A $20 vehicle registration tax in the city of Portage is expected to bring in about $152,000 in its first year — more than $24,000 above what had been projected.
And the money is being spent, for things such as pavement repair, filling road cracks, fixing street signs and maintaining traffic signals.
However, City Administrator Shawn Murphy reminded the city’s Finance and Administration Committee on Monday that there’s legislation afoot which, if enacted, would require that the city’s voters decide whether the “wheel tax” continues.
On July 27, the Portage Common Council went on record in opposition to Assembly Bill 361, which would require all towns, villages, cities and counties to hold a referendum before enacting a wheel tax — even if a government entity has had a wheel tax for years. Kenosha, for example, has had a wheel tax since 1986.
Portage’s wheel tax is, basically, an additional $20 tacked onto the $75 fee that the Wisconsin Department of Transportation collects annually whenever a vehicle owner living in the Portage city limits registers a new vehicle or renews an existing registration. The DOT collects the fees, and keeps 17 cents per registration as an administration fee, before returning the rest of the wheel tax proceeds to the city, for use in street and transportation-related improvements.
The Portage Common Council approved the wheel tax in November, effective with this year’s budget.
City Treasurer Jean Mohr said the city got its first “small” payment on the wheel tax in February. Since then, revenues have been projected at $15,000 to $17,000 per month, depending on how many registrations there are in a given month.
If the wheel tax referendum requirement is not enacted by the Legislature, then 2018 will be the first year that the city has collected the wheel tax for a full year. The revenue for 2018 is projected at $194,276.
This year’s projected revenue was originally $200,000, but the expectation was adjusted downward by $72,000 due to the timing of the wheel tax implementation. But based on actual receipts from February through June and projected receipts from July through December, the projected 2017 total is expected to be $152,211.
Committee member Martin Havlovic asked whether the city would have to return the wheel tax revenue to the state if the referendum requirement should become law.
The bill is “silent on that,” Murphy said.
However, he added, the Legislative Reference Bureau has estimated that it would cost the Department of Motor Vehicles more than $300,000 to remove the wheel tax from the registrations of people who live in communities or counties where it has been implemented.
City officials never expected that the wheel tax revenue would cover major road improvement projects. But by using it for relatively small projects, more money is available for larger projects.
The resolution that the Common Council passed on July 27 noted that Portage is among 20 Wisconsin municipalities and counties that, as of 2016, had enacted a wheel tax. It also noted “continual reductions in state aid” to cities, combined with state-imposed limits on a city’s ability to raise enough revenue to meet local needs.
In Columbia County, Portage and Lodi ($20 per vehicle) are the only communities to have implemented a wheel tax.
The resolution calls on the Legislature to oppose AB 361 and “focus instead on adopting a long-term funding solution to provide sustainable assistance to local communities and allow those communities and counties that have made the local decision to invest in our transportation need to remain intact.”
Murphy added that calls from residents asking about, or complaining about, the wheel tax have dwindled considerably, to maybe one call per month.
“We’re still getting a few, but it’s down to a trickle,” he said.