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Madison Wheel Tax Rolling Forward–Applaud Those Honest About Need For More Revenue

October 22, 2019

There are times, given the limitations imposed by the state legislature, when local units of government need to act decisively in order to properly govern.  Sometimes hard choices must be taken and at times even choices that might leave many feeling unhappy with the outcome.

That is the case with the proposed wheel tax that is part of Madison Mayor Satya Rhodes-Conway first budget.  One can say what they will of the new mayor, but lacking the willingness to be honest with residents will not be something anyone can claim.  She is being upfront about the fiscal needs of the city.

No amendments reduced or eliminated the $40 vehicle registration fee, also called a wheel tax, that is projected to bring in $7.9 million in revenue annually, and would be the highest such fee in the state of Wisconsin.

Even committee members who voted in favor of the vehicle registration fee were not eager to pass it because the tax hits low-income residents harder than those who are better off.

“We don’t wish to do this,” Verveer said. “This wasn’t our first choice.”

The tax would help close a projected $11 million budget shortfall and extend bus service to the city’s South Side. It would also help jump-start programming for Bus Rapid Transit, a high-frequency, high-capacity, limited-stop service that Rhodes-Conway hopes to have in place by 2024 to reduce vehicle traffic.

If approved by the City Council, the fee would be in addition to Dane County’s wheel tax of $28, adopted in 2018, and a state wheel tax that increased $10 this year to $85, bringing the total annual vehicle registration cost for city residents to $153. The city fee would take effect in early 2020.

I have long championed the use of a wheel tax and simply do not feel that it is a regressive tax.  I have always felt it is more akin to a user fee, and all benefit with upgraded transportation services.  But even if one wished to argue the regressive nature of the tax they would be sailing into headwinds following a study by the UW-Madison’s LaFollette School of Public Affairs for the City of Milwaukee in 2008, which found the tax was not regressive.

The report called the “Distributive Impacts of a Local Vehicle Registration Fee,” found the number of cars per household tended to rise with income of families in Wisconsin, so that “as the number of available vehicles increases, the percentage of household income that the……fee per vehicle would represent also increases.”   With that in mind the study added that such a fee “would not impose a disparate economic burden on lower-income vehicle owners.”

I applaud elected officials who are honest about the need for more tax revenues. There are only so many ways that our local government can find the revenues which are required to make sure the needed services can be supplied.  State legislative leaders may find glee in starving government funds, but at the local level, where the tire meets the road, we know it takes leadership to make government work.

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