News

Greg Buckley, Two Rivers City Manager: Cost savings alone won’t fund roads 10/13/2016

10/13/2016, Manitowoc Herald Times Reporter – Last week, I wrote about the need for more state funding to maintain and rebuild our local transportation infrastructure.

I wrote about recommendations that have been put forward in recent years by a special state commission and by Transportation Secretary Mark Gottlieb, citing a $700 million annual shortfall in transportation funding and recommending a combination of a gas tax increase and fee increases to help close that gap.

These are recommendations that have been “dead on arrival” in both the Legislature and the governor’s office.

With a new session of the Legislature and a new state budget process coming up, transportation funding is likely to be a hot topic.

As much as none of us likes paying higher taxes and fees, as you follow this debate over paying for Wisconsin’s highways, bridges, streets and other transportation infrastructure, consider the following:

Yes, our gas tax is high, but …

At 30.9 cents per gallon, our state’s gas tax ranks seventh highest among the 50 states — 9 cents above the national average.

But when you add in other state taxes on gasoline, like special taxes to fund petroleum-related environmental cleanup (2 cents per gallon in Wisconsin) and the sales taxes that some other states levy on gasoline, Wisconsin’s total state tax on a gallon of gas (32.9 cents) ranks 16th highest in the U.S., according to the American Petroleum Institute.

From 1988 to 2006, our state gas tax was indexed to inflation. During that 18-year period, indexing raised the tax from 20 to 30.9 cents per gallon, according to the Wisconsin Department of Transportation paper, “What is the History of the State Gas Tax and Vehicle Registration Fees?”.

If indexing had continued to the present, the gas tax would have increased by about another 6 cents, and would be providing an additional $175 million per year to meet state and local needs.

Given the ups and downs we experience almost daily in gasoline prices, and the historically low gas prices we have enjoyed over the past few years, would another 6 cents at the pump, in support of streets, roads and bridges, have posed an undue burden?

Registration fees: Low, and unchanged since 2008

Next, consider that our vehicle registration fee of $75 per year for a car or light truck is relatively modest when compared to other states. And it has not been increased since 2008.

The 2014 Wisconsin Taxpayers Alliance study, titled “Filling Potholes: A New Look at Funding Local Transportation in Wisconsin,” looked at total gas taxes and vehicle registration fees paid by the owner of a 2011 mid-sized sedan in five Midwestern states.

In the comparison, the vehicle owner in Wisconsin would have paid a total of $254 in such taxes and fees in 2012: $75 to register the car, plus gas taxes of $179. This was the lowest in the five states cited.

Driving the same car and using the same amount of gas, a driver would have paid $308 in Illinois, $342 in Michigan, $410 in Iowa and $463 in Minnesota. All based on 2012 gas taxes and fees — again, such taxes and fees have not increased in Wisconsin during the ensuing four years.

Iowa — a pretty conservative state — increased its gas tax by 10 cents in 2015. Michigan has approved legislation that will increase its gas tax by 11 cents in 2017, along with a $20 hike in registration fees (to $120).

And the analysis did not reflect what a driver in northern Illinois would pay annually in tolls, which fund many of the major expressways in the Chicago area.

‘Pay me now, or pay me later’

I’m not suggesting Wisconsin needs to go hog wild with gas tax and fee increases. But the reality is that our state has a growing funding gap between available resources and infrastructure needs. Major highway projects are getting delayed, and local maintenance and reconstruction efforts are inadequate.

There may indeed by some ways to save money, especially at the state level. An audit of the Department of Transportation, ordered by the Legislature, is underway. Maybe the state will remove prevailing wage requirements from its own projects, as it recently did for local government projects.

But don’t expect to close a $700 million annual gap with cost savings alone.

At the end of the day, Wisconsin’s tax and fee burden for funding our transportation infrastructure is not out of line with other states — especially other northern-tier states that must deal with the ravages of winter, especially other states that do not utilize toll roads.

It may be high time that we all pay a bit more in travel-related taxes and user fees, to protect our huge investment in this infrastructure, on which so much of our economy depends.

When it comes to infrastructure, it truly is a matter of “pay me now, pay me later.”

Two Rivers City Manager Greg Buckley can be contacted by calling 920-793-5532, or by emailing gbuckley@two-rivers.org.