MacIver News Service | June, 12 2019

By M.D. Kittle

MADISON, Wis. — After the Republican-controlled Joint Finance Committee passed a transportation budget heavy on spending and light on agency accountability, some fiscal hawks felt a lot like Clara Peller. 

At 81, Peller played the little old lady in the iconic Wendy’s “Where’s the beef?!” commercials. 

When the JFC last week approved a $484 million spending plan (not including $326 million in bonding) for a troubled Department of Transportation, some conservatives were asking, “Where’s the reforms?!” 

The freshly built budget document includes but one DOT reform measure, and even that’s a pilot program. 

That’s a far cry from the “Road to Sustainability Package” of 15 transportation reform bills authored by several Republicans and led by Rep. Joe Sanfelippo (R-New Berlin) and Sens. Tom Tiffany (R-Minoqua), Dave Craig (R-Big Bend), Chris Kapenga (R-Delafield), and Steve Nass (R-Whitewater). 

Left out of the budget, a stripped-down, stand-alone package of reform legislation that appears to be on a fast-track in the Legislature. Just six bills remain from the original suite of proposals announced just last week. 

“We’re looking at six bills today, and we have 15 or 17 bills out there in total. Quite frankly we could have just as easily made that 20 or 25,” Sanfelippo told the Assembly Transportation Committee during a hearing on the whittled down reform package. Sanfelippo is a member of the committee. 

There could have been more reforms, because there is much left to fix at the DOT more than two years after an audit found the department significantly underestimated the price tag for 16 ongoing major highway projects. Taxpayers were stuck with the tab, to the tune of $3.1 billion on those 16 projects alone. And 19 completed projects came in at $772 million over estimate, the audit found. 

The review found waste, incompetence and an inability to adapt at an agency with a nearly $7 billion biennial budget.  

Among the reforms that have thus far made the cut is legislation targeting a practice that has cost taxpayers a lot of money — single-bid contracts. The bill would require the DOT to rebid projects that receive but one bid, if that bid exceeds the department’s estimated cost of work by 10 percent or more. A fallback provision would allow the DOT to avoid the requirement in cases of a threat to public safety, if the Finance Committee approves. 

As MacIver News Service recently reported, the state has awarded 58 single-bid contracts worth $309 million since January. DOT Secretary-Designee Craig Thompson, who spent years working on behalf of road builders and other transportation interests, now heads a state agency that refuses to release the original cost estimates, even after the contracts are awarded.

The state highway program audit in 2017 found that one-bid contracts cost the state an average of $4.5 million a year from 2006 to 2015. 

Undoubtedly, the most controversial reform bill would require local governments considering implementing vehicle registration fees — or wheel taxes — to first get approval from voters through referendum. More controversially, the measure demands communities with existing wheel taxes to take the question to voters within 18 months of proposing a fee increase.  

Officials from Milwaukee, Janesville and the League of Wisconsin Municipalities declared the bill (AB 283) patently unfair. 

“We urge the committee to reject this unnecessary interference into policy decisions made by local elected officials,” Curt Witynski, the League’s deputy director, said in testimony Tuesday. He said referenda weren’t required for the state to enact vehicle registration fees or for counties to establish a local sales tax. 

Supporters of the bill say school districts that want to exceed their spending limits have to sell the increases to voters. A Milwaukee city official testifying against the measure perhaps made the strongest case for it when he acknowledged it would take Milwaukee wheel tax advocates more time than they had to explain the benefits of the fee to residents. In essence, it’s a lot easier to mandate the fee and not have to answer or explain.  

Another reform measure before the Transportation committee would create a Subgrade Efficiency Provision in state law, allowing contractors to use DOT-approved alternative, lower-cost materials for the under layer of road projects. The change could be a big cost savings for the contractor and, ultimately, the taxpayer. 

“If you have five different grades of material that DOT has certified, why only limit it to one that can be used when maybe three others would be suitable?” Sanfelippo said. 

A related reform would require the DOT to use project materials for sources on the DOT right-of-way, rather than paying higher costs to source and transport materials from more distant locations. 

“These three bills, along with other reform initiatives, will encourage competition and result in lower costs for taxpayers,” James Hoffman, of Black River Falls-based Hoffman Construction.  

There’s still much more the Legislature can and should do to bring accountability to the DOT, as the MacIver Institute noted in a recent list of nine transportation reform recommendations. 

The Joint Finance Committee seems to have heeded one bit of advice from MacIver: It has moved a lot more money over to the Local Road Improvement Program (LRIP). The fund is more defined than the catch-all General Transportation Aids (GTA) program. The Finance Committee’s budget plan includes $90 million in one-time funding for LRIP. 

GTA generally does not go toward road work. Local governments use that money to fund recurring operating costs like salaries and benefits in their public works departments. Many local governments will only conduct major road work when they receive Local Road Improvement Program funds from the state, which can only be used for actual road work. The general pot is funded at much higher levels than the dedicated local road program. 

The Assembly Transportation Committee is scheduled to vote on the six reform bills Thursday at its next meeting.

MacIver Institute photo

M.D. Kittle is an Investigative Reporter with the MacIver Institute. Reposted with permission.