The Road Takes Another Turn

We promised to keep you up to date on the twists and turns in the road as the Wisconsin legislature works on the state’s transportation budget. Here’s another installment in the saga.

When we left our story the governor had introduced a transportation budget that provided a lot more funding for local roads. Since these are the places we ride we liked that. It promised to fix more potholes, resurface more streets, pave more shoulders and the like. But the governor also failed to fix the long-term funding problem in the transportation budget, instead relying on what everyone agrees is an unsustainable amount of borrowing and some delays in big road expansions.

The Joint Finance Committee – the first stop for the budget – set the governor’s proposal aside and decided to work from the existing budget. That’s not necessarily bad, but it does mean that the committee will have to vote to put back in the funding that the governor had ear-marked for local roads.

Now for the latest development. Assembly Republicans have developed a rather complicated plan to deliver more money to the transportation budget (sort of). The plan, developed by Rep. Dale Kooyenga (R-Brookfield) would actually reduce the state gas tax, which has not been raised since George W. Bush was president, but then apply the 5% state sales tax to gasoline (gas is currently exempt from the sales tax) and send that money to the transportation fund even though all other sales tax revenues go to the general fund.

Rep. Dale Kooyenga

But wait, there’s more. The proposal would also lower the minimum markup for gas under state law. So, theoretically, if retailers chose to charge only the new lower minimum markup gas prices would remain relatively unchanged.

And yet, there’s still more. These proposals are part of an even broader plan to remove all kinds of exemptions in the state income tax and move to a flat tax. What does any of that have to do with transportation? Good question.

And if all that weren’t enough, the new revenue generated for the transportation fund would go not to increase road repair but to lower the amount of borrowing for road projects. So, after all that, we would see just about the same amount of road repair that we would have under the governor’s original budget, though the hope is that in the long-run beyond the next two years the plan would actually produce more real revenue for roads. The jury is still out on that one.

We don’t mean to be too hard on Kooyenga and the Assembly Republicans. The governor has drawn a line in the sand and essentially precluded the simple, straightforward option of just increasing the gas tax as many other states, even ones with Republican governors, have done. So, they felt they needed a work around, but the result is to take what is admittedly a politically difficult problem and turn it into a difficult and also complicated problem.

What’s the solution? Well, we like the comprehensive and balanced plan that the Wisconsin Transportation Finance & Policy Commission worked out in 2013. It contains some straightforward tax increases but also a lot more funding to fix local roads and to build bicycle infrastructure.

With the governor dead set against any gas tax increase, that plan is likely to remain on the shelf for now, but it’s there for use by any serious public officials who really want to just solve the problem.

About Dave Cieslewicz, Director Emeritus

Dave Cieslewicz served two terms as mayor of Madison where he set the city on a path for Platinum status as one of the best biking cities in North America. Before that he started his own nonprofit, 1000 Friends of Wisconsin, which focuses on land use and transportation policy. He has been an adjunct professor at the UW Madison's Department of Urban and Regional Planning where he teaches a class called Bikes, Pedestrians and Cities. He pronounces his name chess LEV ich, but nobody else does.

4 thoughts on “The Road Takes Another Turn

  1. Thanks for the useful update, Dave. Does Rep Kooyenga’s plan – the Republicans’ proposal – have a chance of passing into law?

    • Actually, no, it doesn’t look like it. As of this morning, Senate Majority Leader Scott Fitzgerald has said there’s little interest in the Senate in pursuing it.

  2. Dave, is raising the gasoline tax a third rail in USA politics? We pay much lower taxes and prices at the pump than Europeans and in return Europe enjoys much better mass transit. I think the USA can no longer financially afford its love affair with the automobile; at least not in its present form. Also, I am very wary about a flat tax because I think of that has a regressive tax and hurts low income people the most. Your thoughts?

    • Great questions, Tom. Raising the gas tax does seem like political suicide except that recent evidence suggests that it’s not. Several states have raised the gas tax in recent years without much political fallout. Our neighboring state of Iowa raised it by 10 cents in the last couple of years and nobody lost an election over it. As a general rule people seem to understand it’s necessary. Personally I agree with you on the flat tax, though of course that’s not a Bike Fed issue. In any event, right now the whole plan (including the gas tax increase and the flat tax) seems DOA. My guess is that when it’s all said and done they’ll take as much money from the general fund as they can by backing road borrowing with general fund dollars (money that would otherwise go to schools, natural resources, Medicare, etc.) and call it a day.

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