Wisconsin bill would tap regular fuel tax rate increases for road work

By Keith Goble, Land Line state legislative editor | 11/23/2015

Funding for transportation is expected to be a leading topic of conversation at the Wisconsin statehouse after the first of the year.

It is estimated that the state has a $6 billion shortfall to address road and bridge needs over the next decade.

Wisconsin now relies mostly on a gas tax rate of 30.9 cents per gallon and a diesel rate of 30 cents to pay for road and bridge work.

State lawmakers are expected to step forward in the upcoming weeks to offer proposals that would help eat into the funding shortfall.

One proposal at the statehouse would restore fuel tax indexing starting May 1, 2017. The rate would reflect the U.S. consumer price index.

If approved, an increase to 33.3 cents per gallon for gas is estimated by 2019. The change would add $61 million for roads and bridges in fiscal year 2019.

The state Legislature voted in 2005 to end fuel tax indexing.

Rep. Robb Kahl, D-Monona, said tapping the state’s fuel tax to raise additional revenue is a better option than relying heavily on bonding to get needed projects done.

“All we have been doing lately is putting everything into bonding,” Kahl said in prepared remarks, “... and that credit card approach means that my children and their children are going to be paying for roads that they’ll never drive on.”

Kahl’s bill would authorize tax increases only after the Joint Committee on Finance approves the increase or takes no action. The panel could vote to prevent an increase.

Restoring the state’s fuel tax indexing was one recommendation made two years ago by a study commission to address the state’s transportation funding shortfall over the next 10 years.

Instead, Gov. Scott Walker requested $1.3 billion in borrowing for transportation work.in his 2015-2017 state budget. The Republican-led Joint Finance Committee instead chose to trim that amount by about $450 million.

Kahl said increasing fuel taxes makes sense because the state has the lowest cost in the Midwest for drivers to own and operate a vehicle when considering fuel taxes, tolls, vehicle registration fees and other government fees and taxes.

The bill, AB468, awaits consideration in the Assembly Ways and Means Committee.

To view other legislative activities of interest for Wisconsin, click here.

Copyright © OOIDA