Berry Explains His Take On State Transportation Funding

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Premiere Date: 
December 9, 2016

Berry Explains His Take On State Transportation Funding

Todd Berry is the president of the Wisconsin Taxpayer's Alliance. He says Wisconsin needs to stop borrowing for transportation, but the proposed budget calls for $500 million of borrowing for state transportation infrastructure.

Episode Transcript

Frederica Freyberg:

Our next guest says borrowing is no longer an option for transportation funding in Wisconsin. Well, the proposed budget calls for half a billion dollars of it. President of the Wisconsin Taxpayers Alliance, Todd Berry is here with his take and thanks for being here.

Todd Berry:

Good to be back.

Frederica Freyberg:

Why isn't borrowing an option?

Todd Berry:

Well, you know, transportation is one of those things that it might be logical to borrow for it. It's a long-term capital expenditure. The problem is we had Governor Doyle do a lot of borrowing. Then we had Governor Walker do a lot of borrowing. And as a result, the amount of debt service that we're paying per year is pushing a half billion dollars. Not a cent of that is going to roads or transit. It's going to pay off debt service. And just to give people some sense of the magnitude of this, in terms of debt service relative to budgets, we are already where the federal government is going to be in 2040. And everybody is saying, oh, there's a federal debt crisis. Well, Wisconsin’s transportation system is in worse shape financially.

Frederica Freyberg:

But if not borrowing, then taxing?

Todd Berry:

Well, you have two choices then. You either decide that you're going to have a source of revenue to pay for it and it's better to pay for it that way than pay for it indirectly through layoffs from employers that can't get goods to market or back, or better than paying $500, $600, $700 a year to repair your tires, replace them, shock absorbers. I means it's just a question of how you want to pay. Never mind that the gas tax and vehicle registration fee have actually been heading down.

Frederica Freyberg:

Well, so how long have people been sounding the alarm on this? And why no answers?

Todd Berry:

We're about to celebrate at least the 20th anniversary. We've had so many task forces and legislative study commissions and the governor asked his new transportation secretary to study the matter. We have had -- everybody says there's a problem. There should be. People are driving less and they're driving more efficient vehicles. The gas tax doesn't do the job anymore. But this isn't about reality. This is about, you know, symbolism.

Frederica Freyberg:

Well, other states obviously have these same kinds of problems. Do other states do it better than we do?

Todd Berry:

Other states have broader means of financing. It could be tolls. Some of them have general fund monies, their sales taxes or their sales tax goes on the gas tax. We don't have that. We have a very narrow funding system. It doesn't rise with inflation. The thing that I find is so interesting is the same people that don't want the gas tax and the vehicle registration fees to grow as the economy grows are the same ones that are more than happy to see the income tax go up 4%, 5%, 6% a year just because the economy is growing and happy to spend the money.

Frederica Freyberg:

Well, what about that? I think this fits. What about the governor saying about, well, if we raise the gas tax and the reg fees, then we got to cut income taxes or property taxes?

Todd Berry:

Well, we have been cutting gas taxes and registration fees first of all. Not only in nominal terms but in real terms we definitely have. They're losing revenue. They're losing value. But, you know, if you want to balance tax increases and tax cuts, in the -- in 2014 we spent $400 million to cut technical college property taxes. In '13-'15 budget we spent $600 million to cut income taxes. The governor, to his credit, has had some significant tax cuts. We're still in the throes of phasing in a $300 plus million dollar corporate income tax cut. We've had over a billion dollars of tax cuts. I think you could change the way the tax gas and registration fees were designed and not necessarily have a tax increase at all. It's just we need a system that works.

Frederica Freyberg:

We need to leave it there. Obviously, we'll be covering this for months to come, years to come. Todd Berry, thanks very much.

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