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Mar 26, 201912:06 PMTransportation Matters

with Debby Jackson

Transportation funding — Pay now, or pay more later

(page 1 of 2)

Over time, the cost of most things goes up — food, clothing, rent. According to the U.S. Bureau of Labor Statistics and their Consumer Price Index (CPI), it takes about $1.25 today to buy what $1 would get you in 2006.

So, we should not be surprised the gas tax, which is a flat rate per gallon and last increased in 2006, is not keeping up with the needs of Wisconsin’s transportation system.

If the gas tax were still indexed for inflation using CPI, it would be about 8 cents higher today. This is right around the amount of increase the governor is proposing in his budget.

Until a little over a decade ago, small increases to the gas tax based on CPI would have occurred automatically each year.

In 2005, lawmakers repealed the indexing of the gas tax just as the need to rebuild the aging interstates was really picking up steam. While at the time, legislators said they would take the tough vote on increasing the gas tax, they never did. Instead, they treated bonding not as a financing mechanism but as a funding stream.

As a result, the amount of user fee dollars needed to service the debt grew, and the negative cycle began.

More money going to pay off projects already built reduced cash available to build today’s projects, which led to more debt to bridge the funding gap.

Currently, over 20 cents of every dollar paid by motorists in gas tax and registration fees goes to servicing the debt versus around 10 cents in 2006.

These decisions impacted most aspects of Wisconsin’s transportation system. According to information prepared by the Wisconsin Department of Transportation (WisDOT), real spending has declined in all programs since 2006 except two — highway operations (maintenance) and debt service, which has more than doubled.

This has meant local governments and WisDOT had to make tough decisions, a kind of transportation triage where projects and services were sorted based on their need for immediate treatment compared to their chance of benefiting from such care. While this process may be the most rational use of scarce resources short term, let’s be honest, this also left some roads and bridges to simply fail over time.

The road treatments performed were also more likely to fall into the category of “lowest cost today” versus “best value over the life of the asset” — another overlay versus rebuilding an aging and outdated roadway. These short-term Band-Aids may give temporary relief but do not fix the underlying problems, resulting in the need for recurring treatments. Orange barrels became a sign not of progress, but a symptom of the disease — inadequate funding.

Roadway conditions declined, and the public took notice.

(Continued)

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About This Blog

 Debby Jackson assumed the role of executive director of the Transportation Development Association of Wisconsin after more than 15 years with the organization. In addition to her vast experience in association management and transportation advocacy, Jackson has a background in business. She leverages the breadth and depth of her professional experience, along with her knowledge of the membership and mission of TDA, to be a strong voice for robust transportation infrastructure in Wisconsin. Jackson started her career as a staff auditor with Price Waterhouse, which led to a series of accounting and corporate management positions with a major national retailer.

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