Many questions surround the reasons and fairness of the proposed county vehicle registration fee, aka the wheel tax, that is proposed for Eau Claire County. This is an attempt to answer some of those questions.
Why not just borrow money to fix the roads?
Since the life of a road is about 25 years, it seems reasonable to bond (borrow) for road construction rather than implement a county vehicle registration fee.
Every year the county borrows for capital projects. More than half of the borrowing is used for road construction. The county also borrows for sheriff’s department vehicles, security equipment, computer networking equipment, and building construction and repairs. Year after year we borrow about $10 million dollars for all the capital projects. Highway construction borrowing is about $5 million.
In 2014, the county doubled the borrowing for highway road construction to boost the quality of the county roads. Because of years of borrowing, the county has a large debt service that is paid for with county tax levy — your property taxes. So the county does borrow, but a tax is levied to pay the debt service. Paying interest on the debt is the second largest part of the county budget. This level of borrowing is not sustainable and pushes the debt to the next generation.
Why are big trucks exempt from the wheel tax?
County supervisors cannot choose which vehicles to include. The Wisconsin Legislature created the law that allows counties to have a vehicle registration fee. In writing the law, the legislature decided which vehicles could be included in a county wheel tax and made the cut-off at 8,000 pounds.
The Legislature also created a tiered system for the annual registration fees, so the heavier the vehicle the more expensive the fees. A truck weighing 10,000 pounds pays an annual fee of $155, as compared to a passenger vehicle fee of $75. As the trucks get bigger the fee gets higher, up to about $2,560 per year for an 80,000 pound truck and trailer.
What are the state general transportation aids used for?
All vehicles pay an annual registration fee to the state. That fee, along with the gas tax are apportioned and returned to counties as general transportation aids. Eau Claire receives about $3 million per year in GTA and the vast majority is used for summer and winter maintenance of the roads. Winter maintenance includes snow plowing and salting of the roads. Summer maintenance includes crack sealing and brush cutting.
What about property taxes? Can more property taxes go to the couunty highway department?
Each year the highway department receives about $1.8 million from the county property tax levy. By law, the county cannot increase property taxes, except for increase in value from new construction, which is about 2 percent or about $600,000 each year.
Over the past 15 years, the population in Eau Claire County has grown by almost 10,000 residents. The increased population places increasing demands on law enforcement, the courts and human services. The sheriff’s department and the 911 center (the county’s top priorities) together receive the largest portion of the county property tax levy at about $12 million. Reallocating property tax for road construction would jeopardize other county programs.
What about people who only drive to the grocery store or church or the library? Is a wheel tax fair to them?
Everyone relies on roads. We need roads to move our goods and services. Goods need to get to the grocery stores and department stores so we can shop. Books get to the library. Mail carriers and trash haulers use the roads to access our homes. We want law enforcement, emergency medical personnel or firefighters to come to our homes if we need them. How much one individual drives is not a true indication of how much a person relies on the roads.
Fortunately Eau Claire has a vibrant commerce that relies on roads. The county received over $10 million in sales tax in 2017. Individuals come to Eau Claire from other counties to buy appliances, computers and other products, which benefits the local economy.
Why $30? Isn’t that too much?
The decision on $30 is an attempt to obtain about one-half of the annual highway road construction budget. It is a compromise. While $30 seems like a big number, it equates to $2.50 per month.
How much will Eau Claire County get from a wheel tax?
Eau Claire County expects to receive over $2.3 million from the $30 fee. The entire amount would be used for road construction, or about one-half the amount the county now uses for road construction. The county is committed to continuing to improve the roads and plans to use a combination of borrowing and vehicle registration fee money.
The county vehicle registration fee is one of the few options available to county supervisors to provide a source of revenue to improve the road system. It is important to maintain our roadway system for the betterment of the community, and the wheel tax is the best proposed method to achieve this.
Pagonis, of Altoona, is a County Board supervisor and chairwoman of the Finance and Budget Committee.