Republicans in Wisconsin Butting Heads Over Gas Tax

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DALLAS – A Republican lawmaker in Wisconsin is proposing the state raise its gasoline tax or levy tolls on state highways to avoid a $940 million transportation revenue gap over the next two years, but fellow-Republican, Gov. Scott Walker, opposes that idea.

"We need to bring in new revenue that will help buy down our transportation debt and structure a sustainable plan for Wisconsin's infrastructure," said Rep. John Nygren, a Republican from Mariette who is co-chairman of the Joint Finance Committee. The Legislative Fiscal Bureau said earlier this week that the state needs $939 million over the next two-year budget cycle to keep highway funding at the current level.

The current two-year highway improvement program is funded at $2.84 billion, including $850 million of road bonds approved by lawmakers in 2015. The legislative auditors said that without more bonds, funding for the highway program in the next two-year budget cycle would total only $1.9 billion.

The answer to the state's road funding problem is not more debt but additional dedicated revenues, Nygren said.

"Wisconsin's current transportation funding mechanism is neither sustainable nor effective," he said. "If we don't address this funding problem, future generations will be forced to pay for high levels of bonding without a substantial benefit."

The $939 million shortfall does not include debt service payments, Nygren said.

"Our state's principal repayment currently stands at $4.3 billion in bonding," he said. "A whopping $3.5 billion of this repayment is owed by the transportation fund and the rest is set to come from the general fund."

Some of the transportation bonds that were approved in 2015 have yet to be issued, Nygren said, "which means Wisconsin's debt service will only continue to rise."

An increase in the state gasoline tax of 32.9 cents per gallon is preferable to a hike in the car registration fee of $75 per year but everything should be considered, he said.

"I'm willing to consider all options, whether that be a gas tax or registration," Nygren said. "My preference would be a gas tax because that's something that people visiting our state would pay, whereas the registration would simply be on the state of Wisconsin."

Tolling of existing highways could be an acceptable revenue source, Nygren said.

"I'd be open to it," he said. "I think it's a true user fee. If you're not using the toll system, you're not paying."

A study ordered by the legislature in 2015 on creating a system of toll roads in Wisconsin is due to be released in January.

Wisconsin Gov. Scott Walker almost immediately rejected Nygren's revenue proposals.
"Raising taxes and fees is not the answer," Walker said. "I am confident we can do better than placing new taxes on Wisconsin citizens."

Wisconsin spends more on state highways per capita than its neighbors, Walker said, with infrastructure investments of more than $18 billion since he took office in 2011.

Walker said he told Wisconsin Transportation Secretary Mark Gottlieb to prepare a fiscal 2018-19 budget with no new taxes or fees.

"To maintain our good financial standing, hold bonding to a reasonable level in your budget," Walker said in his directive to Gottlieb.

Wisconsin Department of Transportation's next two-year transportation budget request will not include additional funding, Gottlieb said.

"The decision about whether or not that's enough investment in transportation — or whether additional revenues should be raised to make more investments — is a decision that the Legislature and the governor will make," he said.

Funding for Wisconsin Department of Transportation's $6.8 billion budget for fiscal 2016 and 2017 includes $3.8 billion of state fuel taxes and other dedicated fees, $1.7 billion of federal highway aid, and $910.7 million of bond proceeds.

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