Here’s the email to the council about the $17 wheel tax ordinance (or, as the policians prefer it be called, the vehicle registration fee or vrf), the budget message, overview slides and the one0pager on the budget outlook.
2019 Operating Budget-Kickoff Slides
Mayor’s Budget Message 2019
Understanding the 2019 Gap
From: Mayor
Sent: Thursday, June 14, 2018 10:29 AM
To: All Alders
Cc: Ragland, Enis; Crawley, Katie; Reyes, Gloria; Zavos, Nicholas; Monks, Anne; May, Michael; Lauten, Patricia; Viste, Doran; Larsen, Laura; Schmiedicke, David
Subject: Local Vehicle Registration Fee OrdinanceCouncil Members,
As you are aware, I recently directed city agencies to hold the line on spending for next year’s budget. Current projections for 2019 show a budget gap approaching $5 million (see attachment). Closing that gap, as you know, is difficult given the very limited range of revenue options allowable under state law. In recent years, budgets gaps have been closed by new revenues generated through enactment of a special charge for urban forestry costs, increases in ambulance conveyance fees, and, in the 2018 budget, an increase in the City’s room tax rate from 9% to 10%.
One of the last available revenue options for the city under state law is a local vehicle registration fee. With strict levy limits in place for municipalities and counties, and lack of action by the Governor and legislative majority on transportation finance, many communities are turning to this fee. Revenues from this fee must be used for transportation purposes. At last count, 19 municipalities and eight counties, including Dane County, have enacted a local vehicle registration fee. Fees range from a low of $10 to a high of $30. The City and County of Milwaukee each have fees (city = $20; county = $30). Dane County recently enacted a $28 fee that will become effective in October 2018. These fees are added to the state vehicle registration fee, which is currently $75 per year. So, for example, total vehicle registration fees in Milwaukee County are $125 ($75 state; $30 county; and $20 city). Starting in October, all vehicles in Dane County, including those registered in the City of Madison, will pay a registration fee of $103 ($75 state plus $28 county).
According to analyses conducted by the Wisconsin Department of Transportation, Wisconsin has among the lowest vehicle fees and taxes in the country (in 2016, it was estimated that Wisconsin had lower vehicle-related fees and taxes than 35 states and was the lowest among its neighbors). A recent report stated that Wisconsin has the eighth lowest auto insurance rates in the country. Taken together, the cost of owning and operating a vehicle in Wisconsin is relatively low compared with the rest of the country.
While the gas tax is a more effective means of raising transportation revenue, collecting revenue from out-of-state, as well as in-state, vehicle owners, an increase in vehicle registration fees is not unreasonable from an interstate comparison perspective. However, I remain concerned about the impact of an increase in a flat vehicle registration fee on lower income families, individuals and seniors. Unfortunately, the Governor and Legislature have not authorized broader-based approaches, such as local option sales or fuel taxes for cities, or more equitable approaches, such as registration fees based on the value of a vehicle. In addition, state law does not authorize any waiver of local vehicle registration fees based on income.
Dane County proposed its local vehicle registration fee in their 2018 operating budget. Revenues from the fee will be used for existing transportation purposes in the county budget. Current revenues supporting those transportation costs are being reallocated to close a budget gap so that other programs supported by county general purpose revenues, including human services, can be sustained.
I am considering a similar approach for a City of Madison vehicle registration fee. At this time, I am considering a $17 vehicle registration fee. When combined with the state and county registration fees, vehicle owners in the City of Madison would pay $120 annually ($75 state; $28 county; $17 city). A $17 fee would raise an estimated $3.3 million annually (approximately 194,000 vehicles registered in the City would be subject to the fee). If enacted, vehicle registration fee revenues would be used for existing transportation purposes (e.g., the City general fund subsidy for transit), with existing general fund revenues for that purpose reallocated to help close the estimated budget gap and maintain and hopefully expand community services programs. One of my top priorities in that area is to better connect individuals and families in some of our most challenged neighborhoods with city services. In addition, balancing our current services budget and focusing scarce general fund resources on our community services programs helps those with the lowest income in our city toward the goal of offsetting some of the regressive nature of this fee.
At the June 19th Common Council meeting, I am introducing an ordinance to enact a local vehicle registration fee so that it can be considered well in advance of the start of 2019. Under the state law and administrative rule for this program, the state Department of Transportation must receive notification of enactment of a local ordinance adopting the local vehicle registration fee at least three months prior to its effective date. I am referring the ordinance to the Finance Committee for further discussion. Other referrals can be made at the discretion of the Council. In order to have the registration fee effective by January 2019, the ordinance would have to be adopted no later than the September 4th meeting of the Common Council.
More information on the local vehicle registration fee program can be found here.
Please contact David Schmiedicke or Doran Viste if you have questions on the proposed ordinance.
Thank you.
Paul R. Soglin
Mayor
