Wisconsin's Gasoline Tax adds fire to higher fuel prices

Annual adjustment raises rate to 28.5 cents a gallon By STEVEN WALTERS swalters@journalsentinel.com Last Updated: March 23, 2003

Madison - Wisconsin's gas tax, already one of the highest in the nation, will rise from from 28.1 cents to 28.5 cents per gallon on April 1, an increase that coincides with the start of the spring and summer driving season.

With the 0.4 cent increase scheduled to become law April 1, the gas tax alone will bring in $900.5 million this year.

The state gas tax, adjusted every spring for inflation, and the $45-per-car annual registration fee are the two main taxes that pay for highways, bus system subsidies, bridges, aid to local governments and other transportation programs. A separate 3 cent-per-gallon tax funds the replacement of underground fuel tanks.

With the 0.4 cent increase scheduled to become law April 1, the gas tax alone will bring in $900.5 million this year. And Gov. Jim Doyle has recommended a $10 increase in the vehicle registration fee, saying it has not been raised for several years. The April 1 increase will drive gas prices even higher.

Uncertainty over fuel supplies before the U.S. attack on Iraq, and the interruption of oil supplies from Venezuela because of a national strike, boosted the average price of a gallon of self-serve regular in Wisconsin to about $1.75 a gallon last week, up about 23 cents from January and about 39 cents from a year ago, according to AAA Wisconsin.

State Sen. Tim Carpenter (D-Milwaukee) tried last month to add to an emergency spending bill an amendment killing the April 1 scheduled gas-tax increase. But the Senate used a parliamentary maneuver to shelve his proposal.

Carpenter calls the 0.4 cent automatic increase a "covert tax increase" that the full Legislature should have to pass and the governor should have to sign into law.

"All tax hikes in Wisconsin should be openly and publicly debated, and voted on under scrutiny of the citizens who will bear the burden of such taxes," he said.

He also is sponsoring a bill to permanently kill the automatic spring adjustment - called "indexing" - of the gas tax first approved in 1985. According to the Legislative Fiscal Bureau, the spring adjustments have cost drivers a total of about $2.5 billion between 1985 and 2002.

AAA backs increase But AAA Wisconsin official Ernie Stetenfeld said his group, with 590,000 members in the state, supports the annual spring adjustments in the gas tax, despite the "perception" problem the next increase poses by coming at a time of soaring gas prices.

"Indexing maintains the buying power" of the gas tax, which is desperately needed as the state struggles to find money to rebuild highways and intersections, including the Marquette Interchange in downtown Milwaukee, said Stetenfeld, the group's vice president for corporate relations.

"We don't think it's the right time to undo indexing," he said.

While gas prices jumped significantly in January and February, they have leveled off in the last few weeks. But Stetenfeld said no one can predict what will happen to prices now that America and its military allies have invaded Iraq.

Gas prices in Wisconsin soared to about their current levels before the Persian Gulf war in the early 1990s but quickly fell after the war actually started, he noted.

Then, he said, prices fell because "once the war broke out, there was less uncertainty about the future."

But too many unknowns in worldwide oil supplies exist this time to predict future prices, Stetenfeld added. "This isn't an analogous situation, by any means," he said.