Rough road ahead over transportation funding
For Mark O'Connell, executive director of the Wisconsin Counties Association, the debate over funding roads in the state is bewildering.
"If we want to position our state for future success, a strong infrastructure is necessary," he said
O'Connell was part of a four member panel who spoke on the topic last Thursday at the Monroe County Economic Development Conference at Three Bears Lodge in Warrens.
Also on the panel were Todd Berry, executive director of the Wisconsin Taxpayers Alliance, Craig Thompson of Transportation Development Association, and Bob Richards, senior government affairs director for the Wisconsin Farm Bureau.
Berry pointed out the problem is two-fold: an antiquated highway/transportation finance system and an antiquated transportation system that has reached the end of its life.
"And we've known about it for 20 to 30 years and we've only made it worse," he said, regarding the finance system.
Wisconsin gets its road funding mainly through two sources, a 39-cent gas tax and a $75 vehicle registration fee.
The gas tax is a flat tax per gallon of fuel, which is producing less and less revenue as the number of gallons of gas sold across the state is declining
With the state relying on borrowing to support transportation, nearly 20 cents of every dollar collected through the gas tax and registration fees goes toward debt service.
"It's not just about transportation anymore. Its rippling through other parts of the state budget," said Berry, noting its affecting everything from dorm construction to school aid. "It's tentacles are everywhere and we haven't come up with a solution."
Richards agreed. "Wisconsin relies more on its highway network to move goods and services for ag and manufacturing than any other state in the country besides Indiana," he said.
In Monroe County, the problem is more focused because one-fifth of its workforce is directly involved in agriculture, which has a $1 billion economic impact on the area, according to Richards.
Thompson pointed out that there is no natural growth in the gas tax since 2006 when the state repealed indexing, which allowed the gas tax to increase with inflation.
Had indexing not been repealed, the gas tax would be up 8 cents today, generating an additional $250 million this year. Cumulatively, since 2006, it would have brought in $1 billion.
"Raising the gas tax a nickel would cost an average driver $28 a year more and raising it a dime would cost $56 a year more," said Thompson.
While Wisconsin has the highest gas tax among it's neighbors, its registration fee is by far the lowest. Iowa's gas tax is 32 cents, Minnesota's is 28 cents and Michigan's is 31 cents, but they pay on average 60% more in user fees than Wisconsin and; their roads are in much better shape, according to Thompson.
Berry pointed out that a gas tax is like a toll because out-of -state drivers also pay the tax, whereas only in-state drivers are impacted by the registration fee.
All four panelists said the solution to the funding problem is likely going to be a combination of gas tax and registration fee increases. Berry said Governor Scott Walker could be held to a statement he made about increasing transportation fees if there were a corresponding reduction in other taxes.
In Walker's proposed budget there are $300 million a year in tax cuts over the next biennium, so Berry thinks the legislature could make an issue over it.
In the meantime, Wisconsin’s roads are among the worst in the nation. According to the International Roughness Index, a standardized system that rates roads as good, fair or poor, Wisconsin's roads are the third worst in the U.S.
In the Midwest, Indiana and Ohio are rated 75% good condition, Michigan is 66% good condition and Iowa is 55% good condition. Wisconsin is 32% good condition. The national average is 64% good condition.
To make matters worse, Wisconsin's bridges are 17th in the country for being structurally deficient, including one in Buffalo County just north of Arcadia that collapsed last week.
On the local level, most town and county roads are built to last 30 years if properly maintained. However, a survey of the state's 72 county highway commissioners conducted by the Counties Highway Association, revealed that with current available funding, their replacement schedules on average are 200 years.
O'Connell says that puts the state behind the eight ball.
"A successful state means a very successful robust private sector," he said, noting that infrastructure is a main component of that. "With transportation we have some catching up to do and some investment."