Proponents of a state bill that would require local governments to pass a referendum before imposing a vehicle registration fee say it puts decisions in the hands of the taxpayers, but opponents say it takes away one of the few tools local governments have to fund projects.
The state Assembly Committee on Ways and Means heard testimony for and against the bill (AB 361) Thursday from its author, Rep. Michael Schraa, R-Osh- kosh, city council members and county supervisors from around the state.
Under current state law, municipal and county governments can impose a registration fee, known as a wheel tax, with all funds gained from the fee going toward transportation-related purposes. The bill would still allow those fees and keep the mandate that the money go toward transportation, but a community must approve the fee in a referendum at a regularly scheduled election.
“It’s not news that Wisconsin has faced tremendous challenges in transportation funding and that some areas are still hard-pressed to fill the potholes, despite significant reforms from this administration,” Schraa said, maintaining that past mismanagement of the Department of Transportation budget was a factor.
Schraa introduced the bill to the Assembly in June, and Sen. Stephen Nass introduced a companion bill (SB 625) this month.
The bill would also affect local governments that have already passed a wheel tax. Counties and municipalities that have such a fee would have to hold a referendum within 18 months of the bill’s effective date.
Dane County recently passed a $28 registration fee as part of its 2018 budget. Milwaukee County, Janesville and Appleton are among several others that already have such fees.
Rep. Chris Taylor, D-Madison, a committee member, questioned the constitutionality of the bill’s retroactivity. Principal attorney Scott Grosz told the committee that the legislative council did not have a conclusive answer on its constitutionality and that it would be looked into.
Some opponents, including Dane County Executive Joe Parisi, called the bill hypocritical since the state does not hold a referendum when increasing the vehicle registration fee.
“If we’re going to do this, let’s have a referendum for every fee the state Legislature imposes,” Parisi told the Wisconsin State Journal.
Parisi said the vehicle registration fee will allow Dane County to spend about $12 million on transportation matters such as snow removal, road maintenance and road-expansion projects. He said those needs are vital, and if the $12 million couldn’t be collected through a wheel tax, it would have to be reallocated from services related to cleaning the county’s lakes and helping people with mental illness.
He said he expects that the county’s residents would pass the registration fee in a referendum if it were required.
“Nobody likes to pass taxes or fees, but they do want to have their roads maintained,” Parisi said.
Schraa said the onus is on the local government to educate voters before a referendum, but that measures were taken in the bill to address financial concerns. The referendum would be required to be listed on the ballot of a regularly scheduled election to save costly resources associated with special elections.
Schraa likened the process to that of a school district referendum.
“If the municipality or county wants to impose a wheel tax, it is up to them to do a good job to educate the taxpayers,” Schraa said.