Road tax bill dies in state Assembly

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Catherine W. Idzerda
Thursday, February 18, 2016

MADISON—Local governments will have to keep looking for ways to pay for road repairs.

A bill that would have given counties and municipalities the ability to impose a sales tax for road repairs won't get a hearing before the full state Assembly, despite bipartisan support.

Assembly Bill 210 passed the transportation committee and got as far as the Assembly calendar, where it was pushed to the bottom of a list of bills the Assembly is considering before it adjourns for the year Thursday.

The bill would have allowed counties to go to referendum and ask voters to support a half-percent sales tax. The money generated would be divided between the county and its towns, cities and villages. The amount each would get would be determined by the number of miles and types of roads in each unit of government.

Municipalities would have to maintain spending levels so that the money wouldn't be used for other budget items. Voters would have to approve the sales tax every four years.

The bill was supported by the League of Wisconsin Municipalities and the Wisconsin Counties Association.

The Wisconsin Towns Association, which helped with the bill's language, didn't disclose if it was for or against the bill, according the Government Accountability Board.

However, the MacIver Institute, a conservative Madison think-tank, opposed the measure, pointing out that nothing prevents municipalities from going to referendum now. It also noted that the “additional revenue would do nothing to encourage prioritizing when it comes to road expenditures."

Reducing spending on roundabouts, pedestrian bridges and bike paths are just a few of the ways to reduce transportation costs, the MacIver Institute noted.

Paying for road repairs is an issue for all levels of local government.

In 2014, Janesville voters killed a referendum that would have allowed the city to surpass state-imposed levy limits by up to $1.2 million a year for five years. That money was to be used for road repair. Later, the city raised the wheel tax to $20.

Towns have fewer options.

“Finding funding for roads has always been difficult,” said Milton Town Chairman Bryan Meyer.

In a 2013 interview, then-Plymouth Town Chairman Larry Harding said it was all in the numbers.

“In the past 20 years, state aid to towns for roads has gone up 70 percent,” Harding said at time. “During the same time, the cost of paving a mile of road—ripping out the old road and putting in four inches of blacktop—has increased 200 percent.”

The town of Avon, which has the lowest tax base in the county, has opted to rubberize the roads within DNR-owned land and leave them as gravel.

Meyer was under the impression that the Wisconsin Towns Association supported the bill.

Indeed, the formula for funding was reviewed by the towns association, the counties association and the league of municipalities.

The funding formulas varied from amendment to amendment. One gave the county 50 percent of the money raised. The remaining amount would be divided among towns, cities, and villages based on the kinds of roads and the number of miles.

The types of roads would be classed as either “urban” or “rural.” They would be further classed as “local," “collector” or “arterial.”

That concerned Meyer. Before throwing his support behind the bill, he wanted to know more.

“I would want to see the formula, how the money was going to be divided,” Meyer said. “I also have some concerns about who would be managing the money."

He also wondered if the state would use the referendum option to give municipalities less in shared revenues.

The Wisconsin Counties Association did the math for several counties. In Racine County, population 195,000, the sales tax brings in about $14.25 million.

Using the population/types of road formula, the county would receive $4.7 million; towns, $2.42 million; villages, $3.68 million, and cities, $3.42 million.

Rock County has a population of 160,739. In 2015, the county brought in $11.7 million in sales tax.

Meyer noted that towns, like other municipalities, do have the option to go to referendum and ask voters to exceed the state-imposed revenue limits for a set period of time.

“However, nobody wants to pay more taxes, and it would be difficult to get a referendum to pass,” he said.

In 2013, a bipartisan transportation commission reported that if Wisconsin wants to maintain the quality of its roads, it will need to raise $15.3 billion over 10 years.

It recommended a 5-cent increase in the gas tax, which has not been raised since 2006. Wisconsin's gas tax is 16.5 percent, the seventh-highest in the nation, according to USA Today.

Rep. Dean Knudson, R-Hudson, who introduced the bill, told the Wisconsin State Journal in December that conservatives' concerns about raising taxes shouldn't be an issue.

“This is an important tool that allows local taxpayers to have a say in providing additional money for local roads,” Knudson told the State Journal. “To me, this is very clearly not voting for a tax increase. It allows a local county to make that decision on its own.”

Assembly Bill 210 cannot be reintroduced until 2017.

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