Green Bay the latest to add ever-more-common wheel tax

Listen to this article

Green Bay became the latest place in Wisconsin to approve a road-funding mechanism that local governments across the state are increasingly leaning on as state and federal dollars grow scarcer: the wheel tax.

Green Bay’s tax passed on a 10-2 vote on Tuesday. Its supporters say it will not only raise $2.1 million for new road projects but also eliminate a fee that levies a lump sum on homeowners. The rule change still requires one more final vote before it can be enacted.

It has taken quite some time for Green Bay to get to this point. The new tax has been in the works for about two-and-a-half years. Some local officials decried it as a regressive tax that would fall disproportionately hard on poorer residents. The city’s wheel tax is set a $20 a year and comes on top of the $75-a-year registration fee already charged by the state.

But for supporters like the Green Bay Alderwoman Barb Dorff, the wheel tax was the best among the very few ways that local governments now have to raise money for roads. And additional road funding is not the only benefit.

Green Bay’s wheel tax will also allow local officials to eliminate fees known as special assessments, which require homeowners to pay a chunk of the cost of infrastructure projects that abut their property.

Green Bay is far from being alone in turning to a wheel tax.

According to a recently released report from the Wisconsin Public Policy Forum, the number of cities in Wisconsin that are using wheel taxes to patch up their budgets has grown sixfold in recent years.

Although the state has allowed cities to use wheel taxes for a half-century, only four had enacted the tax by 2011. A mere six years later,  the number had increased to 27. The money raised by wheel taxes has nearly tripled, going from $7.1 million to $20.7 million in that time.

The increased reliance in wheel taxes comes as the state contributes less and less to road projects. The independent group the Wisconsin Policy Forum found that the state’s contributions to local-aid programs actually rose by 15.5 percent from 2007 to 2017, going from $412 million to $475.7 million. Adjusted for inflation, though, these aid programs declined 2.3 percent, or by $11.3 million, if measured in real dollars. Highway costs also tend to rise faster than the cost of the goods tracked by the Consumer Price Index, a recent legislative audit found.

Other transportation fees such as the gas tax and vehicle registration fees have been stagnant in recent years, too. Wisconsin has not raised its gas tax since 2006 and has not raised its vehicle-registration fee since 2008. And because of legislation passed since 2011, local governments are often not able to increase their property taxes, hampering their ability to raise money for local road projects.

State law says that wheel taxes can be applied only to vehicles that weigh less than 8,000 pounds. In Green Bay, the tax will apply to 105,000 vehicles and exclude certain types of antique vehicles and motorcycles, among others.

Dorff said Green Bay’s wheel tax will raise $2.1 million a year, of which $750,000 will go toward paying of special assessments placed on residential properties. An additional $175,000 will be used to pay off half of the special-assessment amounts placed on non-residential properties. That leaves about $400,000 for new road projects next year and the rest for bridge maintenance and pothole repairs.

Despite its benefits, the tax is not without critics.

Green Bay Alderman John VanderLeest said Green Bay’s deteriorating roads are the result of the city’s failure to plan for what many knew would be an inevitable drop in state support. He also faulted local officials for being reluctant to make cuts to other departments to pay for road work.

VanderLeest voted against the wheel tax proposal on Tuesday, though he said he supports spending more on Green Bay’s roads. He even proposed a new name for the city’s wheel tax.

“It’s called mismanagement of the city’s money,” VanderLeest said. “I think other places are doing it because they can get away with it.” Follow @natebeck9