Wisconsin Builder | An Elephant in the Room

Party Favors

Victorious Republicans set the agenda for 2005

By Jeremy Harrell

It didn't take long for the M word to appear after the dust settled on the political landscape following the Nov. 2 elections.

Republicans around the country scored widespread political victories, winning by enough of a margin in enough races that folks started referring to a "mandate." Vice President Dick Cheney used the word on Nov. 4 when describing his administration's goals after President Bush won re-election with 51 percent of the vote in the largest turnout ever, and congressional Republicans likewise gained greater control. Wisconsin GOP leaders used the word as well since Republicans picked up one seat each in the Assembly and Senate to expand their majorities in both houses.

At the federal level, Bush said he intended to spend the "political capital" he earned in the election on revamping Social Security, overhauling the tax code and reforming the nation's intelligence apparatus. At the state level, Republican leaders promised to restart a failed attempt to allow citizens to carry concealed weapons, continue the process of amending the state constitution to bar same-sex marriages and pass a constitutional amendment to limit state and local taxes and spending.

That last issue will surely galvanize the construction industry when lawmakers return to their work in January. Tabbed the Taxpayer Bill of Rights, the amendment could affect everything from the automatic escalation of the state gas tax to municipal bonding levels by requiring referendums for spending increases. Routine government business, such as letting a sewer project or creating a tax incremental financing district, could be put up for voters' approval.

"The biggest issue to come to the surface will be TABOR," predicted J. Michael Mooney, chairman of development company NAI MLG Commercial, Brookfield.

"Those of us in the [development] industry have mixed feelings about it."

Mooney, who's also chairman of the Wisconsin chapter of the National Association of Industrial and Office Properties' Public Affairs Committee, echoes the sentiments of many developers, architects, engineers and builders in urging the Legislature to take a deliberate approach to shaping the constitutional amendment.

GOP lawmakers, buoyed by their electoral successes, seemed poised to move swiftly on drafting a proposal to put before the public. Moderate Republicans, however, had other ideas.

Within a week of Nov. 2, GOP senators elected Sen. Dale Schultz, R-Richland Center, to be their majority leader. He supplanted Sen. Scott Fitzgerald, R-Juneau, who had won the post two months before and pledged to coordinate the Senate's activity with GOP leadership in the Assembly and most likely end the disputes that derailed TABOR earlier in 2004.

On the same day Schultz was elected, he said TABOR was, at this point, little more than a slogan and promised to be more inclusive in drafting the amendment, a process that has so far taken place largely behind closed doors. Schultz's more cautious approach meshes with the attitude of the construction industry.

"The first crack that legislators took at TABOR didn't move ahead because of some of the same issues we're concerned about," Mooney said. "Legislators need feedback from the people in the trenches about those issues. They can't know everything. They understand they could be shooting themselves in the foot while trying to save the taxpayers."

If Schultz's elevation hampered the GOP's sense of owning a unified mandate, it certainly didn't diminish the party's momentum. In the last several election cycles, Republicans have gained seats in both houses. Assembly Republicans now have their widest majority since the Eisenhower administration, and the GOP has gone from being the minority party in the Senate before the 2002 elections to wielding a 19-14 majority when the 2005 session opens.

That momentum will be especially important in the upcoming session because the basic political calculus hasn't changed. Despite the Republican electoral gains, the party doesn't have a veto-proof majority in either house to battle Democratic Gov. Jim Doyle, who still has two years left in his term. That will require the Legislature either to reach common ground with Doyle or sway public opinion enough in its direction. If the GOP has public opinion, Doyle would have little choice but to go along with the GOP or come off as an obstructionist, especially when it comes to Republican staples such as tax reduction and streamlining government. Or they can simply bypass him by amending the state constitution, a process that skips the governor's office.

"I think the Legislature is going to be very emboldened to act with strength on some of these regulatory and tax issues," Mooney said.

The same could also be true when it comes to the state's transportation budget. Two years ago, Doyle proposed a transfer of $675 million from the state Department of Transportation to pay for aids to local governments and school districts. With the state facing a $3.2 billion general fund imbalance, Republicans had little choice but to grumble about the move before approving it.

The state's projected $1.6 billion budget deficit for the next two years is half as large, but fears are already growing among GOP lawmakers and within the industry that another transfer is in the works, though the Doyle administration has so far kept its plans securely under wraps.

"Obviously, right now the question is whether they follow the path of the last budget," said state Rep. Jeff Stone, R-Greendale, a member of the Joint Finance Committee and a Republican point man on transportation issues. "I still believe, at the end of the day, that's what they're going to do. It's just a matter of how much."

Stone subscribes to the position of a recently formed construction industry coalition that argues that the transfer raids a pot of money derived from motorists' user fees such as the gas tax. To take that money from the segregated transportation fund to pay for other government programs violates a sense of trust from transportation users, Stone said. "Most people support taxes that have a direct link to the services they're receiving," he said.

And this time around, Republicans will likely have more political muscle to flex when they get a crack at Doyle's budget plan. "It just seems this administration has set a precedent that they're willing to pay for day-to-day programs out of the transportation fund," Stone said. "It's pretty clear the Republican message is one that has been winning resoundingly in the polls."

The federal government is also facing transportation woes, and lawmakers could be in for a showdown of their own. Congress has yet to reauthorize the six-year transportation bill that expired more than a year ago, and the conventional wisdom held that nothing would get passed until after Nov. 2. Powerful transportation advocates from both parties and in both houses favored bills that substantially increased investment levels. Yet the Republican-controlled Congress never acted because increased spending would entail increased taxes, and GOP lawmakers didn't want to saddle Bush with a tax increase in the run-up to the election.

The election is now over, and presumably Congress will put the bill back into motion. The only problem is that Bush, facing historic budget deficits, is determined to hold down spending, and he's singled out the transportation bill as a likely target for restraint. "I think the president understands the needs of transportation, but he needs to stick to his fiscally conservative position," said Bob Cook, executive director of the Transportation Development Association of Wisconsin.

But with Bush no longer needing political cover, Congress might take the unusual step of approving a transportation spending increase and overriding a Bush veto.

Former President Reagan found himself in a similar predicament in 1986, the only year Congress overrode one of his vetoes, which happened to be on a transportation bill, Cook said.

"The only thing that has changed [since Nov. 2] is that it may be more likely that Congress will override the president," Cook said. "Some of the newly elected senators are transportation proponents. Overriding a veto wouldn't be as politically tricky."

While the large-scale tugs-of-war take place, lawmakers will still have their hands full with the more basic duties of running government and passing bills. Several construction-related proposals have been kicking around Madison, in some cases for years, and are likely to see debate in the upcoming session.

Stone, for instance, said he's been working on changes to a bill that would mandate drug-testing programs for contractors working on public projects. Changes are necessary since many industry groups voiced considerable opposition to the first proposal, which faded away in 2004.

It's also fair to expect revivals of bills to require state certification or licenses for various building companies and workers, including general contractors, crane operators and electricians.

The most heated battles, however, might affect project delivery and other more process-heavy considerations. In its two-year budget proposal, WisDOT has signaled that it would like to deliver one-tenth of its program using design/build. The Legislature would need to approve the move even as road-building contractors have emerged with a unified voice in opposition to design/build.

The Milwaukee Metropolitan Sewerage District will also likely continue its quest to obtain design/build authority for its big projects. The MMSD has come up empty in its search for several consecutive sessions. The Wisconsin Counties Association has also registered design/build authority as a legislative priority for the next session.

Also in the realm of project delivery, the State Building Commission is poised to move ahead with a series of statutory changes that its staff contends are long overdue.

One of the changes would raise the threshold for mandatory competitive bidding, while most of the others deal with minimizing the Building Commission's direct oversight over small projects. The panel's members expect to introduce a bill covering these topics next year.

The Legislature could also move ahead with proposals brought forward last session to ease building requirements for local governments. The League of Wisconsin Municipalities, for instance, would like fewer constraints on public notices advertising competitive bids. Several local government groups have proposed raising the minimum threshold for competitive bidding beyond the statutory standard of $15,000, while the Wisconsin Taxpayers Alliance has suggested the state raise the minimum dollar threshold for prevailing-wage jobs.

Most, if not all, of these issues have a common theme of government trying to do more with less. The economy and tax collections are still recovering from the recent downturn. Coffers are still relatively dry, increasing the likelihood of squabbles over money, and the government payroll has shrunk, sending authorities in search of greater latitude to carry out their normal business.

Whether it's fighting for transportation money or streamlining the government's role in procuring construction services, officeholders will be active in the next two years.

And so will the industry.

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