You would think state liberals would be cheering the state Department of Transportation’s 2015-17 budget proposal and not trying to score cheap political points. After all, the budget largely reflects the success of the liberal environmental agenda. …
For those that missed the headlines, on Friday DOT Sec. Mark Gottlieb dropped a staggering request for the next state budget. Totalling $751 million, the proposal radically restructured the state’s existing gas taxes on unleaded and diesel gasoline, raises vehicle registration fees on electric and hybrid vehicles and raises fees on new vehicles sales. All of which are designed to acknowledge a reality facing all 50 states and the federal government – cars and trucks are getting more mileage, and as such, gas tax revenue is shrinking.
For years, the state’s largest source of highway funding has been the gas tax. Since it is a “per use” tax, only those buying gasoline by the gallon pay it. As cars become more fuel efficient, they need less and less gasoline and thus the tax is paid less and less. If you add in new hybrid or even electric cars, the tax is paid even more infrequently or not at all.
So as cars on the roads become more fuel efficient and less revenue comes in through traditional sources, governments are scrambling to find ways to pay for roads, bridges and other infrastructure projects. Most transportation experts will tell you this tends to go into three different routes.
1.) More and more toll roads.
Federal law forbids states to establish toll roads on existing roads. It does however, allow them to be established on either newly built roads or when existing roads go under reconstruction or increase their capacity. Given how anathema toll roads are to the average Wisconsinite, it would both take too long and be too costly to establish a viable toll road system on Wisconsin’s high use roads in Milwaukee, Madison, Waukesha, Green Bay and other locales.
2.) Mileage Use Taxes.
Imagine if you will, a state where every vehicle has a GPS tracker installed. This tracker measures not just how much you’ve driven, but also gives to government agencies detailed information in real time such as where you’ve been, how fast you got there, and any detours you took while along the way. You’re taxed by the mile and sent a monthly bill.
Could police use this data to give driver’s speeding tickets and other traffic violations? Likely. Is this all a series of extreme violations of one’s civil liberties? Probably, but many don’t want to wait for the U.S. Supreme Court to sort it out.
3.) Reconfiguring Traditional Gas Taxes / Increased Registration Fees
The old standby and the route Gottlieb seems to be going.
Given the 2005 fight in which Wisconsin conservatives successfully ended Wisconsin’s practice of gas tax indexing to inflation, one would understand legislative hesitation to go anywhere near DOT’s proposal. After last week’s election, the last thing a newly-minted legislative Republican majority wants to hang on the state is a huge gas tax increase and new user fees related to numerous kinds of vehicles.
Critics of the DOT plan will no doubt mention how Gov. Walker never proposed any of this during the campaign. Then again, Mary Burke didn’t come with any specifics herself.
While the solution is far from perfect, Gottlieb should be applauded for getting the conversation started. Because the past ways; where fund raids and indebting the next two generations with bonds so the highways of today could be paved were all too common, won’t cut it anymore.
When it comes to deciding how best to fund roads, the legislature will either have to get with the times and devise a system that encompasses new technologies into old revenue streams or learn to go with less when it comes to road-building.
The Milwaukee Journal Sentinel reports:
A $751 million boost in taxes and fees isn’t the only way Gov. Scott Walker’s transportation chief wants to keep major road projects on schedule.
Over two years, Transportation Secretary Mark Gottlieb also wants to borrow more than $805 million, study the feasibility of tolling and use $574 million in funds that typically go toward schools and health care.
Under another part of Gottlieb’s plan, the state Department of Transportation would gather odometer readings when drivers register their vehicles each year — a move that would help it review whether the state should create a new fee based on how many miles people drive.
Gottlieb’s proposal is in its infancy. On Tuesday, Walker told The Associated Press he would make significant changes to it before submitting a transportation plan to the Legislature as part of the overall state budget early next year.
He declined to rule out raising the gas tax, saying he was “not making absolutes on anything right now.”
Once Walker gives his plan to lawmakers, they will spend months modifying it before returning it to Walker for his final approval. The Legislature is controlled by Walker’s fellow Republicans.
Legislators from both parties have been muted in their responses to Gottlieb’s plan. They have said they see a need for more money, but also have expressed reservations about increasing taxes and fees or relying too much on borrowing.
Bonding more than $800 million for road projects is “not sustainable,” said Sen. Alberta Darling (R-River Hills), co-chairwoman of the budget-writing Joint Finance Committee.
She said she would listen to her constituents on what to do when it comes to funding transportation.
“I’m all ears,” she said. “I honestly hear about two different pictures of Wisconsin. Some people say we have enough roads already. Others point to what bad shape the Zoo Interchange is in.
“We have a problem. People agree we have a problem, but when you say, ‘How about these solutions,’ they say, ‘None of the above.'”
Brett Healy, president of the conservative MacIver Institute, said Gottlieb would have a tough time persuading people to sign onto his plan.
“Everywhere drivers look, all they see is road construction and orange cones but now the department says they need more transportation funding,” he said by email. “Adequate transportation funding is critical to economic growth but there must be taxpayer balance.
“Higher transportation taxes and fees in this economy and this political environment will be difficult to justify.”
One thing not mentioned is a closer look at what WisDOT wants to fund — for instance, mass transit, which is not used by most Wisconsinites, but you’re paying for it. Gas taxes also pay for such non-motorized-transportation as bike paths. So the first thing the Legislature needs to do is to stop using the transportation fund on things that don’t benefit drivers, including drivers of tractor-trailers. Mass transit is directly contrary to people’s freedom to go where they want when they want.
The gas tax in theory is a proper tax because it’s paid by drivers in proportion to their use of roads. If you drive more, you buy more gas, and therefore you pay more gas taxes. The problem is that as vehicles become more efficient, their drivers purchase less gas. (The Obama Recovery in Name Only has also reduced driving, which also has reduced gas tax revenue.)
User fees are in theory better than taxes because non-users don’t pay them. On the other hand, making car ownership more expensive is not beneficial to users of roads. (This demonstrates, among other things, that Republicans in Madison really haven’t done nearly enough to reduce government in other areas to be able to afford higher spending in transportation. As you know, state and local government is twice the size it would be had it been had government been limited to growth in inflation and population growth the past three decades.)
The feds have a pernicious influence as well. Federal mandates to spend money on mass transit and other things that don’t benefit drivers need to be repealed by Congress. So do prevailing-wage requirements, which make construction projects, including road projects, considerably more expensive than they should be in a supposedly free-market economy.
There have been proposals for several years to devote tax revenues generated by transportation for transportation, particularly sales tax proceeds from vehicle purchases. That makes sense, particularly in keeping with voters’ wise choice to keep legislators’ hands off transportation funds for political convenience (see Doyle, James).
The toll study, however, is a waste of time, because there is no political support for toll roads, even if toll roads today aren’t like the Illinois Tollway of the 20th century. You want more recalls? Create toll roads, and you will have them.
Making driving more expensive by increasing taxes has a direct effect on taxpayers’ wallets, as we all discovered during the $4-per-gallon era of gas prices earlier this decade. Whether people drive less or not, gas prices affect the price of everything that is transported by vehicle, so if you increase gas taxes, you increase the price of things people buy at stores, particularly food.