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    11/8/2007
    Guest Blog from Sen.'s Ellis, Cowles: Watch for highway robbery

    With the ink barely dry on the newly signed 2007-09 state budget, many Wisconsin taxpayers – and, unfortunately, too many legislators – are just now getting their first look at little known provisions in state government’s spending plan for the next two years.

    For example, transportation fees for drivers’ licenses, titling a vehicle, license plates and heavy truck registration fees will be increased $274 million over the next two years.

    While that is a significant increase as it is, it is even more troubling given the recent history of raids and misuse of the transportation fund. The transportation fund is a segregated fund. Unlike the state’s general fund, which is funded by general taxes like income, sales and corporate taxes, the transportation fund is derived from transportation-specific revenues like the gas tax, vehicle registration fees and drivers’ license fees. Those taxes and fees are like user fees in which motorists who pay the fees receive the benefit of spending those funds on highway construction and maintenance, traffic safety and other transportation-related programs.

    Unfortunately, that segregation, that dedication of transportation-related fees for transportation-related spending has been almost completely eroded since Governor Doyle’s first budget. Since 2001, with the Legislature’s complicity and through partial vetoes, $1.1 billion has been diverted from the transportation fund to finance general-fund spending. That’s one reason why the governor could claim to have “balanced” the budget without raising taxes, an exaggerated claim that was exposed with the tax hikes in this budget.

    OK, you say, so transportation fees are going up in this budget, but at least that money is staying where it is supposed to. At least there are no transfers from the transportation fund to the general fund.

    Actually, tucked away in the 674-page budget is a provision to require a lapse of $200 million to the general fund. A lapse is an accounting mechanism by which an agency is provided an appropriation but then is required to “lapse” a certain percentage of that appropriation back into the general fund. One reason for requiring lapses is to encourage savings in government spending but allowing the agency itself the flexibility to find those savings without micromanagement by the legislature.

    Under this provision, the Secretary of Administration is required to lapse $200 million in addition to the usual budget lapses back into the general fund. This “lapse – or transfer – can come from any agency in state government and can come from segregated funds. In other words, the $200 million can come completely from the transportation fund.

    That would be troubling enough given this governor’s penchant for using motorists’ user fees to pay for general government programs. A close look at a veto in this budget gives even further cause for concern.

    Last session the legislature eliminated gas-tax indexing, which allowed for automatic annual increases in the gas tax. As part of that legislation, in an apparent change-of-heart for its own complicity in previous transportation fund raids, there was a provision that prohibited transportation funds from being used for non-transportation purposes. In the 2007-09 budget bill, that provision was further strengthened by language that prohibited a governor from amending or repealing that law in a biennial budget bill. Governor Doyle vetoed that section of the bill, thereby not only eliminating the tougher new language but repealing that section of law altogether.

    Again, it’s perfectly reasonable to expect another raid on the transportation fund given this governor’s past practice.

    The previous raids on the transportation fund have already placed our transportation budget in jeopardy. In each case, the legislature and the governor have opted to fill the hole in the transportation fund by borrowing. In this budget we will borrow $383.9 million on top of the $274 million in higher fees to pay our transportation bills.

    We are literally paying for highway maintenance with a credit card and the interest payments are adding up. At the beginning of this biennium, 10.6 percent of our transportation budget was committed to paying our debt service. At the end of the first year of this biennium, that debt service commitment will increase to 11.6 percent. In the second year, that percentage will drop slightly to 11.3 percent, but that is only because the budget itself grows because it includes a full year of the new fee increases.

    If the transportation fund is again the target of a $200 million “lapse” to the general fund, our credit-card bill will grow even more. The sad fact is, every year more and more of motorists’ taxes and fees are not being used to pay for highway maintenance and transportation. Rather, they are being used to pay the bill for previous raids on the transportation fund.

    Talk about highway robbery.

    Mike Ellis and Rob Cowles are both Republicans and represent folks in, respectively, the 19th and 2nd senate districts.


    COMMENTS

    I understand the problem and thank you very much for the explanation. How do we stop this raid from happening? Is there a campaign going that is working on stopping this raid and getting it written back into law?
    fox cities news, appleton, wi
    Mike (Thu Nov 08 10:38:49 2007)

    Thanks to Michael Boerger, legislative aide to Senator Ellis, for the explanation below, in response to Mike's comment:

    Well, it's not quite as simple as that. First, there is not really a legislative fix to this potential raid in this biennium. The $200 million lapse -- including its potential to come partially or entirely from the transportation fund was in the bill and it is assumed it came from the legislature. By passage of the budget, the legislature -- those legislators who voted for it, that is -- approved the potentiality. Theoretically, the legislature could introduce a bill to prohibit using the transportation fund for this lapse -- but again, the legislature allowed it in the first place. Even if such legislation were passed, the governor could simply veto the bill.

    As to the language that allegedly protected the fund, in reality that was always more symbolic. In its simplest terms, today's legislature may not prohibit the (constitutional) actions of a future legislature -- they simply change the law. The original prohibition -- inserted into the gas-tax indexing repeal by Dean Kaufert last session -- said that the transportation fund could not be used for nontransportation purposes. But all it would take to remove that is an act of the legislature, or the governor in his budget bill. The budget language attempted to further restrict that by saying the governor could not repeal, amend or "notwithstanding" (i.e., the governor can't say "notwithstanding this section.") that section when introducing a budget bill. But again, it had more symbolic weight than actual legal teeth.

    The point senators Ellis and Cowles were making by pointing out this veto was to provide further evidence that Doyle is likely to look to the transportation fund to make this lapse.

    Although it's disheartening I'm sure, I hope this helps explain.


    fox cities news, appleton, wi
    JE (Thu Nov 08 13:01:52 2007)

    So Mike & Rob, what's the fix? We know the fix is in, but these budgetary maneuverings are endemic to our systems. Look at the Frankenstein Veto, "well, he did it so I can do it." The Legislation required is some form of "truth-in-spending" with the requisite APR attached. Now that might get somewhere. It's the same with all the earmarks in the Budget, often we can only guess at their author. In both cases the identification of money where it comes from and where it is ending up is somehow lost in the process. Well gosh almighty!
    fox cities news, appleton, wi
    Richard (Thu Nov 08 13:13:35 2007)




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