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Wisconsin Spotlight | July 15, 2020

MADISON — Wisconsin diverts 11.5 percent of its state gas tax revenue to the state general fund and other non-highway uses, according to a new report by the Reason Foundation.

Half of the states engage in the practice, sending a combined billions of dollars to fund an array of projects and initiatives that have little or nothing to do with roads. 

Wisconsin’s gas tax — at 32.9 cents per gallon — generated $1.065 billion in revenue in 2017-18. More than $123 million of that went to transit aid ($60.15 million), aeronautics aid ($58 million), and harbor aid ($5.77 million). 

Gov. Tony Evers campaigned on a promise of fixing Wisconsin’s roads, but he has been one of the biggest offenders of diverting millions of dollars to non-highway projects, including pedestrian and bike trails across the state. 

The governor used his veto pen earlier this year to change a portion of the Legislature’s transportation funding package, setting up a $75 million “Multimodal Local Supplement” grant program. 

The non-road requests include a pedestrian underpass, bike paths, bus shelters, and equipment purchases. Requests for bike paths/pedestrian walkways alone hit $50 million, the MacIver Institute reported. 

“Many of those requests clearly have more to do with tourism than with transportation, such as West Bend’s $4.1 million downtown riverwalk and the Potawatomi Tribe’s $600,000 ATV trail. However, some requests seemingly have nothing to do with transportation at all. The City of Spooner wants $3.9 million to renovate an old railroad roundhouse into a tourist attraction (See picture above). The Village of Belleville wants $542,000 to restore their old train depot into business space. The Town of Solon Springs wants $347,500 for a scenic overlook.” 

Among the states, New York had the highest gas tax diversion rate, at 37.5 percent, followed by Rhode Island (37.1 percent), New Jersey (33.9 percent), Michigan (33.9 percent) and Maryland (32.5 percent). Wisconsin ranks 11th on the list of diverted gas tax revenue. 

New York used $600 million of its $1.6 billion in gas tax revenue to fund mass transit. 

Rhode Island spent nearly $58 million of its $156 million in gas tax collections on a tossed salad of programs — public transit, human services, a traffic safety capital program, even transportation alternatives.  

“There are clear patterns in where diverted gas tax revenue is allocated. The most common diversion is for non-road and non-highway transportation, such as trains, buses and pedestrian projects,” the Reason Foundation study notes. 

The second most common diversion is for law enforcement, mainly state police, which occurs in nine states. 

“Similar to the diversions toward transit, the diversions for law enforcement are tangentially related to highways but violate the users-pay/users-benefit principle. Not all drivers use roads that are under the purview of state police, nor do all drivers see a proportional benefit to their road use because of the state police,” the report states. 

Geographically, the only major pattern is that the dense liberal states of the Northeast tend to have high diversion rates, according to the report. The average diversion rate in the Northeast is 20.3 percent, well above the 5.7 percent 5.2 percent, and 1.4 percent average diversion rates in the South, Midwest and West respectively.

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