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GOP budget deal would delay major Milwaukee-area freeway work

September 5, 2017

Milwaukee Journal Sentinel – A Republican budget deal on transportation would delay two massive construction projects in Milwaukee, impose a $75 surcharge on hybrid vehicles and for the first time apply to the federal government to establish tolling in Wisconsin.

Among the projects that would be delayed are the north leg of the Zoo Interchange the section of I-94 between between the Zoo and Marquette interchanges. Other projects around the state likely would be pushed back as well, but details were not immediately made available.

Details of the plan were disclosed Tuesday afternoon ahead of what is expected to be a marathon session by the Legislature’s budget committee to complete a two-year state spending plan and approve an incentive package for a Taiwanese technology firm.

The transportation package would include up to $410 million in borrowing for road building

Sen. Alberta Darling (R-River Hills), one of the key negotiators on the deal, said it was “short-sighted” not to move forward with the major Milwaukee projects, calling them essential to the state’s economy.

“I am disappointed about the I-94 East-West,” said Darling, a co-chairwoman of the Legislature’s Joint Finance Committee. “It’s so critical to our economic development.”

The budget compromises among Republicans will include a cut to the personal property tax paid by certain businesses, according to Darling and Rep. John Nygren (R-Marinette), the other co-chairman of the budget panel. But Republicans are still deciding whether to drop Gov. Scott Walker’s proposed sales tax holiday for back to school purchases and whether to loosen regulations on rent to own stores.

The Joint Finance Committee is expected to take up both the budget and the legislation for Foxconn Technology Group of Taiwan, but its work easily could spill into Wednesday or beyond.

Republicans control all of state government but lawmakers were unable to approve a budget by the July 1 start of the fiscal year because of differences over transportation and tax cuts. State funding has been continuing at levels set in the last budget.

They hope to pass on Tuesday and set up floor votes on the budget and Foxconn bills over the next two weeks.

At a visit to a Milwaukee school Tuesday, Gov. Scott Walker said he was optimistic the budget and the deal to bring a Foxconn flat screen plant to Wisconsin would pass the Joint Finance Committee this week.

Walker has proposed a modest cut to income taxes, but legislators have said they may instead reduce the personal property tax that is charged to businesses for their equipment and furnishings. They had hoped to get rid of the personal property tax but now say they are more likely to scale it back than eliminate it.

Their biggest difference has been over transportation funding. Senate Republicans want to borrow more than $700 million for roads over the next two years, but Assembly Republicans have said they want to eliminate or sharply limit borrowing for roads unless it comes with new sources of money to pay off the loans.

In recent days, Republicans have shown increasing support for raising fees for electric and hybrid vehicles. A $100 fee would raise about $8 million a year and supporters say that could be used to support $100 million or more in borrowing.

The state transportation fund is also benefiting from improved projections for gas tax revenue, vehicle registration and debt payments and will have $93 million more than previously expected. The state also recently received about $30 million more than average in federal highway aid.

But even with all that, there’s still a large gap between how much the Assembly and Senate are willing to borrow and it remains unclear what kind of compromise they could reach on the issue. Whatever they decide, it appears likely some projects will be delayed because of a lack of funding.

Criticizing one of those delayed projects, Verona area business owners spoke to reporters at the Capitol Tuesday and called on state officials to finish work on Highways 18 and 151 on Madison’s southwest side. That project began in 2013 and has years to go before it’s completed.

Michael Minkoff, whose family owns wholesale liquor distributor General Beverage, said that the uncertainty over the highway construction had led his business to delay expansions that could have led the company to expand its 300 person work force.

“It’s really been a huge cost operationally and a nightmare logistically,” Minkoff said.

The final stages of budget deliberations are also a time when a grab-bag of policy proposals surface. Groups are lobbying to insert an array of provisions in the budget, including one that would allow rent-to-own stores to operate in Wisconsin without disclosing the interest rates they charge.

Separately, the committee plans to take up a multi-billion dollar package to bring Foxconn to southeastern Wisconsin. That legislation has already passed the Assembly, but the budget committee may make changes to it.

The package includes up to $2.85 billion in cash payments to Foxconn and a $150 million break on sales taxes for construction material. It also includes exemptions to environmental rules that would allow Foxconn to build in wetlands and waterways without getting state permits.

With such a jam-packed agenda, the committee’s Tuesday meeting could stretch into the early morning hours of Wednesday. It’s also possible legislators will break up the meetings so they do some of their work during the day Wednesday or later in the week.

“It’s being worked on… stay tuned,” Kit Beyer, an aide to Assembly Speaker Robin Vos (R-Rochester), said by email.

Leaders hope to have the Senate and Assembly take up the budget and Foxconn legislation next week. But that will hinge on the committee finishing its work this week.