Public Policy Forum Blog

Seeking Sustainability for Our Infrastructure

You might be familiar with a Twenty One Pilots song called Tear in My Heart, which includes the following lyrics: “I’m driving here I sit, cursing my government, For not using my taxes to fill holes with more cement.” I’m sure some of us have had the same thought about where our tax dollars go when it comes to our public infrastructure. The song, as is a popular belief, assumes that the taxes we pay should be sufficient to support the maintenance of our public roads, bridges, and transit.

Well, it’s not that simple. In most states, local governments rely heavily on federal and state funding for their infrastructure maintenance and replacement needs. Of course, these sources are replenished by local tax dollars, which typically consist of property and sales taxes. However, this combination of resources is not keeping up with aging transportation infrastructure owned by many cities and counties, which are forcing them to seek new revenue streams, shift monies from other high-priority needs, or simply defer the needed work.  

 According to a recent article in Governing magazine, part of the problem is that local governments are limited in their options to raise revenues for public infrastructure as maintenance needs continue to grow. In The Fiscal Tools Cities Need to Pay for Infrastructure, the two authors from the National League of Cities discuss the need for local solutions and the impediments local governments face in putting these solutions into practice. They cite the fact that for many cities, infrastructure funding from state government has been declining and is unreliable. They advocate for more reliance on local funding sources, such as dedicated portions of sales taxes directed toward infrastructure maintenance and/or replacement.

The article links to a more complete report by the National League of Cities, which highlights the tools some states allow their local jurisdictions to use for funding road and bridge projects. Wisconsin is listed as offering their municipalities three of the five options discussed:

Option Description Used in Wisconsin
Local Option Sales Tax Local sales tax used for dedicated transportation funding. No
Local Option Fuel Tax Local motor fuel tax applied within the borders of a county or municipality to fund infrastructure. No
Local Option Motor Vehicle Registration Fee Adding a fee to motor vehicle registration for use of public roads. Yes
Public Private Partnerships (P3s) Publicly funded infrastructure, with private sector provision of services. Yes
State Infrastructure Banks State revolving loans for local infrastructure projects. Yes

 

As shown in the chart, local option sales or fuel taxes are not an option in Wisconsin.  So how does the City of Milwaukee pay for its local road and bridge needs? In addition to accessing state and federal dollars, the City uses a $20 per vehicle motor vehicle registration fee, which also has helped it shift away from making special assessments on local residents for projects on streets they live on. The City also relies on property taxes to pay for infrastructure needs, but as we discussed in our 2011 report on the City’s revenue toolbox, the lack of other local revenue options makes Milwaukee much more reliant on intergovernmental revenue (State shared revenue) than other comparable cities.

How the City of Milwaukee's infrastructure needs measure up to its revenue generating capacity is one of the most important questions we are seeking to answer in our multi-part series on regional infrastructure needs, which we launched earlier this year. This work will look at local transportation, water, sewer, and buildings owned/maintained by the City, Milwaukee County, and Milwaukee Metropolitan Sewerage District. Our focus will be on how infrastructure needs are funded, the current state of our local infrastructure, how much funding it will take to get it in good shape, and local governments’ capacity to do so.

Make sure to stay in touch with the Public Policy Forum via Twitter at @PPFMilwaukee or our Facebook page to make sure you’re the first to read the first report in our series when it is released in July.

Author: 
Ben Juarez