Study: Decline in traffic, fewer gas fill-ups could mean millions less 'to pay for highway projects'

MADISON -- The coronavirus pandemic has had a ripple effect on Wisconsin's economy and state budget, from record unemployment to decreasing tax revenue, and a study by the Wisconsin Policy Forum shows changing traffic patterns having both negative, and potentially positive effects.

Before the "Safer at Home" order took effect on March 25, traffic numbers were trending downward, with the number of confirmed cases of COVID-19 increasing. As a result of decreased travel, tax revenue normally flowing in through fuel purchases has slowed, but lesser traffic could be beneficial for the state. However, it will still likely be a slow recovery, regardless of when the state reopens.

Every time you fill up with gas, roughly 30 cents from each gallon pumps up the state's transportation budget, and the number of vehicles on state and U.S. highways and interstates factors into what improvements or repairs may be on the horizon. However, because of the pandemic, and resulting decreasing traffic and fuel sales, predicting what the future may hold is more difficult.

Joe Peterangelo

"Clearly, this is going to make the challenge greater that already existed to pay for the projects that the state is planning," said Joe Peterangelo, Wisconsin Policy Forum senior researcher.

The nonpartisan Wisconsin Policy Forum found from early March to early April, even before the "Safer at Home" order took effect, traffic numbers began to drop at a minimum of 36% statewide. Southeast Wisconsin saw the largest decrease at roughly the same time schools were ordered closed and a national emergency was declared.

While passenger traffic has plummeted, freight traffic has stayed roughly the same, if not a little less.

Less traffic on the roads could mean safer roadways -- but that data remains unclear.

What is clear is less people traveling means fewer fill-ups at the pump. The state averages $80 million a month in motor fuel taxes. In 2019, $1.07 billion covered about half of the state's transportation budget.

"So even if we said there was a 25% reduction over three months, that would mean $60 million less going into the state to pay for highway projects," said Peterangelo.

While this study could not predict the long-term impact, Peterangelo said it's clear the short-term impact is substantial, and how quickly an economic recovery happens, especially related to travel, is largely dependent on consumer confidence -- how confident people are to travel, whether it's safe to travel and whether people have a money or a job to afford it.