County considers wheel tax
Registration fee may be raised by $25
By Robert Cloud
Waupaca County is considering a wheel tax to help pay for its roads.
Highway Commissioner Dean Steingraber told county supervisors Tuesday, July 21, that state and federal funding for county roads is not keeping up with the costs to maintain them.
“Every level of government is struggling with this issue – how to fund transportation,” Steingraber said.
Steingraber noted that the gas tax constitutes 52 percent of state transportation revenues, with 34 percent coming from vehicle registration and 14 percent from other sources. State revenues cover 54 percent of Wisconsin’s total transportation budget, with the rest coming from federal funding and bonds.
The federal gas tax, which is the primary source of federal transportation funding to the state, has not been raised since 1993. It is currently 18.4 cents per gallon.
“At that time, the price of gasoline was just over $1 per gallon and the top-selling Ford Taurus averaged 23 mpg,” Steingraber said. “Today, gas prices are around $3 per gallon, the Ford Fusion Hybrid averages 42 mpg, and the federal gas tax is still 18.4 cents per gallon.”
Steingraber said the state provides little general purpose revenue for those forms of transportation that do not generate user fees.
“Wisconsin’s transportation funding base is one of the narrowest in the nation,” Steingraber said.
Steingraber compared Wisconsin’s registration fees and fuel taxes with four neighboring states in terms of their annual cost to drive a mid-sized sedan in each state.
The cost in Iowa was the highest at $471, while the cost was $318 in Illinois, $352 in Michigan and $470 in Minnesota. The average cost in the other four states was $403.
The annual cost for registration fees and fuel taxes for a mid-size sedan in Wisconsin was $254.
Meanwhile, the county’s costs for operating a truck have increased from $29.84 per hour in 2000 to $58.50 per hour in 2015, according to figures from the Waupaca County Highway Department.
In the past 15 years, the cost of cement rose from $50 per linear yard to $92, blacktop increased from $30 to $63 per ton, and the cost to construct a 36-inch curb and gutter has gone up from $8.75 to $11.25 per linear foot.
“Costs are going up, while revenues are stagnant,” Steingraber said.
Steingraber discussed several options to increase highway funding in Waupaca County.
He said the county could increase the property tax levy, but that would require a binding levy referendum approved by the majority of voters.
He said the county could increase its bonding, but that option should only be used for long-term projects, such as bridge and road construction, not to cover routine highway maintenance.
He also recommended against shifting the county’s spending from other departments to cover its highway costs.
“Adjusting levy dollars will result in a loss of other county services,” Steingraber said.
The county cannot raise its sales tax, which at the current 0.5 cents is the maximum allowed by state law. The county sales tax is paying for the bonds used to build the law enforcement center.
“The wheel tax would be the easiest to administer,” Steingraber said.
The state’s Department of Motor Vehicles would add the county’s wheel tax to the registration fees it already collects each year.
Some vehicles, such as trucks over 8,000 pounds, motorcycles, trailers, dual-purpose farm vehicles and recreational vehicles, would be exempt under state law.
State law also mandates that the wheel tax only be used for transportation funding.
The wheel tax also requires those who use the roads to help pay for their maintenance, Steingraber said.
Three counties – Chippewa, Iowa and St. Croix – collect a wheel tax. Five cities, including Appleton and Milwaukee, also collect a wheel tax.
Steingraber said there are 46,387 eligible registered vehicles in Waupaca County.
A $10 wheel tax could result in $459,000 in additional transportation funding for the county. A $25 wheel tax could generate $1.1 million for the county.
Supervisor Bob Flease, who is also chairman of the Waupaca County Highway Committee, said his committee is recommending a $25 wheel tax.
County Chairman Dick Koeppen said the state is passing more financial responsibilities down to the counties, while not allowing the counties to raise their tax levies in order to pay for those additional responsibilities.
Supervisor Pat Craig noted that while many vehicles would be exempt from the wheel tax, families with multiple vehicles could see a significant increase in their registration fees. The typical fees would rise from $75 to $100 per year.
Once the county board votes in favor of a wheel tax, Steingraber said it will take the DMV about three months to implement it.