Funding challenges for Wisconsin
Every great society throughout history has prospered from a robust and reliable transportation system. Our country is no different in that a reliable and efficient transportation network has helped fuel our economic engine. However, states across the entire country are faced with the challenge of paying for the maintenance and improvement of our transportation network and Wisconsin is no different. Wisconsin’s two primary sources of transportation revenue – motor fuel taxes and vehicle registration fees – are losing buying power at the same time travel is increasing and significant portions of the system are in need of costly reconstruction.
Additional revenue sources will be needed to address the growing gap between available revenues and expenditures. This problem has been studied for the last fifteen years but recently recommendations issued in January 2013 by the Wisconsin Commission on Transportation Finance and Policy identified $480 million in additional annual program needs to maintain pavement and bridge conditions, modal services and congestion levels.
Wisconsin is faced with three options for dealing with this problem:
- Raise additional revenues for transportation investment;
- Reduce transportation programs to match current revenues; or
- Issue bonds in the short term to maintain program levels while work continues on a political consensus for long-term, sustainable transportation funding.
The Commission offered the following recommendations to generate revenues needed to preserve and improve Wisconsin’s transportation network:
- Raise the state motor fuel tax (currently 32.9 cents per gallon, of which 30.9 cents is used for transportation) by 5 cents per gallon.
- Adopt a new 1.02-cent-per-mile registration fee for cars and light trucks that would exempt the first 3,000 miles traveled and cap fees at 20,000 miles.
- Increase annual registration fees for commercial trucks by 73%.
- Increase driver’s license fees by $20.
- Eliminate the sales tax exemption on the trade-in value of a vehicle.
These recommendations were projected to cost the typical Wisconsin motorist – who currently pays the lowest fees in the Midwest – approximately $120 annually, or about 33 cents per day. Below is a comparison by state of those user fees:
- Minnesota – $470
- Iowa – $416
- Michigan – $352
- Illinois – $318
- Wisconsin – $254
The Commission’s work once again highlighted a transportation funding problem that has been the topic of study for the last 15 years. To read more about this topic and the work by the Wisconsin Commission on Transportation Finance and Policy please follow the following link:
What do you think about the Commission’s recommendations? What is your state doing to increase revenues?
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