Audit: Department of Transportation vastly underestimated costs

Scott Bauer and Todd Richmond, AP writers

Major highway projects in Wisconsin over the past decade have cost twice as much as the Department of Transportation  initially estimated, thanks in large part to not accounting for inflation, according to a highly critical audit released on Jan. 26.

The much-anticipated Legislative Audit Bureau report comes as the agency faces a nearly $1 billion budget shortfall and Gov. Scott Walker and Republicans who control the Legislature are sparring over how to solve it.

The audit found that 19 major highway projects completed in the past decade cost a total of $1.5 billion — twice as much as the $772 million original price tag. It also said the cost of 16 ongoing major highway projects more than doubled to a total of $5.8 billion — increasing by a staggering $3.1 billion — from the time they were approved through August 2016.

Wisconsin’s roads have consistently deteriorated over the past five years and are in “considerably” worse shape than roads in six other Midwestern states, the report said. The proportion of state highways in good condition decreased from 53.5 percent in 2010 to 41.0 percent in 2015, the audit said.

Walker, who canceled a series of public events scheduled for Jan. 26 due to illness, has insisted that he won’t raise the gas tax or vehicle registration fees to plug the transportation budget shortfall to pay for ongoing road projects. His plan is to borrow about half a billion dollars and delay about that much in ongoing major highway work.

Assembly Republicans are calling for $300 million in transportation-related tax and fee increases along with unspecified tax cuts elsewhere.

Walker’s spokesman Tom Evenson said the report doesn’t change the governor’s position.

“The bottom line is, we shouldn’t even be thinking about raising the gas tax or fees until we find every last cost savings at DOT, and the audit shows we can find more savings,” Evenson said. “We welcome the opportunity to deliver services taxpayers expect at a price they can afford.”

Democrats seized on the audit, saying it shows that Walker and Republicans — who have controlled state government since 2011 — have failed on roads, created a crisis, and put drivers’ safety at risk.

“The Republican leadership’s neglect of our roads is as inexcusable as it is unacceptable,” said Democratic Assembly Minority Leader Peter Barca. “Our crumbling infrastructure is costing taxpayers and hurting our economy.”

While many Republicans said the report was helpful in showing where Audit: Department of Transportation vastly underestimates costs can save money, Audit Committee co-chair Sen. Rob Cowles was more critical.

“(The audit) will be devastating to the management of the DOT,” Cowles told WHBY on Jan 26. “They have to do this whole thing differently.”

He plans to hold a public hearing on the report within the next two weeks.

The audit said the Department of Transportation hasn’t consistently used performance measures to improve its operations and can do more to control costs. It also doesn’t sufficiently take into account how inflation and unexpected cost overruns affect the price tag of projects, the audit said.

Cowles said the underestimated costs made the projects more attractive to lawmakers, thus increasing the chance of the Legislature approving them. He stopped short of saying department officials were intentionally low-balling bids to get approval.

The audit bureau recommended that the WISDOT use its money more effectively and improve how it manages highway planning, engineering, construction and maintenance.

Agency Secretary Dave Ross, the former mayor of Superior who has been on the job less than a month, said the audit “provides a road map to improved efficiency and transparency at the DOT.” Ross said he’ll work to implement recommendations for improvement. Ross replaced Mark Gottlieb, who resigned as secretary three weeks ago.