Public Policy Forum Blog

Comptroller Adds Important Perspective on County Wheel Tax

One of the most difficult challenges for Forum researchers as we seek to objectively analyze the Milwaukee County, City of Milwaukee, and Milwaukee Public Schools budgets each year is to point out the long-term financial challenges facing each entity without always coming off as purveyors of "gloom and doom."

We appreciate the desire by policymakers to use all available tools to maintain service levels and address the coming year's challenges, but we also feel it is critical to consider a longer-term perspective. Consequently, we are quick to call out overly aggressive use of reserves, deferral of needed capital repairs, inappropriate use of one-time revenues, and other tactics that may help balance the next year's budget while digging deeper holes for the future.        

This theme permeates our recently released analysis of the Milwaukee County Executive's recommended 2017 budget. In particular, we frame the debate on the proposed $60 vehicle registration fee (VRF) – or "wheel tax" – as a short-term versus long-term discussion.

In reviewing the circumstances that created a multi-million dollar hole in the transit system's budget and a huge backlog of needed infrastructure repairs, we point out that the need for a VRF today would not be as great had those issues been addressed when first identified years ago. Because of that inaction, we conclude that the County now must "come up with something big" if it wishes to move toward a permanent solution in 2017.

Little did we know when we released our budget brief that we likely understated the dimensions of the County's financial dilemma. In a memo released yesterday, the independent Comptroller paints an even gloomier picture of the County's transit and infrastructure challenges.

The memo estimates that if policymakers wish to maintain existing service and fares, then the transit system will need an additional $28 million in annual local support five years from now. In addition, it cites $82 million of transportation capital needs within the same five-year period. The scary result: even with the adoption of a $60 VRF in 2017, the County will be $50 million short of the amount needed to address these challenges by 2021.

Again, we cite this information not to argue in favor of a $60 VRF, but simply to point out that the County's structural problems cannot be solved without difficult, permanent decisions that involve either new revenues, service cuts, or both. And, we emphasize again that while a VRF may not be an ideal revenue source, it is the only new comprehensive revenue option available to the County under state statutes.

Yes, policymakers can develop another round of short-term fixes that will put off the tough decisions for another year. But in doing so, they will only create a bigger problem for the future.  

Author: 
Rob Henken