Sustainable Transportation Funding

As greater fuel efficiency limits gas tax collections, transportation officials are tinkering with new ways to fund expensive state and federal infrastructure projects.

Believe it or not, the federal gasoline tax is running on empty, and with little political will to increase it during a period of sluggish job growth and $4-per-gallon gas prices, transportation officials believe a move to “user pay” models is inevitable.

Pilot programs are being tested in various states, and in Wisconsin, a 10-member commission is looking at how to sustainably finance transportation over the next decade. Its recommendations could be part of the next biennial state budget.

In Washington, Congress has passed, and President Obama has signed, a two-year surface transportation bill, Moving Ahead for Progress in the 21st Century (aka MAP-21), that outlines federal policy and contains funding for roads, bridges, and transit systems. Normally, the authorizing legislation covers a six-year period, but lawmakers had difficulty cobbling together funding for even this truncated version. 

While it represents a funding status quo for Wisconsin, the bill does contain helpful language designed to speed up the approval process, and therefore lower costs for major transportation projects. Craig Thompson, executive director of the Transportation Development Association of Wisconsin, cited the four-year deadline for project approvals, additional exemptions for environmental assessments, and the authority to toll new capacity on interstate highways.

What it failed to do is address what Thompson called the unsustainability of transportation funding. The federal gas tax has stood at 18.4 cents a gallon (24.4 cents for diesel) since 1993, but it now buys about half of the construction materials it did then.

What’s a transportation system to do? 

Rather than relying on formula-based funding, Thompson would focus on funding economically vital projects in priority corridors – roads and rail – targeting investments that will affect the economy in the aggregate and paying less attention to how the formulas work for states.

To raise the money, he would make users pay more, citing proposals to create truck-only lanes in certain corridors. The National Truckers Association has been open to paying increased fees for such a proposal if the fees are dedicated to the lanes in question, and a pilot program has been established on Interstate 70. 

In addition, pilot programs in states like Minnesota and Oregon have charged for miles traveled, but there is a privacy backlash to one of the measuring techniques, which involves the use of global positioning systems (another records miles via cell phone technology). 

Another proposal calls for congestion pricing, especially in urban areas, where motorists would be charged more per mile during rush hour.

User fees could be incorporated in addition to the gas tax, to replace the gas tax, or through some sort of hybrid of the two.

Thompson isn’t sure that people take into consideration how much access to highways and the rail means to the state economy. When Wisconsin jumped from 25th to 18th in CNBC’s recent look at “America’s Top States for Business,” the category in which the state improved the most was transportation. Most of the states that scored highly in transportation were among the top-ranked states overall, including No. 1 Texas. 

“We’re constantly trying to get across to the public here in Wisconsin that we are a heavy manufacturing and agriculture state,” Thompson stated. “If you can control the cost of moving those products, it has a huge impact on how competitive you’re going to be.”

State priorities

Federal transportation funding makes up 25% of Wisconsin’s transportation budget and funds 45% of the state’s major highways. It partially funds ongoing work on what the state calls “mega” projects like the widening of I-39/90 between Dane County and the state border and the redesign of the Zoo Interchange in Milwaukee.

The Legislature has created the Transportation Finance and Policy Commission to examine funding issues, and although its recommendations aren’t due until March of 2013, it’s being prodded to report by year’s end so that policymakers can evaluate its findings as part of their budget deliberations. 

Mark Gottlieb, secretary of the Wisconsin Department of Transportation, said the DOT is providing the commission with considerable staff assistance, and its members are emphasizing a user fee-supported transportation system. “I’m very optimistic the commission will bring out some interesting recommendations for policymakers to consider,” Gottlieb said. “What they have done so far is identify the revenue streams we have now and the modeling we put together as to what those revenue programs are going to generate over the next 10 years. 

“That amount of money is considerably short of what is needed on a statewide basis.”

Part of the reason for considering additional funding sources is the growing cost of either rehabilitating or maintaining a multi-modal transportation system that includes a 12,000-mile state highway system and roughly 5,000 bridges. 

In the 2013-15 state budget, the state will continue its work to redesign Milwaukee’s Zoo Interchange, which is used by 350,000 vehicles per day; widen I-39/90 from four to six lanes from the Beltline to the state border; and make improvements to address significant traffic bottlenecks at the Verona Road-Beltline interchange and Verona Road in Dane County. These projects won’t be completed in the course of one biennial budget period, and their projected costs are $1.7 billion, $836 million, and $177 million, respectively. 

The Zoo Interchange project was pared back from its original price tag of $2.3 billion to reduce the impact on abutting properties, control costs, and advance the project more quickly. “The configuration will be completely different,” Gottlieb stated. “What we’ve done on other interchanges is minimize left-hand on and off ramps and go to all right-hand off ramps.”

In addition, the DOT is studying future improvements on the Beltline from Highway 14 in Middleton to Highway N, a study process that could take 10 years, and it’s looking at potential improvements to intersections and interchanges along Highway 51 from the Beltline to Highway 19, a study it expects to complete in 2014.

“We look at capacity issues,” Gottlieb explained. “There are a variety of ways they can be dealt with, and this is part of the study process. It could involve expansion, but also other types of improvements that will maximize the volumes the road can handle. We don’t have a preferred alternative at this point.”

At the moment, the DOT has no plans on the table for the North Mendota Parkway, also called the North Beltline. “That has really primarily been a locally driven issue, and it will continue to be a locally driven issue,” Gottlieb stated. “As the years go on and we study the Beltline, we’ll be looking at what an alternative like that can possibly mean, but it’s been locally driven and will continue to be.”

The state also is looking into ways it can improve freight rail lines, which are serving the fast-growing frack sand industry. Last fall, the Governor invited 100 freight industry stakeholders to a summit, where the DOT took advice about what the state could do to improve the movement of goods. As a result, the department is working on a freight corridors plan that will help prioritize future investment decisions.

In the current biennium, Wisconsin invested $30 million for freight rail improvements statewide. “That’s a vital part of our economy – moving goods, both manufacturing and agricultural,” Gottlieb stated. “The frack sand industry is one prime example where you have to have a good multi-modal transportation system. Some of that is moved by truck, and some is moved by rail.

“Particularly in this [south central] area, we are looking at some upgrades. From Madison to Reedsburg, there are a number of shippers that rely on good freight rail service to maintain their industries and jobs.”

Following recent track and station improvements to the Milwaukee-Chicago Hiawatha rail line, which last year served 800,000 passengers, the DOT is planning more upgrades to the Amtrak Station in downtown Milwaukee. Outside the Hiawatha corridor, the DOT is participating in a study of adding a daily Amtrak train service between Milwaukee and Minneapolis.

Gov. Scott Walker has pursued a constitutional amendment to ban transfers from the state transportation fund for general fund purposes. The amendment passed on first consideration in the last session of the Legislature, and if it passes on second consideration in the session that begins in January of 2013, it will be put to the voters in a referendum.

Walker also has restored about $150 million of the funds that were transferred and not replaced, with the possibility of additional restoration in the next state budget. Gottlieb said somewhere less than $200 million remains to be restored, but he’s uncertain how much will be paid back.

Dane County’s country roads

The Dane County Division of Highway and Transportation manages or maintains hundreds of miles of county, state, and interstate highways, but its most immediate task is upgrading additional sections of University Avenue, Fish Hatchery Road, and Monona Drive. The work began earlier this year and will continue into 2013 under county and local municipal budgets. 

Since they are primarily urban roads, people don’t necessarily think of these as county roads, but Dane County Executive Joe Parisi has the immediate task of completing their upgrades before he can devote more of the county’s $5 million annual transportation budget to a more balanced rural-urban approach.

Since its ability to affect mass transit through a regional transit authority was removed in the current state budget, the county is primarily responsible for roads, bike trails, and bike lanes. Upon taking office, Parisi commissioned a rural roads assessment that uncovered needs outside of Madison – an assessment that provides an opportunity to expand bike lanes. The $1 million repaving of Highway J included the addition of a bike lane for cyclists who like to use the stretch from the unincorporated Village of Riley to Old Military Road.

While there is cost sharing between the county and local municipalities, these improvements don’t come cheap. The University Avenue (County Highway MS) project is a $15 million reconstruction from Allen Boulevard to Segoe Road.

Monona Drive (County Highway BB) is now undergoing a $3.6 million Phase II section from Winnequah Road to Cottage Grove Road, and Fish Hatchery Road (County Highway D) has undergone $3.7 million in repairs from Wingra Drive to Emil Street. 

The county’s $5 million annual allocation represents a 10% increase over 2011, and is nearly double the $2.8 million budgeted in 2008. “We’re at a fairly robust level,” Parisi said,” but again, because we’ve been doing the University Avenue type roads, a lot of that money goes to fewer projects. I’m looking forward to getting past some of these urban corridors so we can focus more on some of the rural needs, the safety needs, that exist.”

As is the case with Highway J, bike lanes will be featured more on rural roads due to their contributions to economic development. Parisi noted that cycling is a growth industry here, and one of the reasons Madison can attract events like the Ironman and was mentioned as part of Chicago’s bid for the 2016 Summer Olympics is a network of on- and off-road bike trails that is under continual development.

“We want to make sure we address the needs of the cyclists and make sure cycling is safe and that we can do everything we can to keep bicyclists and cars in separate lanes,” he stated. “We were able to build some of the off-road trails with grants and, in conjunction with Madison and all the municipalities and towns, these are bike paths that connect people locally and to statewide trails. 

“There is still a lot of work to do, but we have a [development] plan in place. Compared to most places, Dane County has terrific access.” 

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