Madison mayor says $40 wheel tax is ‘critical’ for city, but council members concerned it’s too high

Amid opposition from residents, Madison’s mayor says the city’s new vehicle registration fee, or wheel tax, proposal isn’t ideal but feels it’s the city’s only option.

“We did not make this decision lightly in the mayor’s office. We wrestled with it for several months, honestly, and tried to find other ways to close the gap,” said Madison Mayor Satya Rhodes-Conway.

Upping the vehicle registration fee by $40 is a proposal Rhodes-Conway included in the city’s 2020 operating budget, calling it “critical” to balancing the spending plan. She said Wisconsin state law gives the city few other options because city officials are constrained by how much they can raise property taxes.

The vehicle registration fee is expected to generate $7.8 million, and that money has to go toward transportation services, as required by state law.

Alder Mike Verveer said he’s “not enthusiastic” about the wheel tax proposal but feels like it is inevitable given that the city has few other options available. He does, however, feel $40 is too high and said many of his colleagues feel the same way.

Twenty-four cities and 12 counties, including Dane, have vehicle registration fees, according to a memo from Madison Assistant City Attorney Doran Viste. The memo shows the highest wheel tax is $30 in Milton, Milwaukee County and Eau Claire County.

Dane County implemented a vehicle registration fee in October 2018, and the state just implemented a fee increase this month. Viste’s memo says cars, vans and SUVs would have a total annual fee of $153. Depending on their weight, truck registration fees would be $168 or $174.

Madison provides a subsidy to Metro Transit every year. About $3.6 million from the wheel tax would replace part of the subsidy, freeing up property tax revenue for other city services like police, health, planning and stormwater, according to a city memo.

The wheel tax revenue would also help Madison Metro shoulder increased operating costs, provide summer youth passes and increase low-income bus passes, prepare the city for the bus rapid transit system and increase the frequency of the bus system on the city’s south side.

Verveer said he has heard opposition to the plan from a number of constituents both via email and at community meetings. Many of their concerns center around the budget not including money for more police officers.

“Their argument is, ‘We wouldn’t mind paying the wheel tax if it were going toward public safety,'” Verveer said of his constituents.

Now-former Madison Police Chief Mike Koval’s request for money for more police officers was denied, and his frustration over the issue led to his abrupt retirement.

The city’s Finance Committee discussed the vehicle registration fee proposal at a meeting Monday night but tabled voting on it until Thursday night. The committee and the Common Council would have to approve the proposal, after which the state would be notified and the tax would take three months to go into effect.

Verveer said the mayor is “pressing” council members to move the plan along quickly so that the tax could go into effect by Feb. 1.

But Rhodes-Conway said she understands members wanting to take time to understand the material and the options.

“The longer we take now to approve it at the council level, the longer it will take for it to go into effect and for us to get the revenue back from that, but it is a big decision, and I understand that the council wants to give it adequate time and conversation,” she said.

Nick Jarmusz, director of public affairs for AAA, said his organization has concerns, namely that the process is moving far too quickly and the public is not getting enough opportunity to weigh in.

“Ultimately, when you’re talking about a new tax like this on motorists, it should go before the voters. If not, have ample opportunity for more public input,” Jarmusz said.

So what happens if the council approves a wheel tax under $40 or doesn’t approve one at all? Rhodes-Conway said, “We are almost certainly looking at layoffs, and to me, that’s just not an option.”

In their budget requests, city departments were asked to provide ways they could make a 2.5 percent cut if necessary. The mayor said she may have to consider those options if the wheel tax doesn’t pass.

“Some of those are really dramatic,” Rhodes-Conway explained. “For example, the Fire Department offered to close a fire station as part of their cut, and the Police Department offered to lay off a number of officers and to eliminate the crossing guard program as part of their cut. I didn’t choose to take either of those cuts in my executive budget for perhaps obvious reasons.”

Verveer said he feels it’s more likely that the five proposed new positions at Metro Transit will be “heavily scrutinized.”

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