Local transportation assets are getting a closer look in proposed state and county budgets. But are decision-makers truly serious about addressing the needs of our local roads, bridges and bus systems in a sustainable way?
Gov. Scott Walker released his budget proposal for transportation early, long before the new Legislature forms in January 2017, giving legislators around the state something to argue about through the fall campaigns and into next year’s budget deliberations.
Walker’s Department of Transportation plan pulls back on freeway mega-projects and increases aid to local governments for their roads and bridges. Walker has cut total spending over the two-year budget from $6.8 billion to $6.5 billion and reduced bonding by $350 million. At the same time, Walker is increasing local aids $69.7 million across the state to $605 million total—which still doesn’t meet the needs of local communities around the state. He didn’t release information about public transit aid.
Walker is also delaying some freeway mega-projects. While he’s planning to finish phase 2 of the Zoo Interchange by 2019, he’s delaying the north leg of that project for two years and halting all other mega-projects indefinitely. In addition, Walker allocates $31 million to the I-94 East-West project for design, site acquisition and utility work. The I-94 North-South project gets nothing.
Walker’s offered no new fees or taxes to pay for his transportation projects.
Not everyone is on board with the governor’s proposal. Some legislative Republicans have been pressing Walker to look at new revenue sources but the governor opposes raising taxes or fees, such as the gas tax, for transportation. The transportation fund faces a $1 billion shortfall and legislators are concerned about borrowing and delaying projects, arguing that the state needs a sustainable solution now.
Peter Skopec, director of WISPIRG, called Walker’s proposal “sort of a mixed bag” and said he welcomed a shift in priorities from mega-projects to maintaining local infrastructure and transit. But Walker still commits the state to the $850 million I-94 East-West project in Milwaukee County, which WISPIRG opposes in its expanded form.
“It’s basically given the go-ahead in the governor’s budget, which would contradict everything he’s saying about needing to scale back and re-examine our priorities and invest in maintenance over expansion,” Skopec said. “We’re concerned that it’s in there, and even if only a little bit of money is allocated for that expansion, we’ll be locked into a massive billion-dollar project that we’ll have to find a way to pay for in the future.”
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Skopec said a good way to make the transportation fund sustainable is to take a long, hard look at projects before they launch and focus on maintaining our current infrastructure.
“We shouldn’t be paying for projects that we may not need,” Skopec said.
Abele Proposes $60 County Wheel Tax
While Walker’s isn’t looking at new taxes or fees to cover transportation costs, Milwaukee County Executive Chris Abele is. Last week, Abele proposed an annual $60 vehicle registration fee, otherwise known as a wheel tax, to cover the county’s transit system and county-owned roads and bridges, including those in the parkways. The state currently charges an annual $75 vehicle registration fee, while the City of Milwaukee has a $20 fee. City residents will now pay $155 annually for each vehicle; suburban residents will pay $135 annually.
Abele says the $60 fee will raise $27 million annually; $11.5 million will be allocated to Milwaukee County Transit System (MCTS) operations and $15.6 million will go to roads and bridges and to purchase new buses. The new funds will exceed the $7.1 million deficit MCTS projected in 2016. The system’s ridership is down, part of a national trend linked to cheap gas, and it hasn’t found a way to cover the free Go Pass for seniors and the disabled, which it says costs the system about $4 million annually. MCTS totally eliminated the highly popular Go Pass in its proposed 2017 budget, but Abele is reviving it in a modified form in his 2017 budget, with a means test, $5 fee for the card and requiring a 25-cent fare for each ride.
The county executive is also allocating $44 million for the proposed east-west Bus Rapid Transit line.
Abele’s $60 wheel tax doesn’t need state approval, but whether it will survive the board’s review of his proposed budget is another matter.
Transportation Committee Chair Supervisor Michael Mayo said Abele’s proposal was “dead on arrival with me,” although other supervisors may be more receptive to it. Mayo opposed a $20 wheel tax in 2010, during the Walker era, and says Abele’s $60 hike would hurt the county’s low-income residents.
“I know he’s got a tight budget, but the bottom line is that you don’t hurt the people in the City of Milwaukee,” Mayo said. “And if you look at the suburbs, it’s going up 83%.”
Mayo said he’s still pushing for a dedicated funding source for transit, such as the one-cent sales tax that county voters supported in 2008, since much of it would be paid by those living outside of Milwaukee County and ease the burden on county property taxpayers. He wants Abele to request state legislators to allow the county to enact it. In the meantime, Mayo said he favors a slight increase in property taxes to keep pace with inflation. On Friday, Abele released his full budget, which includes a $4.19 million property tax increase, or 1.46%, on top of the wheel tax.
“He’s been holding the line on taxes, but if he’d upped it a little bit we wouldn’t be in this deficit right now,” Mayo said. “Now he’s saying, I’ve got to use this last option. Now that the dam is busted he’s saying this is the only tool he can use.”
Structural Deficit Remains
But can property taxes and the proposed wheel tax cover the county’s transportation needs?
Rob Henken, executive director of the Public Policy Forum, said thanks to revenue caps the county can only increase property taxes by up to $7.1 million in the next budget. Abele’s proposed wheel tax would raise $27 million next year. And those are the only two new revenue options the county has at its disposal right now, Henken said.
“But even with the vehicle registration fee, there is a deep structural hole in the transit system budget,” Henken said.
The Public Policy Forum’s September report, A Fork in the Road? The Outlook for Transportation Infrastructure in the City and County of Milwaukee, found that the county’s roads and bridges are in pretty good shape. But the forum continues to sound the alarm about the county’s transit funding crisis. MCTS needs to replace 26% of its aging buses, and the county estimated it will need $62.3 million for bus replacement through 2020.
The county typically pays for bus replacement by issuing bonds, which are capped, and with federal monies. But the report warns that the county’s borrowing for bus replacement represents 31% of its available bonding, “which is remarkable in light of the county’s other capital needs in areas like parks, cultural institutions and corrections.” To allocate such a high proportion of borrowing to one program “is highly problematic, to say the least,” the report concludes.
