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Governor Walker proposes lowering bonding for roads by $200 million

(AP) — Gov. Scott Walker put forward what he's calling a "reasonable proposal" that would tap federal money and lower borrowing to pay for roads as he and Republicans who control the Legislature search for a budget deal.

Walker's proposal, sent to Republican legislative leaders on Wednesday and released to The Associated Press on Thursday, would not increase gas taxes or vehicle fees. That has been a key sticking point in the budget negotiations.

"This is a reasonable proposal that allows the leadership in the Assembly and Senate — as well as taxpayers — to have significant wins on our major issues," Walker wrote. "I respectfully ask that you share this proposal with the members of your caucuses."

Lawmakers have struggled to reach a deal on how to plug a nearly $1 billion transportation funding shortfall, leading to a delay in passage of a new two-year spending plan beyond the June 30 deadline. Current spending levels remain in place while the stalemate continues.

Walker proposed in the letter to Assembly Speaker Robin Vos and Senate Majority Leader Scott Fitzgerald to lower borrowing to pay for roads by $200 million without affecting ongoing road work. He said that could be done through cost savings, an improved fund-balance and other cost savings.

Walker also proposed an unspecified amount of contingency borrowing linked to additional federal money to pay for keeping southeast Wisconsin mega-interstate projects on track. The projects cited by Walker are the Interstate 94 expansion from the Illinois border to Milwaukee North/South, the Milwaukee Zoo Interchange and the I-94 east-west expansion.

Walker said Wisconsin is "well positioned" to qualify for additional federal money to help support borrowing for those projects. His letter to lawmakers did not spell out how much federal money may be available.

Walker wrote that reducing borrowing is a win for Assembly Republicans who have objected to $850 million in bonding, and not raising gas taxes or vehicle fees is a victory for Senate Republicans who are against those ideas.

Senate Republicans were meeting privately Thursday to discuss the budget. Fitzgerald said prior to the meeting that Republicans remained opposed to higher gas taxes or vehicle fees, but would be discussing possibly lowering the level of borrowing. Fitzgerald did not mention Walker's letter and spoke to the AP before the governor's proposal became public.

Vos said in a telephone interview that Walker was "showing movement" with his offer, but Vos still remains concerned about the level of borrowing being proposed. Vos said he was "patiently waiting" for Senate Republicans to respond.

"I continue to remain optimistic that Republicans can focus on the core value we all hold that it's not conservative to borrow and spend," Vos said.

Five conservative senators last week rejected an Assembly proposal to increase fees on semitrailers to raise $250 million over two years. Fitzgerald reiterated Thursday that that idea was dead. Various business and transportation groups have also come out against the fee increase, leading Vos to ask them to come up with alternatives by Monday.

Fitzgerald said that "didn't make sense to me" given that those groups, including the state chamber of commerce, are supportive of a gas tax increase. Senate Republicans and Walker are against that.

Walker has been governor with full Republican control of the Legislature since 2011, and all three prior budgets were completed faster than this one. The first two were done in June. In 2015, the Legislature's budget committee passed the plan on July 3, and it won full legislative approval six days later.

In addition to roads funding, Republicans are still negotiating how much to allow income limits to increase for participants in the statewide private school voucher plan and various tax code changes, including possible reduction or elimination of the personal property tax paid by businesses.

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