Opinion Editorial: Transit Proposal Should be Simpler

Appearing online in the Wausau Daily Herald

It is time for state policy-makers to think about taking bus service off the property tax rolls, and there is a simple way to do it.

To frame the issue, urban and rural areas offer different levels of service.  We accept that.  We assume people make choices about the trade-offs between the level of service they want and the level of taxation they are will to pay in choosing where to live.  In theory, everyone pays for the service level they chose to receive.

However, that is a bit of an oversimplification—especially when it comes to bus service.  For many citizens who are unable to drive or cannot afford a vehicle, living in a rural area is not an option.  As a result, the vast majority of people who need transit services from across the state end-up living in cities and villages.  Because the transit-dependent population is not evenly distributed, cities and villages bear a disproportionate share of the costs.

Policy-makers already understand that this migration pattern shifts the costs of supporting the transit-dependent population to urban property taxpayers.  In its January 2013 report, the Wisconsin Transportation Finance and Policy Commission noted that communities in most other states have given options besides property taxes to fund their local share of transit costs.

The commission went on to recommend state legislation authorizing the creation of Regional Transit Authorities (RTAs).  RTAs would be a new level of government.  A community would make a decision whether to join an RTA.  The RTA would have its own elected or appointed board and would take over the responsibility of making decision about transit services from the participating municipalities.  It would also be authorized to raise revenue by imposing up to a half cent sales tax on business conducted within its boundaries.

Politically, giving bus service its very own layer of government is asking for a lot—a lot more than is necessary.

State lawmakers should consider a more modest option.  Skip the RTAs and simply grant municipalities that offer transit services the ability to impose up to a quarter cent sales tax to displace local property taxes used for bus service.

How do the numbers work?  Right now, if you shop in Wausau or anywhere in Marathon County, you pay a 5.50% sales tax.   The 5.00% goes to the state, and the 0.5% goes to Marathon County, providing the county with about $10.1 million annually.  To fund the local share of transit costs in Wausau—roughly $680,000—we would need to add about 0.07% to that sales tax number in the city.

For the Village of Weston, the add-on would be between 0.01% and 0.02% to fund bus service.

Going back to Wausau, a sales tax of 5.57% in town versus 5.50% outside of town should not be a material incentive for shoppers to go elsewhere.  Meanwhile, shifting local transit to the sales tax would reduce property taxes by approximately 3% in the city.

Should we do it?  Maybe.

In any case, we should have the authority to debate and decide the issue at the local level without RTAs.

Funding for transit has been on the back-burner for too long.  This is a simple step that state lawmakers could take in the current budget to provide property tax relief and alleviate the financial stress on local transit systems.

Editors Note:  Keene Winters is an alderman in the City of Wausau and vice chairman of the Wausau Area Transit Commission. Daniel Guild is the administrator for the Village of Weston and is also a member of the Wausau Area Transit Commission.

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