing to do at this point,” until the new DOT Secretary has a chance to reform the agency and the legislature implements new oversight measures.

This light sparring has been typical of the DOT debate so far. That’s because the bottom line is we don’t know what the bottom line is. The side arguing for more highway spending hasn’t provided a solid figure. We often hear about that fabricated billion-dollar deficit, but now there are some, like Rep. Nygren, who say even that might not be enough. On the other hand, Rep. Vos has suggested $300 million might be a realistic amount given the governor’s budget criteria.

The governor has been firm and public in his opposition to raising taxes or fees for transportation. However, in December he made a comment that the only reason he might reconsider is if there were tax cuts in other parts of the budget to offset it. Vos took that comment and ran with it. He announced the $300 million target a month later, and Walker quickly clarified there was no deal to begin with.

Hypothetically, if Wisconsin were to boost highway funding by $300 million and it all came from a gas tax increase, the state’s gas tax would have to go from 32.9 cents to 37.7 cents a gallon. That would give Wisconsin the eighth highest gas tax in the country. Of course, Vos’ plan could spread that $300 million out across various taxes and fees in order to soften the blow. No one’s really talked about that $300 million for over a month now, but then again, Vos and his allies are playing this very close to the vest.

When Nygren was asked about his side’s lack of a definitive proposal to increase transportation funding at the Milwaukee Press Club luncheon, he simply responded, “We have been more about keeping all options on the table and having that dialogue, rather than choosing one path or one plan over the other.”

Yet, the only option we continue to hear is raise the gas tax, and the best evidence to support that option is the fabricated billion-dollar shortfall. And nobody has definitively promised if we raise the gas tax, there will be no transportation bonding – which supposedly initiated this debate in the first place.

June 21, 2017 | By Bill Osmulski

No Connection Between Spending and Best Local Roads in State

Smart planning and management make Marquette County’s local roads the best in Wisconsin, despite low funding levels

[Montello, Wisc…] Public officials in Marquette County apparently know how to get the biggest bang for their buck when it comes to transportation. They have the best roads in the state, while receiving almost the smallest amount of state aid per mile, according to the DOT and the Legislative Fiscal Bureau.

Ninety-nine percent of Marquette County’s local roads are in fair or better condition, and less than 0.8 percent are in poor or worse condition. Remarkably, local units of government in the county only receive an average of $2,605 per mile in General Transportation Aids. Compare that to Monroe and Eau Claire Counties, which are tied for the worst roads in the state and get $4,735 and $10,017 per mile respectively.

“You have to do what you can with the money you have,” Mike Kohnke, Montello Public Works Director, told the MacIver News Service.

Roads can last up to 40 years if properly maintained, but they deteriorate quickly if maintenance is delayed. For example, if cracks aren’t sealed, they fill up with water over the winter and result in more cracks. In order to keep up, Kohnke uses a controversial process – repaving with oil and stone instead of asphalt.

“It’s one of those forbidden things in a city compared to a township. If it was up to me that’s what I would do for every road. But people complain about the lose stones for a little while. Then they complain about the rough road if they skateboard or rollerblade,” he said.

This process, however, only costs 9 or 10 thousand dollars per mile compared to the $80,000 it costs to repave with asphalt. And it still lasts for 5 to 7 years. This allows Kohnke to keep most of the city’s road on a schedule that works.

“You’ve got to do what you think is right, and be willing to be called every name under the sun,” Kohnke said. “You have to tell them this is what we can do with the money we have. Otherwise, we’re going to have to raise your taxes, and then they’re usually okay with it.”

Kohnke communicates constantly with the Marquette County Highway Commissioner Randy Ravenscroft about road maintenance strategies. Ravenscroft told MNS he focuses on prioritization.

“When I got this job 4 years ago I said let’s look at the roads that have the most traffic and get them up to snuff,” he said. While still frustrated by too many potholes, Ravenscroft still has the county roads on a 30-year replacement cycle.

Both Ravenscroft and Kohnke told MNS their predecessors left them with a solid maintenance plan that set them up for success. That’s given them a big leg up compared to some of their colleagues in other counties.

Over in Monroe County, David Ohnstad took over as highway commissioner earlier this year and is currently trying to devise a transportation maintenance plan from scratch.

“There’s obviously some immediate things that need to be addressed,” Ohnstad told MNS. “In terms of the big picture, to come up with a longer-range plan, you really need to do the assessment to see what you’ve got.”

Although funding is a challenge, Monroe County communities are in a much stronger position than those in Marquette County. Not only do they get more funding from the state, their overall funding averaged $13,170 per mile in 2015 and in Marquette it was only $9,750. Despite that, 25 percent of all local roads in Monroe County are in poor condition or worse.

So if road maintenance truly comes down to personnel, Monroe County is far from a lost cause. Ohnstad described the steps he’s taking to turn things around.

“We’re going to make a comprehensive assessment of everything that make up the highway system and put a condition assessment on them, so we can project what the actual need is, and then see where we can maintain the resources to meet that demand. Right now we’re making some assumptions,” he said.

Although challenged, Ohnstad is far from overwhelmed. He said, “It’s a challenge, but it’s a challenge all over.”

July 17, 2017 | By Chris Rochester

Reality Check: Do Wisconsinites Really Want to Pay More for Roads?

The ground should've shifted beneath Madison recently when the latest Marquette University Law Poll found most Wisconsinites aren't nearly as concerned as many have long claimed about the issue of transportation, the debate that's plagued the state Capitol and budget process for months.

Marquette's poll, conducted at the end of June, found that a mere 23 percent of respondents identified transportation as their top priority. More Wisconsinites identified healthcare (25 percent) and K-12 education (37 percent) as their number one concerns.

Even more tellingly, the Marquette poll found that a slim majority - 51 percent - of those who said transportation is their highest priority would not be willing to pay higher taxes for transportation, while just 46 percent said they would pay more. By contrast, 75 percent of respondents who said K-12 education is their top concern would be willing to pay higher taxes for that priority.

When given the chance to list their top two priorities, just 42 percent of respondents in the Marquette Poll included transportation, again trailing K-12 education (63 percent) and healthcare (52 percent).

In other words, transportation isn't that hot a topic outside the beltline, and even those who say it's their most important issue are squishy when asked to put their money where their mouth is.

Proponents of increased revenue point to a different, privately-financed poll conducted in late May to early June by Public Opinion Strategies as evidence they're on the right side of public opinion. That poll found that 76 percent would pay $4 more a month "if it meant creating an immediate solution to fix Wisconsin's roads," according to a Transportation Development Association press release, which commissioned the poll.

The poll leads respondents to a desired answer by implying a measly $4 a month in higher taxes would instantly result in every single road in the state being transformed into pristine condition. It's very easy to respond yes to that question, but fixing state's transportation morass isn't nearly that simplistic.

The TDA poll also found that voters oppose increased borrowing for transportation. But Governor Walker's budget actually decreases road bonding to $500 million, down from $850 million in the last budget and the lowest level of bonding since the 2001-03 budget. Walker also recently offered to cut bonding to $300 million - an offer rejected by Assembly leadership.

The "revenue enhancement" crowd loves to compare transportation bonding to putting road work on the credit card, but a better comparison is buying a home. While it would be ideal to buy a house with cash, only a select few can cut a check that big.

It's simply not reasonable to think the state can or should pay for a billion-dollar interchange project in cash.

Speaking of billion-dollar road projects, respondents to the TDA poll also oppose delaying southeast mega projects. That's not surprising - reasonable people oppose delays in roadwork because every motorist has sat in a traffic jam surrounded by construction barrels. No one likes delays - but the fact is, the vast majority of projects throughout Wisconsin would proceed without delay under Walker's proposal.

So while the TDA poll found large majorities generally support a small revenue increase if it would fill every pothole, seal every crack, and finish every project on time without borrowing, the Marquette poll revealed that Wisconsinites aren't that passionate about the issue and are much more hesitant to pay more when not presented with a low-cost magic fix.

The Marquette poll contradicts claims by the "revenue enhancement" crowd that there's an angry mob of motorists clamoring for a price hike at the pump. Proponents of a gas tax increase also like to point to spontaneous and supposedly uncoached letters that have been appearing in various newspapers around the state demanding action on road funding.

Nearly the same letter appears in newspapers around the state, all written under the same two names - Megan Delaney and Shannon O'Connell. In the Janesville Gazette, Delaney claims to be from Janesville. In the La Crosse Tribune, she says she's from Onalaska. In the Wisconsin Rapids Daily Tribune and Stevens Point Journal, O'Connell claims to be from Wisconsin Rapids, but in papers serving Baraboo, Beaver Dam, and Portage, she says she's from Fall Creek. In the Rice Lake Chronotype, she says she's from nearby Barron.

Even if there are two Megan Delaneys, one living in Janesville and one living in Eau Claire, and three Shannon O'Connells, each very concerned about our transportation infrastructure and the need for higher gas taxes, the similar language used in papers from Janesville to Rice Lake suggests something else may be afoot.

This is an astroturf campaign, the tactic of special interests that want to make it look like the rest of the state cares about their cause and sides with them.

Transportation funding has been the bull in the budget china shop for months here in Madison, but the Marquette poll and the copy-paste-repeat letter campaign suggests a different reality: Wisconsinites are not clamoring for a tax increase like some in the media are trying to portray. Real Wisconsinites are not obsessed with finding ways to increase transportation funding. Remember, according to the Marquette poll, even among those who are concerned about transportation, a MAJORITY of those transportation-concerned individuals DO NOT favor a higher gas tax or registration fee.

Legislative leaders have come up with a cavalcade of ideas for raising taxes and fees to achieve their transportation goals. They and others have floated the idea of applying the sales tax to gasoline, adding toll roads, taxing farm equipment, tacking on a new heavy truck fee, and increasing the sales tax by $1 billion - among other ideas.

The "just tax it" crowd has it backwards. Instead of using manufactured public outcry to justify wringing more money out of Wisconsin motorists, farmers, and truckers, they should support a commonsense budget that focuses on the real concerns of the majority of the taxpaying public.

To paraphrase a famous quip by Governor Lee Dreyfus, Madison is 77 square miles surrounded by reality. The heated and protracted debate over transportation funding taking place in the state Capitol is a perfect case-in-point.

July 17, 2017 | By Bill Osmulski

The Truth About Road Bonding

[Madison, Wisc…] Wisconsin lawmakers might not like the idea of borrowing to pay for road projects, but an overwhelming amount of research and experience, not to mention current state policy, show bonding to be an effective and essential component in transportation funding.

“Without bonding, some projects would likely be delayed regardless of perceived need, and priorities would need to be reconsidered to assure the delivery of a balanced program within available resources,” according to the Wisconsin Transportation Finance and Policy Commission in its 2013 report to the governor and Legislature.

That could be why every state in the country either uses transportation bonds or allows its local governments to use them, according to the American Association of State Highway and Transportation Officials (AASHTO). In fact, AASHTO considers bonding to be one of the most effective strategies for transportation funding.

States typically have debt management policies that put limits on how much they can borrow. According to both the Legislative Fiscal Bureau and the commission, Wisconsin is well below established debt ceiling limits.

In Wisconsin, new bonds should only be issued if debt service is less than $1 for every $2.25 of revenue. Fiscal Bureau recommends a ratio of $1 for every $2.50 “in order to maintain a cushion.”

Over the past ten years, the state has never gotten close to that limit. The current level is $1 for every $3. That’s the same level it was at in 2006-2007. It dropped down to $1 for $3.60 in 2009-2011, which corresponds to an influx of $529 million in stimulus funds for road projects. LFB points out bonding has gradually increased since then to its current level.

The state Legislature created the commission in 2013 to develop a transportation funding policy for the next decade. It recommended continuing the use of bonds, and imposing a different measure for responsible borrowing. It said debt service should not exceed 25 percent of the transportation fund. Wisconsin is currently spending 18.2 percent. Fiscal bureau projected debt service over the next two years could top 20 percent.

Although the level of bonding has been rising over the past several years, Governor Walker’s budget proposal would have reversed that trend. He had transportation bonding at $500 million, which would have been the lowest since the 2001-03 budget.

Assembly Republicans presented a plan in May that would have bonded for $200 million. The current Assembly Republican position is no bonding without new revenues (i.e. tax or fee increases).

“If we are going to borrow more money, there has to be a way to pay for it. We will not continue to borrow and spend; that’s not the conservative way to govern,” Assembly Speaker Robin Vos said in a statement on Wednesday.

Walker and Senate Republicans strongly oppose any tax or fee increases. The Senate’s plan would bond for somewhere between $700 and $850 million.

The state budget debate is currently at a standstill due to this standoff over bonding’s role in road funding.

July 13, 2017 | By Bill Osmulski

Heavy Hitting DOT Reform Bill Emerges at Capitol

[Madison, Wisc…] Republican Lawmakers are pushing a new reform package in hopes of more efficient and responsible highway project management at the DOT.

A memo for co-sponsorship started circulating Thursday morning with two dozen lawmakers from the Assembly and Senate already signed on. Rep. Joe Sanfelippo (R-New Berlin), a co-author of the bill, told MNS Thursday another four to six lawmakers have signed on since then.

The package would address some of the problems identified by the legislative audit that was released this past January. It would implement new procedures to increase oversight at the DOT, while at the same allowing it more flexibility to capture cost saving opportunities.

“The genesis of these ideas isn’t necessarily the audit, but the audit did urge the Legislature to act quickly on these issues,” Senator Dave Craig (R-Town of Vernon) told MacIver News.

Under the bill, the DOT would be allowed to use alternative project delivery methods, specifically “Design-Build” or “Construction Manager-General Contractor” on highway projects. The only method currently allowed is design-bid-build, which critics say is not always the cheapest or most effective method to complete highway projects.

The package also includes five reforms that have already been introduced as standalone bills, including the full repeal of the prevailing wage law for state highway projects. That’s already been passed out of committee, but the other bills have not yet had a hearing.

“When you look at the proposals we’re making, and if you’re in the private sector, you’re thinking this is just common sense,” Craig said.

Provisions in the bill:

Allow the DOT to use alternative project delivery methods, specifically Design-Build or construction manager-general contractor on highway projects.

Allow local governments to use alternative project delivery methods.

Create a technical review committee to review contract proposals.

Create a scoring process for bids that encourages transparency, low cost, and Wisconsin-based contractors.

Create reporting requirements to the Legislature. DOT would have to give updates on the performance of alternative project delivery methods.

Limit how much engineering work can be done in-house.

Implement need-based funding instead of baseline funding for DOT regions.

Require a full audit of the DOT. The audit released this past winter only examined the highway program.

Current Bills

SB 80 requires local approval of roundabouts. There are currently 40 roundabout projects planned throughout the state over the next 4 years, which will cost approximately $10 million, according to Department of Administration estimates. There has been no hearing yet on that bill.

SB 143 establishes an inspector general at the DOT. That person would be able to “examine the accounts and other financial records of DOT and may review the performance and program accomplishments of DOT.” There has been no hearing yet on that bill.

SB 216 repeals prevailing wage. It passed out of committee on May 3, but has yet to be scheduled for a floor vote.

SB 217 swaps federal funds on certain projects with local funding. Savings are involved by categorizing projects from federal to local. There has been no hearing yet on that bill.

AB 361 requires a referendum to institute a local wheel tax. There has been no hearing yet on that bill.

Assembly Speaker Robin Vos supports the package, but says it won’t have much effect on the current transportation funding debate holding up the budget.

“I look forward to working with my colleagues in both chambers to improve the DOT to bring about a more effective and efficient agency. However, it’s important to understand that reforms alone won’t resolve the transportation funding issue that must be addressed in order to maintain a reliable and safe highway system,” he said in a statement Thursday.

However, the memo for co-sponsorship explains the reform package is not about settling the current transportation funding debate.

“Regardless of what emerges from the revenue side of the discussion, we are all keenly aware of the dire need for operational reforms inside the Department of Transportation. The audit released earlier this year confirmed that this agency suffers from gross mismanagement on so many fronts,” the memo reads.

Bill co-author Senator Chris Kapenga (R-Delafield) said “These reforms have been proven around the country to save significant money and deliver projects in a more efficient and effective manner. It is part of what is needed to help get the agency back on track.”

Senator Craig says even though a specific dollar amount cannot be attached to potential savings the bill could achieve, he’s confident it will be significant.

“You’re streamlining the bureaucracy, you’re returning roles back to the competitive market, when you’re returning local control. That’s going to have a big impact,” Craig said.

Rep. Sanfelippo said these reforms represent a two-pronged approach to the transportation issue. As leadership negotiates the funding side, Sanfelippo says these reforms are essential to avoid future funding fights.

“We have our disagreements on the money between the Assembly and Senate side no doubt, but nobody says we don’t need reforms,” he said. “No matter how we get it, we just all feel very strongly that these reforms have to get done.”

July 6, 2017 | By Tyler Brandt

Transportation Fund Pays for New Welcome Center and Otter Exhibit at Milwaukee County Zoo

Zoo pulls slick move to get slick-skinned mammal exhibit

[Milwaukee, Wis…] The Milwaukee County Zoo is scheduled to open a new welcome center and otter exhibit this August on the west side of the grounds. While the zoo’s persistent push to improve its facilities and add new attractions to draw in more visitors is not surprising, what is surprising is where the almost $13 million in funding came from: the Wisconsin state transportation fund.

With the massive zoo interchange project, the DOT needed to acquire zoo land on the east side of the grounds to make way for their work. In 2014, the DOT took eight acres from the zoo, home to 700 parking spaces.

To compensate for the lost spaces, the DOT offered the zoo $8.09 million. The Milwaukee Business Journal reported earlier this year that the two were close to a deal. The agreement was for the state to pay $2.65 million for a new parking lot, $2.76 million for a welcome center, and $2.68 million for other infrastructure improvements.

Just before the deal was signed, zoo officials decided to back out of the proposed agreement and sue the DOT instead. The lawsuit was for $19.3 million. Long before that case was settled, the zoo went ahead and constructed a new 500 space parking lot on the west side of the grounds.

Before the case came to a jury decision, the two sides reached a private agreement, settling at $12.7 million.

Armed with an extra $10 million taken from the transportation fund, Milwaukee County decided to build the new welcome center and otter exhibit in addition to the lost parking lot.

On June 29, MacIver reached out to zoo, county, and DOT officials about the project. The questions were about the appropriateness of $12.7 million taxpayer dollars going towards the zoo and the zoo only constructing 500 spaces when they asked for 700. As of yet, nobody has responded.

While squabbling over the transportation fund continues, the $12.7 million lost is yet another roadblock. With a total estimate of $1.5 billion and a possible 2 year delay, another setback to the zoo interchange does nothing to soothe the transportation woes of the state.

July 6, 2017 | By M.D. Kittle and Tyler Brandt

Two Rivers, Hefty Debt, and the Transportation Tax Debate

[Madison, Wis…] In a sales pitch last October for state transportation tax and fee increases, Two Rivers City Manager Greg Buckley opened with a common refrain from the tax-hike crowd: “(N)one of us likes paying higher taxes and fees…”

But …

Buckley’s argument for the transportation lobby includes a very big but.

“I’m not suggesting Wisconsin needs to go hog wild with gas tax and fee increases. But the reality is that our state has a growing funding gap between available resources and infrastructure needs,” the government executive wrote in his column for the Transportation Development Association. “Major highway projects are getting delayed, and local maintenance and reconstruction efforts are inadequate.”

What’s the harm, Buckley argued, in asking Wisconsin motorists to pay a “little” more? Would “another 6 cents at the pump, in support of streets, roads and bridges, have posed an undue burden?” Buckley asked, pointing to the possible revenue that could have been raised had Wisconsin only kept the state’s comparatively high gas tax indexed to inflation over the past decade. After all, the city manager insisted, we either pay now or we will pay later – undoubtedly much more later.

Buckley’s opinion piece, penned on October 13, 2016, was at the very least prescient.

“With a new session of the Legislature and a new state budget process coming up, transportation funding is likely to be a hot topic,” he wrote.

But you didn’t need to be a soothsayer to see just how heated the transportation debate would be.

What is worth noting is the fact that Buckley made his pitch for more taxpayer-funded road money while his city shouldered a “debt service” level higher than most communities its size. The year before Buckley urged the Legislature to consider boosting taxes and fees to cover a disputed $1 billion state transportation budget shortfall, Two Rivers’ debt service on General Obligation debt topped $8.6 million, or more than one-third of the city’s budget.

The Manitowoc County city with a population of 11,712 residents was at 77 percent of its borrowing capacity of approximately $25 million, according to 2015 data obtained from the Wisconsin Department of Revenue. That was significantly higher than the 11 similarly sized cities included in a review by MacIver News Service. Platteville was second on the borrowing list, at about 63 percent of its limit. Cedarburg was the lowest that year, at 15 percent.

So what gives the administrator of a city carrying so much debt the fiscal authority to ask state drivers to pay more in taxes and fees to cover his city’s transportation needs?

Buckley said the 2015 figure, the latest available data from the Department of Revenue, is an anomaly. It reflects “about $6 million” in refinancing of existing debt for interest savings, sans changes to the repayment term, and $2.6 million in regular, scheduled principal and interest payments.

Buckley, however, concedes the city’s “normal” annual debt service payments, at as much as $3 million per year, “are as high as they are – although not outrageously high – in large measure because this city has “devoted significant local resources to transportation infrastructure improvements,” typically funded through debt. Most of the city’s borrowing has been on a 10-year schedule, an aggressive debt repayment schedule, according to the city manager.

“Two Rivers has made rebuilding its infrastructure a priority, and we have leveraged state and federal resources to the greatest extent possible, in addition to debt financing,” Buckley said.

The city has worked with the state Department of Transportation over the past two decades in replacing three bridges on state highways and several major highway segments in the community, Buckley said.

He points to Two Rivers’ 17th Street lift bridge. A 2002 report found structural deterioration on the 1950s span, Buckley said, requiring a posted weight limit and eventual replacement. The city secured an $8 million earmark in the 2015 federal highway bill.

“During the extended local discussion of that project, we held several public meetings where the City Council and I looked residents straight in the eyes and said, ‘This will require new city debt, this project will raise your taxes.’ And, predominately, the community’s response was ‘let’s do it,'” Buckley said.

But was it necessary?

Traffic studies found a relatively new, four-lane Wisconsin Highway 42 bridge, just five blocks to the north, “could handle all vehicular traffic crossing the East Twin River,” the city manager said. Still, the council “and many local residents” got behind the “lift bridge or no bridge at all” project “in order to maintain a vital vehicular, bike and pedestrian link from our downtown to the City’s east side and Lake Michigan beach,” Buckley said.

The total project cost $14 million, according to the city, with the local share north of $3 million reflected in the city’s debt service payments. Buckley said the bridge, dedicated four years ago, should serve Two Rivers for 60 to 75 years.

If Two Rivers has prioritized transportation infrastructure as Buckley asserts, it’s nowhere near the premium the city has put on government operations and public safety.

According to MacIver News Service’s review, Two Rivers had 115 salaried city employees in 2014. That compares to an average work force of about 70 employees for like-sized cities. Two Rivers’ payroll in 2014 topped $6.5 million. The closest comparable city was Baraboo, which had 94 salaried employees and a payroll of nearly $4.9 million. The average payroll of the 12 cities surveyed was $3.95 million.

In 2017, Two Rivers spent 53 percent of its general fund on public safety, despite having lower crime rates than the state average. The average public safety expenditure percentage of the cities surveyed was 43 percent.

Buckley asserts Two Rivers’ percentage of public safety expenditures is “pretty typical among WI cities – especially those with full-time fire and EMS departments.” He noted the city takes in about $585,000 annually in ambulance revenue.

Two Rivers’ public works department is projected to spend $1.58 million this year, including street maintenance and bridge repair and maintenance projects, part of the city’s budgeted $9.8 million General Fund expenditures.

Total public General Fund spending on public safety is budgeted to approach $5.14 million this year, according to Two Rivers budget documents.

The city annually receives about $3.8 million in shared revenue.

Budgets are about priorities. Two Rivers has prioritized its government workforce, the generous wages paid to its workers, and police and fire protection in a relatively safe community.

And yet it could be argued that Two Rivers is asking motorists across the state to pick up a good part of the tab for its public works projects when the city’s spending priorities don’t include transportation, at least by comparison.

Buckley said he stands by his statement that more resources are needed to fund Wisconsin transportation, perhaps higher gas taxes or some new, mileage-based charges such as toll roads. He points to former Department of Transportation Secretary Mark Gottlieb’s call for the same. But Buckley failed to note the state audit that found hundreds of millions of dollars wasted in a DOT that failed to account for inflation in its project estimates and failed to seek competitive bidding for hundreds of big-ticket projects.

Buckley isn’t alone. Local government leaders across the state have cried poverty on state transportation spending as they have been reluctant to prioritize transportation at the expense of other government initiatives.

As the transportation spending PR campaigns roll on, the Republican-controlled Legislature remains at a standstill. Gov. Scott Walker’s budget proposal includes significant increases in state aid for local road maintenance, but he has rejected calls for tax and fee increases. GOP Assembly leadership has said tax and fee hikes are needed to keep major road projects on track, a position seemingly not supported by Senate Republicans. Meanwhile, the majority party in the Senate is kicking around $350 million more in transportation bonding than the governor’s $500 million, a position sharply criticized by Assembly Republicans like Rep. Jim Steineke, R-Kaukauna.

In his opinion piece last year, Buckley noted the possible savings that could be realized in myriad ways within the DOT, but he cautioned not to expect to close “a $700 million annual gap with cost savings alone.”

Perhaps before calling on taxpayers statewide to pick up more of the tab, communities such as Two Rivers should first try saving at home.

July 6, 2017 | By M.D. Kittle

Walker Offers To Reduce Bonding $200 Million To Break Transpo Impasse

UPDATED at 11 p.m. to include comment from Assembly Majority Leader Jim Steineke (R-Kaukauna)

[Madison, Wis…] In an apparent move to break the stalemate on the state budget, Gov. Scott Walker is proposing cutting $200 million in bonding from his transportation package, a move the Republican governor asserts is a “win for (GOP) Assembly leadership” long critical of borrowing to pay for projects.

But Capitol watchers wonder whether Walker’s latest offer is an olive branch or a stick to beat over the heads of a recalcitrant, Republican-controlled Assembly that has pushed gas tax and fee increases to fill a disputed $1 billion transportation budget shortfall.

One thing is certain: Walker hasn’t changed his mind on tax and fee hikes. In a letter to Assembly Speaker Robin Vos (R-Rochester), and Senate Majority Leader Scott Fitzgerald (R-Juneau), he urges the Legislature to “pass a strong and safe transportation budget without a gas tax or vehicle fee increase.”

“We can pass a budget that provides meaningful increases to local governments to improve roads and bridges – as well as add significant investments in safety and maintenance and highway rehabilitation – all without raising the gas tax or vehicle fee,” the governor wrote in the letter, dated Wednesday.

Noting that transportation is “at the center of finalizing” the past due 2017-19 budget, Walker proposes “reducing transportation fund supported bonding by $200 million in this budget by using an improved transportation fund balance, project cost savings, and other administrative actions.”

“We believe this can be accomplished while continuing to keep projects on schedule,” he wrote.

Walker has proposed $500 million in new bonding. The Senate has been kicking around adding $350 million in borrowing onto that. In his letter to Republican leadership, Walker noted that his original transportation budget, presented in September, includes the lowest levels of transportation bonding since the 2001-2003 state budget.

“Lowering bonding by $200 million is a win for Assembly leadership who have voiced their desire to return bonding for transportation projects,” Walker wrote.

Assembly Majority Leader Jim Steineke (R-Kaukauna), said the governor’s offer was a “good step in the right direction,” signaling Walker’s “willingness to move off the position he laid out in his budget.”

“I think that’s obviously a positive step and he’s getting closer to where we are,” Steineke told MacIver News Service Thursday on the Vicki McKenna Show, on NewsTalk 1130 WISN in Milwaukee.

But Steineke said Republican leaders in the Assembly haven’t changed their basic position that set revenue increases are needed to fund and keep critical transportation projects on track.

“If we’re going to do that, our position is you should pay for it as you go as much as possible, because we’ve already taken transportation debt from about 8 to 10 cents on the dollar to up to 20 cents on the dollar and if we increase borrowing in this budget it will go even higher,” the lawmaker said. “We just think that’s unsustainable and without a clear plan to pay that down over time we shouldn’t do anymore bonding at this time.”

Walker’s updated transportation plan asks the Legislature to approve contingency bonding for the Southeast Freeway Mega Project program, projects receiving federal financial assistance and carring a price tag of $500 million or more.

“Interstate 94 North/South, the Zoo Interchange and Interstate 94 East/West are high profile projects in southeastern Wisconsin. We propose contingency bonding that would be linked to additional federal funding for mega projects,” Walker wrote. “Wisconsin is well positioned to qualify for additional federal funding to help support mega projects.”

Walker said the prospect of moving on several mega projects in southeast Wisconsin is a “win for Senate leadership.”

Sen. Alberta Darling (R-River Hills) recently told MacIver News that the state could be eligible for significantly more funding.

“The federal government budget comes out in August. We’re hoping there is opportunity for us to get a big investment out of the federal government,” said Darling, co-chairwoman of the Legislature’s budget committee.

The Department of Transportation reportedly plans to request $341 million in redistributed federal transportation cash, significantly higher than the state’s average request.

But banking on the federal government to send back more tax dollars is generally a fool’s errand for state governments.

In his letter to leadership, Walker said all active major projects remain on schedule with “these additions to our proposal.”

“In addition, new revenues will be available for roads in the next budget as the bonds funded by the Petroleum Inspection fee will be paid off and those revenues can be available to bolster the Transportation Fund,” Walker wrote. Sources tell MacIver News more than $30 million in freed-up cash would be available beginning in fiscal year 2020.

Senate Republicans spent much of Thursday in caucus. Capitol insiders told MacIver that the Assembly and Senate remain far apart on transportation.

June 30, 2017 | By M.D. Kittle

Senators: No Truck Tax, No Tax Hikes For Troubled DOT

[Madison, Wis...] - Five Wisconsin state senators on Friday announced they will not support an Assembly proposal to place a new fee on heavy trucks - or tax hikes of any kind - to fund the troubled state Department of Transportation.

Sens. Steve Nass (R-Whitewater), Dave Craig (R-Town of Vernon), Frank Lasee (R-De Pere), Chris Kapenga (R-Delafield), and Duey Stroebel (R-Saukville), released a statement expressing their opposition.

"As the budget debate lingers, it remains clear that some in the legislature are seeking to increase WisDOT taxes in any way possible," the senators said.

"The 'tax of the week' is a new tax on trucking. Instead of getting creative to find new ways to tax Wisconsinites, we should be discussing the reforms needed to clean up an agency with a record of over-designing, over-building, and over-paying for our roads," the press release states.

Adding a new tax would only send Wisconsin's tax rankings - still relatively high - in the wrong direction, the senators contend.

"Throughout the budget process, we have been discussing the elimination of taxes like the state forestry mill tax and the personal property tax on Main Street," the statement continues. "Now is not the time to increase taxes on our citizens."

That has been the adamant position of Gov. Scott Walker. But earlier this week, following the governor's meeting with Republican leadership, Assembly Speaker Robin Vos (R-Rochester) said the Assembly backs the proposal and is aligned with Walker on the budget. Vos said the new fee to help pay for Wisconsin's road projects could be a key piece in a budget deal.

Neither Walker nor Vos returned MacIver News Service's requests for comment.

Assembly members have been mostly silent on the idea, raised earlier this month by Rep. Amy Loudenbeck (R-Clinton). Proponents argue heavy truck operators should have to pay more to cover the wear and tear they create.

Critics say the fee singles out one category of vehicles to fix the state's disputed $1 billion transportation budget shortfall.

The Wisconsin Motor Carriers Association joined a coalition of 16 trade groups and businesses - from Walmart to Schneider National - in sending a memo Thursday afternoon to Walker and lawmakers expressing their opposition to the idea.

"We strongly oppose the current proposal being considered to assess a Ton Per Mile (TPM) tax on heavy trucks," the letter states.

The coalition asserts Wisconsin's trucking industry paid 38 percent of all taxes and fees owed by Wisconsin motorists in 2016, and it pays one of the highest trucking registration fees in the nation.

"In addition to adding a new taxing scheme that can be increased by future legislatures, the current proposal embarks on what could be a red-tape nightmare for those doing business in Wisconsin when trying to accurately calculate a Ton Per Mile tax," the memo states.

"Currently there is no TPM tax collection mechanism for intrastate carriers and an extra layer of government reporting would be placed on Wisconsin trucking companies, particularly small businesses."

The bigger problem, according to the senators, is rewarding an agency that has wasted hundreds of millions of taxpayer dollars.

"The recent audit of WisDOT shows there are many reasons the agency has been inefficient and does not deserve new revenues. We should be looking for savings in government," the senators said in the statement.

June 29, 2017 | By M.D. Kittle

Updated: Senators Voice Resistance To Heavy Truck 'Tax'

UPDATE - Gov. Scott Walker on Thursday met with representatives from Green Bay-based Schneider National, one of the nation's largest trucking companies.

The meeting apparently was scheduled before word broke that the Assembly was pushing a proposal that would hit heavy trucks with a new per mile fee.

Walker "got an earful," according to Neal Kedzie, president of the Wisconsin Motor Carriers Association.

"My contacts at Schneider told me they expressed their disapproval and did not feel the trucking industry should be singled out as the only highway user group to fund the bulk of the state's transportation budget shortfall," Kenzie said.

Schneider officials could not be reached for comment. The governor's office has not returned MacIver News Service's email's seeking comment, even communications asking to confirm the governor's schedule.

A source with knowledge of the situation confirmed Kedzie's account.

The Motor Carriers joined coalition of 16 trade groups and businesses - from Walmart to Schneider National - in sending a memo Thursday afternoon to Walker and lawmakers expressing their opposition to the idea.

"We strongly oppose the current proposal being considered to assess a Ton Per Mile (TPM) tax on heavy trucks," the letter states.

The coalition asserts Wisconsin's trucking industry paid 38 percent of all taxes and fees owed by Wisconsin motorists in 2016, and it pays one of the highest trucking registration fees in the nation.

"In addition to adding a new taxing scheme that can be increased by future legislatures, the current proposal embarks on what could be a red-tape nightmare for those doing business in Wisconsin when trying to accurately calculate a Ton Per Mile tax," the memo states. "Currently there is no TPM tax collection mechanism for intrastate carriers and an extra layer of government reporting would be placed on Wisconsin trucking companies, particularly small businesses."

Assembly Speaker Robin Vos (R-Rochester) on Thursday told the AP the fee could be one of the key pieces in a transportation budget deal, and that Walker is "alligned" with the Assembly on the deal.

Others with knowledge of a meeting Wednesday between the governor, Vos, and Senate Majority Leader Scott Fitzgerald (R-Juneau) say Walker agreed to let the two houses work out an agreement on transportation funding and that the governor would not interfere. The Assembly and Senate have been at an impasse.

Amid a transportation standoff between an Assembly that has pushed for "all options on the table" and a governor dead set against tax increases in a time of budget surpluses, Rep. Amy Loudenbeck (R-Clinton) earlier this month floated the heavy truck fee idea.

Loudenbeck has said her proposal is similar to Kentucky's heavy truck fee - at 2.85 cents per mile. The fee reportedly generate north of $200 million over the biennium for Wisconsin's transportation coffers.

It could also be disastrous to an industry operating on thin margins - an industry that transports more than two-thirds of the nation's goods, critics of the proposal say.

Loudenbeck told Wisconsin Public Radio that her proposal does not mean to put anyone at a competitive disadvantage.

"We're trying to be fair so that this would apply to all vehicles traveling in Wisconsin, not just Wisconsin vehicles or Wisconsin companies," she told WPR. "It's everyone that drives on our road with a heavy truck."

State Sen. Steve Nass (R-Whitewater) has come out against the proposal. So have taxpayer-advocate groups such Americans for Prosperity-Wisconsin.

"This proposal is highway robbery in the truest sense of the words," said AFP-Wisconsin state director Eric Bott. "Under this scheme, small trucking businesses will get hit worst and first. They'll pass these new costs onto their customers or lose businesses to firms operating in other states."

The trucking coalition agrees.

"Targeting heavy trucks with a TPM tax to fix Wisconsin's transportation budget will raise the cost to do business here in Wisconsin, resulting in less routes through the state, increases prices for consumers and curtail new investment," the memo states.

Many of the coalition members have publicly or privately supported increasing revenue for transportation funding - including a gas tax increase.

"Other options are available to increase infrastructure investment without jeopardizing Wisconsin's business climate."

MacIver News Service | June 29, 2017 | By M.D. Kittle

[Madison, Wis...] - An Assembly proposal that hits heavy trucks in Wisconsin with a per-mile fee to help fund the state's troubled transportation fund isn't sitting well with some conservative senators.

"Steve will be issuing a statement soon. He's coming out hard against" the proposal, Mike Mikalsen, spokesman for Sen. Steve Nass (R-Whitewater) told MacIver News Service. "It is basically a backdoor increase on taxes on everyone."

One conservative Capitol insider was a little more colorful in his objection to the plan, saying Thursday that he was trying to figure out what kind of lipstick supporters were trying to "put on this pig."

Assembly Speaker Robin Vos (R-Rochester) says the Assembly backs the proposal "and is aligned with (Gov. Scott) Walker on budget," according to a Tweet Thursday morning from the Associated Press's Scott Bauer.

Vos "says new fee on heavy trucks to pay for roads could be one of key pieces in budget deal," Bauer tweeted.

Vos's office has not returned MacIver News' requests for comment. Neither has Walker's office.

It is odd that a Republican governor who has adamantly said he would not support gas tax and fee hikes - something the Assembly has pushed from the beginning - would be on board with a plan to create a fee on one class of road users.

Mikalsen and other Capitol insiders certainly find it hard to believe.

They say they were told that Walker would not stand in the way of the Assembly and Senate negotiating a deal on the heavy truck fee. What isn't clear is whether Walker promised not to veto the fee.

Amid a transportation standoff between An Assembly that has pushed for "all options on the table" and a governor dead set against tax increases in a time of budget surpluses, Rep. Amy Loudenbeck (R-Clinton) earlier this month floated the heavy truck fee idea.

Loudenbeck has said her proposal is similar to Kentucky's heavy truck fee - at 2.85 cents per mile. The fee reportedly could generate north of $200 million over the biennium for Wisconsin's transportation coffers.

Wisconsin Manufacturers & Commerce, vehemently opposed to the heavy truck "tax," asserts the fee would be the equivalent of a 20 cent per gallon tonnage tax on trucks. WMC estimates the cost to be between $130 and $135 million per year.

Wisconsin's haulers say the proposal will hit an industry that exists on paper thin margins. Loudenbeck told Wisconsin Public Radio that her proposal does not mean to put anyone at a competitive disadvantage.

"We're trying to be fair so that this would apply to all vehicles traveling in Wisconsin, not just Wisconsin vehicles or Wisconsin companies," she told WPR. "It's everyone that drives on our road with a heavy truck."

Proponents say it's only right that the heavy users of Wisconsin's highways put in their fair share to fund their upkeep.

Critics say truckers already are paying more than their fair share.

Scott Manley, WMC's senior vice president of government relations, said the type of trucks targeted in the proposal typically account for around 10 percent of vehicle miles on Wisconsin's roads, but their owners pay approximately 38 percent of the fees. Heavy trucks also pay the fifth highest annual registration fees in the country, Manley said.

"Wisconsin is one of the most expensive states in the country to move a truck, and now the Legislature wants to make it even more expensive, to literally tax every mile they drive," he said.

The fee would only end up hurting an industry that directly serves Wisconsin's critical manufacturing and agriculture sectors, Manley said.

Mikalsen said consumers would ultimately pay the price for a tax on truckers.

"Those trucking companies work on such small margins. This isn't something they can eat," he said. "We think the proponents know that. They want truckers to be the bad guys, they want the truckers to do the work for them."

State Sen. Duey Stroebel (R-Saukville), said he hasn't reviewed a Legislative Fiscal Bureau memo on the truck fee, but he has consistently said he's not in support of tax increases. The LFB memo was not available Thursday morning.

"My stance on new revenue for the DOT has not changed," the lawmaker said. "I will continue to participate in the budget process and evaluate the budget in its entirety."

A Senate insider told MacIver News Service that there is a fair amount of resistance to the proposal in the Senate and that it is by no means a slam dunk.

Senate Majority Leader Scott Fitzgerald's office did not return a request for comment.

June 22, 2017 | By M.D. Kittle

Prevailing Wage Reform Snarled In Transportation Gridlock; Dems Push Suspect Report

[Madison, Wis…] There are two things you need to know upfront about the state of prevailing wage reform in Wisconsin:

1. A bill that would end the requirement that an artificially set prevailing wage be applied to state-funded projects is at the moment trapped inside the GOP-controlled Legislature’s snarled transportation debate.

2. Democrats this week held a sparsely covered press conference on their deeply flawed study that suggests taxpayers stand to lose hundreds of millions of dollars on a government reform measure that could save local and state governments hundreds of millions of dollars.

State Rep. Rob Hutton, R-Brookfield, co-sponsor of the prevailing wage bill, said Wisconsin has made significant progress on repealing the anti-free market law in place since the Great Depression.

In January, a law that gives local governments the right to discontinue prevailing wages went into effect. While it’s too early to tabulate the full cost savings, a study by the nonpartisan Wisconsin Taxpayers Alliance found state and local governments could have saved as much as $300 million on vertical projects alone in 2014 had they possessed the freedom to bid on projects not bound by artificially high wages.

“The potential savings that would be achieved by repealing Wisconsin’s prevailing wage laws are staggering,” state Sen. Leah Vukmir, R-Brookfield, said in a statement. Vukmir is co-sponsor of the full prevailing wage reform bill.

But the bill is mired in a contentious transportation funding squabble in which Assembly and Senate Republicans seem miles apart on a revenue- and spending-plan for the troubled state Department of Transportation.

Statewide prevailing wage reform is tied to the transportation budget because of the potential savings it could bring.

“Right now it’s wrapped into the overall transportation discussion and a few proposals that are out there,” Hutton told MacIver News Service Wednesday on the Dan O’Donnell Show, on NewsTalk 1130 WISN in Milwaukee. “While I support that, I am deeply concerned about the fact that there is just really common sense conservative reform that needs to be passed regardless of what happens in the transportation budget.”

Hutton said he has had discussions with his colleagues about pulling prevailing wage from transportation as a standalone. Those discussions are ongoing.

Meanwhile, Democratic Party leadership this week “reacted to” a suspect study claiming the detrimental effects of fully repealing the prevailing wage.

At a Capitol press conference Tuesday, Assembly Minority Leader Peter Barca (D-Kenosha) and Senate Minority Leader Jennifer Shilling joined members of big labor and contractors – who have benefited from the competition-killing prevailing wage laws – to unveil the report.

The “Social Costs of Repealing Wisconsin’s Prevailing Wage Law" was constructed by the liberal Midwest Economic Policy Institute, an assumed name for Illinois Economic Policy Institute, an organization that has been described as a union front group.

The study, according to the Dems’ press release, found that full repeal of prevailing wage could cost Wisconsin taxpayers more than $336 million annually.

How? Apparently the failure to pay artificially high wages would correspondingly draw down income tax revenue and force some workers on public jobs into public assistance.

“The worst case potential social costs of repealing prevailing wage” the report concludes, “range from $224 million to $337 million every year.”

“When worker wages are cut, they contribute less in state and federal income taxes. At the same time, more workers qualify for and rely on government assistance,” the study states.

The report includes many omissions, not the least of which is a labor shortage in Wisconsin, particularly in the construction trade, that has helped drive wages up – without the help of unions and government-mandated wages.

But there’s a bigger issue with the Dems’ drive to protect the prevailing wage.

“Apparently they are concerned about the middle class. Oddly enough, they pick and choose winners,” Hutton said. The winners are the companies who play ball with prevailing wage; the losers, beyond taxpayers, are the companies, often smaller firms, that can’t compete on artificially high wages and lose out. And so do their workers.

“They’re not as concerned about that person or their family that doesn’t have the opportunity to make the same wages,” Hutton added. “I find it disingenuous that the Democrats are one-sided on this issue, versus let the market decide and let those two neighbors and the firms they work for compete for those public construction jobs and whatever firm is best qualified and provides the best proposal, that firm wins, and the workers associated with that firm do as well.”

Perhaps such disparate treatment has something to do with the hefty amounts of big labor cash still coming into Democrats’ campaign coffers. Shilling took in $50,225 in union money between 2013 and 2016, according to the left-leaning Wisconsin Democracy Campaign.

Barca, who raised significantly less than Shilling, received $12,500 from organized labor – his biggest special-interest contributor by far – over the same period.

The nonprofit Illinois Economic Policy Institute pocketed a $25,000 donation in 2016 from AFL-CIO Local 49, according to information obtained by the Center for Union Facts. And the national left-leaning Economic Policy Institute often cites the Illinois think tank in its pro-union reports, according to the center.

Hutton points to the irony of one of the left’s key talking points on prevailing wage. Big labor backers insist Wisconsin will be swamped with outside contractors if it fully repeals the law, and yet opponents of reform have contracted with an Illinois research firm to help make their case.

“So while they are calling the kettle black, they themselves are doing the exact same thing,” the lawmaker said.

A call to Barca’s office seeking payment information regarding the study was not returned Thursday.

June 9, 2017 | By Bill Osmulski

JFC Considering $1 Billion Sales Tax Increase for Roads

The Joint Committee on Finance is considering almost a dozen different tax and fee increases to boost transportation funding, according to Fiscal Bureau memos released Thursday.

The Fiscal Bureau laid out 11 options for transportation fund revenue raisers "that have been the subject of frequent legislative inquiry" over the past year.

The first option would increase the state sales tax from 5 to 5.5 percent. That extra .5 percent would go into the transportation fund. The Legislative Fiscal Bureau estimates that would bring in $960 million over the biennium.

The second option would be to apply the current 5 percent sales tax to gas purchases. LFB estimates that would bring in $660 million.

Option three raises the gas tax by 1 cent per gallon, and would bring in $64.4 million over the biennium.

JFC is also considering indexing the gas tax. That would tie it to inflation, and bring in $29.5 million over the biennium.

Indexing the gas tax ended in 2006. Another option would raise the gas tax by 7 cents a gallon, because LFB says that's how much it would have risen if indexing never went away. That would raise $450.9 million.

JFC could also start applying the gas tax to vehicles used for farming. That would bring in $71.4 million.

Lawmakers are also considering raising vehicle registration fees. Right now annual registration costs $75 in Wisconsin. The JFC proposal would change that to a mileage-based system, where drivers are charged 1.02 cents for every mile they travel throughout the year. That would mean a $102 registration fee for motorists who drive 10,000 miles in a year.

Another JFC idea is a highway user fee, which would be charged when purchasing a new vehicle in addition to the title fee. This fee would be 2.5 percent of MSRP. LFB estimates it would bring in $414.9 million.

Lawmakers might create a $50 fee for hybrids and electric vehicles. That would raise $7.1 million over the biennium.

JFC might also change the way Wisconsin collects vehicle registration fees. States like Iowa, Michigan, and Minnesota charge fees based on a vehicle's original MSRP. That means a driver in Minnesota with a new $20,000 vehicle is paying $271 for registration. In Iowa registration would cost $214. LFB says this proposal could bring in another $13 million in fiscal year 2018.

Finally, JFC is considering raising Wisconsin's title fees by $5. Currently those fees are $69.50. That could raise another $12.6 million over the biennium.

Ultimately, JFC might decide to reject the options, but the LFB memo indicates there is some interest in at least considering them.

Since last summer supporters of raising the gas tax have been pushing a false narrative that Wisconsin has a $1 billion-dollar transportation deficit. Gov. Scott Walker's transportation budget includes no revenue raisers while balancing the transportation budget with the lowest level of new bonding since 2001-02. Meanwhile, recently revised estimates of the transportation fund indicate there will be an additional $101.8 million available during the biennium.

Walker has stated he will veto any tax or fee increase in the budget.

May 11, 2017 | By Brett Healy

MacIver Institute Joins Nationwide Conservative Coalition: Promote Fiscal Responsibility in Upcoming Transportation and Infrastructure Spending

[Madison, Wis…] The Trump administration is widely expected to unveil a far-reaching infrastructure proposal in the near future. In anticipation of President Trump’s proposal, more than 50 organizations from around the country, led by Americans for Prosperity, sent a letter to Congress today urging fiscal responsibility. The John K. MacIver Institute for Public Policy signed onto the letter.

The letter calls on members of Congress to avoid the wasteful spending of the Obama administration, maximize taxpayer dollars in any new infrastructure spending, and use the opportunity to implement long-overdue reforms that will reduce bureaucracy and cut costly red tape.

The full letter follows.

On behalf of our organizations and the millions of Americans we represent, we write to encourage you to prioritize fiscal responsibility while addressing the nation’s infrastructure needs. Previous transportation spending policies shepherded by the Obama administration — the 2009 “stimulus” and all its attendant boondoggles — were chock-full of waste and pet projects and made the nation’s fiscal problems worse. American families cannot afford to repeat the failed mistakes of the past.

Forthcoming transportation plans should be an opportunity for Congress and the Trump administration to further relieve the economy from bureaucratic and regulatory hurdles while maximizing taxpayer dollars. Here’s how:

Reform environmental review processes. Lengthy and often duplicative environmental impact studies increase project costs and drag project timelines. Possible reforms could include the removal of greenhouse gas emissions from the review process and limiting the scope and application of the National Environmental Policy Act as well as other planning and analysis mandates. Doing so would save time and reallocate limited tax dollars from paperwork and red tape to asphalt and concrete.

Repeal draconian labor regulations. Overturning President Barack Obama’s executive order requiring federal contractors to use Project Labor Agreements on federally-funded projects and repealing the Davis-Bacon wage mandate that drives up project costs by 22 percent are two great places to start. Heritage Foundation research shows that repealing Davis-Bacon and reinvesting the funds back into infrastructure would add over 160,000 construction jobs to the economy.

Prioritize transportation dollars on core infrastructure projects. A growing percentage of federal transportation spending — now up to 25 percent of all spending — is going to non-highway projects, diverting these dollars from their ostensible purpose of building roads and bridges. Infrastructure dollars should go toward core projects — not on ancillary projects like highway beautification and public transit.

Empower the states. States, localities, and the private sector understand local needs better than Washington bureaucrats. Local policymakers should have the flexibility to manage projects reflecting local priorities and manage their funding. Federal policymakers can get out of the way by removing existing federal barriers to state-based funding and financing.

Fully pay for projects. The spirit of President Trump’s first budget blueprint, the so-called “skinny budget” that cuts non-defense discretionary spending, should be applied to future transportation spending initiatives. Any new spending should be offset with spending cuts, not tax increases nor budget gimmicks.

Seek spending reforms instead of new funding sources. Two concerning ideas circulating on Capitol Hill include creating a national infrastructure bank and using new revenues from corporate income repatriated from abroad. Congress should be cautious of both. The first would lead to more bureaucracy and subsidies for the politically- connected at taxpayers’ expense, and the second has little to do with transportation issues and instead is a symptom of our broken federal tax code that should be addressed in the context of comprehensive tax reform.

We look forward to working with you in promoting responsibility in upcoming transportation and infrastructure initiatives. Keeping these conservative principles in mind as you craft plan details will improve our nation’s infrastructure and create jobs while protecting taxpayers. Thank you for your consideration.

May 5, 2017 | By Brett Healy

Assembly Transportation, Tax Proposal: What They’re Saying

[Madison, Wis…] Dozens of Assembly Republicans joined Rep. Dale Kooyenga and Assembly leaders on Thursday afternoon at the state Capitol to present their caucus’s plan to reform taxes and expand transportation funding in Wisconsin.

Dubbed “The Road to a Flat Tax,” the plan combines a major income tax overhaul that would lead to a 3.95 percent flat tax by 2030, a reduction in the minimum markup on gasoline, elimination of the sales tax exemption for gasoline, and other measures. The plan would also pay down transportation bonding and result in a net increase in transportation revenue of nearly $300 million.

Read the MacIver Institute’s breakdown of the plan here.

Assembly Speaker Robin Vos and Majority Leader Jim Steineke said the plan is an example of the Assembly Republicans’ leadership in making long-overdue reforms.

While Vos said he doesn’t think the plan is perfect, he said it makes progress toward the goal of higher transportation revenue. The plan’s author, Rep. Kooyenga, described his practical approach.

Senate Majority Leader Scott Fitzgerald did not endorse the plan, but said his caucus may consider some of its elements.

Meanwhile, opponents on the other side of the aisle bashed the plan as a tax increase that they claimed won’t fix roads – even before the proposal was actually rolled out.

Keep an eye on the MacIver Institute for more analysis of the Assembly GOP plan and any new developments as they unfold.

March 29, 2017 | By Bill Osmulski

Hidden Valley Can't Hide WISDOT Waste

[Sylvan, Wisc...] Sen. Marklein recently published an editorial in the Tomah Journal about excessive overhead costs in local transportation projects. MNS' Bill Osmulski set out to find one of his examples in a secluded valley in the Town of Sylvan. What he found might surprise you.

March 24, 2017 | MacIver News Service

Road Builders Could Soon Also Become Road Designers In Wisconsin

[Black River Falls, Wisc...] When a road project is planned in Wisconsin, the company that designs it is not always the company that will build it. Governor Walker is proposing changing that model in the next state budget, hoping it will lead to more innovation and efficiency in future road designs. Hoffman Construction in Black River Falls says it would be a big improvement from our current system.

March 20, 2017 | By Bill Osmulski

Walker’s Plans for the Transportation Budget

The Legislative Fiscal Bureau recently completed its analysis of Governor Walker’s budget proposal, which will be the Joint Committee on Finance’s starting point when it begins work on the budget next week. Transportation will be the center of controversy during the budget debate, and it’s expected many decisions will be decided based on their potential impact to road funding.

Under Walker’s budget, the Department of Transportation would receive $5.9 billion in all funds over the biennium. That’s a 6.4% increase from the current budget, or $359 million.

Part of the increase will come from an increase in federal highway aid, which is expected to come out to an extra $136 million.

On the other side of the equation, however, is bonding. The governor wants to decrease new bonding from $805 million in the current budget to $500 million. This decrease is important given the current trend with DOT’s debt service payments, which are steadily increasing and eating up a greater portion of its budget. In 2015-16 it was $340.8 million. In 2018-19, it’s expected to be $413.4 million. That will take up 22 percent of its transportation fund spending. (By the way, that percentage doesn’t include federal aid, bond revenue, or transfers from other funds).

Despite the overall increase of $359 million in transportation spending, there are those who say that is not enough; not by a long shot. Their main area of concern is the State Highway Program.

Governor Walker wants to decrease over spending for the state highway program by $289 million, a 10.4 percent change. That is mostly due to decreased bonding for the Southeast Wisconsin megaprojects.

Right now there are two SE Wisconsin Megaprojects that have been enumerated: the Zoo Interchange and the I-94 North-South Freeway. Walker’s budget provides $121.9 million for them: $31 million for the I-94 project and $90.9 million for the Zoo Interchange. Walker says he can do this without any delays on projects currently underway.

His opponents say that level of spending is not enough, and argue the state needs to raise the gas tax to boost funding. They’ve built their argument on a supposed billion-dollar deficit in the transportation fund, which the MacIver Institute debunked earlier this month. Their efforts have also been frustrated by the results of a recent state audit that focused on the highway program. It uncovered enough examples of inefficiencies, incompetence and illicit behavior at the DOT to convince some lawmakers not to support any additional funding until the new DOT secretary can clean house.

The Senate Committee on Transportation and Veterans Affairs just recommended Dave Ross’s appointment as DOT secretary on March 16th. Although not yet confirmed, he’s been in charge at DOT since the beginning of January. Ross believes revenue is not the DOT’s problem. He says the main problem is spending and that the DOT has taken on more projects than it ever complete in a reasonable timeline. He has committed the DOT to adopt all the recommendations found in the audit.

In an effort to explore one potential efficiency, Walker is proposing a pilot program concerning the DOT’s bid process. Right now, the DOT works with consultants to plan projects, and then bids out the construction phase separately. Walker’s budget would authorize a pilot program to see if it makes sense to let the consultants that plan the project also execute it, providing they meet certain requirements.

One of the areas Governor Walker points to when he talks about boosting transportation spending is local aids. His budget would increase county aid by $15.9 million, municipal aid by $14 million, and the local roads improvement program by $14 million. Part of this increase will come from a permanent transfer of funds from the Petroleum Inspection Fund, which is a 2 cents per gallon tax and will raise an estimated $19 million annually during the biennium.

That increase to the Local Roads Improvement Program (LRIP) represents a 25.2 percent boost. The LRIP is a grant program to help local communities pay for capital projects. Currently, grants can cover up to 50 percent of the cost. Walker wants to change that to 60 percent. The total boost in funding to the program would be $14 million, a 25.2 percent increase from last budget.

Under the governor’s budget, there would be no change to mass transit funding, but Milwaukee County would be getting new buses from the $26 million Volkswagen Settlement.

Walker’s DOT budget includes a pretty significant change to the DMV that will directly affect every driver in the state. He wants the department to send renewal notifications to drivers by email. This would not be a complete replacement for traditional notices, and people would have to request the email service.

Finally, Governor Walker wants to do some department streamlining with this budget too. He’s proposing moving the DOT’s human resources functions, an accountant, and an IT position to DOA.

The Joint Committee on Finance is expected to begin agency briefs during the last week in March. That will be the JFC’s first opportunity to ask the DOT directly about these proposals.

February 8, 2017 | MacIver News Service

Walker’s Transportation Budget Sets Up Showdown With Legislature

[Madison, Wisc…] Transportation funding is expected to dominate this year’s budget debate as concerns over Wisconsin’s road conditions clash with concerns over financial mismanagement at the DOT.

Governor Walker insists there will be no gas tax or fee increases for transportation. He plans to bond for $500 million over the biennium, whereas the last budget authorized $850 million in transportation bonding.

Walker also wants to transfer $30 million from the petroleum inspection fund (PIF) into the transportation fund. The PIF is funded by 2 cents of the state’s 30.9 cents per gallon gas tax.

In the fall, the DOT requested $522 million in additional funding, and the governor says his proposal meets that request.

The DOT warned, however, even with this increase in funding, three major highway projects would be delayed. Also, the north leg of the Zoo Interchange megaproject would be delayed two years, and work on I-94 would not be funded.

The governor says all active major projects would stay on schedule under his plan. However, the Zoo Interchange “North Leg” would remain on hold, and the state would not enumerate the East-West I-94 project. However, the core of the Zoo Interchange will be completed on schedule.

Walker’s plan also leaves $31 million for southeast Mega Projects for the North-South I-94 project, although work on that will not be finished on time.

Last month after the Audit Bureau released its report on the DOT, Assembly Speaker Robin Vos said “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.”

Vos and other lawmakers believe the answer is to increase transportation funding, preferably by raising the gas tax. That is the largest source of revenue in the segregated transportation fund, making up 53.7 percent of it last year.

However, the audit also contained a devastating assessment of the DOT’s internal operations, which undermines any efforts to raise taxes on its behalf.

That audit found the DOT regularly breaks state law in budgeting, negotiating, communicating, and managing contracts. Among these statutory violations: the department does not always solicit bids from more than one vendor, it does not spread out solicitations throughout the year, it does not post required information on its website, its cost estimates to the governor are incomplete, and it skips steps in the evaluation process for selecting projects.

These practices manifest themselves through an inescapable reality: the cost of major projects tends to double after the DOT gets approval from the governor and legislature to proceed.

In August 2016, the DOT was $3.1 billion over budget on 16 projects, according to the audit. Shoddy recordkeeping made it difficult to determine the exact cause of this. The DOT has a committee in charge of approving substantial increases, but it doesn’t keep minutes and auditors were told it would take months to reconstruct what happened from scattered emails.

Sen. Chris Kapenga (R-Pewaukee) zeroed in on these problems in the audit. “A lack of transparency has led to costly overruns on projects, which is unacceptable moving forward,” Kapenga explained in a press release.

Kapenga also noted that the audit only scratched the surface. “It is important to know that the audit is not a comprehensive review of DOT. It looked at specific areas, so there is significantly more to this discussion than the audit; however, it highlighted the need for significant reform within the DOT,” he wrote.

When Vos reacted to the audit, however, he pointed out $1.5 billion in savings since 2011 under Secretary Mark Gottlieb. (Gottlieb resigned right before the audit was made public.)

In addition to bonding and the transportation fund, the DOT receives funding from the federal government. According to the Legislative Fiscal Bureau, the state received $748 million in Federal Highway Aid in 2015-16. Governor Walker’s proposal for transportation funding in this budget does not depend on what the state might or might not get from Washington.

January 10, 2017 | MacIver News Service

Transportation Emerging as Wedge Issue in Wisconsin

[Madison, Wisc…] Governor Scott Walker promised a big boost to transportation spending during his State of the State Address on Tuesday, January 10th. However, fellow Republican, Assembly Speaker Robin Vos, said the governor is not showing the full picture of the numbers behind his proposal. Vos believes all options need to be considered, including a gas tax increase. That’s something Walker says is out of the question.

December 15, 2016 | By Chris Rochester

State Rep. Sanfelippo Has a List of Questions About State Transportation Spending

A member of the Assembly’s transportation committee wants the state Department of Transportation (DOT) to answer for how it spends money before giving the go-ahead on any increase in revenue for the department.

Rep. Joe Sanfelippo (R-New Berlin) expressed his concerns on how the DOT is spending its money in an interview with WISN host Jay Weber Thursday morning.

“There are just a lot of areas where they are spending money, more than what they need to be spending building these projects, putting on all the bells and whistles as if money is no object,” Sanfelippo told Weber. “Yet they’re coming to the legislature and crying poor and telling us we’re going to have to delay all these projects because we don’t have enough funds.”

“We’re getting a confused message – which is it?” Sanfelippo asked, repeating his comment to DOT Secretary Mark Gottlieb at a Committee on Transportation hearing last week where he said the committee has been hearing a “tale of two departments.”

Sanfelippo cited several examples of wasteful spending by the DOT. One example is the department’s expenditure of $28 million on just two projects to use stainless steel rebar instead of standard epoxy coated iron rebar for bridge decks. Gottlieb at the hearing defended the spending, saying the stainless steel rebar, used in the Zoo Interchange and the Hoan Bridge projects in Milwaukee, is intended to ensure the road decks last as long as the rest of the bridge structure.

While traditional rebar typically lasts as long as the concrete structure, the more expensive rebar will actually outlast the entire 75-year lifespan of the bridges, Sanfelippo said. “The cost-benefit isn’t there,” he told Weber.

Sanfelippo also questioned the DOT’s decision to install a new, more expensive style of light poles at traffic intersections. The department has installed 1,100 of the new style of traffic light systems since 2009, costing a total of $55 million more than the traditional “trombone” style traffic signal that had been in use before.

The DOT claims the new style is safer, but Sanfelippo said he hasn’t seen any studies from the department backing up the claim, despite having asked for specific studies several times. “They’re just making numbers up,” he told Weber.

“We’d all like to spend and get the very best of everything, but we have to live within our means,” he said.

He also pointed out the state is also providing freeway service teams where the state spends $5 million a year to help motorists fix flat tires or bring gasoline, services that people can sign up for privately through programs like AAA or private insurance.

“These aren’t nickel and dime initiatives, they add up to a lot of money,” Sanfelippo said, adding they’re not just one-off expenses but savings that could be realized every year. He said his office has assembled two binders full of information about DOT’s spending adding up to about $100 million.

The MacIver Institute has previously reported on other examples of wasteful spending. In one case, the DOT built a $3.6 million foot bridge two blocks from an existing bridge with sidewalks. Another report highlighted a lightly-used four-lane bypass near Baraboo.

In its last budget, the DOT added 180 engineer positions at a $10-12 million annual cost. While the department assured legislators the engineers would have plenty of work, Sanfelippo questioned if that would hold true if proposed project delays are passed.

He also questioned the expenses run up on special spending cards the DOT issues some of its employees. From 400-500 employees in the DOT have these purchasing cards that were first issued in the 1990s and were originally intended for small purchases like office supplies. However, the department spent more than $10 million in the last budget cycle on purchases made on these cards; some people are spending from $300-500 thousand per year.

Sanfelippo said he’s not alleging misuse or abuse, but called on the department to explain how it’s monitoring such spending to prevent waste and abuse. “These are all conversations that I think we need to have before we start talking about ‘are we raising revenue, and if so, how much’,” he said.

He also questioned the department’s travel expenses for staff junkets to conferences around the world, which Gottlieb defended at the transportation hearing as a good business practice.

Sanfelippo said the savings he’s found add up to real money for an agency some claim is desperate for more revenue. Based on an exchange with Gottlieb at last week’s hearing and previous conversations with the DOT, Sanfelippo estimated the potential savings he’s found so far could pay for up to 70 new road construction jobs.

He also questioned the process the department uses to get projects from the drawing board to being completed.

The state currently uses a design-bid-build process for construction projects. “That is the most expensive and lengthy way to build roads,” Sanfelippo told Weber. Many states are going to a system of design-build construction, where the general contractor takes over a project from the design phase right through construction, he said. Sanfelippo believes such a change could save 10-30 percent on construction costs and reduce project times.

Another alternative to consider is a public-private partnership, in which the private market provides funding for a transportation project. Sanfelippo believes federal transportation dollars come with red tape and strings attached that drive up the cost of a project. He cited Indiana as an example of the potential for savings. “We could be saving hundreds of millions of dollars on construction if we just revamped the way we do our process.”

“There’s so much resistance from the bureaucracy in Madison,” he said.

While the legislature awaits a Legislative Audit Bureau analysis of DOT spending, Sanfelippo said lawmakers should “take that a step farther” and look at other spending like the bidding process to find more savings.

While he criticizes DOT spending, Sanfelippo said he’s not unilaterally opposed to increased revenue, but wants answers to his questions about suspect spending first.

“In the end, we need a great transportation network to move our goods and services around the state…but by God, we have got to make sure that the money they’re getting, they’re using wisely.”

“I can’t look at anyone squarely in the eye right now and tell them, yes, the DOT is operating properly. I just don’t have that faith in them right now.”

Listen to Rep. Sanfelippo’s full interview with Weber here.

December 14, 2016 | By Chris Rochester

Creativity Needed to Pave Way for Transportation Solution

The following column originally appeared in the La Crosse Tribune:

Politicians and special interests have lined up to raise Wisconsin’s gas tax, a contentious issue that the recent election did not resolve. But the simplistic solution of a gas tax hike overlooks the complexity of the transportation funding issue and the buffet of alternative options available to legislators who are willing to be creative.

While Wisconsin’s “other season,” construction season, is quickly coming to an end, you still can’t drive more than a few miles in the state without finding a sea of orange construction barrels. There’s also the endless struggle over the contentious north-south corridor, which could put a four-lane highway through the La Crosse River Marsh.

Let’s acknowledge that there’s plenty of work to do as our region grows and demands on our infrastructure increase. Let’s also acknowledge that a gas tax won’t solve the problem. A breathtaking 28-cent-per-gallon hike — a 91 percent increase — would be needed to fully fund all of Wisconsin’s transportation priorities, according to a recent memo by the nonpartisan Legislative Fiscal Bureau.

By contrast, the state Department of Transportation’s 2017-2019 budget proposal does not raise the gas tax or registration fees at all. Instead, it redirects more funding to local governments, who will get the largest funding boost from the state that they’ve seen in 15 years. This proposal will help local governments carry out needed maintenance.

The DOT proposal would increase general transportation aid by $65 million, an increase of 8 percent for counties and 4.7 percent for municipalities over the last budget. That’s $14 million more for local roads and $5 million more for local bridges — the largest increase since 1998. It also boosts the highway maintenance fund to $1.7 billion, the largest that fund has ever been.

This shift to local projects is welcome news, but it should be noted that the state has never funded the lion’s share of local road maintenance. This puts La Crosse County in a bind because the county has been putting road repairs “on the credit card,” as Rep. Steve Doyle likes to quip when criticizing transportation bonding by the state. The county takes in plenty of tax revenue, but it has chosen not to invest the money in roads.

Though he’s wrong on his tax-first position, Doyle is right about something: we still need a long-term solution to funding transportation into the future.

There are many options at legislators’ disposal. While the prevailing wage law was repealed for local projects, a full repeal of the outdated law that inflates the cost of projects would save taxpayers untold millions on state-funded projects. West Virginia saved $22 million in just three months after eliminating its prevailing wage law.

Lawmakers could also shore up the transportation fund by putting sales taxes paid on cars and other transportation-related purchases directly into the transportation fund. Thankfully, the fund is now protected from being used for general purpose spending after Gov. Jim Doyle raided it to the tune of $1.4 billion to plug holes in his final budget.

Lawmakers could also repeal the state’s antiquated Unfair Sales Act, also called the minimum markup law, which mandates a 9.18 percent markup on the prices we all pay at the pump. While increasing the gas tax should be a last resort, repealing the minimum markup law and adding a smaller gas tax increase would be a net decrease in the price at the pump and a win for cash-strapped Wisconsinites.

In addition, lawmakers should consider a surcharge for electric and hybrid cars, which contribute significantly less toward road maintenance since they don’t use as much gasoline.

Lawmakers must also be willing to wring every bit of savings out of the DOT, including cutting down on unnecessary projects like four-lane bypasses in the middle of nowhere, roundabouts where they don’t improve safety, lavish decorations on overpasses and bridges, and rooting out other wasteful spending.

Also, as if the DOT is flush with cash, the department keeps dangling $140 million over La Crosse for a new north-south corridor. Though voters overwhelmingly rejected a marsh road 18 years ago, the department seems determined to spend the money anyway.

There’s no special “north-south corridor” account in the DOT budget — the money isn’t really there. The fact that the department persists despite its budget challenges speaks volumes about its spending priorities.

A historically large Republican caucus will vote next year on a transportation package. Let’s hope the newly elected Legislature can put aside old arguments and muster the creativity to find the right solution for their constituents, not just the easiest solution.

Read the original column here.

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