Wisconsin Gov. Scott Walker Drops Gas Tax Hike in Favor of Bond Financing

Gov. Scott Walker's new transportation funding plan calls for increasing debt service while forsaking a pay-as-you go approach based on raising user taxes and fees, an abrupt change from what his transportation secretary had proposed in November. The governor "leads a big, tightly packed field of potential contenders in a new Des Moines Register/Bloomberg Politics Iowa Poll of likely Republican caucusgoers," according to The Des Moines Register.

"The [governor's transportation] plan, released (Jan. 30) to the Milwaukee Journal Sentinel, comes after Walker has spent more than a year calling for finding new long-term solutions for funding transportation," writes Patrick Marley of the Journal Sentinel. Relying on transportation bonds is not viewed as a long-term solution.

The plan will allow Walker to tout his opposition to raising taxes as he considers a possible run for president. But the increased reliance on borrowing to fund highways may not go over well with his fellow Republicans who control the Legislature.

Last November, his transportation secretary had proposed increasing the gas tax, largely by restructuring it to a wholesale sales tax, and increasing registration fees, i.e., creating a long-term financing plan based on increased user fees.

Roads are funded largely with gas taxes and vehicle registration fees. Paying past debt takes up about 19% of the state money that flows into the transportation fund each year. That percentage would rise under Walker's plan, though [Walker's] office did not provide specifics.

The new plan ignores the recommendation of his own transportation commission, which "recommended raising the state's gas tax by five cents and creating a mileage-based registration fee for drivers," wrote Kris Maher of The Wall Street Journal in February 2013. "Drivers would report their odometer readings when renewing their registration each year and pay a fee based on how many miles they drove."

Hat tip to AASHTO Daily Transportation Update.