Transit board suggests sales tax for rail, buses

By David Steinkraus
Journal Times

Tuesday, November 11, 2008 1:24 PM CST

A group representing three local counties and the governor is proposing a sales tax of up to .5 percent to fund public transit.

It’s easy to get lost in the details, but no one should ignore the magnitude of what happened on Monday morning, said Jody Karls, the city of Racine representative on the Regional Transit Authority.

What the RTA voted to do on Monday was ask the state to make it the permanent transit oversight body for southeast Wisconsin and to give it power to levy local sales taxes of up to 0.5 percent in each member area. That tax would fund the extension of Kenosha-Racine-Milwaukee commuter rail service from Kenosha through Racine and to Milwaukee, and would fund other transit modes such as city bus systems.

Beyond those specifics, Karls said, is the over-arching importance of having all the counties and municipalities along the potential KRM corridor speaking with a single voice.

He and other officials met with The Journal Times editorial board on Monday morning, a few hours after the RTA voted on its recommendations. It has a Nov. 15 deadline to report to Gov. Jim Doyle and the Legislature, and it would be up to them to grant the RTA’s requests.

Tax implications

Although all of Kenosha and Milwaukee counties would be taxed, for Racine County a transit sales tax would apply only to the portion of the county east of Interstate 94. That compromise was necessary to gain the vote of the Racine County representative, Karls said. The RTA board consists of one representative from each of the counties and cities of Racine, Kenosha, and Milwaukee, and a representative of the governor.

In addition to a sales tax of up to 0.5 percent, an area could have an additional 0.15 percent levied for public services. Milwaukee County may need the full amount given its varied needs, but eastern Racine County wouldn’t, said Racine Mayor Gary Becker. A 0.1 percent tax would raise about $2 million here, he said, and a tax between 0.l and 0.15 percent would more than meet local needs for KRM and buses, he said.

The RTA is also suggesting that a transit sales tax be accompanied by a requirement that municipalities reduce their property tax levies by the amount shifted to the sales tax, Becker said.

Although a rental car fee has been batted about as a possible funding source, officials said, it is not preferred by the federal government which doles out matching grants. In contrast to a rental fee, sales taxes increase with inflation and grow as an area grows so that a transit system could expand in proportion.

Moreover, estimates are that between 25 and 30 percent of a sales tax would be paid by outsiders, said Ken Yunker, deputy director of the Southeastern Wisconsin Regional Planning Commission which provides technical support to the RTA.

“There is a legitimate argument to say that a vote for this tax is a vote for less taxes,” Karls said. Preliminary indications are that a sales tax would be easier to pass in the Legislature at the moment, he said.

Regional unity

The regional aspect of the RTA vote is a key now and for the future because it increases the chance that southeast Wisconsin would receive federal money. Wisconsin has never received a dime of discretionary federal money for a major project, Yunker said.

“This is a competitive process,” Becker said. “It’s not like there is enough money to fund every application for expanded transit ... This at least puts us in the game. Because without the dedicated funding source, you’re not even in the game.”

Making the RTA permanent and responsible for area transit also means that there could be connections between the various bus systems in the three-county area. And these connections could move workers not just for first shifts by for second and third, too, Yunker said.

“We’ve all been in community meetings where we talk about the future is education and training and access,” Becker said. “And our bus system doesn’t go to Parkside. Our bus system doesn’t go to Carthage. Our bus systems stops four blocks short of CATI out in the industrial park ... But I don’t have money as a mayor to do that.”

The next key, Yunker said, is that the RTA proposal be incorporated in the state budget which will be proposed after the first of the year. If it isn’t, he said, we’ll wait another two years for the next budget.

Jim Beere, a member of the board of Racine Area Manufacturers and Commerce, said the plan looks like one which the business organization can support.

“Now we’re going to find out how serious the governor is in supporting this region,” he said.

ON THE NET: The Southeastern Wisconsin Regional Transit Authority is at http://www.sewisrta.org.

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