Gov. Jim Doyle signed a bill into law Dec. 22, 2005, ending Wisconsin’s
automatic indexing formula of the fuel tax adopted two decades ago.
But, Doyle said lawmakers might have to raise vehicle registration fees
to compensate for the drop in funding for the state’s roads and bridges.
The Republican-led Legislature voted in early December 2005 to end the
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. In 2005, the tax increased 0.8 cents a gallon.
In the 20 years since the automatic indexing was implemented, fuel
taxes have increased 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.
Cutting off the annual increase would cost the state $5.1 million in
the current two-year budget that ends in mid-2007, The Associated Press reported. The tax hit will increase to
$75 million by mid-2009.
The Democratic governor said he did not believe ending the automatic
increase would lead to a slowdown in transportation projects.
Wisconsin has 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 used primarily to build roads.
Sponsored by Sen. Tom Reynolds, R-West Allis, the law permits one more
automatic increase in April before implementing the new restriction.
The new law, previously SB331, also moves up by one month a May 1 penny
cut in the portion of the tax that is used to replace leaking underground fuel
In addition, it protects the transportation fund from future attempts to use money earmarked for
roads to fund other state programs.
Doyle previously had expressed some
reservations about the bill, noting the $5.1 million that would come out of the
transportation budget. However, he said lawmakers would now have to make the
tough decisions on how to fund the state’s roads and bridges.
His Republican opponents in this year’s gubernatorial election –
Milwaukee County Executive Scott Walker and U.S. Rep. Mark Green – support the
repeal of the automatic fuel tax increase.