The Legislative Audit Bureau kicked the tires on Wisconsin’s transportation budgeting last week and its audit was enough to give state residents sticker shock.
The audit concluded the cost of major road projects in the state from 2006 to 2015 was double the costs that were originally estimated — costing $1.5 billion to build 19 major projects which was $772.5 million higher than the estimates.
The bureau report said the Wisconsin Department of Transportation did not take into account the considerable effects that inflation and changes to project design would have on those costs over time.
Worse, the situation is continuing today. The audit said 16 projects that were ongoing as of last August face similar cost jumps and instead of costing an estimated $2.7 billion, the final bills will come in at $5.8 billion.
Government cost overruns are almost an oxymoron. But usually we think — and get upset — over numbers like five percent or 10 percent. The notion that such bad accounting would reach 100 percent is almost unfathomable.
It raises the specter that, for years, highway construction projects were using low-ball estimates in order to get approval from the state Legislature.
The audit is sure to dump a can of gas on this year’s budget debate over long-term funding for Wisconsin’s highway construction budget and its projected $1 billion gap.
Even in the face of the DOT audit, Gov. Scott Walker was hewing to his stance of no increases in the state gas tax or vehicle registration fees. Walker has preferred to borrow money to finance major highway construction and to delay projects — including the reconstruction work on Interstate 94 between Milwaukee and the Illinois state line which got a two-year delay in the proposed budget.
Delay is also part of the equation that ultimately drives up final road construction costs as State Assembly Speaker Robin Vos pointed out in the wake of the audit’s release. Vos said ‘construction delays are driving up costs unnecessarily, our road conditions are only getting worse and a long-term solution is needed. It’s clear Wisconsin is trying to do too much with too little, and taxpayers are not getting their money’s worth.”
We agree. And piling on more highway debt is not the answer. Ten years ago about one in every 10 dollars in the state transportation fund went toward debt service. By the end of the next budget cycle, that is projected to be one in every four dollars. That’s a collision course.
Gov. Walker should abandon the political comfort of his “no tax increase” mantra and take the lead in finding a long-term solution to get Wisconsin back on the road to better highway conditions that are fiscally sustainable.
Yes, that probably starts with better practices at the Department of Transportation and that includes meeting its performance goals for bid solicitations and controlling construction costs.
For Walker and the GOP-controlled Legislature, it means coming to grips with the funding mechanisms and putting together a package that works — whether it is a gas tax increase, toll roads (which we have opposed in the past because of their high administration costs), adjustments in vehicle registration fees and a method to have hybrids and more fuel efficient vehicles pay their fair share of road construction costs.
Gov. Walker and the Legislature need to get the state’s road house in order.