Wisconsin facing a long, rough road on state highway funding

WISCONSIN POLICY RESEARCH INSTITUTE, INC.
P.O. Box 382 Hartland, WI
(262) 367-9940
E-mail: wpri@wpri.org • Internet: www.wpri.org

CONTACT: David T. Hartgen, Ph. D., P.E., Office: 704-405-4278, Cell: 704-785-7366; or WPRI President George Lightbourn, 608-220-6085

WISCONSIN FACING A LONG, ROUGH ROAD ON STATE HIGHWAY FUNDING

National expert points to billion-dollar-a-year funding gap; lays out options in WPRI paper

A comprehensive study by one of the nation’s foremost transportation policy and planning experts has concluded that even modest maintenance, repairs and expansion of Wisconsin’s State Highway System over the next ten years will result in a funding gap – given realistic revenue trends – of almost $1 billion per year.

Expected resources are likely to cover only about 65% of the “prudent” highway needs between 2011 and 2020, leaving a total estimated shortfall of $9.93 billion, according to the in-depth study conducted by David Hartgen for the Wisconsin Policy Research Institute. Even if all major new projects or capacity-related road widenings are deferred and work limited to basic projects such as pavement and bridge repairs, maintenance and shoulder- and signal-work, a gap of between $2.1 billion and $3.8 billion would still remain, Hartgen and his researchers have found after examining travel trends, road conditions and funding sources.

Hartgen is Emeritus Professor of Transportation Studies at the University of North Carolina at Charlotte, andPresident of The Hartgen Group.  Widely known in transportation circles, he established the UNC Charlotte’s Center for Interdisciplinary Transportation Studies, is the author of approximately 355 publications on transportation policy and planning and is the US Co- Editor of the international academic journal Transportation. His annual reports on the cost-effectiveness of the state highway systems get wide media attention.

“Prof. Hartgen is a recognized national expert on highway needs, funding and policy matters,” said George Lightbourn, president of WPRI. “His findings should be mandatory reading for Democrats and Republicans alike as they address the current budget and, hopefully, think about future ones. Closing the billion-per-year funding gap would be a significant challenge under any circumstances. Given Wisconsin’s fiscal circumstances, it is daunting. David Hartgen is issuing a wake-up call here.”

Wisconsin is growing, and the population will increase about 5% between 2010 and 2020. The number of drivers and the amount of travel is expected to increase in tandem with the population. The State Highway System – not including local roads – has about 11,700 miles. After reviewing the project lists of transportation planners in the state, Hartgen identified another 809 miles of planned new roads or expansions over the next decade. Significant portions of the current system also need repair, replacement or modernization. Addressing most, though not all, of the repair needs and allowing for some expansion would cost about $28.6 billion over the next decade, Hartgen estimates. Of this, about $9.2 billion is for highway rehabilitation, $13.9 billion for capacity and expansions, $3.6 billion for maintenance, and $1.8 billion for administration.

“This is not an estimate of what it would cost to address all needs,” said Hartgen. “And it also doesn’t consider the costs of local roads not under the purview of the state. It’s an estimate of what it would cost to prudently maintain, repair and, to some degree, expand the state highway system. Similarly – on the resource side – we considered only sources and amounts likely to be realistically available over the next decade, assuming no major changes in state funding mechanisms and a cautious view of federal funding.”

The study estimates that approximately $18.6 billion in funding is likely to be available over the next decade, including an estimated $5.8 billion in federal funds, $11.6 billion in state services and funds, and $1.2 billion in bonding.

Those figures represent modest increases in federal and state funding. But the study also highlights one source, per-gallon fuel taxes that currently make up about 22% of all State Highway System funding in Wisconsin, that is expected to go down. As fuel efficiency increases, fuel consumption and per-gallon gasoline and diesel tax revenues could decline by as much as 8% by 2020 in comparison to 2000 levels, the study predicts.

The study does not evaluate or recommend specific ways to deal with the funding gap but does note a wide variety of options on both the revenue and expenditure side. For instance:

Only about 36% of state fuel tax and vehicle registration fees go to the State Highway System. A higher percentage could be used for state-owned roads, although that would impact other areas that currently get revenue from those taxes and fees, including local roads and transit.

  • Fuel tax and registration fees could be increased, as could bonding.
  • Public-private partnerships and tolls could also produce revenue.
  • Priority could be given to projects that produce new jobs or economic activity.
  • Congestion could be allowed to worsen above the current state standards, in effect delaying some road-widening projects.
  • Repair cycles could be lengthened, although that could result in greater future costs.
  • Improved transit service, carpooling and flexible work hours could, among other alternatives, be used to lower demand for road capacity.

“If this report sparks discussion among Wisconsin’s policy-makers and transportation experts on how to address the daunting funding gap, we will consider it a success,” said Lightbourn. “We’re not recommending how Wisconsin officials address the gap – only that they do. That’s imperative.”

Read Hartgen’s study here.

The Wisconsin Policy Research Institute, established in 1987, is a nonpartisan, not-for-profit think tank working to engage Wisconsinites in discussions and timely action on key public policy issues critical to the state’s future.

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