Sales+Tax+Smarter

Why is a sales tax a smarter way to invest in our transportation system?

Let’s look at the math

To create a strong transportation infrastructure (which is vital in attracting new businesses), we should remove transit from property tax and institute up to a 0.5% sales tax (0.25% for Racine and Kenosha). That means for everyone $100 dollars spent on taxable items (food and other essential items are exempt), 25 cents goes to transportation costs. And, property taxes would be reduced by $50 on a $100,000 home in areas that currently support transit services.

Currently, property tax contributions do not generate enough funds to support the current bus system, let alone commuter rail or other enhancements. By instituting a dedicated funding source and sharing the expense of transit with visitors to the area, we will generate enough money to support a bus system that could now afford to extend its service and bring people to jobs in the outlying business parks. And it would fully support KRM commuter rail, linking people to jobs beyond our borders.

Without dedicated funding, the burden on local property tax will increase and service will decrease.

Service cuts have made jobs inaccessible by transit. A recent UWM study reported that bus route miles have been reduced by 20% in Milwaukee and Waukesha Counties over the last 7 years, resulting in 40,000 fewer jobs being accessible by mass transit.
Bus transit in Kenosha and Racine is also facing funding problems as state funding is not keeping up with capital costs. In Racine, The Belle Urban System has seen a dramatic decline in passenger trips (from 6.2 Million to 1.1 million annually) and has cut service by nearly 30% since 2003.
Without dedicated funding cuts in routes and service frequencies are expected to continue at an alarmingly fast pace making more destinations, such as jobs, inaccessible by mass transit.
Additionally, the sales tax would increase with inflation, ensuring that service would be maintained and routes remain intact.

It’s also good to know that 20 to 30% of these revenues are generated from visitors. For example, in Racine the Spirit of Racine Triathlon that generates 8,000 to 10,000 visitors every year and generates about $1M in economic impact. And that’s just one event. According to Dave Blank, CEO of Racine County Convention and Visitors Bureau, visitors spend almost $250 million annually in Racine County. Most of these dollars are spent east of I94 on shopping, hotels, attractions, and restaurants and gas stations. That means that under the RTA at a sales tax rate of 0.25%, $625,000 would be generated for transit from those visitors alone. In Milwaukee, visitors would generate $13 - $18.5 million for transit (0.5% sales tax). And, by investing in better transit access for visitors, more visitors are attracted to the area and more revenue is generated to support the transit systems and our build our tax base in general.

Like many businesses, the Olympics looks at transportation in deciding where to locate. Right now the Olympic International Committee is in the Chicago area determining if it’s a suitable place for the next Olympics. Their main focus is on transportation and the ability to move people in and around hte region. Wouldn’t it be a shame to lose that opportunity because of our lack of an RTA to provide modern transportation services and infrastructure?