February 9, 2016

Report to call for gas tax increase

A new report will recommend a hike in the state gasoline tax. It’s not due out until next week, but the Transportation Finance and Policy Commission report will address ways to overcome a crucial funding gap on the horizon, according to Craig Thompson, executive director of the Wisconsin Transportation Development Association and a commission member.

“The commission looked at what it would take over the next decade, to really try to maintain our current level of service,” Thompson. “We came to the conclusion that we’re about $5 billion dollars short over the next decade,.”

With that in mind, the report will make a number of recommendations. “Adjusting the gas tax by five cents, implementing a one cent per mile, vehicle miles traveled fee, or in lieu of that, if people were not interested in going that route, a $55 increase in the registration fee, and eliminating the sales tax exemption on trade-ins,” explained Thompson. Also recommend is an increase of $20 in the license renewal fee.

Thompson said the need for the gas tax increase is driven by fuel efficiency. “If I had a car that gets 15 miles per gallon, and I was paying our current 32 cents per gallon, and then I buy a new car that get 30 miles per gallon, I’ve effectively cut my gas tax that I pay in half, to drive the same distance,” he said. “So as fuel efficiency goes up, if we don’t adjust the gas tax, we are going to drastically reduce the amount of revenues that come in.”

It’s not clear at this point whether any of the recommendations will be adopted by the legislature or Governor Scott Walker, although Walker has said transportation infrastructure is one of his key priorities for the state.


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