Financing transportation funding, especially highway construction, could be the biggest problem facing Wisconsin’s newly elected officials.
A state study commission earlier this year reported the state was facing a $2 billion gap over the next 10 years if funding resources were unchanged and spending continued at 2013 levels in the next decade.
The Wisconsin Taxpayers Alliance suggested in August that the political candidates should answer how they would close the gap. Alas, candidates don’t want to talk about difficult issues that just might include increasing tax and fee schedules.
But with the average price of gasoline dipping below $3 per gallon as November started, there may be some wiggle room for the newly elected folks, even the ones who promised and pledged and vowed that they would never, ever vote for any type of tax or fee increase.
The new major sources of income for the state transportation budget are gas taxes (52 percent) and vehicle registration fees (32 percent). Gasoline tax revenues have dipped an average half percent in each of the last seven years (2006-2013). Between 2000 and 2006 Wisconsin gas tax revenues were increasing annually by 3.2 percent.
Between 1985 and 2006, the state had increased the gasoline tax to reflect inflation. That indexing moved the gasoline tax from 16 cents per gallon to 30.9 cents per gallon in that period. Opponents of tying the gas tax to inflation argued elected officials should be required to vote on any tax increase.
An easy solution for elected officials was to increase bonding. The impact grew as the state shifted money from the transportation budget to the general fund. A constitutional amendment on this year’s budget would stop that sort of shifting. But the bonds still have to be paid from the transportation fund.
In 2013, the debt service payments consumed about 16 percent of the transportation fund spending.
Other factors in the revenue decline were more efficient vehicles and the number of miles traveled did not increase as it had earlier. The average car in 2010 was 9 percent more fuel efficient, reflecting federal mandates.
The number of miles traveled reflected in part the economic downturn that hit America beginning in 2007 and 2008. If you are a Democrat, you may blame the economic policies of President George W. Bush. If you are a Republican, you may wish to blame former Democrat Gov. Jim Doyle for the economic woes.
There are a variety of ways to solve the transportation fund problems. The state could simply reduce its spending in this area, delaying some major highway construction or shifting more of the costs of mass transit to local governments and the property tax. Assembly Speaker Robin Vos, R-Rochester, has been critical of mass transit, calling it a “social” program.
Some might want to solve the transportation funding by declaring that any sales tax money collected on automotive products be used solely for transportation. That would shift any funding woes to the general fund where the major spending is for aid to local government and school districts.
Another sales tax move would be to fully tax the gross price of vehicles, rather than allowing trade-ins to create a net price that is now subject to the state sales tax. Perhaps politicians could claim that is not a tax increase.
In the end, a gas tax increase might be easiest to sell. Those out-of-state vacationers coming to Wisconsin would be helping to pay for the Badger State roads.
Known as the “dean” of the State Capitol correspondents, Matt Pommer covered government in Madison for 36 years. He writes this column for the Wisconsin Newspaper Association.