Waukesha County Executive Dan Vrakas said people are fed up with the state government raiding the transportation fund to spend money on operating expenses.
“We are violating the faith and trust of the people who pay the gas tax,” he said, and then asked what people must think when they fill out a check at the Department of Transportation to the “Registration Fee Trust.” “We’re breaking the trust with the people and that’s the worst thing you can do.”
Vrakas supports an amendment to the state constitution that would prohibit transfers from the segregated transportation fund to spending on other budget items. Under the state’s amendment process, the state legislature would have to pass the amendment in two consecutive sessions of the legislature and then go to statewide referendum. The earliest such a referendum could take place would be 2013.
Vrakas said the state constitutional amendment is necessary because, “It’s too easy to transfer the money and play the game.” Vrakas said the reason the state transfers the money from the transportation fund is to get around the prohibition on borrowing for operating costs.
When the state takes the money from the transportation fund, the state borrows money to pay for transportation costs including road maintenance, new road construction, mass transit, and even mowing the grass on the medians. While the state has taken $1.3 billion from the segregated fund since 2003, the state has borrowed money to fill the gap.
“We don’t borrow for operating costs,” Vrakas said, saying it was one of the reasons Waukesha County has a triple-A bond rating. “It’s just a terrible budgetary practice. It’s very unseemly from a financial management standpoint.”
That borrowing for transportation comes at a cost, too. State Senator Dale Schultz wrote last year,
“Interest payment on the additional debt during the next two years alone will be nearly $5 million.
“The use of debt to build our state’s roads has risen dramatically in the last six year to the point where only 88 cents of every dollar we pay in gas tax and other transportation fees helps build our roads. The other 12 cents goes to the debt on past road projects.”
This will only get worse as the borrowing continues. The Lakeland Times reports,
“The 2009-11 state budget authorizes transportation bonding of $1.304 billion. That’s an increase of $767 million in borrowing over the 2007-09 budget act, and that’s on top of a 96-percent increase in the use of transportation fund supported bonds between 2002 and 2006, according to the Legislative Fiscal Bureau.”
Even after the borrowing, the state’s transportation fund still fell short $435.4 million, according to the Legislative Fiscal Bureau. Local transportation priorities suffered as a result.
“They need to tackle the tough issues like we have in Waukesha,” Vrakas said. He pointed to the success of the county in controlling county employee costs and said he may be the first County Executive in Wisconsin to contribute to his own retirement.
Vrakas said Wisconsin is not alone in raiding their transportation funds. However, at least 29 other states have some constitutional protections against such raids, according to the Transportation Development Association of Wisconsin.
“It’s time to push the legislature to do it,” Vrakas said. To push the legislature into getting the amendment process started, Vrakas is introducing an ordinance setting up an advisory referendum in Waukesha at the November election.
Waukesha County is not the only county considering an advisory referendum. Already, Calumet County is also considering having their own advisory referendum. Other counties may soon follow suit.
Vrakas said he is not concerned about the credit. “It doesn’t matter who is first.”
He said the idea of a constitutional amendment has a lot of broad-based support, and that he personally has gotten a positive response from the idea.
The non-binding advisory referendum will possibly be considered by the full Waukesha County Board on June 22nd.
By James Wigderson
Special Guest Perspective for the MacIver Institute