Combination of sales taxes, referendums shows promise

KRM backers have a new plan

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RACINE COUNTY - Have mass-transit supporters found the funding method to bring commuter rail to this corner of the state?

Everyone knows that the possibility of getting commuter rail here stalled in Madison, with a legislative logjam in the state budget.

But a new idea for reviving commuter rail funding would also start in Madison. And it appears it could erase or avoid opposition in places where the prevailing attitude about rail might be "What's in it for me?"

The Wisconsin Alliance of Cities is working on a bill, not yet introduced in the Legislature, that would allow two or more communities to create a regional transit authority.

An RTA would be able to levy a sales tax of up to .35 percent, or 35 cents per $100 spent, for mass-transit needs. The plan's strong points, to transit fans, are at least twofold:

1. Each municipality's voters would decide whether they should be in the RTA and have a mass-transit sales tax. That should eliminate commuter rail opposition from the west end of Racine County, for example.

2. In participating communities, the new sales tax would replace the portion of their property tax that funds mass transit.

City of Racine property taxpayers, for example, now contribute about $1.1 million annually to the Belle Urban System. That obligation would be wiped out by sales tax revenues.

In some communities, the sales tax would only fund the bus system.

In Racine, under the proposal, an RTA would set its sales tax amount high enough to generate roughly $500,000 more. That would be the local funding source for the proposed Kenosha-Racine-Milwaukee, or KRM, extension of Chicago's Metra commuter rail line.

Racine Mayor Gary Becker, a strong KRM supporter, estimated that a mass-transit sales tax would be 0.20 percent (20 cents on $100) or less. He said he thinks the Alliance of Cities proposal is worth a try.

"I'm willing to try to sell it as a tool of economic development," he said.

Becker added, "The beauty of a sales tax versus a property tax is: The sales tax grows as the community grows," and the cost of goods and services inflate. "It has a cost of living

(increase) built in."

A revived idea

The City of Racine's Southeastern Wisconsin RTA representative, Jody Karls, said the Alliance of Cities idea had been "bouncing around" for much of this year. "It re-emerged after we lost the state budget vote."

State Rep. Robin Vos, R-Caledonia, could not be reached for comment about the recent proposal. But it might seem to meet his demand that voters must decide about any attempt to fund KRM. It was Vos who, as a member of the Legislature's Joint Committee on Finance, helped kill the previous KRM funding mechanism.

Karls, a commuter rail advocate, said the alliance's proposal looks promising. By moving mass-transit funding from the property tax to a sales tax, a sizable percentage of money for bus and rail would flow in for commuter from outside the RTA member communities.

"You're making somebody else pay for it," he said.

Becker also pointed out that the sales tax plan would make the KRM funding discussion a moot point on the county's west end where KRM is not popular.

Becker has gotten actively involved in the alliance's proposal. Tuesday he visited Gov. Jim Doyle along with Milwaukee Mayor Tom Barrett and the mayors of Madison, Appleton and Waukesha.

Milwaukee is a strong ally because its mass-transit troubles had undermined earlier support for the car rental fee endorsed by the RTA.

"Of anybody involved, they have the biggest problem, and that's their bus system," Karls said.

With a sales tax Milwaukee could not only fund a KRM extension but also provide aid to their bus system.

Becker said Appleton and Green Bay are likely facing similar troubles; they both stand to lose huge federal mass-transit subsidies after the 2010 U.S. Census, when they pass a certain metropolitan population marker.

That kind of situation is brewing support from both Democratic and Republican mayors, he said, adding, "It shouldn't even be a partisan issue."

The ability to ease property taxes, to create new mass-transit funding, and for each community to participate or not - those things "make opposition harder," Karls said.

"If you keep giving (opponents) what they ask for," Becker said, "at some point, how can you object?"

How It Would Work

Here's how a mass-transit funding proposal would work, as proposed in a bill the Wisconsin Alliance of Cities is working on:

- The boards or councils of all municipalities involved would pass an identical resolution to create a regional transit authority, or RTA, and use a sales tax to fund mass transit.

- Each of those municipalities would hold a referendum on the question. Voters would decide whether their community would be part of the proposed RTA.

- Each community voting itself in would become part of the RTA, which would then impose a sales tax of up to 0.35 percent, or 35 cents per $100 spent. The actual tax needed here to bring commuter rail is expected to be no more than 0.20 percent, or 20 cents per $100 spent.

- The bill mandates that the new sales tax receipts would replace what each community had been spending on mass transit. Mount Pleasant, Sturtevant and Caledonia all pay the City of Racine to provide bus service to them; sales taxes would replace those payments.

- In southeastern Wisconsin, the RTA would also aim to raise enough sales tax money to pay the local operating costs of a commuter rail extension.

- Where such arrangements exist, they are normally renewed by voters periodically - every 10 years, for instance.

- As the bill is being discussed, the referendum could not be a separate election, so the goal of rail advocates would likely be to hold a vote in September or November 2008.

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