What To Do About DOT's $650 Million Funding Gap

Apr 18, 2014

The Zoo Interchange reconstruction is one huge project consuming the transportation budget.
Credit Bob Bach

The state is projecting a huge deficit in the budget that pays for highways, local roads and public transit.

Wisconsin’s transportation secretary is traveling the state, hearing residents’ ideas for tackling his department’s budget woes.

Secretary Mark Gottlieb held his first of nine public hearings last week in La Crosse. He’ll wrap up his tour in the Milwaukee area next month.

Gottlieb says he’ll use the testimony to craft the Department of Transportation’s next budget. It faces a $650 million funding gap in the next two-year budget cycle. Gottlieb says a shrinking revenue stream is contributing to the shortfall.

“We rely very heavily on motor fuel taxes to support our transportation fund, it’s our largest single source of revenue. The motor fuel tax has not been raised since 2006, it’s remained steady at 30.9 cents per gallon. The purchasing power of that 30.9 cents per gallon is decreasing, as the cost of providing our services increases,” Gottlieb says.

Gottlieb says another reason that revenue is declining, is many people are driving fewer miles in more efficient vehicles.

So, how is he going to plug the budget hole? Gottlieb admits options are limited. State law put an end to annual increases in the gas tax. A proposal in the Legislature to set up toll booths didn’t go anywhere, and the Joint Finance committee nixed additional borrowing to pay for projects.

Gottlieb says the public hearings so far have generated a smattering of suggested solutions, including charging people an annual user fee -- based on the number of miles they drive. And Gottlieb says his department might be able to tap other funds.

“Some other states that have recently put transportation finance packages together are relying a little more on general tax receipts on transportation,” Gottlieb says.

But state Rep. Dale Kooyenga points out other agencies are eyeing the general fund. The Brookfield Republican sits on the Legislature’s joint finance committee.

“The general fund has a lot competing for other revenue. We have Medicaid, we have tax cuts we want to do more of, we have University System, K-12 system, and to use the general fund for transportation projects is just not reasonable,” Kooyenga says.

Kooyenga thinks one viable option might be to lower income and property taxes, in favor of increasing vehicle registration fees. Democratic Assemblyman Daniel Riemer argues the Department of Transportation is in a bind because it doesn’t spend the money it has, wisely. He says the DOT needs to better prioritize its projects.

“In the district I represent, people want to know why West Allis can’t fill potholes, why the city of Milwaukee doesn’t get resources from the state to do that, too,” Riemer says.

Milwaukee area residents will get a chance to air their grievances about state transportation spending -- and propose solutions to the budget shortfall -- at a town hall meeting May 20 in West Allis.