MADISON, Wis. – Tuesday night, the Madison Common Council approved a $40 wheel tax that will help fund the city’s future bus rapid transit system.
The vehicle registration fee is expected to generate about $7.8 million annually, and state law requires that money go toward transportation services. The city’s transportation director said about $1.4 million of that will go to toward the bus rapid transit system annually, while money can also replace general fund revenues that would otherwise be used for transportation-related items, freeing up unrestricted funds for other purposes.
The passing vote comes after controversy surrounding the fee, with some worrying the tax will disproportionately affect those of low income.
“I have to consider there are many people struggling behind closed doors and this tax will definitely cause folks to fall through the cracks — low-income seniors, hardworking middle class people,” said District 1 Alder Barbara Harrington-McKinney. “I cannot balance the budget on the back of the citizens who are most vulnerable.”
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Alders, including District 12’s Syed Abbas, heard opposition from constituents and urged the city to consider alternative funding sources.
“I will not support a $40 regressive tax because my neighborhood and my district will suffer a lot through this,” Abbas said.
Mayor Satya Rhodes-Conway said that, with state limits on ways to raise revenue for projects such as this, alternative sources of funding aren’t an option.
“I don’t want to have to do vehicle registration fee. It’s not my first choice, not by a long shot,” Rhodes-Conway said.
She implored alders to consider the city’s future before a final vote.
“I don’t want us to miss our opportunity to invest in the things that will make us a greater city than we are,” Rhodes-Conway said. “I’m sorry, but the vehicle registration fee is the way to make those investments. I don’t want that to be the answer, but it is.”
The vote was 11 in favor, 8 opposed and 1 pass. It came after three amendments were rejected, including two that would lower the $40 fee to $35 or $20, and another that added a sunset clause in 2026.
The fee will be issued sometime at the beginning of next year, according to the mayor’s 2020 budget proposal. The city must give the state 90 days notice before enacting the tax, which means it could be put in place in February.
Passenger vehicle owners can expect a total registration fee of $153 with the new wheel tax.
The Madison Finance Committee passed a budget amendment Monday night that members hope will offset the cost of the wheel tax for low income individuals.
The move pulls $100,000 from the transportation budget and reallocates it as $40 gift cards to people who are recipients of the federally-funded Special Supplemental Nutrition Program for Women, Infants and Children (WIC) and pay the vehicle registration fee.
Some believe the program won’t help enough low-income families deal with the burden of the additional cost.