Capitol Week-in-Review – September 29, 2016

DOT Provides the Governor with Transportation Budget Blueprint

Earlier this year, Governor Walker directed Wisconsin Department of Transportation (DOT) Secretary Mark Gottlieb to come up with a 2017-2019 transportation budget that addresses pavement preservation, maintenance and critical safety needs, and provides additional funding for local aids, without any additional tax or fee increases. Two weeks ago, Secretary Gottlieb provided the Governor with a proposal that accomplishes the aforementioned directives.

Of particular interest to WIB are the two major transportation programs – the State Trunk Highway (STH) program and the General Transportation Aid (GTA) program. By way of background, the STH program is responsible for the construction, improvement, and maintenance of the 11,213-mile trunk highway system and for improvement on 553 miles of state connecting highways under local jurisdiction. The GTA program provides money to local units of government (counties, cities, villages and towns) to assist in the maintenance, improvement, and construction of local roads.

The DOT plan makes the following funding changes to the STH program:

Increase state highway maintenance funding by $70 million – $535 million to $605 million;
Increase state highway rehabilitation funding by $5.1 million – $1.702 billion to $1.707 billion;
Decrease major highway development funding by $123 million – $686 million to $563 million; and
Decrease Southeast Wisconsin Freeway funding by $292 million – $414 million to $122 million.

The DOT plan makes the following funding changes to the GTA program;

Increase county funding by $16 million – $197 million to $213 million;
Increase city\village funding by $23 million – $366 million to $389 million; and
Increase town funding by $7 million – $277 million to $284 million.

The DOT plan recommends an additional $500 million in borrowing – the majority of which (92%) is used to finance state highway rehabilitation and major highway development projects.

Our initial observations of the DOT plan are as follows:

  • Additional state funding for local road construction, repair and maintenance is a wise investment. So is putting more money into state highway rehabilitation and maintenance;
  • Reducing funding for major highway development and southeast Wisconsin road work will result in higher construction in the future; and
  • Financing the necessary improvements to Wisconsin transportation network with a limited amount of new borrowing is not adequate, equitable or sustainable.

Governor Walker has described the DOT plan as a “good start and solid foundation to build a fiscally responsible budget.” We look forward to working with state lawmakers on a better long-term transportation funding plan.

Wisconsin Joins Coalition of States Challenging New Federal Overtime Rule

Last Wednesday, Wisconsin Attorney General Brad Schimel joined a coalition of 21 states in filing a federal lawsuit challenging the new overtime rules enacted by the United States Department of Labor (DOL).

The three main legal arguments outlined in their lawsuit are:

  • Rather than analyze (and allow for notice and comment about) the duties that employees actually perform, DOL simply doubled the current “salary basis test” that must be satisfied before an executive, administrative, or professional employee is ineligible for overtime, and rendered virtually irrelevant any inquiry into whether an employee is actually working in an executive, administrative or professional capacity;
  • Under the premise of updating regulations related to the federal Fair Labor Standards Act, DOL has disregarded the actual requirements of the statute and imposed a much-increased minimum salary threshold that applies without regard to whether an employee is actually performing “bona fide executive, administrative, or professional” duties; and
  • Under the guise of interpretation, DOL included an automatic indexing mechanism to ratchet-up the salary level every three years without regard for current economic conditions or the effect on public and private resources.

The states are seeking a permanent injunction preventing DOL from implementing, applying or enforcing the new overtime rules which are scheduled to go into effect on December 1, 2016.

After joining the lawsuit, Wisconsin Attorney General Schimel said:

“Wisconsin, and every other state, must be able to set their own priorities and policies, and not be forced to take directives from an unchecked Washington D.C. bureaucracy attempting to establish unprecedented power.”

We agree. Let’s hope the federal judge who will hear this case shares that same point of view.