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Caution ahead: State might push to boost transportation taxes

Get ready for a late-winter or spring public relations blitz to try and convince you to pay more to maintain Wisconsin transportation systems, including local roads and aging miles of Interstate.

A coalition of transportation groups has already focus-group tested this question:

How much does the average vehicle owner, driving between 12,000 and 15,000 miles per year, pay in a year to use Wisconsin highways and bridges? Guesses ranged from $500 to $1,000 per year.

The answer is $200 to $300 per year—making current transportation taxes and fees a bargain, according to a special Wisconsin Department of Transportation commission that will be recommending ways to close the looming funding shortfall.

That means Wisconsin drivers pay less in a year to use Wisconsin’s highways than they pay for cable TV or Internet service, Martin Hanson, an engineer and member of the Transportation Finance & Policy Commission, told a Transportation Development Association (TDA) seminar.

“That’s going to be an important message,” Hanson said. “It’s not clear what kind of value (drivers) are getting for their gas tax and registration fee payments.”

Hanson offered another example of how it’s a bargain to own and drive a vehicle here: Wisconsin’s gas tax is now a smaller percentage of the retail price of gas than it was in 1929.

Numbers on which that claim is based:

--Wisconsin’s gas tax was 2 cents per gallon in 1929, according to the Legislative Fiscal Bureau, and gas was then selling for about 21 cents per gallon. Now, Wisconsin’s gas tax is 30.9 cents per gallon, and Wisconsin AAA reported that regular gas was selling for a statewide average of about $3.41 last week.

--Wisconsin gets 85 percent of its transportation cash from only two sources—the 30.9-cent-per-gallon gas tax, last increased in April 2006, and the $75-per-vehicle annual registration fee, unchanged since January 2008.

-- State transportation taxes, fees and transfers will total $1.9 billion this year, and federal aid will add about $847 million.

Wisconsin Department of Transportation officials, transportation-group advocates and some legislators agree on what’s at stake: If more transportation cash isn’t forthcoming, major highways will not be rebuilt, pavement will wear out quicker than it can be maintained, and traffic congestion will worsen.

In January, the Finance & Policy Commission will make recommendations to Gov. Scott Walker, who can follow them or come up with his own ideas when he gives lawmakers his proposed 2013-15 budget early next year. Two years ago, Walker proposed using sales tax money to help cover the transportation funding gap.

Finance & Policy Commission estimates of projected 10-year funding shortfalls are huge—between $3.3 billion, which would not even maintain highways and bridges at current levels, and $18.4 billion.

Assembly Speaker Robin Vos, a Republican, has estimated the 10-year shortfall at about $4 billion. But Craig Thompson, executive director of the TDA coalition, puts the gap at about $6 billion.

Hanson and Thompson, who is also a member of the study panel, said the panel considered dozens of ways to make drivers pay more.

Those still being seriously considered include:

--Increasing the 30.9-cent-per-gallon gas tax, which is all but certain to be recommended. The tax is already in place and would not cost more to administer, so raising it “only makes sense,” Hanson told the TDA.

--Raising the $75 annual vehicle registration fee. A $10-per-vehicle increase would bring in $45 million more each year.

--Collecting a new miles-driven fee, although Wisconsin would be the first state to do so. It could work this way: When you get your annual vehicle registration notice, you would report the odometer reading and pay a per-mile fee based on the number of miles driven. There could be a 3,000-mile exemption and a cap of 15,000 miles.

But it would take years to phase in a mileage-based fee, so it is not an option for the next state budget, Thompson added.

--Eliminating the sales tax exemption for trade-in vehicles, which would be unpopular but net $900 million more over 10 years.

--Creating regional transportation authorities with new taxing powers.

Because tolls could only be charged on new Interstate lanes and would require federal government approval, they are not a serious option, Thompson added.

Steven Walters is a senior producer for the nonprofit public affairs channel WisconsinEye. This column reflects his personal perspective. Email stevenscwalters@gmail.com.