In late January, the Southeastern Wisconsin Regional Transit Authority (SWRTA) recommended that a proposed commuter rail line be funded by an increase in the rental car fee in Milwaukee, Racine and Kenosha counties. The fee would increase to $15 from its current $2.
The proposed Kenosha-Racine-Milwaukee (KRM) commuter rail line would be a 33-mile extension of the current commuter rail system (Chicago-based Metra), which terminates in Kenosha, Wis. The extension, connecting Kenosha to downtown Milwaukee, is expected to draw an estimated 1.43 million annual riders and will feature seven stations, including one at Milwaukee’s General Mitchell International Airport. Estimated costs for the project include $200 million in capital costs and $900,000 in annual operating costs.
An SWRTA consulting group was tasked with researching potential funding for the project. “We did find that other cities throughout the country have been using rental car fees to fund things like stadiums, public infrastructure projects and other transportation projects as well,” said SWRTA spokesperson Lori Richards. “Through our study of different potential funding sources for the commuter rail project, the consensus was built around the rental car fee, so the RTA made that recommendation based on the support of the mayors and county executives in the three-county area.”
If the fee increase goes through, the amount of the car rental tax could be as much as the base car rental fee itself, says Dan Ewald of Mayfair Rent-a-Car in Waukesha, Wis. Ewald is a board member of the Wisconsin Car Rental Alliance (WICRA), an organization that is fighting the fee.
Auto renters in southeastern Wisconsin pay a 5% sales tax, a half-percent county tax, a tenth of a percent for the local baseball stadium, a 5% state rental fee to fund the tourism budget and another 3% to fund the local convention center.
The American Car Rental Association (ACRA) has gotten involved by informing members in the affected areas about the latest news regarding the proposed increase, says ACRA Executive Director Sean Busking.
Ewald and Busking both say mass transit projects are healthy for the economy of a region. “But funding it through layering on another tax to an industry that is already supporting all these other things, we feel, is not correct,” Ewald says. “We don’t feel it’s an appropriate funding method.”