January Newsletter
Not Playing the Zero-Sum Game
My Perspective
by TDA Executive Director Debby Jackson

We all know that Wisconsin's transportation funding challenges are long in the making and not solved by the recently enacted federal infrastructure law. The much-needed additional federal money will allow Wisconsin to make progress on some key objectives. Nonetheless, it alone will not address all our transportation network's pressing needs.

But let's not kid ourselves. There are people who think that with the "windfall" of federal funds, the problem of our underfunded system is in our past or at least paused.

Just look at Ohio as an example. In 2019, the Republican governor and a legislature controlled by the same party passed a package that increased the state gas tax by 10.5 cents per gallon and the diesel tax by 19 cents and implemented annual registration fees for electric and plug-in hybrid vehicles. This was the compromise. The governor originally requested an 18-cent gas tax increase.

Now, an Ohio state senator (R) wants to roll back the state's gasoline tax and other user fees to pre-2019 levels for the next five years. And he has 15 co-sponsors at this time, seven less than the 22 senators that approved the 2019 user fee increases.

"The federal government is giving us ten times more money than what we thought we would need for our infrastructure costs. Why don't we give it back to Ohioans to spend themselves to generate more money in our economy?" the senator said. "The gas tax is really a tax on the poor because they can least afford another $5 or $10 a month more in gas."

Now, I don't know how the senator is making his calculations. According to news reports, the senator says the increased state user fees are expected to generate around $1.5 billion annually, which is questionable as that is more than the roughly $900 million estimated at the time of the package's enactment. He compares this to the $2.3 billion a year he says the state will receive from the federal infrastructure law. However, he is obviously not taking Ohio's base federal funding into account. Back that out, and the increase in federal formula transportation dollars is about $550 million yearly.

Walking away from the 2019 user fee increases necessary to maintain the Ohio's transportation system seems like a move in the wrong direction to me. And it appears the governor agrees as he has asked legislators to put the brakes on this proposal.

In addition, the great majority of a panel of 32 Ohio economists said in a survey that the proposal to cut the state's gas tax is a bad idea. As one economist wrote, "This proposal simply shifts burdens; while motorists save pennies at the pump, dollars will be spent on expedited vehicle depreciation and in repair shops over the five years plus of highway maintenance neglect."

Ohio is not alone. I am currently tracking seven other states considering undoing recent increases to the gas tax, pausing inflationary increases, or floating gas tax holidays. I am not saying anything like this will pop up in Wisconsin. Still, we should proceed as if it could. To that end, TDA's January blog (below) tackles the boost in federal funding and how it plays only a part in Wisconsin possibly moving beyond slowing the decline of transportation conditions to actually improving the system. This column is the first of many planned communications to set the narrative.

In 2022, we need to:
  • Get ready to move projects and programs forward;
  • Explain what the federal money will do and what it won't do;
  • Show how increased investment will benefit the public and our economy; and
  • Highlight new and growing hurdles to sustainable transportation funding, including increased fuel economy, the transition to electric vehicles, and inflation.

We have a lot of work to do. Traditionally in the spring, TDA heads to DC for the Fly-in. All the same, the timing is not right for an event this spring. This decision, reached with member input, is as much about the amount of work many members must do early this year to ensure Wisconsin can obligate all its fiscal year 2022 funds as it is about COVID and the DC mandates and restrictions. We continue to look for possible options later this year.

We must seize the moment and ensure this infusion of federal funds is the next step toward ongoing and adequate funding for a transportation system that supports Wisconsin's vibrant communities and growing economy. Otherwise, we will be playing a zero-sum game.
BIL & Other Federal News
Coalition Urges Congress to Wrap FY 2022 Appropriations
A coalition of almost 70 public and private transportation stakeholders delivered a message to congressional leaders last week. And the message was simple — without the availability of full-year fiscal year 2022 appropriations, the promise of the Infrastructure Investment and Jobs Act (IIJA), also know as the Bipartisan Infrastructure Law (BIL), cannot be fulfilled as the public expects.

In a letter dated January 24, the groups put a spotlight on the hardship of not only partial year obligation authority but also the inability of states, local governments, and public transit agencies to access the funding increases and new programs provided for in the measure.

The coalition continues to advocate for a full-year appropriations bill. However, if Congress is unable to finish work on the Transportation, and Housing and Urban Development appropriations bill by February 18 —when the current continuing resolution (CR) expires — the group asks that Congress “includes an anomaly to provide full obligation limitation levels in any future CR in order to fully honor the IIJA’s funding levels for all transportation related programs.”
Treasury Broadens COVID Relief Uses
Earlier this month, the U.S. Treasury Department issued the Final Rule for the use of Coronavirus State and Local Fiscal Recovery Funds (SLFRF). The SLFRF program, a part of the American Rescue Plan, provides $350 billion to state, local, and tribal governments to respond to the COVID-19 emergency and support economic recovery.

Local officials and transportation stakeholders were concerned the Treasury’s initial guidelines, issued last May, were unclear in some areas and didn’t provide local governments needed flexibility. Unless a recipient could document lost revenue, it was limited to using the funds to:
  • Support public health expenditures;
  • Address negative economic impacts caused by the public health emergency;
  • Provide premium pay for essential workers; and
  • Invest in water, sewer, and broadband infrastructure.

TDA members, most notably our local government partners and their national counterparts, pushed the Treasury for changes and lobbied Congress to step in if the criteria were not relaxed.

One of the most significant changes in the final rule will allow state and local governments to claim up to $10 million of pandemic revenue losses without documentation. The federal money replacing lost revenue can be used to support traditional government services, including road building and maintenance, and other infrastructure.

In Wisconsin, this $10 million standard allowance covers the entire allotment for small municipalities and towns (under 50,000 population) and almost two-thirds of counties. Recipients may also calculate their revenue losses using the formula set forth in the final rule.

The final rule takes effect on April 1, 2022. However, according to the Treasury's overview of the final rule, "recipients can choose to take advantage of the final rule’s flexibilities and simplifications now, even ahead of the effective date."
Port and Waterway Projects Receive Boost from Infrastructure Law
The Biden Administration recently announced $14 billion for fiscal year 2022 port and waterway infrastructure projects. The funds come from the Bipartisan Infrastructure Law (BIL), also known as the Infrastructure Investment and Jobs Act (IIJA), and other sources, with more than $1 billion designated for projects that benefit Wisconsin.

The U.S. Army Corps of Engineers (USACE) includes the following projects in its 2022 work plans:

North/Northwest Wisconsin
  • $350,000 for River Falls’ Kinnickinnic River Restoration to complete feasibility study (Pierce County)
  • $5.31 million for Arcadia to initiate construction (Trempealeau County)
  • $625,000 for the City of Bayfield’s Apostle Islands Marina Breakwall Restoration Project (Bayfield County)
  • $1.935 million for the Red Cliff Band wastewater treatment (Bayfield County)
  • $1.3 million for the Red Cliff Band water supply system (Bayfield County)
  • $450,000 for the City of Superior’s Hill Avenue Interceptor Rehabilitation Project (Douglas County)

Northeast Wisconsin
  • $500,000 for dredging on the Big Suamico River (Brown County)
  • $50,000 for Central Brown County Water Authority to complete feasibility study (Brown County)
  • $19.166 million for Algoma Harbor to repair south breakwater (Kewaunee County)
  • $1.5 million for Menasha Dam repairs on the Fox River (Winnebago County)

Southeast Wisconsin
  • $75,000 for Kenosha to complete feasibility studies on the South Branch Pike River (Kenosha County)

  • $830 million for the Navigation and Ecosystem Sustainability Program to modernize lock and dams on the Upper Mississippi River
  • $225.8 million for the Brandon Road Project in Illinois to prevent Asian Carp from reaching the Great Lakes

USACE work plans for the IIJA are available here.
TDA Outreach
TDA Blog on Making the Most of Federal Money
In her first blog of the year, TDA Executive Director Debby Jackson urges Wisconsin leaders to seize the opportunity provided by the Bipartisan Infrastructure Law.

An essential part of making the most of the measure's increased federal funding is understanding it alone will not address all of our transportation network’s pressing needs. Read the blog.
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