Steven Walters: Assembly leaders pushing local-option sales tax for roads

Steven Walters

January 11, 2016

The state Assembly will soon debate allowing counties to levy a 0.5 percent sales tax to rebuild crumbling local streets and highways. Voters in a given county would have to pass a referendum agreeing to the surtax. The bill has much less support in the Senate, however.

“This is the Pothole Repair Act,” Republican Rep. Dean Knudson, a former mayor of Hudson, said last week. “It's only for repair and maintenance.”

Knudson said his bill, which got a 14-0 vote from Republicans and Democrats on the Assembly Transportation Committee, would dramatically help local governments.

What the surtax raises would be divided according to a formula based on the miles of roadways maintained by each county, city, village and town.

“Most (local governments) would probably see a doubling” in cash for local roadways, Knudson added.

According to the state Department of Revenue, 62 of the 72 counties now levy a 0.5 percent sales tax to help pay for other local programs.

If those same 62 counties levied a new half-cent sales tax to maintain local highways, streets and bridges, it could raise about $333 million a year, the revenue department estimated.

Other provisions of Knudson's bill:

-- The countywide 0.5 percent surtax must end after four years. It could only be extended if a county board voted to put a new referendum to continue it before voters, and that passed.

-- Countywide referendums on whether to levy the 0.5 percent surtax could only be held in April or November general elections.

-- Counties and local governments getting aid from the surtax could not use it to reduce what they now spend on those programs. A “maintenance of effort” provision in the bill requires local governments to keep spending amounts equal to the average of what they have spent over the past five years.

-- Cash from the 0.5 percent surtax could not be used to fund bus or mass transit systems.

Lobbyists for local governments say those communities desperately need that additional cash.

“An optional half-cent local option sales tax for transportation purposes at the county level will significantly help counties address their highway funding needs,” said Dan Bahr of the Wisconsin Counties Association.

Knudson's bill “provides local governments with a new tool to address the backlog of maintenance on local roads and bridges, while also charging local taxpayers with the decision of whether to approve the tax,” Bahr added.

A local-option sales tax for local roads was one option recommended by a past study committee, although it—and every other recommendation—went nowhere in the Capitol.

Knudson and others say one reason to pass the local-option sales tax for streets and highways is the impasse over long-term funding of state transportation programs. Instead of raising fees or taxes, Gov. Scott Walker and Republican legislative leaders borrowed an additional $850 million by mid-2017.

Paying for state and local highway systems is “the most pressing problem” facing Wisconsin, Knudson said. And, in this session of the Legislature, “No other concrete suggestions have really come forward.”

“Allowing local communities the option to raise money specifically for transportation purposes in their own area is good public policy,” said Craig Thompson, executive director of the Transportation Development Association, a statewide umbrella group that has been pushing for long-term funding of state and local highway systems for years.

Thompson suggested one change in Knudson's bill: “Ideally, the legislation should allow voters the latitude to raise the money for any form of transportation they deem important for their community, including mass transit.”

Knudson's bill has 16 bipartisan sponsors in the Assembly, including Joint Finance Committee Cochairman John Nygren and Assistant Majority Leader Dan Knodl. But only one of the 33 senators—Republican Sen. Tom Tiffany—has signed on so far.

Knudson said he expects “strong bipartisan support” for his bill when it passes the Assembly in the next few weeks.

But that Assembly vote won't force the Senate, although it's also controlled by Republicans, to take up the bill, Knudson conceded.

Knudson said it is “ridiculous” for other conservative Republicans to oppose his bill by suggesting it raises taxes. Instead, he said, it puts decision-making in the hands of local elected county supervisors and local voters, and the surtax must end after four years.

“It really is consistent with conservative principles,” Knudson added.