Finance Committee Votes 3-2 To Deny Resolution To Increase The Wheel Tax But 6 Alderpersons Express Support For The Proposed Increase

The Finance Committee met 05/20/2024. One of the items they took up was the resolution to raise the wheel tax from $20 per vehicle per year to $30 per vehicle per year.

Broadly speaking, the argument in favor of the increase was that the wheel tax had been implemented to replace the portion of street reconstruction project that had been covered by special assessments to homeowners; however, the wheel tax has not kept pace with inflation and does not bring in as much money as special assessments would to cover the same projects.

The arguments against increasing the tax were that this was not the time to be increasing taxes on residents. An increase to $30 would make Appleton’s wheel tax among the highest in the state. Additionally, at the time it was implemented, it had been known that the wheel tax would not cover the total cost of roads. It was also not an equitable tax in that it could not be levied against commercial vehicles and heavy trucks that were causing the most amount of damage to the roads. It was also suggested that there might be other options to increase funding for roads beyond the wheel tax.

The resolution ended up being vote down by a vote of 3-2 with Alderpersons Katie Van Zeeland (District 5), Sheri Hartzheim (District 13), and Chris Croatt (District 14) voting to deny it and Alderpersons Brad Firkus (District 3) and Denise Fenton (District 6) voting in favor of it.

I’ve prepared a transcript of the discussion for download:

PUBLIC COMMENT:

Five residents appeared at the meeting to provide public feedback on the proposal. Two of them, a husband and wife, opposed the increase because it hurt taxpayers. Wisconsin had the fifth highest property taxes in the nation, and the recent city-wide reassessment saw property values increase by an average of 43%. They believed Appleton was an unaffordable city for young families to purchase homes. They were unhappy with the amount of debt the city was taking on which increased taxes and suggested that more American Rescue Plan Act dollars should have been directed toward roads.

Another resident felt that a $10 increase was not in itself a big deal, but he was frustrated with the recent property reassessments that left him paying $734 a year more in taxes when he hadn’t made any improvements to his house and he was getting no benefit from that tax increase in the form of additional services or better roads. He suggested that rather than increasing the wheel tax amount, the city start levying the existing $20 wheel tax against motorcycles, commercial vehicles, and RVs which were currently not subject to the wheel tax. [It was mentioned later in the meeting that exempt vehicles were only exempt from the tax because state statute does not allow them to be subject to wheel taxes.]

The fourth speaker supported an increase to the wheel tax because “As a person who walks to navigate this city and lives in a dense, efficiently planned part of the city, we bear very little impact on the need for the city’s roads to be reconstructed as a family and pay our share as per the number of vehicles which we choose to own.” He also thought that the roads in new subdivisions were not efficiently planned, and the city was building more roads for fewer residents. “We need to come up with ways that we’re going to fund these things based on who needs them and how we do them. And if we can’t come to a way to fund them within our means, then we need to start thinking about should we build that next road? Or should we continue to densify this city?”

The final speaker supported the wheel tax being increased given the way city had been starved of shared revenue for so many years and had experienced tight finances.

SUPPORT FOR RESOLUTION BY ALDERPERSONS:

ALDERPERSON DENISE FENTON: The wheel tax was intended to replace the special assessment portion of street reconstruction costs; however, it was not doing it. They were going to bring in $1,280,000 through the wheel tax in 2024. In 2024, the city was reconstructing Alvin, Linwood, Alice, Rankin, Helen, and Summit. The Alvin Street reconstruction in District 6 cost a total of $922,263.14. Under the old special assessment formula $460,583 of that would be covered by special assessments. One street reconstruction was using up 36% of all of the wheel tax dollars for the year and there were 4 other street projects taking place.

A Transportation Utility would be a better solution to equitably spread costs among road users, but that option was not legally tenable. The city wanted to reduce its borrowing, but the cost of construction has more than tripled since 2003. Increasing the wheel tax seemed a better solution than going back to special assessments.

ALDERPERSON BRAD FIRKUS: He had been interested in replacing the wheel tax with a transportation utility, but at this point a transportation utility seemed out of the question, so what was the next best option? He felt that increasing the wheel tax was “the least bad option of a lot of bad options.”

Last year in his aldermanic newsletter he had outlined a number of options to help pay for road maintenance. Those included: (1) Raise the wheel tax, (2) bring back special assessments, (3) special assessments for street parking spaces, (4) surcharge for excessively noisy vehicles, (5) heavy vehicle surcharge, (6) an Electric/Plug-in Hybrid Electric vehicle surcharge, (7) raise levy limit by a referendum, (8) sell the swimming pools, (9) sell off some of the parks, (10) naming rights to public buildings and facilities, (11)  reduce eliminate programs within Parks and Recreation, Library, and Public Health, (12) stop building new roads, (13) flatten/loosen the residential zoning code, (14) borrow more money, (15) keep doing what we’re currently doing and make no changes.

The residents who responded had been resoundingly opposed to cutting or selling anything but had found increasing the wheel tax to be tolerable.

His final thought was “[I]f the wheel tax isn’t doing the work of what special assessments were doing, then we’re putting more pressure on our other options, which is the General Fund, which means cutting from other areas, or it means borrowing, which means paying now exorbitant interest rates on that same work. We’re going to get less done going status quo. There’s no two ways around it. We may not—there’s never going to be a good time to do this, but the longer we wait, the worse it gets.”

ALDERPERSON ALEX SCHULTZ (DISTRICT 9): After Covid, the cost of material, labor, and everything skyrocketed and has not come down. The city had not been able to keep up with those increased costs. He thought an increase to the wheel tax was preferable to special assessments. [It’s more than a little frustrating to hear politicians blaming Covid for increased costs when they received fair warning at the time about all of these things happening. People said that there were going to be a lot of negative repercussions to society going crazy and upending basic norms in the face of Covid. People said that printing billions of dollars in Covid relief dollars was going to cause skyrocketing inflation. But were these people listened to? No. They were belittled and scorned and called grandma killers and accused of spreading misinformation even though they were right. And now, to add insult to injury, the totally foreseeable consequences of the terrible response to Covid are being used to justify tax increases.]

ALDERPERSON VERED MELTZER (DISTRICT 2): Roads wear out on a regular basis, taxes always go up, and inflation always goes up. When queried on a possible increase to the wheel tax, District 2 residents were overwhelmingly fine with it. “[M]any of those who provided feedback not only said they were okay with $10, but said, you know, $20 or $30 would be fine, too. There were actually people who their criticism of this was not, ‘Don’t raise it,’ but ‘You’re not proposing to raise it enough.’” Alderperson Meltzer went on to say, “I would like to live in a world where we never have to increase. I would like to live in a world where the state takes proper care of us as they should. There is so much money being extracted from populations on many different levels to fund different things; it would be nice if it were all consolidated together and we didn’t have to worry about the cost of repairing roads competing with the cost of keeping yard waste sites open and things like that. But the reality is that we are facing such significant resource constraints. No matter how nobly we might say we want to keep the taxes down for our residents, our residents themselves also have expressed the view that they would like to see the roads maintained, and they don’t have a problem with paying a bit more.”

ALDERPERSON MARTYN SMITH (DISTRICT 4): The wheel tax was preferable to special assessments and a $10 increase was consistent with the amount of inflation that the city was seeing in a lot of areas.

ALDERPERSON NATE WOLFF (DISTRICT 12): There had been a lot of talk over the years about how the city was going to pay for its roads. Increasing the wheel tax was his proposal. He talked to people in the community who felt that an increase of $10 was the right amount. He also disagreed with alderpersons who claimed an increase would be a hardship for lower-income people. As a working-class person, he could not afford a multi-thousand-dollar special assessment, but he could afford $10 more a year.

OPPOSING TO RESOLUTION BY ALDERPERSONS:

ALDERPERSON KATIE VAN ZEELAND: Taxpayers are dealing with inflation, high home costs, and the high cost of childcare. The city should not place more costs on them at this time, particularly when the city would not be offering anything concrete in return. She was worried that people would think an increase in the wheel tax would lead to more work being done or that their streets would be done, but that was not what was going to happen. She also felt that the amount of additional money this would bring in would not make a dent in the problem.

ALDERPERSON SHERI HARTZHEIM: She felt special assessments were being brought up as a threat, to either increase the wheel tax or go back to special assessments. She thought a wheel tax increase would be an insult to the less affluent residents in town, and she believed that a deeper review of the issues might present an option that did not involve increasing the wheel tax or returning to special assessments. She did not think Alderperson Firkus’ list was exhaustive and there were more options available. She suggested that maybe the allocation excess general fund dollars be changed to automatically have a portion go to road maintenance. She also vehemently disagreed with Alderperson Meltzer’s belief that the state should take care of us.

ALDERPERSON CHRIS CROATT: The wheel tax is not completely fair. Some vehicles are taxed, and others are not allowed to be taxed even though some of those untaxed vehicles are the ones that are damaging the roads the most. “But I think it comes down to priorities, and at some point, we have to look at making the tough, tough decisions versus just pushing the easy button and saying, ‘Let’s collect more money.’” [He did not, however, say what he though the “tough decisions” might be.] He noted that if this increase was approved, it would put Appleton’s wheel tax “in the higher echelon of the wheel tax group, which I don’t think that’s something we want to be a leader on.” He went on to say, “We were a leader for a long time on no borrowing for streets. We used to brag about that and be very proud of it, and we were, and we should be. I wish we could get there again, but times have changed, right?” He opposed the wheel tax but also thought the city was not doing enough infrastructure projects. “We just need to find ways to pay for it, and that means tough, tough decisions at budget time.”

The committee voted 3-2 to recommend the resolution for denial, but in addition to the two alderpersons on the committee who voted in favor of it, four other alderpersons not on the committee were on the record supporting this resolution. That means, they only need 2 more votes to have a majority at the Common Council.

[While I’m not necessarily opposed to increasing the wheel tax due to the issues of inflation and increased construction costs, the increase does bother me in that it would be happening after years of what appears to me to be Appleton’s government not taking seriously the need to focus on basic infrastructure maintenance.

The fact that so many ARPA dollars were allocated toward non-essential programs and grants really bothers me and is just one more example of how the city government is not taking infrastructure maintenance seriously. I think the bulk of those funds should have been allocated to core city responsibilities such as roads/utility infrastructure and public safety which are the things Chapter 62 of the Wisconsin State Statutes list explicitly as being the responsibility of cities. (https://docs.legis.wisconsin.gov/statutes/statutes/62) The city overall seems to put an inordinate amount of focus on non-essential aspects of city government to the detriment of essential functions. If the Common Council votes to increase the wheel tax, I would like to see that move come along with a concerted and public effort to bring the city’s priorities in line with Chapter 62.]

View full meeting details and video here: https://cityofappleton.legistar.com/MeetingDetail.aspx?ID=1189394&GUID=02DF36EF-8711-45CF-8D94-A112FB9D1832