CHICAGO –Wisconsin’s GOP leadership is moving closer to final votes on an overdue two-year budget plan after settling on a transportation funding package that critics and even supporters warned falls short of tackling state needs.
Differences between Republicans lawmakers over transportation borrowing and taxes has been the key sticking point holding up passage of a roughly $67 billion, two-year budget for the fiscal cycle that began July 1.
The plan approved by the legislature’s key budget-writing Joint Finance Committee late Tuesday in a party-line vote puts off some major projects, includes $400 million of borrowing, raises annual fees on hybrid and electric vehicles, and funds additional studies on implementing tolling.
The agreement fails to tackle an estimated $1 billion shortfall in the state’s transportation funding needs to maintain and improve roads, but it appeared the best the state could accomplish given deep divisions on how to make up the gap.
House leaders supported a gasoline tax increase and limited borrowing without corresponding new revenue to support it. Gov. Scott Walker had originally proposed $500 million in borrowing and opposed the tax hike or higher registration fees. Senate leaders had endorsed as much as $850 million in borrowing.
“While this budget is not a solution to our transportation funding problem, we are taking a step in the right direction,” Joint Finance co-chair Rep. John Nygren, R-Marinette, said in a statement.
“We have limited our reliance on bonding, adopted important reforms, and sent the message to state taxpayers that we won’t spend what we can’t afford,” Nygren said.
"This budget includes more transportation funding for all levels of government to provide better roads and bridges and historically low levels of borrowing. We did all of this without raising taxes,” Walker said in a statement.
Democrats voiced frustration that after two-month budget delay, the state still lacks a plan to materially lift transportation funding levels.
“Republicans spent more than two months squabbling with each other and this is the result – a spending plan that still doesn’t create a sustainable funding solution, that is littered with political pork for their buddies, and sneaks in non-budget policy changes that strip local control from counties, towns, and cities across Wisconsin,” Assembly Minority Leader Peter Barca, D-Kenosha, said in a statement.
About $150 million of the $400 million in bonding authorization would be repaid from transportation revenues with the other $250 million relying on general fund support to finance interstate improvements tied to the Foxconn plant proposed for southeastern Wisconsin that relies on $3 billion in state subsidies.
Under the plan, owners of hybrid vehicles face a $75 fee which would generate about $8 million for two-year package. The plan strips some local regulations on quarries that produce materials such as gravel for transportation related projects, prevailing wage requirements were lifted, public funding for a Milwaukee streetcar was limited, and $2.5 million would be spent to study tolling which would require federal approval.
“This budget misses the opportunity to provide a reliable and sustainable long-term revenue source to meet the current transportation infrastructure needs in Wisconsin and does nothing to address the $1 billion shortfall in the transportation fund,” said Pat Goss, executive director of the Wisconsin Transportation Builders Association. The group did praise the drop in borrowing and tax on hybrids.
The committee was expected to wrap up work on other differences in the overall budget Wednesday, allowing a final package that includes the transportation plan to soon go before the Assembly and Senate.
Wisconsin carries double-A ratings from three of four rating agencies. Moody’s Investors Service raised the state’s rating to Aa1 last month.
The Joint Finance Committee also on Tuesday approved revised legislation to provide the $3 billion in incentives for the Foxconn plant.
The changes altered a bill previously approved by the Assembly. The new version will go before the Senate for a vote Sept. 12. One change speeds up any litigation tied to the project allowing it to bypass the appellate court to be heard by the Wisconsin Supreme Court.