Budget Would Invest in Transportation, But At What Cost?

If there’s one winner in the Governor’s proposed biennial budget, it’s state highways. The Governor’s budget proposal characterizes spending on state highways as critical to economic development in the state, and calls safe and efficient movement of traffic through Southeast Wisconsin “one of his top priorties.” His budget includes proposals to create a new program for funding Southeast Wisconsin’s freeways megaprojects and to provide a total of $420 million for two highway projects over the biennium, including $151 million in general obligation bonding. The budget also recommends a two percent increase in each year for state highway maintenance (while cutting aid to maintain local roads).

The substantial increase in highway funding is on top of already significant investment in Wisconsin’s transportation infrastructure – in 2008, Wisconsin ranked 12th in per capita state and local spending on highways, according to the U.S. Census Bureau, 24 percent above the national average.

Most spending for highways comes from the state’s Transportation Fund, which means that – at least in theory – spending on highways does not directly compete with programs supported by General Purpose Revenue (GPR) and the General Fund, such as K-12 education, aid for local services, and support for low-income workers. Walker has argued that steep cuts for GPR-funded programs are necessary because the state is “broke.” (A recent Politifact check in the Milwaukee Journal Sentinel  examined that claim and returned a rating of “false.”)

The Governor’s budget includes several provisions that would beef up the Transportation Fund at the expense of the General Fund. This would have the effect of increasing money available for highways and other transportation projects while decreasing resources available for education, health, and human service programs. Governor Walker’s recommendations include:

• Redirecting 7.5 percent of sales tax from automobile-related sales to the Transportation Fund starting in fiscal year 2013, and gradually increasing the percentage until it reaches 50 percent. In 2013, this change would send $35.2 million to the Transportation Fund that would otherwise go to the General Fund, and in future years the amount could rise to more than $200 million a year. According to the Governor’s budget, this action would “strengthen the relationship between taxes and fees on motor vehicles and the state’s investment in transportation.”

• Shifting the funding source for local mass transit aid from the Transportation Fund to the General Fund, beginning in fiscal year 2013. This represents a cost of $106.5 million to the General Fund that would otherwise be borne by the Transportation Fund. According to the Governor’s budget, this move would “strengthen the relationship between user fee revenues and investment in transportation infrastructure.”
• Issuing $115 million in general fund supported bonds to support the highway program. His budget characterizes this action as helping “offset diversions of transportation revenues in prior budgets.”

There is a long and not-so-proud tradition of transferring money from the Transportation Fund to the General Fund to help augment GPR. Governor Walker has pledged to break that trend, a move that could help encourage responsible budgeting practices. But the pendulum is now swinging too far in the other direction: Investment in the state’s transportation infrastructure should not come at the cost of investments in our human infrastructure.

Tamarine Cornelius