Vehicle Registration Fee

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Wauwatosa is proposing a vehicle registration fee (also known as "wheel tax") as part of the 2019 budget.

What is a vehicle registration fee?

Wisconsin law allows a town, village, city or county to collect an annual vehicle registration fee, also known as a wheel tax, in addition to the regular annual registration fee paid for a vehicle.

The fee applies to vehicles kept in the municipality or county with automobile registration and truck registration at 8,000 pounds or less.

State law does not specify the amount of the wheel tax. However, we must use all revenue from the wheel tax for transportation-related purposes.

Why is Wauwatosa considering a vehicle registration fee?

The main reasons why we are proposing this vehicle registration fee:

  1. Our infrastructure needs planned maintenance. For decades, we didn’t adequately repair our streets, water pipes, sewer pipes and storm sewer. In government speak, we call this infrastructure. Our Common Council determined we should turn this around and begin making the necessary infrastructure updates.
  2. More cars on the road means more upkeep. In 2017 there were 30,390 vehicles eligible for the wheel tax registered in Wauwatosa. This has been steadily increasing since 2009 due to population growth. This could climb above 31,000 by 2019. More cars on the road means more maintenance.
  3. If we finance infrastructure with cash rather than borrowing, you save money. We primarily pay for infrastructure with borrowed funds, but a solid financial practice would be to pay for at least a portion of our this work through cash on hand. In fact, if we used the revenue from a vehicle registration fee to pay for roadwork over the next 25 years, the proposed vehicle registration fee would reduce our costs to do the work by $4.04 million dollars or about $176,000 each year by saving money on interest. This means that the vehicle registration fee will be saving you and Wauwatosa money in the long run.

Why doesn’t some of the recent development or TIF projects help with this?

New development helps with our everyday operating budget. Development doesn’t bring more money for the capital budget except that it spreads the costs out over more taxpayers, and in some cases new road or utility work is actually paid for through a TIF* instead of by our residential taxpayers.

Another item to note about a vehicle registration fee is that it is applied to all residents, including renters who use the roads, but don’t pay property taxes annually like a homeowner does. We are being proactive and fiscally responsible by making long-term investments in our infrastructure today.

*Tax increment financing, or TIF, refunds or diverts a portion of our taxes to help finance development or infrastructure.

What are the next steps for this proposal?

The topic will next be discussed with the capital budget in September, October, and November.