Truckers in Wisconsin could soon be paying another dime per gallon at the fuel pump if a new transportation budget request is approved.
Confronted with a pending budget shortfall of nearly $700 million during the next two years, the Wisconsin Department of Transportation is looking for additional revenue from motorists and truck drivers. Among the options submitted for consideration are increased costs for diesel fuel and gasoline, raised fees for overweight trucks, and higher fees on electric and hybrid vehicles.
The nearly 600-page budget request submitted by DOT Secretary Mark Gottlieb would put all drivers in the state on the hook for an additional $750 million in taxes and fees over the next two years.
Gottlieb’s request comes as Gov. Scott Walker is expected by some to use his Election Day victory to bolster his pursuit of replacing the state’s fuel tax with a sales tax on gas, diesel and alternative vehicle fuel sources.
Walker has said the change would help provide the state with a stable revenue source. The sales tax would be collected based on the price of fuel, not just the number of gallons.
The budget request for 2015-2017 is intended to help resolve the state DOT’s projected $680 million shortfall during that time.
The biggest component of the budget request would overhaul how the state collects tax on fuel purchases. The 30.9-cent-per-gallon excise tax on gas and diesel would be trimmed to 13.5 cents for gas and 16.3 cents for diesel.
To compensate for the drop, the state would include a variable component that would change annually based on the wholesale price of fuel. Specifically, the tax rate would be set at 8 percent of the average wholesale price in the state.
For diesel, the tax rate would initially be set at 24.6 cents while the gas rate would be set at 22.4 cents.
Starting in September 2015, combining the excise tax rate with the variable rate would put the diesel tax at 40.9 cents per gallon and the gas tax at 35.9 cents. The changes would amount to increases of 10 cents and 5 cents, respectively.
Gottlieb wrote in his letter to the governor that he wants a higher tax rate on diesel “so that heavy vehicles pay more to reflect the damage they cause to roads and bridges.”
He also noted that higher diesel fuel rates would delay the need for raising annual truck registration fees.
Another part of the budget request would double oversize/overweight permit fees. According to WisDOT, the fees were last increased in 1981.
As proposed, owners of hybrid and electric vehicles would also pay $50 annually to “ensure these owners continue to pay their fair share of the operating costs of our infrastructure,” the letter reads.
Sen. Jennifer Shilling, D-LaCrosse, said the DOT’s proposal is only the beginning of a “serious discussion” that lawmakers need to have in the months ahead to address the long-term stability of the state’s transportation infrastructure and funding options.
“Maintaining our transportation infrastructure, reducing congestion, and improving safety are all important issues and we need to keep an open mind on all proposals as we work to find a solution,” Shilling said in a news release.
The Republican governor will consider the DOT’s request as he works on the budget he will submit early next year to cover all state operations. The Republican-led Legislature will then make changes they deem necessary before sending it back to the governor for final approval.
Officials at OOIDA are reviewing the state DOT’s 577-page budget request.
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