July 23, 2018
An Analysis By Bill Osmulski
Perception and reality take radically different paths in Wisconsin when it comes to local road maintenance. Basically, local governments throughout the state claim their roads are falling apart and they don’t have any money to fix them. That’s not true; not by a long shot.
There’s no reason why most local governments can’t address their road funding needs with existing resources. The problem is, many simply choose not to make transportation a top priority.
Local governments have more than enough funding available to maintain their roads – it’s just not a high enough priority to them. What’s worse, by neglecting road repairs, they seem to believe they can manufacture a crisis as a way to get more state funding. There’s no reason why most of them can’t address their road funding needs with existing resources.
There are two main ways to fund local road projects: bonding and state aid. Many choose to use neither, and yet complain that their roads are crumbling.
Take Johnson Creek for example. The village is responsible for 21 miles of local roads. Over the past two years, it has received over $276,000 in General Transportation Aid (GTA) from the state, and it has $11 million in bonding authority. Yet for the past two years, there has been no road work in Johnson Creek. The public works director simply says, “There’s no money.”
When local governments borrow money, they get to collect extra property taxes to pay it back. In Wisconsin, local governments can borrow up to 5 percent of their total value. They are then allowed to raise property taxes beyond their levy limit to make the payments. This is designed so local governments can fund capital projects, like road construction, without dipping into their general fund or worrying about levy limits.
Judging by school referendums, local taxpayers are more than willing to pay higher property taxes for capital projects so long as they consider it to be a priority for the community. Going back to Johnson Creek, voters there just approved an $18.9 million referendum in 2014 to build a new middle/high school.
There’s nothing stopping village officials in Johnson Creek from issuing some bonds to fix roads if the community feels that is a priority. The bottom line: there is money.
Unlike school districts, counties and municipalities don’t have to go to referendum in order to bond. There’s nothing stopping village officials in Johnson Creek from issuing some bonds to fix roads if the community feels that is a priority. They could then raise property taxes above the levy limit to make the debt service payments. The bottom line: there is money.
Also, it’s not like local governments are averse to borrowing money for big projects. Total local borrowing throughout the state is at $9.3 billion. Fortunately, they still have a combined $41.2 billion in borrowing authority available to them. That’s enough to resurface every single mile of local road in the state four times over.
In addition to bonding authority, every year the State of Wisconsin provides well over $400 million to local governments in General Transportation Aids to help “offset” local costs. This year GTA funding totaled almost $460 million. Interestingly, the state is not responsible for local roads. The state does not authorize, plan, construct, or maintain local roads. Those decisions are made locally. In other words, local roads are a local responsibility, yet the state is willing to help.The state does not authorize, plan, construct, or maintain local roads. Those decisions are made locally. In other words, local roads are a local responsibility, yet the state is willing to help - to the tune of $460 million. Click To Tweet
GTA payments are calculated based on either mileage or cost-sharing, whichever results in a larger amount of aid. Obviously, municipalities that spend very little on transportation, yet have a lot of road miles receive aid based on the mileage calculation. That’s how 1,294 local governments in Wisconsin, mostly towns, receive their payments. Only 631 municipalities receive aid based on the cost sharing formula.
While GTA is awarded based on transportation-related criteria, there are no requirements for how it is actually spent. The transportation aid goes directly into local governments’ general fund and is spent on general government operations. It can still help support actual road projects, but only if general funds are used for capital projects. Road work is considered a capital project.
And so, in Edgerton, the city is spending $176,000 on road repairs this year, and all of it is being funded by bonding. That means none of the $216,000 Edgerton received in GTA this year helped to resurface or reconstruct the city’s streets.
In Edgerton, the city is spending $176,000 on road repairs this year, and all of it is being funded by bonding. That means none of the $216,000 Edgerton received in GTA this year helped to resurface or reconstruct the city’s streets.
Because road construction is part of the capital budget, it’s also easy to see what other priorities rank other than fixing roads. In Evansville, for example, the city is spending $469,039 on road construction, yet $3 million on renovating the library. We can see Two Rivers is spending $1.07 million on road construction, yet $700,000 on a bike trail and $490,000 on park improvements.
Of course, the debate over road funding often comes down to messaging and rhetoric, conveniently brushing aside facts, studies, and history.
Town of Farmington chair Mike Hesse recently told the La Crosse tribune his town doesn’t have any funding to maintain its 40 miles of road. “The roads haven’t been touched for 30 years. Some of them are beyond patching up,” he said.
Interestingly, ten years ago the town conducted a resident survey as part of its comprehensive planning. Residents reported they were happy with the quality of local roads and recommended maintaining the current level of funding.
However, instead, the town cut road construction spending down to $7,100 in 2011 and eliminated it completely for 2012, 2013, and 2014. In each of those years, the state provided $84,000 to Farmington in GTAs. Also, from 2009 to 2018, state transportation aid to Farmington increased by 22 percent.
The town finally started taking roads seriously in 2016 when it spent over a million on road construction. Today, the town chair claims they need more funding, and that their roads are falling apart from decades of neglect.
This disjointed narrative has been typical throughout Wisconsin’s road funding debate, and demonstrates that local officials are working an angle they believe will lead to more state funding – whether they actually need it or not.