Home » Opinion » Last piece of budget puzzle

Last piece of budget puzzle

Joint Finance continues work on state budget


By State Sen. Luther Olsen

As we head into summer, the Joint Finance Committee continues its work on the state budget.

One of the remaining pieces of the budget puzzle is the state’s transportation budget. Funding transportation projects is only a small part of the entire state budget; the combined budgets of the Departments of Transportation, Tourism and Natural Resources make up only 11.1 percent of the budget.

At the same time, a strong and well-maintained transportation system is critical to the economic well-being of the state. While transportation funding only makes up a small portion of the overall state budget, the legislature’s decisions on how to pay for it impact all of us.

The three sources of revenue for transportation projects are bonding (which means borrowing), the transportation fund and federal funds. The sticking point in the budget debate now is figuring out the right balance to borrowing money and cutting or delaying road projects.

The governor’s budget calls for borrowing $1.3 billion to pay for transportation projects. Many of us, myself included, think the state is relying too heavily on bonding, which saddles future generations with large loan payments.

For example, if we approve the governor’s proposal for the full $1.3 billion in bonding, we will have to spend a quarter of every dollar repaying our loans. I’d rather we use future transportation dollars to fix and maintain roads and bridges, rather than just repay loans.

One funding option is to increase the amount of revenue available for transportation projects by increasing the gas tax or vehicle registration fees, for example. The governor has said that he will veto any tax increase that is not offset by a corresponding tax decrease, so the net effect on taxpayers is zero. The reality of this takes increasing the gas tax off the table, leaving legislators with the question of how much to borrow for road projects.

The effect of less bonding is that some transportation projects will be delayed, will take longer to complete, or won’t happen at all. Right now, legislators are considering how much bonding is appropriate, with suggestions of cutting the governor’s proposed bonding amount by $500 to $800 million.

In addition to considering how bonding impacts the current budget and current projects, the legislature has to consider the long-term health of the transportation budget. As it stands now, the state is expected to have a nearly $6 billion deficit in the transportation budget over the next decade and a significant shortfall in the upcoming two-year spending plan. Even if we reduce bonding in this budget, we will still be left with a transportation funding problem in years to come.

I do not believe it is responsible to continue to bond at high levels, saddling future generations with debt. The question of how to pay for transportation projects as well as how much to spend impacts more than major transportation projects happening in Milwaukee or Madison.

After highway programs, the second largest area of spending is on aid to local governments for the maintenance of local roads. These are the roads we drive on everyday. I am hopeful that this budget piece will fall into place in the coming weeks.

Scroll to Top