Wheel taxes have popped up around Wisconsin

MADISON - More than 20 communities around Wisconsin have adopted wheel taxes in recent years, resulting in a sevenfold increase since 2011, a new report says.

Twenty-seven communities impose or soon will impose wheel taxes on their residents, up from four in 2011, according to the nonpartisan Wisconsin Policy Forum. Over that time the amount of money brought in from local wheel taxes nearly tripled from $7.1 million to $20.7 million.

While the number of communities with wheel taxes has been growing, they still make up just a small portion of the state’s 72 counties and 600 cities and villages, the report notes.

One possible reason for the increase is because local governments have few options for raising new money, the report says. Property taxes have been tightly limited since Gov. Scott Walker took office in 2011, leaving local officials with tough decisions when their expenses increase.

Wheel taxes are to be used only for transportation projects, but local governments can use revenue from their wheel taxes to offset property tax money that they had been using for such projects.

Walker said he is not seeking to make changes to the law governing wheel taxes.

“We’re not talking about taking it away nor adding to it,” he told reporters Tuesday. “I think that’s one that jurisdictions have to debate on at the local level in the same way that school districts debate on whether they put referendum questions on the ballot. To me, that’s up to the local officials.”

He said he thought local governments would be less likely to adopt wheel taxes in the future because they received increases in state aid for transportation in last year’s budget. The report noted such aid increased by 15.5% from 2007 to 2017, which was not enough to keep up with inflation.

Walker’s opponents have contended the local increases aren’t sufficient, particularly in the face of the limits on property taxes for local governments and a broader political fight over state funding for highways.

The wheel taxes range from $10 to $30 a year, according to the state Department of Transportation. The wheel taxes are tacked onto the state’s annual vehicle registration fee, which is $75 for most passenger vehicles.

The highest local fees are charged by Milwaukee County and Milton in Rock County. Drivers in Milwaukee pay the most because they are charged wheel taxes by both the city and the county.