Evers Wants More Taxes for Roads

Road Closed. Photo by Dave Reid.

Democratic Gov. Tony Evers’ plan to pay for state highways over the next two years may be almost as controversial as his proposed spending increases and tax-code changes.

The budget summary of the state Department of Administration (DOA) says the governor’s changes would mean $411 million more for the Transportation Fund over the next two years that is needed to “maintain our roads today and in the future.”

Debby Jackson, executive director of the nonprofit Transportation Development Association that advocates for the industry, said the increases are justified. “The need for additional revenue,” Jackson said, “is driven by the issues we have discussed for decades — stagnant transportation revenue and aging infrastructure.”

Still, it is far from certain that Republicans who control the Legislature will go along with the governor’s proposals, which include:

-A $120 increase — from $164.50 to $284.50 — in the fee to issue vehicle titles. The 73% increase would be the first change in six years and is expected to cost vehicle owners $122 million more in the first year of the two-year budget and $160 million in the second year.

-Diverting proceeds from the 5% state sales tax on vehicle “parts, tires and repairs” from general state revenues into the segregated Transportation Fund. DOA officials said the diversion allows “owners of vehicles to prepay for the roadways that they will use over the ownership period of that vehicle.” It would also generate $62 million more for highway projects in the first year and $67 million in the second year, officials estimated.

-$60 million for new “calming grants” that the state Department of Transportation (DOT) would award to cities, counties, villages and towns. Who would get the grants, the size of them and criteria required to qualify for them would be determined by DOT officials.

DOT officials said the grants would pay for “infrastructure related projects that are designed to reduce the speed of vehicular traffic…. Examples could include construction of on-road and off-road trail facilities for pedestrians, bicyclists, and other non-motorized forms of transportation, such as sidewalks and bicycle lanes, speed humps, pedestrian crosswalks, and textured roadway surfaces.”

The governor’s request for the two new funding sources — raising the title fee and diverting sales tax proceeds to the Transportation Fund — meant he did not have to ask for increases in three other traditional sources of funding: the $85 annual registration fee for gas-powered vehicles, the 30.9-cents per gallon gas tax and truck registration fees.

Transportation Fund “revenue stagnation is caused by the fixed, flat nature of our user fees (per gallon gas tax and per vehicle registration fees) that don’t grow with the economy like a percentage-based income or sales tax. In addition, more fuel-efficient vehicles put downward pressure on gas tax receipts,” Jackson said.

“In recent years, Wisconsin has enacted electric and hybrid vehicle registration surcharges, which are essential to the fund’s long-term health. Still, most (about 97%) of Wisconsin’s fleet remains more fuel-efficient, gas-powered vehicles.”

DOA’s summary also said more funds are needed to keep three major highway construction projects on schedule — expanding I-41 from Appleton to De Pere, I-39/90/94 north of Madison and the I-94 East/West Corridor in Milwaukee. These projects serve the state’s three largest population centers, not to mention many other drivers using these key state highways.

Jackson called those projects “critical to our state’s economy and the traveling public’s safety.”

“These corridors’ pavement and structures (bridges and overpasses), many constructed in the 1960s, are at the end of their lives. In addition, outdated design standards result in crash rates that exceed statewide averages for similar roadways.”

But the needs are statewide, Jackson added.

“DOT estimates that if state highway rehabilitation funding is kept at current levels, highway conditions will decline by 12% in a decade. Also, without the level of funding in the governor’s budget, there will not be funds to provide inflationary increases for general transportation aids or the Local Road Improvement Program or to make other modal investments.”

Inflation has also eroded spending on highways, Jackson said. The Wisconsin Construction Cost Inflation index increased 17% in 2023, for example.

Jackson said TDA has no position on other fund-raising options to maintain highways.

Evers’ budget also includes a favor for Dane County-area legislators: $6 million to help rebuild the I-90/94/39 and County Highway V interchange for a potential 74,000-square-foot Buc-ee’s gas station and convenience store.

Steven Walters started covering the Capitol in 1988. Contact him at stevenscotwalters@gmail.com.