Burke thought raiding transportation fund made ‘good sense’ before $680M shortfall

By Adam Tobias | Wisconsin Reporter

MADISON, Wis. — Democratic gubernatorial candidate Mary Burke once gushed over former Gov. Jim Doyle raiding almost $1.4 billion from the segregated transportation fund to balance several state budgets, claiming the series of moves made good business sense.

But after admitting last week those actions contributed to a projected $680 million shortfall in the transportation fund, Burke is trying to pretend she never fully supported those transfers.

“When we collect revenue, particularly from the gas tax for a certain purpose, I think it’s reasonable to say that it stays there,” Burke told Milwaukee Journal Sentinel reporters and the newspaper’s editorial board Oct. 15.

In Burke’s first few months as the state’s secretary of commerce she had a completely different view, according to talking points prepared for a March 2005 Joint Finance Committee hearing.

“Of course (Doyle) uses money from the most flush funds,” Burke said in the notes, which Wisconsin Reporter obtained on a condition the source of the documents wasn’t revealed. “It makes good sense. No business would allow one of their divisions to be devastated while another one sat on piles of cash they didn’t need. The Governor’s budget makes good business sense.”

A month later, Burke told the Capital Times she supported Doyle’s positions entirely and “he is just doing so much that’s right for Wisconsin that creates a better place to live for everyone.”

But Wisconsin is continuing to pay for that “good business sense” and “better place.”

“The transfers from the transportation fund to the general fund, obviously, depleted it of some money, but more significantly, it was replaced, in part, by borrowing … that puts incredible pressure on the transportation fund when a good part of its expenditures are going to, you know, essentially paying for past projects,” Wisconsin Taxpayer Alliance President Todd Berry said.

Emily Goff, a transportation and infrastructure policy analyst for the Heritage Foundation, also told Wisconsin Reporter that raiding a segregated transportation fund to pay for other priorities gives the false impression general budgets are balanced.

“Outside the transportation budget, if the rest of the budget is coming up short, I would have to think there is too much spending,” Goff said. “That deficit shouldn’t be born on the back of a transportation budget.”

Wisconsin’s segregated transportation account is primarily funded through state and federal gas taxes and vehicle registration fees. Revenue for the 2013-15 budget totals $7.024 billion.

If that money is used for other reasons than highway and infrastructure improvements, Goff says some safety issues and needed upgrades may not be addressed, giving motorists and taxpayers a raw deal. For example, about 1,200 of Wisconsin’s 14,000 bridges are considered structurally deficient.

Goff told Wisconsin Reporter a similar practice is also happening in Washington, D.C., where Congress and the Obama administration have been diverting federal gas tax revenues to pay for transit projects and bicycle and walking paths.

“I don’t think it makes good business sense because you’re breaking the link between the people who are using the transportation system and paying for it and then what the money is going toward,” Goff said. “So, there’s this breakage of the user-pays, user-benefit system, which I think is crucial to having an effective, efficient transportation policy.”

But Berry still believes major changes have to be made to the transportation budget’s funding mechanisms before the state can begin to see some progress.

The state started experiencing a decrease in revenue after 2005 when Doyle and legislators on both sides of the political aisle moved quickly to eliminate the automatic annual adjustment of the fuel tax, according to Berry. Since that time, gas tax revenues have declined due to inflation, Berry said.

“If asphalt prices, if concrete prices, if labor prices are going up — and they all are — then there’s going to be a built-in shortfall,” Berry told Wisconsin Reporter. “And it’s made worse by the fact that the Wisconsin population is aging, the Wisconsin economy is not growing particularly fast, and both of those things mean people drive less.”

The state has also been collecting less in fuel taxes because of federal mandates requiring higher mileage standards for new vehicles, Berry said.

To fix the problem, Berry said state government has to look at cutting spending, raising taxes and fees or reimplementing gas tax indexing. Berry doesn’t consider transferring money from segregated funds as an acceptable alternative.

“If you are going to tell people that their gas taxes, their registration fees are user charges … and that we’re going to use them to maintain and build the transportation infrastructure, then honesty and transparency would dictate that we better darn well use the money the way we tell people we’re going to use it,” Berry said. “And if we’re not, then we should recognize that the segregated fund approach doesn’t work anymore because the political actors don’t want to keep their word to the public.”

A referendum question will appear on the Nov. 4 ballot asking state voters if revenues collected from transportation-related levies should be used for any programs not directly administered by the Wisconsin Department of Transportation.