There is an interesting if not amusing "debate through the media" about the state's transportation funding taking place between long-time conservative George Mitchell and Sen. Duey Stroebel.
Mitchell begins ...
Urban Milwaukee Excerpt:
A group of Senate Republicans, including state Sen Duey Stroebel, believe this unprecedented borrowing embodies a “conservative” approach to financing highway construction. After approving new highway debt of almost $3 billion since taking control of state government, they want to add $700 million more in 2017-19.
Stroebel responds to Mitchell by attempting to paint himself as a victim of Mitchell's "vitriol," and then proceeds to lay out his fiscal conservatism. Uh huh.
Right Wisconsin Excerpt:
Consider the five cent gas tax floated as a long term solution that increases revenue by $150 million per year. After twenty years, the taxpayers would have paid $3 billion more in taxes. The tax continues in perpetuity. Our kids and grandkids are saddled with high taxes.
To get a better handle on where he draws his anti-tax simpleton nonsense from, like Scott Walker, Stroebel is pledged to Grover Norquist.
But sure, why stop at twenty years? If you're looking for that "perpetuity" effect, why not fear monger with 100 years and $15 billion? LOL. But okay, collect $150M PER YEAR with a new gas tax for twenty years and we end up with $3 billion worth ...of road maintenance and highway expansions. I get it.
Right Wisconsin Excerpt:
Consider $150 million in bonding. After twenty years the bonds are finished at a total cost of approximately $240 million. Our kids and grandkids do not continue to pay the debt servicing.
Whoa ...whoa ...wow!! This is hysterical to the point of logical treason.
First of all, Stroebel is comparing apples and oranges, but they are his words. So let's play along with him.
Is it unreasonable to ask for $3B in additional road funding over the next 20 years? According to Mitchell's column, Wisconsin republicans approved nearly $3B in new highway debt in just six years. So no, it's not unreasonable.
Is Stroebel implying that $3B worth of transportation can be paid with $240 million? Well, not quite ...it's actually much, much worse than that.
As per Stroebel's math, a single $150M twenty year bond at 3% will cost Wisconsin taxpayers $4.5M per year in debt service or $90 million in interest before it's finally paid off in 20 years. But we're still short $2.85 billion in additional road funding for the next 19 years. To put that number into perspective, the I39/90 expansion alone is expected to cost $1.5B and that's climbing higher as I write.
So we must assume Stroebel would rather buy a $150M twenty year bond ...each year for the next twenty years to equal the $3B target a 5¢ tax on a gallon of gas would raise over twenty years, given the choice. BUT, instead of paying $3B for $3B worth of transportation with a higher gas tax after 20 years - Wisconsin taxpayers will end up shelling out, in one shell game or another, $4.8B for $3B worth of transportation funding using Stroebels' borrow approach. The bottom line: State taxpayers will pay $1.8B more unnecessarily ...and get less. AND ...the last bond won't be retired until year 40 from the time the first bond was purchased.
So, it will be like borrowing and making debt payments into perpetuity just like the debt trajectory President Reagan put the nation on beginning in 1981.
Come to think of it ...THAT is the conservative way.
1 comment:
GOP math does it again. Head exploding stuff.
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