Drivers in Wisconsin would have to pay an additional $751 million in taxes and fees over the next two years if a new transportation budget request is approved.
Faced with a looming budget shortfall, the state Department of Transportation wants to create a fee for new cars, increase fees on electric and hybrid vehicles, raise taxes on diesel fuel and add a new variable gas tax.
The transportation department’s 2015-17 budget request submitted late Friday also calls for an increase in the use of the state’s general fund revenue. It came just over a week after Republican Gov. Scott Walker, who touted tax cuts on the campaign trail, won re-election.
“We have to deal with putting our funding on a long-term, stable path, and we’re asking people to consider it,” department secretary Mark Gottlieb said in a Friday afternoon conference call with reporters. “We feel this is a very balanced proposal.”
Cost increases would include a “highway use fee” for new vehicle purchases, which would amount to $800 on a $32,000 vehicle, he said.
Gas taxes would increase by about $27 a year for the owner of a typical late-model sedan, Gottlieb said, adding that the request calls for changing the state’s gas tax so it would be linked in part to wholesale prices of fuel.
And the owners of hybrid and electric vehicles would also have to pay an annual $50 fee, said Gottlieb, a former Republican state representative who was appointed by Walker to head the transportation department.
That fee aims to “ensure these owners continue to pay their fair share of the operating costs of our infrastructure,” his request letter said.
The gas tax overhaul and new fees for hybrid and electric cars mirror ideas floated by Walker during a meeting with the State Journal editorial board last month.
The proposal aims to shore up the state’s projected $680 million shortfall in the DOT’s 2015-17 budget.
A Walker spokeswoman said he would review the plan and get feedback from others on it.
“Gov. Walker asked Secretary Gottlieb to develop a thoughtful plan addressing the current deficit in the transportation fund,” spokeswoman Laurel Patrick said. “He looks forward to hearing from constituents and working with stakeholders and legislative leaders on putting forward a solution in the budget.”
Walker will consider the proposal along with other agency requests — including those dealing with schools, prisons, the University of Wisconsin System, and public assistance programs — when putting together the state’s budget, which he is expected to submit early next year.
Walker has said he wants the Republican-controlled Legislature to pass the budget quickly, but debates over things like tax increases could slow the process.
Assembly Speaker Robin Vos, R-Rochester, had no immediate comment on the budget request.
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His spokeswoman Kit Beyer said he would review it and discuss it with the members of the caucus.
And Myranda Tanck, a spokeswoman for Senate Majority Leader Scott Fitzgerald, R-Juneau, said, “We will review this along with all other agency requests as we begin the first steps in preparing the budget.”
Democrats quickly criticized the proposal, saying Walker wantED to raise taxes on Wisconsin families.
“Walker’s plan imposes an undue financial burden on working families who are already suffering the effects of an economy plagued by low, stagnant wages and Walker’s inability to create the jobs he proposed,” said Mike Tate, chairman of the Democratic Party of Wisconsin.
He also took a jab at Walker and his possible 2016 presidential bid.
“Maybe tax increases are suddenly the rage with primary voters in Iowa and New Hampshire, but my guess is they aren’t going to go over so well in Wisconsin,” Tate said.
Gottlieb said the plan would “broaden the base” of how the state funds transportation and “lessen the reliance on fuel taxes.”
He said the proposal, which replaced a partial request submitted in mid-September, would keep critical infrastructure projects, like the Zoo Interchange and Hoan Bridge work in Milwaukee, on schedule. It would also provide an increase in public transit funding with some targeted specifically at providing access to employment, he added.
The fuel tax increases would amount to a 5-cent increase per gallon on gasoline and a 10-cent increase on diesel, Gottlieb said. The higher diesel cost was designed so that heavy vehicles pay more to reflect the damage they cause to roads and bridges, he added.
He also said the department would decrease its use of debt by $186 million, in comparison to the current two-year budget period.
And it would increase the money taken from the general fund from $133 million to nearly $574 million.
“By any measure, this request is ambitious and far-reaching,” Gottlieb wrote in his letter.
The League of Wisconsin Municipalities praised the plan.
“The proposal is comprehensive and well thought out,” executive director Jerry Deschane said. “It offers a viable and long-term strategy for addressing the state’s transportation needs.”