Republican proposal would allow counties to raise a half-cent sales tax for roads

Rep. Dean Knudson, R-Hudson, is the lead author of a bill that would allow counties to hold a half-cent sales tax referendum to fund roads.

The Republican author of a proposal to give local governments the ability to raise a half-cent sales tax to pay for road repairs is making the case to colleagues that a vote for the bill isn’t a vote for a tax increase.

Assembly Bill 210 would allow counties, with voter approval in a referendum, to impose a half-cent sales tax and distribute the revenue to local municipalities for road maintenance. The municipalities would have to maintain pre-existing spending levels so the funds wouldn’t displace spending in another area of the budget. Voters would have to approve the sales tax every four years.

The bill passed on a bipartisan 14-0 vote in the Assembly Transportation Committee on Dec. 10, but its prospects are unclear in the state Senate, where only one senator, Sen. Tom Tiffany, R-Hazelhurst, has signed on as a co-sponsor and there is not a companion bill introduced.

Rep. Dean Knudson, R-Hudson, said he has heard concerns from fellow fiscal conservatives that the bill would violate their opposition to raising taxes, but Knudson said that shouldn’t be a concern.

“This is an important tool that allows local taxpayers to have a say in providing additional money for local roads,” Knudson said. “To me this is very clearly not voting for a tax increase. It allows a local county to make that decision on its own.”

A spokeswoman for Senate Majority Leader Scott Fitzgerald, R-Juneau, said his office will track the bill’s progress through the Assembly to determine if and when it is taken up in the Senate.

Jerry Deschane, executive director of the League of Wisconsin Municipalities, said several municipalities around the state would likely take advantage of such a sales tax. He noted Douglas County in the far northwestern corner of the state has stretched its road replacement schedule out to 50 years, whereas other counties typically replace roads every 10 to 30 years.

“I’m not sure anybody is disputing we’re falling behind on maintenance and it’s only getting worse,” Deschane said.

The proposal comes as Gov. Scott Walker and the Republican-controlled Legislature have struggled to come up with a long-term fix to the state’s transportation funding woes.

A bipartisan transportation commission reported in 2013 that if Wisconsin wants to maintain the current quality and congestion on its roads it will need an extra $15.3 billion over 10 years.

It recommended increasing by 5 cents the state’s 30.9-cent per gallon gas tax, which is sixth highest in the nation, but hasn’t been raised since 2006 when the Legislature ended inflation-based indexing, as well as increases in other transportation fees.

In both state budgets since the report came out Walker and the Legislature have primarily increased transportation borrowing, taken money from the general fund and delayed road projects to keep up with the state’s transportation needs.

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Peter Skopec, executive director of the Wisconsin Public Interest Research Group, opposes AB 210 because he worries it would give the Legislature another incentive to cut funding to municipalities.

“That’s the wrong way to go,” Skopec said. “Instead of asking people to pay higher taxes, we should instead first make sure that the money we have is being spent in the right ways.”

A legislative audit of the Department of Transportation’s highway program that will look at whether the state has been adequately justifying highway expansions is an important first step, Skopec said.

That report is due out next fall, according to the Legislative Audit Bureau.

According to a Wisconsin Taxpayers Alliance study released earlier this year, 40 percent of state transportation spending in 1999-2001 went to local roads. By 2013-15, that share had dropped to 32 percent.

Meanwhile, the share spent on retiring debt doubled from 8 percent to 16 percent.

Spending on local roads also has slowed. In the 1990s, local road spending increased 5.7 percent each year, compared with 5.5 percent for all local spending. From 2000 to 2005 it increased 2.4 percent per year.

Then from 2005 until 2012 it increased 0.5 percent per year as the state imposed tighter controls on property taxes.

From 2000 to 2011, Wisconsin ranked 12th nationally in how much state highway spending increased (4.1 percent per year). But during that same period it ranked 48th in how much local road spending increased (0.6 percent per year).

Per capita spending on local roads has dropped from $275 per capita to $227 in 2012, or less than what it was in 1986.

All dollar figures are adjusted for inflation).

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