Democrats aim to revive KRM fee
Jan. 31, 2008

JOE POTENTE

Kenosha News

State Senate Democrats are trying to resuscitate a plan to levy a $15 rental car fee to pay for the Kenosha-Racine-Milwaukee commuter rail line.

The KRM fee was included in an economic development agenda that members of the Senate majority unveiled Wednesday, a little more than a week after Gov. Jim Doyle gave a State of the State address that did not mention the rail proposal.

KRM has been in limbo since last fall, when KRM funding was left out of the state's biennial budget.

The fee increase - a 650 percent boost over the $2 fee now charged on rental car transactions in Kenosha, Racine and Milwaukee counties - won support from the Senate during last year's budget deliberations but did not pass muster with the Republican-controlled Assembly.

Sen. Robert Wirch, D-Pleasant Prairie, said the fee continues to be his preferred KRM funding option, though he is not certain it will go any further than it did in the budget process.

"It's a long shot, but it's worth trying again," Wirch said.

A leading critic of the proposal, Rep. Robin Vos, R-Caledonia, said he does not imagine the rental car proposal will be any more successful now than it was last year.

Vos recently signed onto a bill backed by the Wisconsin Alliance of Cities that would allow individual communities to levy sales taxes to cover transit initiatives, so long as residents approve of the taxes in referendum votes.

"Been there, done that," Vos said of the Democrats' plan.

Critics of Vos' proposal, including Assembly Minority Leader Jim Kreuser, D-Kenosha, say it is an unworkable effort to kill KRM.

About $4.23 million would be needed annually to cover the annual costs of the $198 million project, which would be paid for largely with federal funds. The 33-mile line would use existing tracks to connect Kenosha and Racine with downtown Milwaukee and numerous communities in between.

Regional transit officials recently stalled KRM's application for federal funds until a local funding arrangement is agreed upon.

Republicans were quick to come out Wednesday in opposition to various components of the Senate Democrats' agenda, which also includes increased investments in road building, child care, job training, technical colleges, financial aid and renewable energies.

Proponents say much of this could be funded by another piece of the package - closing the "Las Vegas loophole," by which state companies set up Nevada satellites to avoid paying Wisconsin corporate taxes. Democrats say cracking down on this would generate about $90 million a year in new revenue for the state.

"It's a tax dodge," Wirch said, noting that 21 other states have acted to close the loophole.

Senate Majority Leader Scott Fitzgerald, R-Juneau, countered that the state cannot tax and spend its way out of an economic showdown.

"The idea that you can grow the economy by increasing business taxes and regulation flies in the face of basic economics," Fitzgerald said in a statement.

The Senate initiatives differ somewhat from the proposals Doyle floated last week, emphasizing incentives for business development and research and growing venture capital startups.

With just a handful of floor sessions scheduled before the Legislature adjourns for the campaign season, there is a limited amount of time to tackle the various measures.

Wirch said he anticipates there will be an eventual picking and choosing between Doyle's and the Senate's proposals.

"I don't think it's an either-or situation," Wirch said.

Kreuser said there is likely "tough sledding" in the Assembly for some of the Senate Democrats' proposals, but he is pleased to see the KRM funding mechanism back in the fold.

He said Doyle has asked the Legislature to work out a rail funding scheme. Kreuser, in turn, asked the governor to keep an open mind to whatever the Legislature sends him.

"If we get the KRM package to him, I think he's going to look favorably on it," Kreuser said.