We all know a friend or relative in financial trouble. They have used credit cards to live a $100,000 lifestyle while holding down a job that pays $75,000. Sooner or later there has to be a day of reckoning.
That, in a nutshell, is Wisconsin’s transportation finance problem. Real income from the gas tax, adjusted for inflation, has declined for more than a decade. So Jim Doyle and now Scott Walker have used hundreds of millions of debt in every one of their budgets in an unsustainable attempt to keep up with highway needs.
Things have reached a point where Governor Scott Walker wants to borrow another $500 million for roads while cutting the overall highway budget. Where debt service once consumed a modest seven percent of transportation revenue, the Doyle-Walker record will bring that to an unsustainable twenty-two percent if Walker’s current plan is approved.
Some legislators say, in effect, “enough.” They believe the state either needs to live within its means or it needs new revenue. This explains the decision by Assembly Republicans to use the so-called “base” budget as a starting point in negotiations over transportation finance. This budget strips new borrowing from Walker’s proposal. In the process, it illustrates the impact (and clear inadequacy) of current transportation revenue.
It can be tough for that friend of ours to come to grips with their out-of-whack spending habits. They need help from a credit counselor to get things back on track. Effectively, that’s the role being played by legislators who realize the large borrowing started by Governor Jim Doyle and continued by Walker can’t be sustained. The state either needs new revenue or it needs to cancel more road projects and reduce maintenance.