Six Things about the KRM

Call your legislators.  The KRM is a bad idea for SE Wisconsin and should be shot down.

Six Things KRM Rail Supporters told Washington that they didn’t tell Wisconsin.

The Southeastern Wisconsin RTA has contracted for $611,000 in taxpayer funded lobbyists and PR people to craft and deliver their message to you.  The proposal they sent to Washington told a very different story.

They expect regular tax increases, whenever they need them.  They have a deficit from the start and assume you will give them another $4.5 million every year.

(1)
In Wisconsin, they said the 650% increase in car rental taxes was all the money they needed.

In Washington they said the Legislature would continue to raise taxes whenever the RTA needed it, “The fee [car rental tax] is assumed to be adjusted as needed over time such that revenue keeps pace with inflation,” is what they told the federal government. 

The fact is this tax fluctuates wildly because it is based on the number of cars rented, which has nothing to do with inflation. Five percent inflation does not lead to 5% more people to renting cars.  In fact, according to DOR information on Wisconsin, car rental activity has risen at well below inflation for the past six years and has dropped by as much as 14% in a single year.  Shortfalls for them mean tax increase votes for you.

(2)
In Wisconsin, they said other communities wouldn’t lose millions in transit aid if this passed.  In a Waukesha Freeman story entitled, “SEWRPC says commuter rail memo inaccurate: Response blasts validity of reported transit funding cuts,” the Southeast Wisconsin Regional Transit Authority Director attacked the Legislative Fiscal Bureau analysis showing the RTA taking $4.4 million in mass transit funds from 23 Wisconsin communities.

In Washington they said they counted on getting $4.5 million from that same fund.  This was one month after questioning the LFB analysis that said they would take $4.4 million.  The only difference was they “assume” the state Legislature will give them $4.5 million in new mass transit funding and increase it every year so they won’t have to take it from other cities and counties.

The fact is state mass transit funding has not kept pace with inflation.  In fact, their own proposal acknowledges it only increases at 1.5% per year.  Their assumption is that Tier B Mass Transit Funding would be increased by over 23% just for them.

If SEWRTA is counting on million more in state taxpayer dollars, wouldn’t it be nice if they asked?

(3)
In Wisconsin we know raising the car rental tax increase 650% to the second highest in the nation will result in fewer cars being rented.  That is why the Wisconsin Tourism Federation and every major tourism association oppose this tax increase.  In fact a study of the only higher car rental tax in the nation shows rental dropping 9% from a much smaller tax increase.

In Washington, they didn’t care whether car rentals would drop, creating a deficit.  Why?  Their proposal states, “The fee [car rental tax] is assumed to be adjusted as needed over time such that revenue keeps pace with inflation.”  An “adjustment” to them is another tax increase vote to the Legislature.

The fact is, if the tax increase leads to the expected 20% drop in rentals, they ASSUME you will raise the tax another 20% to cover their deficit.  Of course, the 20% drop will also mean a 20% drop in related tourism.  And, the ASSUMED next tax increase will give Milwaukee the highest car rental tax in the nation.  Not to mention that tax increase will also lower rentals, requiring another tax increase.

(4)
In Wisconsin, they failed to have the tax included in the Governor’s budget.  Then they failed to add it in Joint Finance.  They got it added in the Senate but failed in the Assembly.   They have failed in three of four state budget steps so far.

In Washington, they ASSUME you will pass their 650% car rental tax increase by October 1 or you will increase the tax again to make sure they have the revenue they assume they will get.

(5)
In Wisconsin, they failed to build local consensus among local elected bodies.  The Milwaukee Common Council and Milwaukee County Board have passed resolutions opposed to the tax increase plan the RTA is asking you to pass.  In fact, Milwaukee Common Council opposition to the funding and priorities of the RTA prevented passage of the land use resolution required by the federal government to be considered for federal funding.

In Washington, their proposal mentions nothing about the local elected bodies that oppose this tax plan or that the Governor has refused to support this tax increase without local consensus and more accurate cost estimates.  They don’t even mention the Milwaukee Common Council opposition that prevented passage of the land use plan.

In fact, they don’t even mention their failure to win the support of the Governor, Joint Finance Committee or the state Assembly in this budget.

(6)
In Wisconsin, they failed to tell you Congress is considering legislation to strike down new rental car taxes like this across the country.  The Wisconsin Legislature and Governor would be left holding the bag for the RTA if Congress strikes down this tax.  Once again, their deficit becomes your problem.

In Washington, relying on a tax increase that Congress is considering striking down really hurts you chance of approval UNLESS you convince them you can ASSUME your lobbyists can pass more tax increases.

The fact is, HR 2453 is expected to have hearings this fall.  It would strike down all rental car taxes past since May 2007.

Provided by the Wisconsin Car Rental Alliance