Wisconsin, other states, look for fuel tax relief

| 9/2/2005

If three Republican lawmakers in Wisconsin get their way, drivers in the state would get a slight reprieve from high fuel prices.

Representatives Robin Vos, Pat Strachota and Don Pridemore want Gov. Jim Doyle to call a special legislative session to approve their plan to give residents a fuel tax holiday for the rest of the year. If the Democratic governor, as expected, fails to call lawmakers back to the capitol to consider the tax holiday, Republicans say they plan to pursue the effort when the regular session resumes in mid September.

A similar plan was implemented last year in Florida. Lawmakers cut the state’s gas tax by 8 cents per gallon for the month of August, saving motorists $59.7 million.

Wisconsin’s GOP lawmakers want to cut the state’s tax on diesel and gasoline by 15 cents per gallon through the end of the year.

“I can’t control OPEC, I can’t control crude oil output in the Gulf, but I can work with my colleagues to try to help people who need help right now with gas prices that are going through the roof,” Voss told Land Line.

Vos, of Caledonia, said the loss of state revenue would be offset by using $180.8 million left after Doyle’s vetoes of the state’s two-year budget, which transferred additional money from the state’s transportation fund to the general fund.

“If you’re going to collect it, it should be spent on roads and transit. If you’re going to collect it and spend it somewhere else, we shouldn’t collect it in the first place,” Vos said. “Our plan is to take the money he raided out of that transportation fund and use it as a 15-cent cut in all motor vehicle fuel.”

But the staff of the Democratic governor says the revenue has already been designated to schools.

Doyle spokeswoman Melanie Fonder told The Associated Press that taking the money away now would drive up property tax bills.

Instead, the governor is pushing an alternative to ease the burden on consumers.

A bill stalled in the Senate judiciary panel would repeal the state’s minimum markup requirement for diesel and gasoline. The rule has been in place since the 1930s.

SB215, sponsored by Sen. David Zien, R-Eau Claire, would strike provisions in state law requiring markups of 3 percent for wholesalers and 6 percent for retailers.

State law prohibits the sale of fuel at below cost, which is designed to prevent businesses from selling at a loss in order to drive out competitors.

If signed into law, the governor’s office said fuel prices would drop about 9 cents “virtually overnight.”

Wisconsin lawmakers are not alone in their pursuit of relieving the burden of higher prices at the pump.

A new law in Hawaii that took effect Thursday, Sept. 1, limits the wholesale price of gasoline, making it the first state in the nation to limit prices.

The original version of the bill included diesel in the price cap, but dropped the provision in the final version.

The new rule limits wholesale gasoline prices at just under $2.16 a gallon. Combined with the state’s 59-cent gas tax, the pre-retail price per gallon of regular unleaded will be $2.74. According to The Associated Press, retailers typically charge a 12-cent-per-gallon markup, bringing the total cost per gallon for consumers to $2.86.

The amended price-cap formula is intended to ease Hawaii’s inflated gas prices by tying the prices to a weekly national average instead of a West Coast benchmark.

Democrats in the Missouri House say they’ll ask Gov. Matt Blunt to expand the agenda of the special session that begins Tuesday, Sept. 6, to include a two-week fuel tax holiday.

The proposed tax holiday would cut Missouri’s 17-cent-a-gallon tax on diesel and gasoline to 7 cents a gallon.

“I’m just like everybody else,” House Minority Leader Jeff Harris, D-Columbia, told Land Line. “I’m tired of paying high gas prices. This is a way to give consumers, businesses and truckers immediate relief at the pump.”

Harris said the direct revenue loss from the tax holiday would be about $18 million, but he said drivers from neighboring states and over-the-road truckers who come into Missouri to fill up would offset the loss.

Blunt, a Republican, doesn’t appear too keen on the idea. Jessica Robinson, a spokeswoman for the governor, told the Columbia Daily Tribune the proposal is a “risky scheme that could jeopardize vital, ongoing transportation projects in our state.”

The Missouri Department of Transportation also is leery of the Democrats’ plan.

Spokesman Steve Porter said the proposal “would hurt our ability to provide the road and bridge improvements we’ve promised to taxpayers. The state fuel tax is the only tax that Missourians pay that goes entirely to road improvements.”

If the governor opts not to add the proposed tax holiday to the upcoming legislative agenda, Harris said he would consider bringing the matter up again when lawmakers return to the capitol for the regular session that begins in January.

“If (fuel) prices continue to be a hardship for hardworking Missourians and Missouri businesses, we’ve got to look at ways to address it. This is one possible way,” Harris said.

In Michigan, state Rep. Robert Gosselin, R-Troy, has proposed a measure to drop the state’s sales tax on gasoline – but only after a certain point.

The bill – HB4841 – would drop the 6 percent sales tax if the price pushes above $2.30 a gallon for regular unleaded.

However, Gosselin said the move would save motorists only a few cents per gallon.

According to The Detroit News, the tax would cost Michigan $3 million a year in sales tax revenue for every penny that gas prices rise above $2.30.

– By Keith Goble, state legislative editor