Effort to end fuel tax indexing nears vote in Wisconsin Senate

| 12/2/2005

With the high cost of fuel the past several months fresh on the minds of lawmakers in Wisconsin , the state’s Senate is soon expected to consider ending the automatic indexing formula adopted two decades ago.

Sponsored by Sen. Tom Reynolds, R-West Allis, the measure would end automatic increases and require lawmakers to annually vote on any tax changes.

Reynolds told the Milwaukee Journal Sentinel Senate Majority Leader Dale Schultz, R-Richland Center , pledged to hold a vote Tuesday, Dec. 6, on the bill.

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.

In the 20 years since the automatic indexing was implemented, fuel taxes have risen from 19.5 cents per gallon to 32.9 cents. The non-partisan Legislative Fiscal Bureau estimates the latest increase 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.

Reynolds’ bill – SB331 – would permit one more automatic increase in April 2006 before implementing the new restriction.

It would create a $5.1 million shortfall in the current state transportation budget, which ends in mid-2007, the newspaper reported. The Wisconsin Department of Transportation estimates the bill would increase the shortfall for the budget by several million dollars in the following year.

If approved by the Senate, the bill would move to the state’s Assembly for further consideration.

The office of Democratic Gov. Jim Doyle was non-committal about the governor’s stance, telling the newspaper he would review the bill if it makes it to his desk.

Doyle previously has said he wants to stay away from any effort that would cut into the state’s ability to generate revenue for roads.