Sales taxes and those on income, cigarettes, beer now pay for roads
You paid $1,299 to have that new plasma TV for the Packers season opener and shelled out $71.45 more in Wisconsin sales taxes.
Here’s what you may not know: A few pennies of your sales tax went to the state Transportation Fund, which builds and maintains highways and bridges and subsidizes bus systems, airports and harbors.
For years, state officials and candidates in election years promised to stop “raids” on the state Transportation Fund, which they said must be solvent—or close to it—to pay for the state’s highway infrastructure.
And cutting the ribbon on a new, wider and safer stretch of highway or rebuilt bridge is every politician’s perfect “photo op.” It ranks right up there with their smiles when they use those gold-trimmed shovels to turn over dirt at groundbreaking ceremonies.
The politicians repeatedly pledged to protect transportation cash because, according to the Legislative Fiscal Bureau, $428.6 million was diverted from the Transportation Fund to help pay for other programs between the 2003 and 2010 budgets.
It didn’t get a lot of attention last year, but two provisions of the current state budget not only stopped raids on the Transportation Fund, they reversed them by diverting $160.1 million in general-fund taxes to the Transportation Fund.
That means when you pay sales, income, cigarette and even beer taxes now, you’re dropping pennies into the Transportation Fund.
Sure, it’s not much. For now.
For example, general-fund taxes are expected to total $26.79 billion in the current two-year budget. So diverting $160.1 million of that—or 0.5 percent—to the Transportation Fund amounts to a you-won’t-miss-this skim.
But the diversion highlights some tough 2013-15 budget choices facing Republican Gov. Scott Walker and legislators who will be elected Nov. 6:
--The Transportation Fund will need more cash, especially as Walker and legislators from both parties who represent the Madison-to-Beloit corridor push to widen Interstate 39/90 during the next several years. That project’s price tag: $835.7 million. And that’s in 2012 dollars.
--More than 90 percent of Wisconsin’s transportation funds—not including federal aid—come from just two sources, the gas tax and vehicle registration fees. The $75-per-vehicle annual registration fee has not increased since January 2008; the 30.9-cent per gallon gas tax has not risen since April 2006.
The conservative Walker may do all he can to avoid recommending any increases in these two fees when he presents his 2013-15 budget early next year. Last year, he recommended diverting a percentage of sales tax collections to the Transportation Fund and ratcheting up that percentage each year.
Under Walker’s plan, state officials would have had to estimate sales taxes collected on the sale of motor vehicle parts and accessories, and each year a greater percentage of that total would go to the Transportation Fund.
Republicans in the Legislature balked at that plan, however.
Instead, they voted to redirect $125 million in general-fund taxes to the Transportation Fund and added $35.12 million as a consolation prize for killing the governor’s funding idea.
Craig Thompson, executive director of the Wisconsin Transportation Development Association, a coalition of special-interest transportation groups, defended using sales, income, cigarette and beer taxes to bail out the Transportation Fund.
“The $160 million was a recognition by the Legislature and governor that investing in transportation is incredibly important to our manufacturing and agricultural base in Wisconsin and was necessary for our economic recovery,” Thompson said.
For example, he added, the “single biggest reason” that Wisconsin jumped to 17th—from 25th—in a recent national survey of job creation was “transportation and infrastructure.”
Thompson noted the limits of relying on only two sources of revenue—the gas tax and vehicle registration fee—to pay for the state’s infrastructure.
“Our preference is that transportation in Wisconsin be predominantly funded by user fees, but some general-fund support is very legitimate and is utilized by many states across the country,” Thompson said.
Some states add their sales tax to prices at gas-pump prices, for example.
The need to find a way to pay for future transportation is why there are whispers about charging highway tolls.
Need another wide-screeen TV? The Transportation Fund needs a few more sales-tax pennies.
Steven Walters is a senior producer for the nonprofit public affairs channel WisconsinEye. This column reflects his personal perspective. Email email@example.com.