Why doesn’t the cost of car registration in Wisconsin depend on miles driven?

Why doesn’t the cost of car registration in Wisconsin depend on miles driven?

Wisconsin funds its state transportation system mostly through a gas tax and various vehicle registration fees. Democratic Gov. Tony Evers vetoed a proposal to study a mileage-based fee system in 2019, but national efforts are underway to expand such systems as vehicles become more fuel-efficient.

Wisconsin charges $85 to register an automobile with the state, with certain larger vehicles — tractors, trucks, buses — costing more.

It costs an extra $75 to register a hybrid vehicle and $175 to register an electric vehicle, an amount that increased $75 in the most recent state budget. Hybrid and electric vehicle owners pay more to make up for losses in gas tax revenue.

Certain municipalities and counties also assess additional “wheel taxes.” In Madison, for example, in addition to the $85 state fee, residents must pay a $40 registration fee to the city and another $28 to Dane County.

Wisconsin’s main source of road funding is the gas tax, currently 31 cents per gallon, which accounts for 45% of funding. The vehicle registration fees cover 30%.

In the 2019-21 budget the Republican-controlled Legislature approved spending $2.5 million for the Department of Transportation to study mileage-based vehicle registration fees. But Evers vetoed it because he objected “to the financing of another study that will show, yet again, that the motor fuel tax is the most effective way to approximate a user fee of roadway use and the most cost-effective way to collect revenue.”

The 2021 federal Infrastructure Investment and Jobs Act included $75 million for state and local grants to pilot mileage-based vehicle registration programs. The latest round of grant applications is due May 27.

The state Department of Transportation did not respond to questions about whether it plans to apply for the pilot. Evers’ office noted the last three budgets have taken multiple steps to increase road funding, including most recently dedicating $800 million for road projects and moving the amount of electric vehicle sales tax revenue from the state’s general fund to the transportation fund.

Other U.S. states assess vehicle registration fees in a variety of ways. Some charge based on the type of vehicle. Others charge based on the vehicle’s weight. In some places, registration costs change as a vehicle gets older.

Last year Hawaii became the first state to adopt a mandatory mileage-based registration fee system. The state already requires annual vehicle inspections, and now electric vehicle owners must switch from set fees to a mileage-based system by mid-2028. Other vehicles will be required to do so by the end of 2033.

Oregon, Utah and Virginia have an opt-in mileage-based system primarily for electric vehicles, and Connecticut has a program for trucks, 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,” Rohde said based on feedback she got from a panel discussion in Madison last year. “The gas mileage in all the vehicles that we’re driving are getting so much better fuel efficiency and that has an impact. … I’m hopeful that Wisconsin will be really a part of a real trajectory in the Midwest to look at this.”

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This article first appeared on Wisconsin Watch and is republished here under a Creative Commons license.