Wisconsin

With Truck Tax Unlikely, Steineke Voices Frustration on Budget Deadlock

Policy

A July 1 deadline has come and gone and the State of Wisconsin is still without a new budget. How to pay for transportation has been the biggest point of contention between the Senate  and the Assembly. Senate leaders have backed Governor Scott Walker’s pledge not to raise taxes or fees to pay for roads. Assembly leadership has said it is open to revenue increases to bridge the funding gap.

For a brief moment last week, it appeared a heavy truck tax might be the answer. There were indications Senate Majority Leader Scott Fitzgerald and Walker were open to at least considering the per mile tax. But that optimism waned quickly. Wisconsin Manufacturers and Commerce was the first to mention the tax was being considered and argued strongly against it.  Then, five GOP senators said on Friday they opposed the truck tax:

As the budget debate lingers, it remains clear that some in the legislature are seeking to increase WisDOT taxes in any way possible. The recent audit of WisDOT shows there are many reasons the agency has been inefficient and does not deserve new revenues. We should be looking for savings in government.

 

The “tax of the week” is a new tax on trucking. Instead of getting creative to find new ways to tax Wisconsinites, we should be discussing the reforms needed to clean up an agency with a record of over-designing, over-building, and over-paying for our roads.  If the state were to add a new tax, Wisconsin’s tax rankings will go in the wrong direction.

 

Throughout the budget process, we have been discussing the elimination of taxes like the state forestry mill tax and the personal property tax on Main Street. Now is not the time to increase taxes on our citizens.

Assembly Majority Leader Jim Steineke told Media Trackers Monday that while the five senators didn’t seem to be saying the tax would keep them from voting for a state budget, he thinks its prospects are now very dim. And Steineke was clearly frustrated:

The senate has been great at saying no to every proposal that we put forward for a long term solution. The thing they haven’t been so good at is coming forward with real solutions of their own. Five senators the other day came out and said they don’t trust DOT enough to provide them with more revenue, yet the senate’s plan (such as there is one) is to infuse that same agency with $850 million of borrowed money, which is a higher spend than the assembly is even proposing. The assembly in essence has two plans. One where we recognize the need for continuing improvements to our infrastructure and find a revenue source to pay for it, and another plan that says if we can’t afford to keep projects on track without running up the state’s credit card, then we need to only spend what we can afford.

But it was clear that the per mile tax proposal caught many in the trucking and related industries off guard. Several trucking owner/operators calling the Jerry Bader radio show said that their already thin profit margins would vanish under such a tax. One of the calls was from a truck driver named Scott who is from Rhinelander.  Scott works in the timber industry.  Speaking of the truck tax, Scott said “I will be out of business” if it goes into effect.  Scott also said “You will kill Northern Wisconsin” with the truck tax because of its reliance on the timber industry. Bill Johnson with Johnson Timber echoed and amplified Scott’s sentiments:

No doubt about it. We already had some of the highest wood costs in the country if not the world. And to add further expense to product going into paper and saw mills, when you’ve got global companies;  Brazil and Canada and even the Nordic countries, where they’re deploying their capital. This number is scary.

When told of the timber industry concerns, Steineke told us they’re willing to sit down and talk with any business sector about concerns they may have with funding proposals:

Any rise in revenue is going to be met with resistance by some. We’ll be particularly sensitive to those that worry that a specific proposal would have negative effects on their ability to compete as a WI based business. However, we will need those same people to come forward to support some form of a plan to stabilize funding, because their livelihoods depend on a safe and efficient infrastructure as much as anything else.

Johnson said he was glad to hear Steineke is willing to listen:

I appreciate  that the leader and the other members of assembly are willing to sit down rather than ramming this through. They want to get of the forestry tax. We’ll see what happens with that. They’re dismantling elements that make this industry the second largest in the state. Forestry means 23 or 24 billion to the state. It’s tough to get that reinvestment back as it is.

And Johnson agrees with state senate critics that much of the answer lies in a more efficient Department of Transportation. He believes there are several not-so-new technologies the DOT could take advantage of in road construction; most notably the type of rebar used. And Johnson also challenges the chief rationale behind the truck tax: that big rigs cause most of the road damage

“Let’s look at the major problem caused by fully loaded school buses, garbage haulers,  and ag. I don’t care if you’re over 60 thousand pounds or not; if you look at pounds psi, that’s the true science of what’s tearing up the roads,” Johnson told us. He then quickly pointed out that nobody is going to propose getting additional revenue out of school buses.

Unlike the federal government and some other states, Wisconsin state spending continues at current levels if the budget isn’t passed on time. But the longer the budget stalemate continues, the greater the impact on road projects, which are heavily funded through borrowing, will be.

 

 

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