Independent Student Newspaper Since 1969

The Badger Herald

Independent Student Newspaper Since 1969

The Badger Herald

Independent Student Newspaper Since 1969

The Badger Herald

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Walker to borrow $1 billion for roads

Gov. Scott Walker’s proposed biennial budget would borrow nearly $1 billion, with most of the money going toward improving the state’s infrastructure and roads, a Thursday analysis from the Legislature’s budget office revealed. 

According to the Legislative Fiscal Bureau, Walker’s budget would call for $994,212,000 in bonding to fund road projects throughout the state over the next two years. 

About $416,512,000 of the proposed amount of bonding for transportation projects would come in the form of transportation revenue bonds, which would support major highway development as well as administrative facilities. 

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According to an informational paper on transportation finance the LFB issued in January, the state pledges vehicle registration fees and other vehicle-related fees to cover these types of bonds.

According to the LFB, the other $577,700,000 comes from general obligation bonds, which the state pledges its “full faith, credit and taxing power” to pay back. Of that amount, $302,000,000 would go toward the Zoo Interchange Project, a freeway interchange built outside of Milwaukee. 

The informational paper said by issuing bonds, the state can finish transportation projects earlier and spread the costs over a long period of time. However, the paper said by relying on bonds too much, the state could spend an increasing amount of transportation fund revenues on debt service. 

According to the paper, the percentage gross transportation fund revenues devoted to debt service has increased over the past decade, from 7.6 percent of transportation fund revenues in 2002-03 to 13.4 percent in 2011-12. The paper said this suggests the use of bonding is growing at a faster rate than revenues.

In a February interview with The Badger Herald, Bob Delaporte, spokesperson for the budget-writing Joint Finance Committee’s co-chair Sen. Alberta Darling, R-River Hills, said Darling was concerned with the level of bonding in the budget.

He said new revenue streams may open up in the next few months because of an improving economy that would allow for less bonding on road projects throughout the state. 

Mike Mikalsen, spokesperson for Rep. Stephen Nass, R-Whitewater, said the state is not in the position to go further into debt, and added many of the projects the bonding covers may not be needed. However, he said Nass supports bonding for some of the road projects and for other state buildings.

“But overall, it’s too much,” Mikalsen said. 

Jon Peacock, Wisconsin Budget Project research director, said Walker and others may be looking to use increased bonding to cover transportation projects because of the low interest rates, which would make it cheaper to build.

However, he said, with the increasing percentage of transportation revenues going toward debt services, people should not think of bonding as free money. 

Legislators may eventually have to face a choice to either increase the gas tax or scale back on highway building projects, Peacock said. Walker and Republican leaders have said they do not support raising the gas tax or increasing user fees.

“At some point, legislators have to start making tough choices instead of delaying tax increases and relying on bonding,” Peacock said. “We’re just kicking the can down the highway.”

Members of the Legislature’s Joint Finance Committee declined comment or did not return requests for comment on this article. 

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