A state memo projected the state’s transportation fund will likely have a $63.5 million deficit by mid-2015, a figure which could result in changes to Gov. Scott Walker’s current proposed budget.
At the time Gov. Scott Walker introduced his budget, the bureau projected a $12.6 million surplus, but largely because of declining gas tax collections, the bureau changed its projections to a $63.5 million deficit.
The Legislative Fiscal Bureau released the memo last week in preparation for the Legislature’s Joint Finance Committee vote on the Department of Transportation’s budget Tuesday.
According to Craig Thompson, Wisconsin Transportation Development Association executive director, the deficit may result in delaying major projects, borrowing more money, moving money from general state funds to the transportation fund or increasing user fees.
A commission that Thompson was a member of earlier this year recommended major reinvestments in transportation, but also recommended increasing the state’s user fees that are below national averages, which Walker and Republican leaders rejected.
“My guess is if they didn’t choose to look at revenue from an increased gas tax before, they’re not likely to now,” Thompson said.
The LFB memo found the state would collect about $48 million less in gas taxes in the next biennium than was originally predicted.
Walker’s proposal to borrow more than $1 billion for construction projects has drawn criticism from some Republicans, who asked the transportation secretary to find about $200 million the department can delay. Thompson said further borrowing is a more likely strategy for the Legislature to take than increasing user fees.
Tom Howells, president of the trucking industry’s Wisconsin Motor Carriers Association, said there is a serious problem with the state’s transportation fund. Although he said an increase in user fees might be necessary, the trucking industry would prefer an increase in the fuel tax, rather than an increase in registration fees.
Fuel taxes are pay as you go, while registration fees are a lump sum paid at one time that can sometimes be too expensive for truckers who drive less, he said.
“As we move forward, our preference would be that we should [increase] the fuel tax,” Howells said. “It’s a pretty efficient way to collect money.”
