State Transportation Secretary Mark Gottlieb defended Gov. Scott Walker’s budget plan to borrow $1.3 billion for road construction at a budget hearing on Wednesday.
Gottlieb, a Walker appointee, had wanted to raise a variety of taxes and fees to pay for roads in this budget. Walker rejected those ideas and called for borrowing funds instead. But even though Gottlieb has long warned against the dangers of too much borrowing, he defended Walker’s plan during the budget briefing before the Legislature’s Joint Finance Committee.
Walker’s fellow Republicans have bristled at the borrowing. Gottlieb, however, told the committee that interest rates are favorable and if bonding is reduced without raising gas taxes or vehicle registration fees, current and future projects will be delayed.
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“As distasteful as you may think the bonding is, it would be a worse outcome in the long term to cut the highway program and not do the bonding than it is to do the bonding,” he said.
He warned that the state’s highway system will still deteriorate even with the borrowing.
The committee’s co-chairman, Rep. John Nygren, asked Gottlieb what road building would look like if legislators chopped the borrowing by $500 million. Gottlieb said major projects around the state not completed by 2017 would be substantially delayed.
Rep. Dean Knudson, R-Hudson, asked Gottlieb what Walker would do if the Legislature increased the gas tax. Gottlieb said the entire budget had to be “tax and fee neutral.”
Knudson responded: “So is your understanding then if we raised the gas tax and got more revenue for you, that he would then wish to see us lower taxes a comparable amount somewhere else in the budget?”
Gottlieb replied: “That is my understanding.”
Sen. Luther Olsen, R-Ripon, was more explicit, saying the state needed to raise revenues somehow.
“I think we have to man up and woman up and say ‘We’ve got to deal with this,’” said Olsen.
Without changes to Walker’s budget, roughly 20 cents of every dollar of transportation revenue would go toward paying off debt by next year — almost double the amount of transportation debt service the state faced the year before Walker took office.
Update: This story has been updated with more details on Gottlieb’s testimony.
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