Lawmakers Tap General Fund – Again – to Pay for Roads

Wednesday, July 15, 2015 at 12:06 PM by

A sizable portion of new transportation borrowing approved by lawmakers will be repaid from the state’s General Fund, rather than from the Transportation Fund. The General Fund is the state’s main account for spending on education, health care, and communities. Using money from the General Fund to pay borrowing costs for highway projects reduces resources available for critically important institutions such as the University of Wisconsin System and public schools.

During budget deliberations, lawmakers had a tough time agreeing on how much to borrow for transportation projects. In his 2015-17 budget proposal, Governor Walker recommended borrowing $1.3 billion for transportation, but legislators balked at that amount. Instead, the legislature approved a budget that included up to $850 million in borrowing for transportation, and delayed a number of planned highway projects around the state to trim spending.

Of the up to $850 million in new borrowing for transportation, as much as $307 million of that amount could be repaid from the General Fund rather than from the Transportation Fund. Legislators specified that repayment costs for $132 million of the new borrowing should come from the General Fund, and said that the legislature’s budget committee will decide at a later point whether repayment costs for an additional $175 million in borrowing should come from the General Fund or the Transportation Fund. Repayment costs for the remaining $543 million will come from transportation sources.

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Wisconsin voters recently approved a constitutional amendment that prohibits lawmakers from using resources from the Transportation Fund to support other public services. But the amendment does nothing to prohibit transfers in the other direction, in which resources from the General Fund support transportation projects. By the end of this current budget period in June 2017, about half a billion dollars more will have been transferred into the Transportation Fund than transferred out of it. (That dollar figure includes the use of General Fund-backed borrowing for transportation purposes.)

If there isn’t enough money in the state’s Transportation Fund to pay for highway projects, then lawmakers should consider raising the gas tax or reassessing the need for new highways, rather than tapping the General Fund to pay for transportation costs. Using resources from the General Fund to pay for highways and other transportation projects shortchanges important priorities supported by the General Fund, such as keeping higher education accessible and helping workers get the training they need.

Tamarine Cornelius

 

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