WI: Scott Walker's Budget Borrows $1B, Mostly for Roads

Gov. Scott Walker's proposed budget would borrow more than $1 billion over two years, the Legislature's budget office reported Thursday.

The vast majority of that money — $994 million — would go toward shoring up the state's sagging transportation fund, which faces rising demand from major projects at a time when its traditional sources of revenue are shrinking.

Like Walker, Republicans who control the Legislature are wary of increasing taxes or raising fees. But some GOP lawmakers such as Assembly Speaker Robin Vos (R-Rochester) also have expressed skepticism about the amount of borrowing contained in the budget.

To become law, Walker's proposal must pass both houses of the Legislature and then be signed by the Republican governor. A spokesman for Walker had no comment, saying the administration was still reviewing the new report.

Almost all the borrowing in Walker's proposed budget would go toward transportation. In all, he would bond $994.2 million for transportation, including $404 million for major highways, $302 million for the Zoo Interchange, $200 million for the Hoan Bridge and $60 million for rail.

Even before the report's release, members of the Legislature's Joint Finance Committee had raised concerns about the borrowing in Walker's budget.

"I'm not comfortable with the level of bonding," Rep. Dale Kooyenga (R-Brookfield) said in an interview shortly after Walker introduced his budget last month. "It's inconsistent with the message I ran on and the majority of this body ran on."

The co-chairs of the Finance Committee, Rep. John Nygren (R-Marinette) and Sen. Alberta Darling (R-River Hills), have also said they would like to see less borrowing in the budget.

So far, Republicans have not spelled out how they might reduce bonding.

Walker's transportation secretary, Mark Gottlieb, noted in a recent interview that legislators will have two options if they want to cut borrowing — finding new revenue or cutting back the highway program.

Walker is proposing the increase in transportation borrowing so projects including the Hoan Bridge can get done and the Zoo Interchange can stay on schedule. A 2011 structural analysis found making improvements on the Hoan was critical, he said.

"We really don't believe the Hoan Bridge is delayable. It has to happen," Gottlieb said in the recent interview.

He noted that interest rates are low and said borrowing for long-life projects like the Zoo Interchange and the Hoan make sense because the state will be "spreading out costs to future users." The state no longer bonds for projects with shorter life spans, he said.

Thursday's report by the Legislative Fiscal Bureau also concluded Walker's plan would bolster spending on roads, rail and transit by using $445 million from sources other than the transportation fund.

His proposal is the latest sign of difficulty for the transportation fund, which is made up largely of collections from the gas tax and vehicle registration fees. Those collections have been stagnant in recent years as people drive more fuel-efficient vehicles.

Making the problem worse, the state is anticipating a decrease of $21 million over two years in transportation aid from the federal government, according to the fiscal bureau's analysis.

To supplement the transportation fund, Walker wants to use money from other accounts to pay for roads. That includes $94.4 million from the state's main account, which is made up of money from the income and sales taxes and goes to pay for schools, health care for the poor and other major programs.

Additionally, Walker wants to push the cost of transit programs out of the transportation and into the general fund. That would save the transportation fund $106.4 million in this budget, and far more in future ones. Walker proposed that same change in 2011, but lawmakers rebuffed him and kept transit funding in the transportation account.

Walker also wants to issue $200 million in bonds for the Zoo Interchange and have that borrowing paid back from the general fund, rather than the transportation fund.