Common Council

Wheel Tax & 2020 Budget - 10/29/19

Wheel Tax & 2020 Budget

As I shared previously, the 2020 Executive Operating Budget relies on $7.88M in revenue from a new $40 vehicle registration fee that would be assessed to motor vehicles registered in the City of Madison. I have heard concern and frustration from many of you about this proposal, particularly regarding the unfair nature of the tax. People with limited incomes driving old beaters will pay as much as wealthy residents that can afford to drive the latest model. And City of Madison residents are being asked to shoulder all of the burden for improving our regional transportation system while those that live just outside of the city limits and who take advantage of the same transportation system will pay nothing.

I share these frustrations and have taken them to heart as I wrestled with the budget in front of us. Because very few of the dollars that residents pay in state and federal taxes come back to us, Wisconsin municipalities have had to rely overwhelmingly on property tax revenues to fund our services. Since 2006, our ability to raise revenue via the property tax has been restricted to the rate of net new construction. Over time, this has made it increasingly more difficult for cities and villages to fund our services and, correspondingly, many local governments have turned reluctantly to an unpopular and regressive wheel tax to make ends meet.

While we have successfully managed to balance our budget in Madison over the last decade without such a fee, last year's executive budget proposed by former Mayor Soglin signaled a change. That wheel tax proposal was ultimately not implemented, but it's no surprise that this year's executive budget recommended one as well. The notion that Madison residents can continue to receive the same level of service without additional revenue is not realistic and a local wheel tax is one of very few options to raise that additional revenue.

As I said in my last post, I believe it would be irresponsible for any member of the Common Council to vote against the wheel tax without putting forward a proposal to achieve a balanced budget. To date, I have not seen any such proposal and have not come up with one on my own. As part-time public servants, many of us struggle to fully understand the details of the proposed $340M operating budget and we are not in a good position to propose a radically different budget. Instead, we are largely reacting to the executive budget that is put in front of us by the mayor and our contributions to the debate largely focus around small proposals or initiatives around the edges. 

While I have come up short in identifying a budget proposal that would allow us to avoid implementing a vehicle registration fee, I have identified a way to reduce the fee from $40 to $35 per vehicle while still balancing the budget. There are downsides and tradeoffs to this proposal and it will make balancing our 2021 budget even more difficult, but I believe we owe it to Madison residents to minimize the impact of the new fee to the degree we're able. I believe that a reduced fee is a compromise that tightens our belt, while still acknowledging our fiscal reality and allows us to continue to support the provision of high quality city services while beginning the hard work of preparing for a significant overhaul of our transportation system.

I sent details on this proposal to my council colleagues last night and will move an amendment to the ordinance at today's special council meeting. Anyone interested and able to provide public comment at tonight's meeting is encouraged to do so and for those unable to attend in person, you can watch the discussion and debate on City Channel.

Thank you to all of those that have taken the time to reach out to me on this topic and a special thank you to those that have acknowledged the difficult position we're in. Please know that I've taken all of your comments to heart and that I remain committed to representing your interests and acting in the best interest of our city as a member of the common council.