Walker: New sources of revenue need to pay for I-90/39, other projects

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Jim Leute
Tuesday, April 22, 2014

JANESVILLE—Gov. Scott Walker acknowledged Tuesday that a funding shortfall could delay the expansion of Interstate 90/39, but he's confidant his next budget will include new ways to pay for road improvements and keep the project on schedule.

Two weeks ago, Department of Transportation Secretary Mark Gottlieb said the state faces a transportation budget shortfall of between $600 million and $700 million for the next biennium, which runs July 1, 2015, to June 30, 2017.

Gottlieb said it's “very plausible” that the expansion of Interstate 90/39 in Rock and Dane counties would be delayed if funding isn't shored up in the state's next budget.

Walker acknowledged the possibility Tuesday during a break at a meeting of the Wisconsin Economic Development Corp.'s board of directors at Grainger in Janesville.

The governor said the $950 million project is still a top priority.

“From an infrastructure standpoint, particularly so,” Walker said. “When we think about manufacturing—particularly in this corridor but all across the state—a good piece of that is proximity to things like an Interstate system and proximity to a system that's wide enough to handle the capacity needs.

“Whether it's for tourism, whether it's for manufacturing or whether it's for agriculture, there are a lot of elements that tie into that.”

The state's Transportation Projects Commission approved the I-90/39 project in 2010. Construction is scheduled to start in 2015 and end in 2019.

The project would expand the Interstate from four to six lanes from the Illinois state line to Madison and from four to eight lanes through Janesville.

As of February, the state had spent more than $41 million on the project, with about 78 percent for design work. In 2015, 2016 and 2017—part of which would be funded by the state's next budget—the state plans to spend $443 million on I-90/39.

The state also gets money from the federal government that it spreads among state projects. The federal funding bill, however, expires at the end of September, and the likelihood of a reauthorization bill is uncertain.

The state's main source of transportation revenue—gas taxes—has been declining as vehicles become more fuel-efficient and people drive less.

Walker said new revenue ideas likely will be part of his next budget, but they will be balanced by tax cuts.

He wasn't specific on what new revenue streams would be proposed to avoid delays to the I-90/39 project and others.

“For us in the next budget, part of what Secretary Gottlieb is working on is reaching out to stakeholders and working with others across the country as to what sort of options there are because, in the long term, we can't sustain almost exclusively on the gas tax,” said Walker, who faces re-election this fall.

“Right now, we're one of the few states that has vehicle registration fees and the gas tax, and whether we have to shift to a sales tax or a hybrid or something in that regard, we'd probably do that in this next budget as part of overall tax reform where income and property taxes go down.”

Last year, Walker established a commission to review major highway projects and report back to the Legislature by January 2016 on projects appropriate for removal from the list.

In a lengthy report, the commission recommended a variety of ways to raise revenue, including a gas tax hike, charging drivers at registration based on how much they drove the previous year, increasing registration fees for larger vehicles and boosting driver's license fees.

Walker said his administration will look at a variety of new revenue sources.

Fees based on miles driven will not likely be one of them, he said.

“The challenge with that … is that it's just a lot more cumbersome for the average tax payer,” Walker said. “I get why logically they thought it made sense: It says if you use it, you pay for it.

“There's gotta be an alternative way of doing it that doesn't require people to prove how many miles they've driven in some sort of audit.”

Walker said Gottlieb and his department are traversing the state for a series of town hall meetings to gather information about the future of transportation in Wisconsin.

Part of that is a discussion about funding.

“We're looking at different ways of funding transportation in the future, and that would be part of an overall tax reform so that for the everyday taxpayer, their overall burden at worst would be the same and ideally would go down a little bit,” Walker said.

“What it would do is change how we fund transportation because long term—with more and more vehicles getting better gas mileage—doing it on a gas tax per gallon really isn't sustainable.”

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