Baraboo leaders are considering new taxes to help pay for necessary road work.
On Monday, the City Council’s Public Safety Committee discussed implementing a vehicle registration tax. A “wheel tax” of $10-25 on top of the state vehicle registration fee has been adopted by an increasing number of municipalities as state transportation support has dwindled.
Monday’s discussion expanded to address a special sales tax that can be enacted by communities whose economies depend on tourism. Aldermen asked Mayor Mike Palm to have the full council discuss taxing options at an upcoming meeting.
The committee has discussed a “wheel tax” for nearly two years. The full council determined in January that community feedback was needed, prompting Palm to solicit opinions through the city newsletter. He said responses were split evenly between supporters and critics.
A $20 fee would net the city nearly $275,000 per year. In recent years the city has borrowed $1.5 million every three years for road work, and has found that a half-million a year isn’t enough to keep up.
Palm said the city has three choices: Continue borrowing and put the onus on property taxpayers, find an alternative revenue source or continue to fall behind.
“An extra $20 a year, to a lot of people, is a lot of money,” the mayor said. “But we also hear, ‘What are you going to do for the roads?’
“It’s a way to raise revenue without putting it on borrowing.”
A decision may be needed soon, as there’s talk in Madison of the Legislature placing restrictions on municipalities collecting vehicle registration fees. Plus, it could take 90-120 days to enact the fee, and the city already is budgeting for 2018.
Alderman Mike Plautz said he’s “on the fence” regarding the vehicle fee, and worries about burdening taxpayers. They already are funding Baraboo High School renovations and construction of a city Public Safety Building. He suggested starting with a $10 fee.
“It seems like we’re adding a lot in a short time,” Plautz said.
Alderman Phil Wedekind supported setting the fee at $20, rather than starting at $10 and increasing it later. “If I’m going to take grief, I’ll take it once,” he said.
During Monday’s committee meeting and last week’s council meeting, city leaders discussed enacting a sales tax to help fund road repair. They learned only communities reliant on tourism are eligible to collect the Premier Resort Area Tax. Forty percent of their land value must be used by tourism retailers.
Eligible communities can collect a half-percent sales tax, except for Lake Delton and Wisconsin Dells, which get 1.25 percent. Rhinelander began collecting the tax Jan. 1, joining communities like Bayfield and Eagle River.
It’s unknown whether Baraboo qualifies. City Administrator Ed Geick noted that Baraboo’s postal code stretches north into Lake Delton, and city emergency services respond to calls at Devil’s Lake State Park, the most popular destination in the state system.
Fire Chief Kevin Stieve estimated 5,000 to 7,000 visitors flock to the park on peak dates. “It’s a small city in and of itself,” he said.
Determining Baraboo’s eligibility for the Premier Resort Area Tax would require help from number-crunchers at the Wisconsin Department of Tourism, support from local legislators and possibly a consultant study.
“We don’t have the capability to determine exactly what our tourism territory is, as a staff,” Geick said.