Madison Metro bus, State Journal generic file photo (copy)

Mayor Satya Rhodes-Conway’s budget proposal anticipates $7.9 million in revenue from a $40 vehicle registration fee that would, in part, help fund the city’s plan to implement a bus rapid transit system.

Alders on Madison’s Finance Committee reluctantly recommended an ordinance creating a $40 vehicle registration at the end of a lengthy budget meeting that ended in the early hours of Tuesday morning.

Rhodes-Conway’s budget proposal anticipates $7.9 million in revenue that would, in part, help fund the city’s plan to implement a rapid transit system or a bus system that is more efficient, faster and more reliable.

Alders acknowledged the fee’s regressive nature, but said it is difficult to change the proposal because the budget has been built around the new revenue stream.

“I think it’s a thing that is really going to hurt a lot of people,” said Ald. Marsha Rummel, District 6, who is not a member of the committee. “I’m struggling with it, but I don’t really know what the options are.”

Over the past several years, more municipalities have been turning to vehicle registration fees as a revenue source. Until 2011, only four communities in the state enacted the tax, according to the Wisconsin Policy Forum. That list grew to 27 by the end of 2017, with tax revenues nearly tripling from $7.1 million to $20.7 million.

If adopted, Madison’s $40 vehicle registration fee would be the highest in the state. Madison residents would pay a total of $153 in vehicle registration fees — $40 from the city, a $28 tax that Dane County adopted in 2018 and a state fee of $85, which the state raised by $10 over the summer. Hybrid car owners in Madison would pay an additional annual state-imposed $75 fee.

The City Council will likely schedule a special session to vote on the ordinance.

Ald. Mike Verveer, District 4, amended the ordinance to be effective Feb. 1, 2020. He also unsuccessfully attempted to add a Dec. 31, 2021 sunset date after which the city would not impose the fee as a way to send a message to constituents.

“It sends the message that we don’t wish to do this,” Verveer said, "that this wasn’t our first choice but rather we’re forced to do this by the legislative majority at the state capitol.”

Rhodes-Conway said adding a sunset date would be “lying” to residents as a way to comfort them.

“We are not going to be able to get rid of a vehicle registration in two years because our costs are going to continue to go up,” Rhodes-Conway said.

Earlier in the meeting, the committee adopted an amendment to add a new program that would provide $40 gift cards to approximately 2,495 households that are eligible WIC recipients to offset the cost of the fee. The program would be funded by reducing Metro Transit’s budget by $100,000.

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