As inflationary costs have exceeded state transportation support over the past 15 years, a new study shows the number of local governments turning to wheel taxes for revenue has grown exponentially.
The analysis by the nonpartisan Wisconsin Policy Forum shows nearly half of Wisconsin residents will have to pay local vehicle registration fees, or wheel taxes, by the end of the year.
While local governments have had the authority to unilaterally levy wheel taxes since the late 1960s and 1970s, the Policy Forum report shows how widespread the funding tool has become in recent times.
In 2010, just three cities and one county were using local registration fees. This year, 64 cities, counties, towns and villages had a wheel tax in place, which represents a 1,500 percent increase. The Policy Forum data shows nearly 50 percent of all Wisconsin residents will be ponying up added wheel tax fees by the end of 2025.
The surge in local wheel taxes has caught the attention of some Republicans in the Wisconsin Legislature who are looking to tamp it down. A GOP-backed bill would not only require local referendum votes before new wheel taxes could be enacted, it would also require voters to retroactively approve any wheel tax on the books — no matter how long they’ve been in place.
Supporters of the legislation argue it would be no different than the referendum process school districts go through before raising residents’ property taxes. Opponents, like local government advocacy groups, say wheel taxes may not be popular, but they’re a reliable source of revenue to respond to roadbuilding costs outpacing state support.
On Tuesday, the Eau Claire City Council became the latest local government to increase its wheel tax, voting to more than doubled its tax to $50. With the county’s existing $30 registration fee, residents in the city will pay the highest combined local registration fees in Wisconsin the next time they renew their vehicle registrations.