Bill in Wisconsin would end fuel tax indexing

| 4/7/2005

As of April 1, drivers in Wisconsin already paying close to record prices to fuel up started paying nearly a penny more per gallon thanks to an automatic fuel tax indexing formula adopted two decades ago.

In response, a group of legislators have introduced a bill to end automatic increases and require lawmakers to annually vote on any tax changes.

The automatic increase in the tax has been adjusted for inflation on April 1 each year since 1985. This year, the tax increased 0.8 cents a gallon.

Leading the charge to end the annual fuel tax increase, Sen. Tim Carpenter, D-Milwaukee, and Rep. Spencer Black, D-Madison, called the spring increase a “covert” tax hike.

“The politicians’ boast of ‘no new taxes’ is false if the Legislature allows gas taxes to keep going up without a vote,” Black said in a statement. “Elected officials cannot escape their accountability for tax hikes by blaming an automatic formula. It is hypocritical for politicians to pat themselves on the back for not raising taxes while at the same time they are quietly allowing a major tax hike.”

Black said he, Carpenter and more than 20 other Democrats and Republicans are sponsoring the legislation to require an annual vote by the House and Senate to alter the fuel tax.

In the 20 years since the automatic indexing was implemented, fuel taxes have risen from 19.5 cents per gallon to 32.9 cents, as of Friday. The non-partisan Legislative Fiscal Bureau estimates the latest hike will cost taxpayers an additional $366 million this year alone.

With the new tax rate, Wisconsin claims the highest average fuel tax in the nation. Revenue from the tax, which is almost 14 cents per gallon higher than the national average, is primarily used to build roads.

SB156 has been sent to the Senate Natural Resources and Transportation Committee.