BOSCOBEL - In a narrow 4-3 vote, Boscobel’s City Council voted in favor of a “wheel tax” at their June 6 meeting. The new ordinance would charge $10 per vehicle registration, over and above state fees.
According to the Wisconsin Department of Transportation, 2,532 vehicles were registered in Boscobel at the end of 2021 that would have been subject to the new tax. That amounts to about 40 percent of the city’s street maintenance budget, according to City Administrator Misty Molzof.
A growing trend
Boscobel is not alone. Wheel taxes are one of the only revenue sources in Wisconsin that remain under local control, and municipalities are adopting them at a rapid pace.
In 2011, only four communities imposed a wheel tax; by February 2022 that number had grown to 44, according to a report released last year by the nonpartisan research organization, Wisconsin Policy Forum. During the same period, local-level wheel tax revenues ballooned from $7.5 million to $62.8 million, driven in part by cities like Milwaukee and Madison, which charge $30 and $40 respectively.
The state raised its fees for vehicle registration to $85 in 2019. Title transfer fees doubled to $165 in the same year. These fees, combined with the gas tax, fund the state transportation budget, which has not kept pace with inflation, according to the report.
Wisconsin’s transportation budget took a further hit during the pandemic. Federal recovery funding may make up some of that difference.
A Madison issue
Wheel taxes are becoming more common for a few reasons. Wisconsin law does not allow municipalities to charge a sales tax, which other states use to offset local costs. And for the past decade, the legislature has made it increasingly difficult for local communities to raise taxes on real estate.
It’s a complicated picture, but in a nutshell, since 2011, tax hikes have been tied to new construction. The idea, explains Jason Stein, research director at Wisconsin Policy Forum, is that existing property owners don’t see an increase in their tax bill.
For communities growing slowly, especially in rural areas, that can be a problem. “There’s a concern that you trap slow-growth communities,” Stein said. “They can’t make investments in infrastructure to attract growth. It could in the long run make it hard for communities to break out of that cycle.”
In the meantime, residents still expect the same level of public service—policing, fire prevention, street maintenance, and so on.
“So where do you get the money, right?” asked Molzof. “How long can you run a marathon with your hands tied together and your feet tied together—before your community suffers?”
Many communities, including Boscobel, turn to fees to make up the difference. Other examples include fire department fees for service, which vary depending on the severity of the fire.
Roll call
The new ordinance won’t go into effect immediately. It must be approved by the Wisconsin Department of Transportation, which generally takes 90 days, according to City Attorney Ben Wood.
Voting in favor of the ordinance were Roger Brown, Krissy Schneider, Steve Fritz, and Gary Kjos. No votes came from Brian Kendall, Milt Cashman, and Stephanie Brown. Barb Bell was absent.
Other business
The council approved several items on the agenda:
• an ordinance permitting food trucks and other mobile businesses to park on city property
• licenses for liquor, cigarette, pool tables, mobile home parks, and salvage lots
• a street closing for a July 4 party
• hiring pool and summer rec employees
• selling a parcel near the industrial park to Bob Bremmer and Diane Watson for new storage units
• accepting the resignation of Tyler Herman from the street maintenance department
• ratifying a payment of $32,555 for pool painting and one for $212,486 for the water pipe replacement project
• appointments for the Capital Improvements Plan
