Transportation Commission Makes Ambitious Recommendations for New Revenue & Spending
Advisory Committee Report Draws Criticism from Across the Political Spectrum
Revenue for the state Transportation Fund would be boosted by about $6.8 billion over the next ten years if lawmakers enact the recommendations made today by a state advisory panel on transportation financing. The advisory committee recommended the following measures for generating additional revenue for transportation spending:
- Increasing the state gas tax by 5 cents per gallon, and indexing that tax (and/or vehicle registration fees).
- Adopting a new mileage-based registration fee of 1.02 cents per mile for passenger cars and light trucks – based on odometer readings reported by the vehicle owner at the time of annual registration. (The first 3,000 miles would be free, and the maximum number of miles charged for would be 20,000.)
- Increasing annual registration fees for commercial vehicles by 73%.
- Increasing the fee for an eight-year driver license by $20 (to $54).
- Eliminating the sales tax exemption on the trade-in value of vehicles.
This fiscal plan was developed by the Transportation Finance and Policy Commission, which is a 10-member citizen commission that was created in the 2011-13 budget bill to advise the Governor and Legislature on how to finance state transportation needs over the next 10 years. Read more about the commission and its charge here, or in their lengthy report.
The Commission recommends using the additional revenue to increase spending by about $479 million per year for the following purposes: $387 million per year for state highway rehabilitation, maintenance and modernization; $40 million (per year) for local highways and bridge;, $36.3 million for public transit; and $16.1 million for airports, rails, harbors, bicycle and pedestrian facilities.
There was bipartisan support for the plan among the members of the commission, but opposition or concerns have been expressed from politicians and groups across the political spectrum. A number of Republican lawmakers, including the Governor, have expressed strong reservations or open hostility regarding the proposals to increase the gas tax and initiate mileage-based registration. See, for example, the press release from Assembly Speaker Robin Vos and Majority Leader Scott Suder.
Others, such as John Dickert, who is the Mayor of Racine and president of the Urban Alliance of the League of Wisconsin Municipalities, opposed the recommendations for very different reasons. According to a Journal Sentinel article about the report, Mayor Dickert: “questioned why the commission seeks expansion of highways in the state if there are not sufficient funds to maintain existing roads. Increasing taxes and fees to build more roads is not a sustainable use of tax dollars.”
See also WISPIRG’s press release, which is highly critical of the large increase in spending for major highways, but it “applauds the report’s recognition that we must repair and maintain our crumbling roads and bridges and adjust to changing demographic and transportation trends with more and better transit.” Similarly a press release by the Sierra Club (John Muir chapter) endorses the increased transit funding and a measure allowing local communities to form regional transit authorities, but says the large boost in highway spending “is out of step with current state trends and needs.”
The committee’s report says their recommendations would raise gas taxes and fees by $120 per year for a typical driver, an increase of 47%. I don’t think that portion of the plan will go far, and lawmakers may turn instead to the General Fund and siphon off those dollars to fuel increased spending for highways.
Tapping the General Fund for transportation system spending, while decreasing the state income tax, as some are proposing, is likely to create huge problems for other parts of the state budget, such as education, health care and property tax relief.