Wisconsin DOT Unveils Wide-Ranging Plan to Boost State’s Transportation Fund

AASHTO Journal, 21 November 2014

Wisconsin Transportation Secretary Mark Gottlieb

In what he called an “ambitious and far reaching” budget request, Wisconsin Transportation Secretary Mark Gottlieb submitted a plan that would raise a number of existing taxes and introduce new ones to help cover a projected shortfall in state highway and transit spending.

The two-year budget proposal, if approved by Gov. Scott Walker and the legislature, would raise a reported $751 million over two years starting in July through new taxes and fees, and would increase the amount of money now transferred into transportation accounts from the budget’s General Fund.

It would increase motor fuel taxes – 5 cents a gallon for gasoline, and 10 cents for diesel to make heavy trucks pay a higher share for their greater pavement impact. It would introduce a blended fuel tax system that pairs a lowered per-gallon fee with a wholesale percentage tax on fuels that could increase over time with fuel costs.

The plan would also levy an additional annual registration fee on electric and hybrid-electric cars whose drivers now pay little or nothing in fuel taxes to maintain transportation infrastructure, and create a 2.5 percent “highway use” tax on new vehicle sales.

The WisDOT chief said the proposed increased use of general state revenues takes into account “that not all users of our transportation system pay transportation user fees.” The budget document also notes that “broader support from the General Fund for transportation expenditures recognizes the economic benefits that result from meeting Wisconsin’s transportation needs.”

In submitting his budget to the Department of Administration, Gottlieb said Gov. Walker charged him last year “with finding a long-term solution for ensuring that our transportation system continues to support economic development in Wisconsin while also developing a sustainable way to fund it.”

The new proposal replaces a partial budget request Gottlieb submitted in September. At that time, he said it was unable to send in a full two-year budget due to lack of certainty about federal funding over the next two years.

Now, though “a great deal of uncertainty remains” about future Highway Trust Fund levels, Gottlieb said he needed to go ahead with the WisDOT request for Walker to consider for his budget bill.

Gottlieb said his plan “puts the Transportation Fund on firm financial footing over the long term.” The proposal also gives detailed explanations for the revenue measures, including the justifications for each and comparisons with other states that have taken similar actions.

“States have found that they cannot rely on the federal government for new and innovative transportation funding approaches,” he said, but the WisDOT proposal draws on lessons from other states, from a public outreach initiative the department conducted and the recommendations of a Wisconsin Transportation Finance and Policy Commission that completed its work in January 2013.

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