To avoid wheel tax increase, alderman suggests cutting streetcar funding

MILWAUKEE (CBS 58) -- As city leaders craft Milwaukee's 2026 budget, one of the most contentious items is Mayor Cavalier Johnson's proposal to raise the city's vehicle registration fee, commonly referred to as a wheel tax. One alderman wants to instead defund the city's streetcar as budget-balancing measure.

Milwaukee's current vehicle registration fee is $30/year. In addition to $85 in state fees and $30 from Milwaukee County, drivers who store their cars in the city of Milwaukee would pay a total of $155 annually under Johnson's plan to raise the city fee to $40.

According to the Wisconsin Department of Transportation, a $40 wheel tax would tie Milwaukee with Madison, Janesville, Fitchburg, Oregon, Shawano and Evansville for the steepest in the state. Milwaukee's total cost of $155 would be the state's most expensive, edging out Madison's $153 cost.

An analysis of Johnson's proposed budget by the Wisconsin Policy Forum notes the last increase, from $20 to $30 in 2021, raised about $3 million in new revenue. The analysis found this proposed increase would also generate nearly $3 million in additional revenue. 

Ald. Scott Spiker, whose district covers the city's far south side, said Milwaukee should instead shelve "The Hop" streetcar to avoid fee increases.

"Should we even be looking at that as long as we're sending $7 million a year out the door in the form of a streetcar?" he said in an interview Thursday at City Hall. 

The Hop began operation in the fall of 2018 after being constructed with a federal grant. Now, it costs $6.9 million to operate the streetcar each year.

The policy forum's analysis found only $1.8 million of those expenses are offset by grants. The Hop does not charge any fare for riders, even though the original plan was to eventually charge streetcar passengers. Spiker said he wasn't concerned about leaving abandoned rails and wires across downtown streets.

"Leave it as an artifact to previous administrations' misplaced hopes," he said.

Spiker said the streetcar's fatal flaw is that it won't expand into other parts of the city. As part of a revenue sharing deal that allowed Milwaukee to implement a 2% city sales tax, the Republican-controlled Legislature banned the city from using local tax dollars for the operation or expansion of The Hop.

With the streetcar running on a two-mile loop downtown, Spiker said there simply aren't enough people riding The Hop to make it viable.

"We're essentially transporting the well-heeled and unhoused, and is that worth $7 million a year?" he said. "What other uses could we put that money to?"

Shani Harris took issue with the alderman's assessment. Waiting for the streetcar at a stop near E. Odgen Ave. and N. Van Buren St., Harris sat next to a wagon full of grocery bags.

Harris said she works as a personal care assistant and uses The Hop almost daily to take groceries and other essentials to the people she helps.

"I'm not well off, that's for sure, but I'm not unhoused," she said. "I do have a place, so I'm good in that manner."

Harris added she appreciates The Hop being free because sometimes affording bus fare is a struggle. She added the streetcar is also less physically taxing.

"It would be kind of hard on me because I hurt myself recently, my leg," she said. "So, it's easier for me to get on and off The Hop, rather than getting on the bus."

Spiker has previously pushed to cut The Hop's funding and has been unsuccessful. He said he'd be introducing an amendment to defund the streetcar during the ongoing budget amendment process.

"I have definite interest [from other council members]," Spiker said. "How much of that interest translates to support, we'll see. We're talking behind the scenes."

Given the outcomes of past efforts, it's highly unlikely Spiker will find the votes to close down the streetcar. However, several members of the common council have bristled at the idea of raising fees at a time when residents are struggling with rising costs in many other areas.

When asked if Johnson was in talks with alders about a compromise on the fee proposal, spokesman Jeff Fleming only said, "Discussions are ongoing."