Over $3 billion in proposed budget for transportation

Joe Leibham • 9th Senatorial District

This week, I will continue my efforts to outline some of the major provisions in Governor Scott Walker's recently proposed biennial state budget plan for 2013-15. Last week, I highlighted some of the major budget initiatives involving health services and children and families, and this week I will examine those portions of the budget that relate to transportation and infrastructure development. Again, please remember that Governor Walker's budget is simply a proposal at this time. The legislature now has an opportunity to make its own changes to the budget before it becomes law.

Transportation Finance- In the 2013-15 budget proposal, funding for transportation programs totals just over $3 billion per year. Funding for these programs comes from several sources, outlined below:

The primary source of transportation funding is the Transportation Fund. This fund includes revenues from specific taxes and fees paid by users of our state's transportation systems. For example, a major source of revenue for the Fund is the gas tax. In each year of the biennium, motorists in Wisconsin will pay more than $1 billion in state gas taxes. Like the gas tax, there are many other taxes and fees paid by users of our state transportation network that support the Transportation Fund. These include: vehicle registration fees, driver's license fees, miscellaneous motor vehicle fees, aeronautical fees, railroad taxes, and a variety of others. Governor Walker's budget plan proposes to maintain the current gas tax and fee rates - no increases. In total, revenues to the Transportation Fund are expected to total between $1.6 and $1.7 bil- lion in each year of the biennium.

Another major source of funding is the federal government in the form of federal highway funding and other funding for specific programs. Federal transportation funding for Wisconsin is projected to total about $840.3 million in each year of the biennium. This is a decrease of about $10.6 million per year compared to current federal funding levels.

A third major source of revenue for transportation is General Purpose Revenue (GPR). This is general tax money collected by the state that is not specifically associated with transportation fees. In the first year of the biennium, there will be about $177 million of GPR use for transportation, and $250 million in the second.

The final way the state raises money for transportation is through the issuance of public debt through bonds. Bonds are used primarily to finance large projects, such as major road construction projects, that have a life span of several decades. The justification for using bonds for these purposes is that it spreads out payment over the lifespan of a given transportation project. Typically, bonds are repaid over time by revenues from the Transportation Fund, although GPR can also be used to make debt service payments. This budget proposal authorizes $994 million in new bond issuance over the biennium.

Below is a list of some of the major transportation programs that these monies fund.

State Highway Program- The budget proposal contains numerous provisions related to the development of our state highway network. Funding for the state highway program is broken down into various sub-programs. The largest projects, centered around Milwaukee, are called megaprojects and are funded with their own specific appropriations. Funding for these projects over the biennium is $550 million. The current megaprojects that receive this funding are the Zoo Interchange reconstruction in Milwaukee and the I-94 North-South project in the Milwaukee Area.

Slightly smaller than megaprojects are Major Highway Development projects. These are large projects across the state that are specifically approved for major improvements. One example of this is the Highway 23 expansion that is proposed between Plymouth and Fond du Lac. Funding for these projects under the budget proposal is $367.8 million per year over the biennium.

Smaller than the Major Highway Development program are projects in the State Highway Rehabilitation Program. This program includes resurfacing, reconditioning, and reconstruction of highways and bridges around the state. These kinds of projects are typically managed on a regional basis, and since they are smaller projects are not approved through the same formal methods as the first two programs. Funding for this program is proposed under the budget to be $815.6 million in each year of the biennium.

State Highway Maintenance- Most routine highway maintenance and general traffic operation activities on state highways are actually performed by county staff, under contract with the state. These individuals perform basic maintenance, upkeep, and general day-to-day management of the sections of state highway under their jurisdiction. In the winter, these maintenance activities include snow removal. In return for these services, the state reimburses the counties. The budget proposal would increase maintenance funding by $55 million over the biennium. In addition, the budget proposal divides this program into two separately funded sections "routine maintenance" and "highway system management and operations" to ensure more stable funding for maintenance in the future.

General Transportation Aids- The state makes yearly payments to counties and municipalities called "General Transportation Aids". These aids are designed to help local units of government maintain and repair local roads under their jurisdictions. Under the budget proposal, funding for these aids remains at prior levels. $309 million will be appropriated annually for aids to municipalities, and $95 million for aids to counties.

Mass Transit- The budget provides $106.5 million in each year of the biennium to support various mass transit networks in various municipalities. This is consistent with current funding levels. Mass transit primarily consists of bus systems and shared-ride taxicab services. In general, mass transit assistance is provided by the state to specific cities based upon size. Municipalities are organized into tiers based on population, and funding is distributed to the various tiers. In the second year of the biennium, the budget proposal changes how Wisconsin finances mass transit, by removing funding from the Transportation Fund and replacing it with an equal amount of GPR.

Harbor Assistance Program- Wisconsin's Harbor Assistance Program provides grants for harbor improvement projects on the Mississippi River or Great Lakes. The goal of the program is to ensure that Wisconsin's harbors continue to remain in good operating condition so freight products can be shipped to market by water. With currently low water levels on the Great Lakes, dredging projects have become an important component of this program. The program requires a local funding match for approved projects, and maintains current funding levels by authorizing $10.7 million in bond revenue for the biennium under the budget proposal.

Freight Rail- Wisconsin operates a Freight Rail Preservation Program. Under this program, funds are appropriated for acquiring and maintaining state-owned railroad lines intended to be used for freight transport. This network allows heavy goods to be transported across the state without causing stress to our highway system. Over the biennium, $60 million in bond revenues are authorized for this program under the budget. This is an increase of $30 million from current levels.

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