Oshkosh Common Council approves wheel tax and utility cost increases to fund road and sidewalk reconstruction. Here's what to know.

OSHKOSH ― Ready or not, here it comes.

Residents will start paying a new wheel tax starting July 1 as Oshkosh Common Council voted in favor of adding a $35 vehicle registration fee and increasing the cost of three utilities to fund road and sidewalk reconstruction.

The ordinance was adopted during Tuesday’s common council meeting after City Manager Mark Rohloff and Director of Finance Russ Van Gompel put forward the resolution to raise $3.75 million annually for road-related special assessments.

Oshkosh vehicle owners will now pay $35 per year in addition to the regular annual registration fee while residents will have their water, sanitary sewer and storm sewer utilities increased between 0.25% to 0.5%.

The new wheel tax and utility increases also eliminates any future pavement-related special assessments on properties for 2024 and beyond.

According to city staff, the ordinance needed to be passed as the current funding mechanism done through special assessments “have seen a rise in cost faster than the rate of inflation.”

Council member Michael Ford said during the meeting: “This is about facts. This has nothing to do with emotion, [so] if you look at the Department of Revenue numbers, Oshkosh collects more in special assessments than any other city in Wisconsin.

“Data-driven governance means ensuring we’re not outliers in critical quantifiable areas," Ford continued. "We’re an extreme outlier. Our current policy isn’t working, and we need to fix it.”

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City of Oshkosh will collect $1.5 million annually through the new VRF.

The city expects to collect $1.5 million annually through the VRF while charging approximately $750,000 for each of the three utilities per year.

That $750,000 charge on each utility, which is the estimated cost of an 8-foot utility trench, will go into a separate capital projects fund.

But council member Paul Esslinger, who cast the lone dissenting vote, believes the new funding mechanism is a “huge inequity” for Oshkosh residents who’ve already paid special assessments or own multiple vehicles.

Esslinger lobbied instead for a gas tax program, saying it is better to charge people at the pump so those who drive more pay more.

“There are thousands of Oshkosh residents that have paid these large assessments for several years," Esslinger said. "Now imagine how they feel after paying these large assessments and now others don’t have to pay them at all.

“Then, you have the largest inequity under this program [where] vehicles over 8,000 pounds pay nothing," he added. "The average citizen and driver subsidizes the vehicles that do the most damage, [and] that is insane.

“The state uses a gas tax to fund roads they own, so we should be able to implement our own or the state should do it for us,” he added.

The initial VRF proposal was met with varying responses, as property owners who didn’t get hit with special assessments supported the move while other residents viewed the initiative as a “band-aid approach.”

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An Oshkosh Chamber survey revealed the business community was not in favor of the VRF.

A recent Oshkosh Chamber survey revealed several members of the business community were not in favor of the wheel tax, suggesting council use a smaller VRF and lesser utility increases combined with a general tax levy increase instead.

But the Realtors Association of Northeast Wisconsin rejected such a move, arguing that high property taxes are making it difficult for businesses to attract qualified labor from outside the state.

“Wisconsin is still one of the top-10 taxed states in property taxes in the country [and] this is not attractive when we are trying to recruit people from other states for our workforce,” said the association’s director of public relations and government affairs, Jennifer Sunstrom, in support of the VRF.

“When they get here, there are two top things they see right away when they are trying to purchase a home in our communities. One is income taxes, but another huge one is property taxes.”

Omro's city council recently slammed the brakes on implementing a new wheel tax after residents pushed back against paying more taxes.

Wisconsin law allows for cities or counties to collect an annual wheel tax in addition to the already existing yearly vehicle registration fees paid to the state.

The Department of Transportation then keeps an administrative fee of 17 cents per vehicle registration before distributing the balance of that fee to the county or municipality.

Currently, the DOT collects wheel taxes in 13 Wisconsin counties and 38 municipalities, ranging from $10 in Kaukana up to $40 for Madison.

Have a story tip or public interest concern? Contact Justin Marville at jmarville@gannett.com.