New London considers wheel tax
Revenue would repair roads
By Scott Bellile
New London residents may soon be paying an annual wheel tax to help generate revenue for road repairs.
The New London Finance and Personnel Committee authorized city staff to draft a wheel tax ordinance on July 5.
The wheel tax ordinance is not officially approved yet. It would undergo two readings by the committee and ultimately require city council approval before going into effect.
City Administrator Kent Hager told the committee July 5 that New London’s 9,500 taxable vehicles, taxed at $20 per year, would generate approximately $189,000 annually for the city.
Roads in poor shape
City officials and aldermen believe New London’s roads are deteriorating.
Wheel tax revenue could give the city a steady stream of revenue to supplement its yearly capital projects budget for roadwork.
Ideally New London would be budgeting $500,000 a year for road repairs, City Finance Director Judy Radke said. But with the state’s share in revenue remaining constant over the years and the city’s capital operating budget shrinking, the city can afford to budget half that amount, $250,000 a year, for road repairs.
“Would [$189,000 a year] increase our ability or our speed at which we can kind of get the roads to a point where it would be a noticeable difference for folks?” committee member and First District Alderman John Faucher asked Radke.
“We’re talking a million dollars over five years, so it would definitely be something that would substantially help enable construction projects that we’re looking at in our capital projects in the next five to 10 years,” Radke said.
Mayor Gary Henke added: “It would be a major boost to what we spend on roads every year. Major.”
Committee member and Third District Alderman Mike Barrington expressed doubt $189,000 could make a world of difference for the city’s roads.
“I think it’ll [help] but I don’t think it’s going to be a complete saver because they are so far behind right now,” Barrington said.
In the committee’s 4-1 vote, Barrington, Faucher, Dave Morack and Mary Tate voted in favor of drafting a wheel tax ordinance. Tom O’Connell voted against.
Background on wheel taxes
Under state law, wheel tax revenue must be used for community improvements related to transportation.
Hager explained how a wheel tax works in a memo to the committee dated June 27.
“State law allows a town, city or county to collect an annual wheel tax (registration fee),” he stated. “This tax is in addition to the annual state registration fee. The local tax is collected on cars and trucks that weigh 8,000 pounds or less. The amount of the tax is not specified by state law but typically runs in a range between $15 to $25. All the revenue generated by the tax must be spent for ‘transportation related purposes.’ DOT collects the fee as part of the annual state registration fee and in turns (sic) keeps an administrative fee of 17 cents per vehicle.”
The Wisconsin Department of Transportation would receive an approximately $1,600 share of the tax revenue each year.
State law exempts antique and collector vehicles, buses, farm trucks, mopeds, motorcycles, motor homes, trucks heavier than 8,000 pounds from wheel taxes, Hager said.
Not a simple issue
Although the committee mostly agreed there should be a wheel tax, members acknowledged the arguments against it.
“My take on it,” Faucher said, “is obviously nobody likes to increase – a wheel tax is a tax – but to me, I think it’s probably one of the fairest taxes that there can be because if you drive a vehicle on a municipality-owned road, it’s not just somebody who owns a big white house on the corner paying for that. It’s everybody that uses it pays for it. To me it’s equal.”
“It’s somewhat of a user fee although not proportional. Mary drives her car much less than I do,” Henke said, motioning to Second District Alderwoman Tate.
“A guy over the fence in Mukwa isn’t going to be paying it either” despite using city roads frequently, Second District Alderman O’Connell said.
“No. Only city of New London residents,” Hager said. “If he has his post office box within the city limits, that would be a circumstance where he would do it. If they have a letter in front of their address, they’re not going to pay it.”
Hager stated in his memo that with more Wisconsin communities jumping aboard the wheel tax – around 10 governments have enacted one within the last two years – legislation has been introduced that would.
A package of legislative proposals introduced by Republican lawmakers Thursday, July 13, would require taxpayers approve a wheel tax through a local referendum, according to The Capital Times in Madison.
With more communities introducing wheel taxes, Hager speculated state legislators could become less inclined to increase road aids and shared revenue.
Early this year at the Jan. 4 finance and personnel committee meeting, when Faucher first asked for a wheel tax discussion to be placed on a future agenda, Henke blamed state legislators for not allocating enough transportation dollars to municipalities to keep their roads in shape.
“The sad thing about the whole situation is the governor refuses to raise gas taxes or whatever, doesn’t want to do that, which is forcing cities to put more taxes on in order to pay for roads rather than have the state do it,” Henke said. “And I mean it’s nice that he doesn’t want to look like the bad guy and force us to look like the bad guy.”
Henke has written to state officials and legislators to express his concerns.
“Those guys have got to come to some consensus and figure out how to fix that highway fund in the state of Wisconsin,” he said, adding, “We just want our roads improved, period.”