A fee of up to $16 on rental car transactions would fund a Kenosha-Racine-Milwaukee commuter rail link, under a legislative committee’s recommendation.

The Joint Finance Committee deliberated into the early morning hours Friday on regional transit authority language Gov. Jim Doyle included in his state budget plan.

Doyle proposed to allow authorities to levy up to a half-percent sales tax.

The committee rejected that plan, in favor of the rental car proposal for KRM rail and a Milwaukee County authority that could impose a 1 percent sales tax to pay for local transit there.

Kenosha-area lawmakers lauded the KRM compromise, while the existing Southeastern Wisconsin Regional Transit Authority’s leader panned the committee for failing to back a comprehensive regional body.

Sen. Robert Wirch, D-Pleasant Prairie, Rep. Peter Barca, D-Kenosha, and Rep. John Steinbrink, D-Pleasant Prairie, issued a joint statement Friday, proclaiming the rental car fee as their preferred KRM funding source. The legislators said they believed the proposed KRM authority will receive support in the Assembly and Senate when those bodies act on the full budget.

“The car rental fee increase can be a reasonable and stable funding source for the line and will mainly affect visitors from out of state,” the local lawmakers wrote. “This means of financing can minimize the fiscal burden on Wisconsin’s citizens.”

Karl Ostby, chairman of the temporary authority that the Legislature created to study transit operations and the KRM project, countered that a regional body with a dedicated sales tax remains a more ideal option.

Ostby’s group late last year recommended that the state form a permanent three-county authority to oversee all existing transit in Kenosha, Racine and Milwaukee counties, levying a sales tax to remove transit from the property tax rolls.

“The fact that today we made initial steps toward securing dedicated sales tax funding for some of our local transit systems, as well as creating the KRM commuter rail, tells us the Legislature sees transit as critical to the success of our region and worked hard to include it in the state budget,” Ostby said in a prepared statement.

“But what they did was inadequate to meet the needs of the entire region.”

In spite of Doyle’s inclusion of the authority’s recommendation in his budget, some Democrats — notably, Sen. John Lehman of Racine — balked at raising the sales tax.

Democrats spent more than 12 hours meeting behind closed doors Thursday to work out the revised plan. The committee did not start debating the issue until close to 1 a.m. Friday.

Republicans wanted to require a vote in any county that wanted to pursue rail projects, but that was rejected. They also questioned the merits of commuter rail.

“You want to keep the city of Milwaukee in the dark ages,” said Rep. Pedro Colon, D-Milwaukee, to Republicans who criticized the rail proposals.

A new board created to oversee the rail line’s construction also could levy $50 million in bonds to help pay for it.

The project has been discussed for years but always stalled over ways to pay for it.

The 1 percent sales tax that the committee recommended for Milwaukee County would raise $132 million each year, to go toward transit, parks, cultural and emergency medical services. Fifteen percent would go to the city of Milwaukee.

In Dane County, which includes Madison, the committee recommended a half-cent sales tax that could be imposed to pay for commuter rail and other transit projects.

The four Republicans on the committee voted against all of the proposals.

On a 9-7 vote, the committee voted against Doyle’s plan to create a regional transit authority in the Fox Cities to help pay for the existing regional bus system, using up to half a cent sales tax.

The committee also voted against allowing other authorities with the power to raise sales taxes to pay for transit programs.