The state’s Joint Legislative Audit Committee proposed a bill Tuesday that would hold Wisconsin’s Department of Transportation accountable for factoring in inflation when estimating highway project expenses.
The bill was introduced the same day the Audit Committee held a hearing on the recent DOT audit that uncovered the department’s severe underestimations of state highway programs.
If passed, the bill would require that road and bridge projects estimated by DOT fully account for cost elements such as inflation or the rise in prices and fall in purchasing power of money in order to receive approval by the Transportation Projects Commission.
The commission reviews highway project proposals and makes recommendations to Gov. Scott Walker, the commission chair, and the Legislature about which projects should be included in the state budget.
The bill would also require that DOT project estimates be updated annually. State transportation officials would also have to inform legislators of any changes to original cost estimates and the reason for the change.
“It is not uncommon that a project gets planned at some cost and then it doesn’t get built for a long time and there is inflation,” said managing director of State Smart Transportation Initiative and transportation policy expert Eric Sundquist.
The audit, released last month, discovered that the DOT's projects repeatedly ended up costing double their initial projected expense, often because the DOT did not account for inflation.
According to the Legislative Audit Bureau's State Highway Program report, the estimated expenditures for 19 major highway projects completed from January 2006 through December 2015 were a total of $772.5 million higher than DOT’s initial cost estimates.
The report also found that some projects cost close to four times the initial estimated cost, such as Highway 29 from 1-94 to Chippewa Falls and the Whitewater Bypass project on Highway 12.
“Cost overruns are pretty common. The reasons and some of the particulars may be different, but it is not at all uncommon to have projects that are supposed to be $1 million and come in at $2 million or something that is much higher than the original count,” Sundquist said.
The hearing of the panel came as the Legislature’s Audit Committee debated how to address a nearly $1 billion shortfall in the road budget, questioning whether more money should be given to transportation.
Sen. Chris Kapenga, R-Delafield, who is opposed to raising taxes to fund highways, stated the DOT is currently too problem-ridden to give more money.
“We must further investigate practices at DOT ranging from how they select projects for construction to ensuring they have a competitive bidding process,” Kapenga said in a statement. “We should not begin discussing revenue increasing until the DOT can prove it can be more transparent and accountable to the taxpayers of Wisconsin.”