Transportation maciver budget blog

April 12, 2017 | By Bill Osmulski

Transportation Budget: What a Mess!

Transportation has been the most contentious part of this session’s budget debate by far, and it’s about to get worse. The Joint Committee on Finance announced on April 6th that it was rejecting Governor Walker’s proposal for transportation funding and instead would start from scratch. According to the non-partisan Legislative Fiscal Bureau, the Finance Committee has not tossed out an entire section of a Governor's budget proposal since 2007.

So for the most confrontational part of the budget, the new starting point is we start over.

The governor’s proposal included a balanced transportation budget that kept all current projects on schedule, increased local road and bridge aid, decreased new bonding to a 15-year low, and did not raise taxes or fees. Walker’s plan also had shortcomings, like a 70.6 percent decrease in funding for the southeast megaprojects, amounting to $292.7 million less in funding for the state's most important projects. Despite Walker's decision to spend less on megaprojects, the level of bonding used for transportation projects continues to be a concern for many legislators. Under Walker's transportation plan, debt service would cost taxpayers $394.4 million in 2017-18 and $413.4 million in 2018-19.

In any case, everything in the governor’s transportation budget, good or bad, is gone for now.

During public hearings last week, members of the Finance Committee expressed support for fully funding the biggest projects around the state, which include the I94 east-west expansion between the Zoo and Marquette interchanges, the north leg phase of the Zoo Interchange project and completing the expansion I94 from the Illinois border to the city of Milwaukee. Most legislators would also like to keep Governor Walker's aid increases for local roads and local units of government. But in order to keep the state's megaprojects on track, lower the amount of borrowing used for transportation projects and increase state support for local roads, some legislators believe this would require a gas tax increase or an auto registration fee increase. Assembly leadership has been adamant for months that we have no choice but to raise the gas tax or the registration fee. Gov. Walker has responded by saying that he will veto a gas tax increase.

And if you do the math on how much additional transportation revenue is needed to keep all of these projects on time, the gas tax increase required is steep. The additional projects are estimated to cost $1.3 billion, and an increase of 5 cents on the gas tax (presently the gas tax stands at 32.9 cents a gallon) brings in an an additional $300 million in tax revenue. That means the Finance Committee would need to raise the gas tax 21.7 cents to make legislators happy. Under Walker’s budget, county aid would have increased 12.9 percent, aid to municipalities would have increased 8.5 percent, and there would have been $6 million more for local bridge improvement. Now that JFC is starting from scratch, these increases for local governments are gone, and to add them back into the budget would require 9 yes votes from the 16 members of JFC.

And so, starting over from scratch has added uncertainty to an already contentious issue. Friction between Governor Walker and Assembly Speaker Vos has been front and center so far. However, with everything up in the air, it’s not clear what side everyone will land on, but that’s going happen soon. JFC is expected to begin voting on the budget in May.

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 overspending 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 could 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.

March 6, 2017 | By Bill Osmulski

The Many Methods Of Rating Roads Leads To Confusion

No Consistency On Way Road Conditions Are Reported

The Feds, the State and local governments use different reporting methodologies

Talking about roads is like talking about the weather - people never get tired of the topic and everyone has their own opinions. Apparently, even for the pros, the state of Wisconsin's roads lies in the eye of the beholder.

For example, when the Department of Transportation announced last year that 91 percent of local roads in the state were in fair or better condition, the Counties Association said there was no way.

"Unfortunately, this analysis is, at best, a poor interpretation of the data that is provided to WisDOT or at worst, just wrong," according to a WCA press release at the time.

The DOT uses the International Roughness Index (IRI) to determine how smooth roads are, which is required for federal reports. It also uses the Pavement Condition Index (PCI) to determine the overall integrity of roads, which relies on an individual engineer's personal assessment of photographed cracks on the surface. Then there are local units of government, which are required to collect data on local roads. Most use a system similar to PCI called PACER. The DOT says PACER data cannot be used together with PCI, because they use different measurement scales. All these methods require different equipment for collection.

"There's kind of been multiple sides in the discussion on the condition, the funding, and the management of the system. I think regardless of where you come down on this, I think there are bullet points or there's some meat in here for you," Rep. John Nygren stated at the public hearing on the DOT audit.

"How can we really understand the true condition if we can use different scales? My fear is with different measures, it appears as if it makes it easier to craft a message," Senator Chris Kapenga (R-Pewaukee) later said at that same hearing.

Kapenga and Nygren are correct in their assessment. Within the DOT audit there were three different sets of results for road conditions in 2014. The IRI results indicate 32 percent of the state's roads are in good condition. According to CPI, 64 percent of backbone highways are in good condition and 40 percent of non-backbone highways are in good condition. Using those three sets of results, you could also say either about 1 percent or 9 percent or 17 percent of Wisconsin roads are in not acceptable, poor or worse condition.

Then there's always the statistics game, where you can pick and combine different categories. By combining the IRI's results for Good and Acceptable roads, you could say 91 percent of Wisconsin roads are in fine shape. That's what the DOT was able to do in the example above.

When MacIver News wanted to take a closer look at the IRI data and see how the results change over time, the DOT provided the link to a Federal Highway Administration (FHWA) report. Now in the audit, there were three categories for IRI: Good, Acceptable, and Not Acceptable. In the FHWA report, there are eight different ranges: <60, 60-94, 95-119, 120-144, 145-170, 171-194, 195-220, and >220. Also, roads fall into one of eight different types: interstate rural, other freeways and expressways rural, other principal arterial rural, minor arterial rural, interstate urban, other freeways and expressways urban, other principal arterial urban, and minor arterial urban. MNS asked the DOT, how was all this official data condensed into the one neat table broken into good, acceptable and not acceptable roads? The DOT did not respond.

There are reasons for the different rating systems. IRI is the most objective and easiest method to employ. PCI provides the most data, but it is expensive, subjective, and time consuming. PCI is mostly used by local governments across the country, because it makes sense on that scale. The Federal Highway Administration requires states to report using the IRI data, because CPI data collection is so inconsistent from state to state. It learned this when conducting a study on I-90 in 2012 and compared data from South Dakota, Minnesota, and Wisconsin.

Most states only collect IRI because they have to, and many consider CPI to be too impractical to collect on a statewide level. Wisconsin, however, believes that CPI is invaluable in decision making, and so the state collects the IRI for the feds and CPI for the state.

During the Audit hearing, one of the auditors related what DOT officials have been telling him for years "You can have a bumpy road, but the underlying quality of the road could be very good. A bumpy road doesn't necessary mean the DOT would have to initiate rehabilitation or major highway work to fix it. So that's why DOT has moved to that Pavement Condition Index that involves high resolution photography and an experienced DOT engineer looking at the condition of the road, and not only saying how many cracks does this road segment have, but what types of cracks... because different cracks mean different things."

If you were to ask the DOT, these measures show road conditions are getting better all the time. In fact, according to a January 2017 DOT report, 97.6 percent of state (backbone) highways and 78.8 percent of non-backbone highway were in fair or better condition.

This month, the Joint Finance Committee starts its work on the 2017-19 budget, and transportation funding will likely be the most contentious issue it addresses. With so much room for interpretation, pavement conditions will be a focal point for both sides hoping to bolster their arguments. And in the end, the final determination will be - how many potholes did you hit on your drive home?

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