Wisconsin Grapples with Transportation Funding Amid Push for Mileage-Based Fees

Wisconsin currently funds its state transportation system primarily through a gas tax and various vehicle registration fees. However, as vehicles become more fuel-efficient, there is a national push to explore mileage-based fee systems to supplement dwindling gas tax revenue. While Wisconsin Gov. Tony Evers vetoed a proposal to study such a system in 2019, the state Department of Transportation (DOT) is a member of the Mileage-Based User Fee Alliance, indicating potential interest. Several other states have already adopted or piloted mileage-based registration fee programs, primarily for electric vehicles. As Wisconsin grapples with sustainable transportation funding, the possibility of a mileage-based system remains on the table.

Wisconsin Grapples with Transportation Funding Amid Push for Mileage-Based Fees

Wisconsin’s Current Transportation Funding Model

Gas Tax and Registration Fees

  • Wisconsin’s main source of road funding is the 31-cent-per-gallon gas tax, accounting for 45% of funding.
  • Vehicle registration fees cover 30% of transportation funding.
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Hybrid and Electric Vehicle Fees

  • Hybrid vehicles pay an additional $75 registration fee.
  • Electric vehicles pay an additional $175 registration fee, an increase of $75 in the most recent state budget.
  • These higher fees aim to make up for losses in gas tax revenue from fuel-efficient vehicles.

Local Fees

  • Some municipalities and counties also assess additional “wheel taxes” on top of state registration fees.
  • For example, Madison residents pay an extra $40 to the city and $28 to Dane County.

Exploring Mileage-Based Fees

Previous Study Proposal Vetoed

  • In the 2019-21 budget, the Republican-controlled Legislature approved $2.5 million for the DOT to study mileage-based vehicle registration fees.
  • Gov. Evers vetoed the proposal, arguing that the gas tax is the most effective way to approximate a user fee for road use and collect revenue.
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Federal Funding for Pilot Programs

  • The 2021 federal Infrastructure Investment and Jobs Act included $75 million for state and local grants to pilot mileage-based vehicle registration programs.
  • The DOT did not respond to questions about whether it plans to apply for the pilot program.

Other States’ Approaches

  • Hawaii became the first state to adopt a mandatory mileage-based registration fee system in 2022.
  • Oregon, Utah, Virginia, and Connecticut have opt-in mileage-based systems, primarily for electric vehicles.

Interest in Wisconsin

According to Barbara Rohde, executive director of the Mileage-Based User Fee Alliance, of which the Wisconsin DOT is a member, “There’s interest in Wisconsin” based on feedback from a panel discussion in Madison last year.

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As Wisconsin confronts the challenge of sustainable transportation funding in an era of increasing fuel efficiency, the possibility of a mileage-based fee system remains on the table, despite previous setbacks and the current reliance on traditional funding sources.

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