Nobody likes potholes.
Providing well-maintained streets is one of the fundamental duties of municipal government, but the price of asphalt and other street construction costs are on a steep climb, with Janesville averaging 8% annual increases. At the same time, the ability of municipalities such as Janesville to pay for streets is hobbled by state-imposed levy limits, which the League of Wisconsin Municipalities says are the “strictest property tax levy limits in the country.”
The city went to referendum in 2014, asking voters for permission to exceed the levy limit—by up to $1.2 million annually for five years—and put the extra money toward street repairs. It failed overwhelmingly, despite residents saying road improvements were one of their biggest priorities.
To make matters worse for Janesville, the city’s slice of state shared revenue is the smallest among 14 similar Wisconsin cities.
To keep up with increasingly expensive street repair and replacement while income is capped, Janesville has been borrowing money. Unless something changes, projections show the city likely will fund 70% of its transportation program through borrowing.
We suspect most readers would agree that’s not sustainable.
The Janesville City Council is considering an alternative—creating a transportation utility that would collect fees based on the number of vehicle trips taken to and from each class of property per day.
A manual published by the Institute for Transportation Engineers assigns traffic volume based on land use. “This method measures a property’s use of the transportation system much the same way a water meter measures a utility customer’s water consumption,” reads an analysis written by Ehlers Public Finance Advisors, one of the companies involved in creating a transportation utility feasibility analysis for the city.
The analysis indicates homeowners should like this idea. If the cost of street repair and maintenance is distributed according to assessed property value, residential property owners foot 67% of the bill. If it’s distributed based on traffic volume, residential would pay 34%.
The opposite is true for retail properties. When street costs are distributed according to assessed property value, retail property owners pay 7%. If they’re distributed based on traffic volume, retailers would pay 28%.
In a meeting Thursday, the city council heard more about the proposal for a transportation utility. Council members should keep their minds open.
We’re not ready to say we support a transportation utility, but the city is smart to consider it as an option. Perhaps such a utility would allow the city to stop borrowing for streets. Maybe the city could abolish its $20 wheel tax. Or maybe a transportation utility would be part of a more nuanced solution that includes less borrowing and a smaller wheel tax.
A concern is the impact such a utility would have on retailers, who for months have been pounded by the coronavirus pandemic.
Although transportation utilities are more common in the West, Neenah is the only city that has one in place in Wisconsin.
Janesville doesn’t have many good choices for funding street maintenance, but weighing a transportation utility as an option is smart.