10/13/2016, Jefferson Daily Union – City of Milton staff is recommending a $30 “wheel tax.”
The recommendation was included in the 2017 preliminary budget presented to city council members by city administrator Al Hulick on Monday.

State law allows a town, village, city or county to collect annual municipal or county vehicle registration fee (wheel tax) in addition to the vehicle registration fee paid to the state.

If a wheel tax is approved by the city council, it would apply to autos and light trucks kept in the city. The wheel tax would not apply to motorcycles or motor homes. State law also exempts vehicles that have special plates including: farm truck, dual purpose farm truck, antique, collector, ex-prisoner of war (if issued without registration fee), historic military, hobbyist and medal of honor. “Collector Special” plates, however, are not exempt and would need to pay the wheel tax.

Establishing a $30 wheel tax in the City of Milton would generate about $165,000 annually, Hulick said. That’s based on the city having 5,600 cars and trucks that would qualify for a wheel tax. (The Wisconsin Department of Transportation collects wheel tax fees for municipalities and keeps 17 cents per vehicle.)

He acknowledged it’s a bit strange that the city has more vehicles than people.

Though the wheel tax is controversial and often difficult to explain (people don’t understand what they get out of it), Hulick said it is “one last vestige of hope” for a city that cannot increase taxes or borrow.

“The cost of doing business for a municipality is vastly outpacing the revenues we generate to pay for those costs,” he continued.
While numbers in the preliminary budget are likely to change, on Monday the budget was about $13,000 over the limit to qualify for an expenditure restraint payment from the state (estimated at $115,000). A wheel tax would not affect the expenditure restraint calculation.

Hulick said in his opinion the preliminary budget shows a reduction in services, with the removal of about $30,000 in roadway supplies.
“To fund roadway improvements at the same level as in previous years ($55,000), we would need to find an additional $30,000 in cuts,” he said.
The wheel tax could solve that problem because the state requires wheel taxes to be used for transportation-related purposes, including road improvements.

Why is city staff suggesting $30, rather than $10 or $20, which is what Janesville and Fort Atkinson have?

A $10 wheel tax would generate about $55,000 for the city, but Hulick said the $55,000 previously budgeted for road improvements was not sustainable.

“We were fortunate we were able to use some alternate funding sources in the past couple years to fund various roadway improvements,” he said. “Chicago Street was funded through TIF. Merchant Row was funded partially through TIF partially through savings from another project. Parkview Drive was funded from a borrow.”

The goal of setting the wheel tax at $30 per vehicle (and generating $165,000) is to main current infrastructure, he said. The life of roads in fair condition could be extended with seal coating or a simple overlay, he said, “so we’re not faced with a major road reconstruction on an annual basis.”
Roadway repairs are among the costliest expenses municipalities face.

For example, Hulick said Chicago Street, currently being resurfaced with a simple overlay, is about a third of a mile and costs about $130,000.
He estimates: a simple surface overlay is about $90 a linear foot, a full overlay is about $180 per foot and full reconstruction is about $450.

Once a road is at about a 5 on the 10-point PASER (pavement surface evaluation and rating) scale, he said, “it starts deteriorating really quickly and repairs become more costly.”

Hulick presented to the city council a map of potential projects for 2017. They include Second Lane, which in 2016 was partially funded, Northside Drive, Woodcrest Lane, Chapel Drive and Woodland Drive.

“Those aren’t necessarily the roads we should do. We wanted to illustrate in a visual way what we could do,” he said, referring to how the city might use the $165,000 in 2017.

If the city council passes a wheel tax, Hulick advised that the city develop a 10-year road improvement plan.

City council president Maxine Striegl said she’s received more complaints about roads than anything else. Referring to the wheel tax, she encouraged, “We need to think about it.”

As for how long a wheel tax might be in place, Hulick said the city is not in a position to borrow for probably the next seven years.
“The wheel tax would need to be in place in order for the city to stay on top of those roadway projects,” he said.

The city council could at any time vote to repeal the wheel tax.

Council member Lynda Clark said, “I believe our citizens want to keep our roads nice.”

For that reason, she said she would not be opposed to a wheel tax.

City council member Dave Adams said, “If you decide not to do this, you’re going end up pushing off these road projects like the council did with building projects eight or nine years ago. You get to the point where you have to do something you can’t afford to do because it’s gotten so expensive. We don’t want to get in that hole.”

Hulick noted the wheel tax would not have to be set at $30 – it could be more or less.

The council will continue discussing the 2017 budget at its Oct. 18 meeting (7 p.m. at city hall).