Monday, September 22nd, 2014

Walk-O-Meter

Shift sales tax money into road building fund


Will shift some of the sales tax collected on vehicle sales to the transportation fund, beefing up that account. "We need to diversify our funding," Walker said. Currently, sales tax money is used for general state operations.

Updates

A dedicated funding stream was created, but from another source

Gov. Scott Walker wanted to provide a dedicated funding stream for transportation using sales taxes garnered from the sale of vehicles and vehicle parts.

But his approach to divert a portion of those funds ran into objections from fellow Republicans in the Legislature who did not like the way Walker"s plan dramatically escalated the diversion in years to come.

In the end, lawmakers replaced Walker"s plan with a similar move to boost transportation funding by pulling in dollars from the state"s general revenue pot.

In the two-year budget, the effect will be about the same, but the new approach does not ramp up the new funding for roads and other transit like Walker"s plan did. His plan would have diverted 7.5 percent of the vehicle-related sales tax money in year one, rising each year until it reached 50 percent in 2021.

So in the end, Walker got substantially less than he wanted, but the change does mean more for transit and sets up a dedicated funding stream from a different source.

When Walker signed his budget, he signed on.

That puts this at a Compromise.

Sources:

Milwaukee Journal Sentinel, Darling opposes plan to use general tax funds for highways, April 28, 2011

Milwaukee Journal Sentinel,"Walker beefs up transportation funding,” April 7, 2011

Interview with Fred Ammerman, supervisor, Transportation and Property Tax Relief section, Legislative Fiscal Bureau, July 6, 2011

This one is on the road to final passage

While campaigning for governor, Scott Walker decried raids on the state"s transportation fund under his predecessor, Democratic Gov. Jim Doyle.

Walker pledged to take some state sales tax collections -- from vehicle sales -- and earmark the cash for the general transportation fund.

In March 2011, Walker put the proposal into his 2011-"13 state budget proposal.

As the Journal Sentinel reported:

Walker proposes "putting more than $35 million in sales tax revenue from vehicles into the transportation fund. Under Walker's plan, the state would deposit 7.5% of the revenue on the sales of vehicles and vehicle parts into the transportation fund. That percentage would rise annually until it reached 50% in fiscal 2021.”

There has been opposition to Walker"s proposal, even among majority Republicans. It remains to be seen whether Walker accomplishes his goal. But for now we"ll rate it as In The Works.

Sources:

Milwaukee Journal Sentinel, "Walker beefs up transportation funding,” April 7, 2011

Milwaukee Journal Sentinel, "1.36 billion in road projects backed,” Oct. 19, 2010

Wisconsin Taxpayers Alliance, report on sales tax shift, May 5, 2011