Reform Could Solve Local Road Funding Challenges

A new study by the Wisconsin Taxpayers Alliance (WisTax) takes a look at municipal spending across the state and finds that when it comes to roads, Wisconsin’s local governments are doing a generally good job maintaining local roads, but funding remains a challenge for some. Overall, the study found that in 2014 municipalities spent 13.8% of their total revenue on roads, a slight uptick from 12.9% in 2011. But the number of municipal roads rated as “good” or better by the Wisconsin Department of Transportation dropped slightly from 72% in 2011 to 68% in 2015.

Last legislative session, 40 Republican lawmakers supported SB 411, a measure that would have shifted state transportation dollars away from federal projects and towards local – including municipal – road projects. State and federal road dollars come with different strings attached, a federal road dollars have enough extra stipulations attached to them that the cost of a project rises significantly whenever federal dollars are used to foot even a portion of the final cost.

The disparity between using state dollars versus federal dollars on road repairs or construction was highlighted by a project in Waukesha County. A 2.4 mile long project to rebuild part of County Highway L (also known as Janesville Road) resulted in massive cost differences when entirely local funds were used to fund half the project, and federal funds made up 80% of the money funding the second half of the repair.

According to a letter sent by Waukesha County to lawmakers during the initial debate over SB 411, 1.2 miles of the county highway was rebuilt at a cost of $5.9 million. An identical segment of the road, rebuilt with federal money – which included federal restrictions – cost $7.2 million, a cost increase of 22%.

The WisTax study found that it was Wisconsin’s largest municipalities – those with a population of over 50,000 – that were responsible for the greatest decline in road conditions rated “good” or better, and also saw the greatest increase in roads rated “poor” or worse.

In an April article, the National Association of Counties (NACo) endorsed the idea of swapping federal transportation dollars for state dollars. “Trading 90 cents for a dollar may seem like a bad deal, but for county governments in a growing number of states, it’s a shrewd way to fund road improvements,” organization’s trade publication noted. The state of Kansas saw substantial savings when it implemented a so-called swap plan, NACo reported:

“A sample cost comparison by the Kansas Department of Transportation showed a 20 percent savings if a $423,000 project was otherwise completed under federal guidelines.”

In Nebraska, a state program gives municipalities the chance to trade $1 in federal road funding for $0.80 in state funding. According to the Nebraska DOT, the trade, “will allow local agencies to tailor projects to better meet their local needs.”

In 2013, the state of Indiana started a program that gives Hoosier cities and towns a chance to get $0.75 in state funds for every $1 in federal funds that they turn over to the state DOT.

Minnesota also runs a 1-for-1 exchange program that allows local road projects to give their federal dollars up in exchange for state dollars, although the state DOT does not mention cost savings in its promotion of the program. Instead, the MN DOT says that the benefit comes from streamlined timelines for project completion.

The Wisconsin proposal, which failed this year but may well be resurrected next year, shifts the federal and state money around at the DOT level, so local municipalities don’t have to request the swap for each and every project.

Waukesha Letter:

Waukesha County Letter to Legislature re Federal Transportation Money Swap