February 11, 2014
***Updated*** State Senate passes Sen. Ellis’ Fox Cities regional transit authority 25-7. See the vote here.
by James Wigderson
Special Guest Perspective for the MacIver Institute
Deep within the laboratory of the state senate offices, while Governor Scott Walker’s proposed tax cuts sit idle, Senator Mike Ellis is presiding over his creature, the Son of RTA. “It’s alive! Do you hear me Chris Larson, it’s alive!”
You would think Ellis would have the decency to wait until Halloween to re-animate the dead. Ellis is attempting to bring back the Regional Transit Authorities (RTAs), this time to fund transit in the Fox River Valley.
The impetus for the new RTA is the evaporation of $2 million in annual federal funding for transportation in the region. There’s a lesson there about depending on federal funding for ongoing operational costs.
(There’s also another example why Governor Scott Walker was correct to turn down federal funding for the expansion of Medicaid, but I digress.)
To replace that $2 million in revenue, the new RTA would impose up to a 0.5% sales tax on the participating communities. The Department of Revenue estimates the new tax would raise $16.8 million annually (minus the state’s 1.5% share of the revenue to administrate the tax).
That’s a lot more than the $2 million they’re trying to replace. The extra $ 14,548,000 (above what the federal government was giving) will buy a lot of shiny new buses in the region.
By the way, that’s an additional $14.5 million in tax revenue for transit, and not instead of what local communities are already charging taxpayers. The legislation does cap what participating local communities can tax for transit (give or take convenient government accounting) at the level prior to the enactment of the RTA tax, but it does not mandate the lowering of property taxes.
When Republicans killed off the old RTAs in the 2011 budget, the complaint was that the RTAs were largely bodies that were not responsible to anyone. They could spend as they pleased without being accountable to the voters.
Supporters of the bill claim that the new RTA is not as scary as the old RTA. It’s more like Peter Boyle in Young Frankenstein than Boris Karloff in the original.
RTA supporters claim there is more accountability because the RTA board members will all be elected officials. “All directors shall be elected officials of one or more of the authority’s participating political subdivisions.”
But the method of choosing these elected officials to serve is left to the RTA participating communities to decide. They will not be chosen by direct election.
Any alderman in any participating community could find themselves with a four-year term on the board of directors for the RTA, and the only ones that can hold him accountable are the constituents in his aldermanic district. Even if a majority of his own community is opposed to the decisions he makes, the board member is only accountable to his own constituents.
Granted, to be in the new RTA a community would have to pass a referendum. The level of the sales tax is also subject to referendum in the participating communities. However, the RTA board also has the power to bond, meaning the participating municipalities could be placed into debt by an appointed, unaccountable body.
That unaccountable body is also responsible for spending all of that money. There is nothing to prevent a repeat of the horror show that was the Southeastern Wisconsin Regional Transit Authority. According to the Milwaukee Business Journal, that RTA took the money generated from a tax on rental cars and used it to spend $1.2 million on a communications firm to lobby the state legislature for the ability to – you guessed it – raise more taxes.
A new RTA in the Fox River Valley could take the sales tax revenue and lobby the state government to eliminate the referendum requirements. That’s a horror picture sequel that isn’t funny.
There is nothing preventing municipalities from entering into bilateral agreements to increase transit cooperation. There is nothing preventing municipalities from going to referendum to exceed state imposed caps on local tax revenue to pay for increased transit. Instead of increasing cooperation between neighboring units of government in pursuit of efficiency, the legislation as proposed merely creates an additional layer of government unaccountable to the taxpayers.
We need less layers of government, and those layers of government need to be more accountable to the taxpayer. Regional Transit Authorities move us in the wrong direction.