Highway Funding Impasse Hits Home in Milwaukee

A major highway expansion is now on hold because Wisconsin Republicans couldn’t agree on how to pay for it.
by | October 11, 2017
A $1.1 billion project to expand Interstate 94 near downtown Milwaukee is likely frozen. (AP/Carrie Antlfinger)

For years, the Republicans who control Wisconsin’s state government have been hopelessly split on how to pay for road improvements. Things got so bad earlier this year that the whole state budget was held up for three months over the dispute.

But last week, Wisconsin residents got their clearest signal yet about how the impasse will affect them when the state transportation department effectively backed out of a major highway expansion planned for the heart of Milwaukee.

The move likely freezes action on a $1.1 billion project to expand Interstate 94 from six lanes to eight for a three-mile stretch west of downtown. Highway planners had hoped that the expansion would have eliminated a bottleneck between interchanges with two north-south interstates, but local chapters of the NAACP and the Sierra Club sued to block the project on the grounds that it did not include transit and that it would further pollute the predominantly black neighborhoods alongside the freeway.

The lack of money, combined with the lawsuit, forced the state to back off the project, Transportation Secretary Dave Ross wrote in a letter to federal officials.

“Without statutory authorization to advance this project, pursuing this litigation presents an unnecessary expense for all parties involved,” he wrote.

Ross asked the Federal Highway Administration to withdraw the project’s record of decision, a stamp of approval at the end of the environmental review process that allows the project to go ahead.

“This is probably the first of many more to come. We are just woefully lacking in funds to meet the needs that we have,” says Craig Thompson, the executive director of the Transportation Development Association of Wisconsin.

That’s because state lawmakers decided in 2005 to repeal a law that helped gas tax rates keep up with inflation, he says. If legislators had left the gas tax indexing in place, Wisconsin would have collected $1.4 billion more for road projects over the last 11 years, according to the state’s Legislative Fiscal Bureau.

Former Gov. Jim Doyle, a Democrat who signed the repeal, later said that the indexing should be reinstated. But his Republican successor, Gov. Scott Walker, has been reluctant to raise gas taxes. Walker’s administration, though, has increasingly turned to borrowing to pay for road work. The share of the state’s transportation budget spent on debt service rose from 11.5 percent to 18.2 percent under Walker, and that could rise to 23 percent in two years, Wisconsin Public Radio reported.

The search for new transportation money delayed the entire state’s budget for three months this summer, as lawmakers split over whether they should raise new revenue or authorize more bonding for projects. Assembly Republicans in May tried to pair an increase in road funding with a decrease in income taxes, but Walker dismissed the idea.

“If people are buying fuel for their vehicles, their cars and trucks, that is a net tax increase of $433 million, which obviously to me is problematic,” Walker told the Milwaukee Journal Sentinel.

It took until September to break the impasse. Lawmakers agreed to impose a new registration fee on hybrid and electric vehicles, but they also reduced the amount of bonding the state could use for transportation projects.

The deal left the I-94 project in jeopardy. Federal transportation officials had already wondered whether the project was viable because Wisconsin didn’t have a plan to pay for it. But Walker wrote a letter to the Federal Highway Administration that assured officials there the project would be paid for in the next budget.

After the new budget passed, the Walker administration asked to put the project on hold.

Karyn Rotker, an attorney for the ACLU of Wisconsin who worked on the lawsuit challenging the I-94 expansion, says the case is still pending until the federal government formally decides to withdraw its approval.

The challengers agree that the existing interstate should be repaved, but they object to widening the highway. Rotker says the Wisconsin DOT never proved it could achieve its goals of alleviating congestion just by adding more lanes; she says some form of public transit would be needed to offer relief.

Public transit would also serve people who live in the adjoining neighborhoods who don’t have cars, rather than just people traveling through the area in their own vehicles, Rotker adds.

“We hope this decision will give [the Wisconsin DOT] time to go back and do it right,” she says.

But Tracy Johnson, the president and CEO of the Commercial Association of Realtors Wisconsin, worries about the effect the postponement will have on the larger economy. The I-94 corridor is an important area for industrial, logistical and retail businesses, she says, and it’s an important link for the area’s manufacturing businesses to Chicago and other markets.

“It’s disappointing. The finality of the decision is hard to get our head around,” Johnson says, noting that much of Wisconsin’s business community supported the project and other big transportation projects in the state. “We don’t think this conversation is going to be done forever. We’re not going to give up.”

CORRECTION: This story previously stated, erroneously, that Gov. Jim Doyle lost to Gov. Scott Walker in a re-election bid. Doyle did not run for a third term in 2010.