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DOT Secretary Proposes New Taxes, Fees to Pay for Roads

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Bob Bach
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Wisconsin transportation officials are eyeing ways to raise $750 million over the next two years. Possibilities include higher prices at the gas pump and new fees on vehicle purchases. Gov. Walker and GOP leaders have been cool to the idea of new taxes, so it’s unclear what might happen with the DOT plan.

Right now, Wisconsin funds its transportation needs mainly through gas taxes and vehicle registration fees. But those revenue sources are stagnant, while the costs to maintain and build roadways keep climbing.

Transportation Sec. Mark Gottlieb calls the current funding scenario unsustainable.

“We will either have to raise some revenue, or we will have to significantly reduce the investments that we’re making,” Gottlieb says.

Gottlieb says Wisconsin needs to raise an additional $700 million a year to cover roadwork. If the state doesn’t find more money, even some current projects – such the Zoo Interchange or the Hoan Bridge in Milwaukee – are threatened.

“It’s almost inevitable that a significant number of those projects…would have to be delayed because we just would not have the revenue to support our continuing obligations,” he says.

The proposal Sec. Gottlieb submitted to Gov. Walker would use several methods to raise more money. First, the state would restructure how it calculates gas taxes, resulting in a hike of about 5 cents per gallon – and even more for diesel fuel.

Wisconsin would also impose a new fee on vehicle purchases, adding hundreds of dollars to the cost of a new car. The state would charge people who drive hybrid or electric vehicles an additional $50 a year.

Gottlieb also suggests the state use more money from its general fund on transportation projects to cover for people who don’t contribute.

“If you don’t own a vehicle and you don’t pay any user fees, somehow your groceries are getting to the store. They’re coming there on a truck on our highway system, things that you order, the things that are important to your quality of life, they all depend on our transportation system,” Gottlieb says.

“We’re particularly pleased at how balanced it is,” says Jerry Deschane, executive director of the League of Wisconsin Municipalities. It represents nearly 600 cities and villages.

Deschane praises the DOT plan for not just focusing on highways, but also spending $60 million over two years on public transit.

"The feds used to provide a lot of that funding, but they changed the formula so radically that it really disadvantages Wisconsin. We give Sec. Gottlieb a lot of credit for seeing that change at the federal level and compensating for it at the state level,” Deschane says.

Deschane says the DOT proposal also allocates more money for local roads.

“Wisconsin has a very spread out population compared to a lot of states. We’re not all clustered in just one urban area. As a result you need all forms of transportation in order to make Wisconsin work well,” Deschane says.

There are critics of the proposed transportation budget, including Democratic Sen. Tim Carpenter of Milwaukee.

“Ninety percent of my constituents want money, if there’s any money to be spent, to be spent on local roads, first of all. Second of all, the DOT has to go on a diet,” Carpenter says.

Carpenter says before the state raises taxes and fees, it needs to postpone or cancel what he calls unnecessary projects, such as a proposed double decker freeway near Miller Park.

“I’m on the transportation projects commission. We’re meeting on December 1, and at that time there’s going to be a discussion about funding new highway projects. I’m not in favor of it because we have to cut spending and the Republicans promised they weren’t going to raise taxes,” Carpenter says.

A spokesperson for Gov. Walker says he will review the DOT request along with those from other state agencies. Walker is expected to submit his budget to the Legislature early next year.