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Loss of county wheel tax would cost $7 million
Severe cuts in bus service and sharp increases in fares would be needed if a tax plan proposed by Assembly Republicans is in the next state budget, county officials said.
Severe and immediate cuts in bus transit services and sharp increases in bus fares would be necessary to repair a $7 million hole in this year’s Milwaukee County budget if a state tax plan proposed by Assembly Republicans is included in the next state budget, county officials said.
The legislative package authored by Rep. Dale Kooyenga (R-Brookfield) would terminate Milwaukee County’s $30 vehicle registration fee as soon as July 1 and erase half the revenue the county transportation department expected to receive in the first year of a wheel tax.
The county could regain the wheel tax only if approved by voters in a referendum, under the proposal. There are no scheduled elections for the remainder of this year so a referendum would not be added to a ballot until 2018 at the earliest.
County voters in April rejected an advisory referendum asking if they supported a total $60 vehicle registration fee, or double the current wheel tax.
Milwaukee County Executive Chris Abele said the unexpected blow to this year’s budget “effectively cripples the county’s ability to connect thousands of workers and employers” and will impact transit services both in the city of Milwaukee and the suburbs.
“The state’s transportation budget deficit is $1 billion,” Abele said. “Taking away Milwaukee County’s ability to generate its own revenue does nothing to solve the state’s budget problems.”
The Kooyenga plan focuses on changes to gas taxes, to help resolve the state’s transportation budget problems, and changes to income taxes.
The county wheel tax was expected to generate $13.9 million this year, county Budget Director Steve Kreklow said Friday. The revenue estimate was based on 10 months of collections that began March 1.
Most of that revenue, fully $11.9 million, was to pay for bus and paratransit services provided by the Milwaukee County Transit System, he said. The remaining $2 million was to be spent on development of the proposed Bus Rapid Transit route between downtown Milwaukee and the Milwaukee Regional Medical Center in Wauwatosa.
He expects the wheel tax would be paid through July since owners of vehicles coming due for renewal that month would have received their invoice in June or earlier. That would provide the county with five months of receipts and result in a nearly $7 million revenue loss if the Kooyenga proposal is included in the budget bill, he said.
“It is a real challenge to absorb a hit like this” coming in the middle of the budget year, Kreklow said.
“If this was a one-time loss of revenue, you could defer some spending, push things back a year,” he said. “Since this would eliminate the funding permanently, we would need to make permanent cuts.”
To fill the budget hole, Kreklow and other county officials said they would consider: eliminating all summer festival bus service, including routes to Summerfest and the State Fair; increasing bus and paratransit fares; reducing paratransit service areas; eliminating lower-ridership routes; and eliminating shuttle services that transport workers to outlying businesses and industrial parks. County road projects and the Bus Rapid Transit service also could become targets of cuts, Kreklow said.
Vehicle owners in the county started paying a $30 per vehicle registration fee in March as part of a 2017 budget adopted by the County Board.
The first full year of county wheel tax collections in 2018 was forecast to generate up to $17 million for transit operations and major transportation projects, Kreklow said.
County Board Supervisor Michael Mayo Sr. described the GOP tax plan as a “hostile action” against the county.
“Milwaukee County is focused on meeting the needs of our residents and getting people to work,” Mayo said. Killing the county’s wheel tax “will make it harder for people to get to work and contribute to the economic growth of our county and the region,” he said.
County Board Supervisor Steve Taylor criticized Assembly Republicans for not helping the county find solutions to the budget problems created by the proposal.
“The only real alternative is to make cuts to transit services, which could have enormous negative consequences on the county’s employers and economy,” Taylor said.