December 22, 2014

Wisconsin Rep. Tom Petri proposes federal gas tax increase

petriblumenauerWhen it comes to pushing policy, perhaps nothing works like a cardboard cutout of President Ronald Reagan. Wisconsin Republican, congressman Tom Petri and Oregon Democrat Earl Blumenauer had the Gipper on hand as they proposed an increase in the federal gasoline tax.

“Ronald Reagan supported raising the gas tax back in 1982 because he believed in funding American infrastructure in a responsible way. I think he was right, and it’s the best course of action we can take at this time,” said Petri, who was first elected in 1979 – the year before Reagan won the 1980 presidential election. Petri chose not to seek reelection in November.

Craig Thompson with Wisconsin’s Transportation Development Association said the federal gas tax has not been raised in twenty years. “It’s been the same since 1993. It hasn’t been adjusted since then. Most of us, if we’re driving cars that get better gas mileage than we did twenty years ago, are paying less than we were 20 years ago in the federal gas tax,” Thompson said.

Federal gas tax revenues make up about twenty-five percent of Wisconsin’s transportation spending, so even a modest increase would help. But – President Reagan notwithstanding – that’s unlikely. “It’s a little hard to picture this congress and president coming together to solve something like this right now, and if they don’t it’s going to be left up to the states to come up with answers on their own,” Thompson said.

Wisconsin is facing a projected $680 million shortfall to fund transportation needs, and the state DOT recently proposed a funding plan that includes an increase in state fuel taxes, something that could be a tough sell in the legislature.

Tax cuts to be a priority for Governor Scott Walker

There’s a tax cut in your future – although the specifics are still a work in progress. Governor Scott Walker is making it pretty clear that tax cuts will be a high priority as he begins his second term.

“I think our overall goal is to lower both property and income taxes, if we keep chipping away over the next four years” Walker said in Green Bay on Thursday. “It’s not something you can do all at once, but I think we can continue to lower the burden on the hardworking taxpayers of this state.”

That combination of income and property tax reductions is a likely scenario – although Senate Majority Leader Scott Fitzgerald says it’s the latter which seems to irk voters the most. “Just coming off the campaign trail, it’s still something that people bring up all the time,” Fitzgerald said.

Fitzgerald said the size of the state budget deficit, and the potential impact any tax reductions would have on it, will be a major consideration as Republican majorities in the Senate and Assembly consider what type of tax cut package they can support.

Governor Walker considers revamping the gas tax

(PHOTO: Jackie Johnson, file)

(PHOTO: Jackie Johnson, file)

Governor Scott Walker floats the idea of replacing the traditional gas tax with a sales tax on gasoline and alternative fuels for vehicles, saying it could help stabilize the state transportation fund as it faces a $680 million shortfall in the next biennial budget.

Walker gave scant details on his plan during an editorial meeting with the Wisconsin State Journal on Monday, but elaborates a bit on Tuesday when meeting with the Milwaukee Journal Sentinel editorial board and reporters.

Walker points out fuel-efficient vehicles don’t generate enough revenue from the gas tax. “The gas tax is based on gallons of gas purchased,” he says. “As the gallons of gas go down, the gas tax collections go down, even though those vehicles put the same wear and tear – if not more – on the roads and infrastructure.”

Craig Thompson heads the Wisconsin Transportation Development Association. He says more information is needed on the proposal. “Well, without knowing all the details, it’s a little hard to say, but there are other states in the country who have looked at these sorts of things.”

Walker suggests his idea would be a more stable source of revenue, rather than relying on fuel usage. A bipartisan state transportation commission has recommended, among other things, an increase in the state gas tax and a higher driver’s license registration fee to help generate revenue to maintain the state’s roadways. Those ideas were rejected by Republicans.

Thompson says he needs more details before he can fully comprehend or comment on the governor’s proposal. “I think you have to give the governor credit for putting some ideas on the table. Many of the media have asked both candidates to do that and he’s started that conversation.”

Democratic gubernatorial candidate Mary Burke doesn’t like the idea, which would make fuel taxes for motorists go up or down based on the fluctuation of prices at the pump, rather than hinging on the actual amount of gas pumped into the tank. “Pegging it and having it be a sales tax rather than on a gallon of gas actually subjects it to wide fluctuations because of the changes in prices of gas. So, I think it probably doesn’t work very well. I would be looking to address the real issue.”

Walker’s idea comes just three weeks before he faces Democrat Mary Burke in the general election November 4th.

Mary Burke: No new taxes

Mary Burke (Photo: WRN, file)

Mary Burke (Photo: WRN, file)

Democratic gubernatorial candidate Mary Burke says she will not raise taxes, if she wins the election in November. The Madison school board member wants to cut taxes for middle class families.

Burke was asked during a conference call whether she’d increase taxes on the wealthy to achieve that goal. “I’m not going to increase taxes on anyone.” Burke says she’s focused on growing the economy. “As the economy grows my focus will be on reducing taxes for working and middle class families.”

Meanwhile, Governor Walker’s office is touting the latest revenue numbers. An analysis from the Legislative Fiscal Bureau shows actual revenue collections for the first quarter of the current fiscal year are up $55.3 million above projections.

Walker is projecting a balanced state budget by the end of the biennium.

Tax collections fall $281 million short of estimates

dorDemocrats see problems for Governor Walker in the latest state revenue estimates. Revenues are off by $281 million for 2014, according to tax collection numbers released by the state Department of Revenue.

Assembly Minority Leader Peter Barca said things would look different, had Governor Scott Walker invested in job training.

“There’s about 40,000 jobs that are being advertised in Wisconsin that could have been filled immediately if we had just had the aggressive job training programs to put those people to work, and that would have generated tax revenues,” Barca said.

The numbers indicate that the current two-year budget is still in the black. But the projections show a 2014-2015 budget with a shortfall of $115 million dollars.

Representative Cory Mason, a Racine Democrat on the Joint Finance Committee, said there are no guarantees that matters will improve.

“If the employment situation is not looking good and the budget situation is not looking good, I think it’s important that the governor take those issues head on and tell us what he’s going to do differently as opposed to telling us that it’s working,” said Mason.

Republicans in the legislature put a different spin on the projections.

“The latest revenue projections show the state budget is balanced and continues to have a surplus,” said a statement from Assembly Speaker Robin Vos. “Consumer confidence is on the rise as seen by the increase in sales tax revenues. It’s clear that returning taxpayer dollars to the rightful owners can help grow the economy.”