Walker was in Rock County on Tuesday for a Wisconsin Economic Development Corp. board meeting, the Janesville Gazette reported Tuesday.
The Republican governor said a project to widen Interstate 90 from the Illinois border to Madison is still a priority despite the projected shortfall.
"From an infrastructure standpoint, particularly so," Walker said. "When we think about manufacturing_particularly in this corridor but all across the state_a good piece of that is proximity to things like an Interstate system and proximity to a system that's wide enough to handle the capacity needs."
But Department of Transportation Secretary Matt Gottlieb said it is possible the $950 million project could be delayed if funding isn't found soon.
Walker called the current method raising money by taxing every gallon of gas is unsustainable because cars are becoming more fuel efficient, so revenue from the tax would drop. He said his administration is looking at tax reforms to fund the department going forward, but gave no details.