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Tax Watchdog Group Criticizes Transportation Fund Borrowing

Wisconsin Taxpayers Alliance

New state budget plans to borrow almost $1 billion to pay for proposed transportation programs is sending a fiscal warning.

The Wisconsin Taxpayers Alliance President Todd Berry says borrowing to pay for transportation projects accounts for 16 percent of road revenues compared to 6 percent ten years ago. He says Governors and legislators transferred money to the general fund when the transportation fund was flush, leaving the state needing to borrow to finish projects...

"...the long term effect of that is the more borrowing you take on, the more debt service you're going to have and as the debt service gets bigger it tends to crowd out other things in the transportation budget..."

At the current rate, debt service would account for nearly a quarter of the transportation budget by 2023.

One factor was the 2005 end to the automatic increase in the state gas tax. Berry says they don't favor tax increases, but the transportation fund is lagging....

"....the income tax and the sales tax have that every year because as prices and incomes rise the income from those taxes rise. The gas tax rate, when it was adjusting for inflation essentially did was the sales tax did, but without that, it effectively loses value every year..."

Berry says state officials need to sit down and discuss just how the state spends money on transportation projects. Berry says the state might have to trim its budget to meet realistic revenue projections rather than borrow.

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