Transportation Fund Facing Critical Crossroads

As the State Legislature’s budget writing committee, the Joint Committee on Finance, approaches the end of its work in modifying the Governor’s budget proposal, the transportation fund is one of the few remaining issues pending before the Committee. There continues to be significant debate and discussion among transportation stakeholders, local elected officials, and legislators regarding how best to proceed with the state’s transportation budget.

The transportation fund is at a critical juncture as revenues to the fund are not sufficient to meet the demands on our transportation system. The cost of road construction and maintenance have increased in response to a number of factors, including the price of road materials such as asphalt and steel. While there are growing expenditure pressures on the transportation fund, revenues have not increased to meet our state’s infrastructure needs.

The primary sources of funding for the state’s transportation fund are vehicle registration fees and the gas tax, which account for around 90% of transportation fund revenues. Due to the improved fuel efficiency of motor vehicles, the number of gallons of gas sold has decreased by an average of 0.2% annually in Wisconsin over the last ten years. As a result, revenues from gas taxes have remained relatively flat since 2006. Additionally, the number of automobiles and light trucks registered with the state has increased by less than 1% annually over the same ten year time period.

As a result of this squeeze on the transportation budget, the State Legislature is now debating the best approach to addressing our long-term transportation needs. The Governor’s budget proposal, which relies heavily on bonding to pay for transportation projects, has drawn significant scrutiny and will not be approved in its current form. If the level of bonding proposed was to be approved, it is estimated that 22 cents of every dollar in the transportation fund would be committed to debt service by the 2016-17 fiscal year. By comparison, ten years ago less than ten cents of every dollar in the fund was committed to debt service.

I, along with many of my colleagues, believe that a sustainable solution to the transportation fund must be found and the level of bonding must be lowered. Even as legislators largely agree over the amount of bonding that should be removed from the budget, discussions are ongoing over how those reductions should be implemented. While reducing bonding will delay transportation projects and present difficult choices, it is critical that we pass a fiscally responsible transportation budget that does not burden future generations with an unsustainable level of borrowing.

What are your ideas for funding infrastructure in Wisconsin? Which options do you prefer in addressing the transportation fund challenges? Please feel free to share your thoughts by calling my office at 1-800-862-1092 or 608-266-7745 or by sending me an e-mail at Sen.Harsdorf@legis.wi.gov.

1 Response

  1. Doug Margolis

    Nobody likes increased taxes, but from the way Senator Harsdorf has described the situation, an increase of the gas tax seems appropriate and necessary as a means for ensuring that our roads remain safe and usable.

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