Analysis Finds Proposed Gas Tax up 64 Percent Since Introduced
Tax Climbs to 3rd Highest in Nation; Worse in Milwaukee Area

MADISON – A proposed gross receipts tax in the state budget would drive gasoline taxes up by 7 cents a gallon, a 64 percent increase since the tax hike was proposed in February, a new analysis from WMC reported Wednesday.

“This proposal is like gas tax indexing on steroids,” said James A. Buchen, vice president of government relations for Wisconsin Manufacturers & Commerce. WMC released “Gas Tax Hike Hits 7 Cents Per Gallon” on Wednesday. The report is available at www.wmc.org.

The analysis shows the proposed gas tax increase is actually $98 million more than originally projected. The tax would raise more than $370 million during the biennium.

In 2005, Governor Jim Doyle and the Legislature repealed automatic gas tax hikes – inflationary indexing – because they said it was unfair to raise taxes without votes in the Legislature. Under the old system, the gas tax would have only increased by about a penny per gallon.

The gross receipts tax would be a very bad precedent for Wisconsin’s tax system. “As gas prices climb so do the tax collections,” Buchen said.

Since February, when Governor Jim Doyle first introduced the plan, the expected tax collections have spiked by 64 percent due to increases in pump prices. That would take Wisconsin’s state gas tax to 40 cents a gallon, which would rank third highest in America, according to WMC’s analysis.

Other key findings in the WMC report:

Milwaukee Area Hit Hardest – Because the Milwaukee metropolitan region uses more-expensive reformulated gas, those counties will pay an extra 4.5 percent more than the rest of the state.

Gas Tax Hikes 21 Percent – If the gas tax goes to 40 cents a gallon, that will be a 21 percent hike in the state gas tax.

-- 30 --

FOR FURTHER INFORMATION CONTACT:
James A. Buchen, (608) 258-3400
Jeff Schoepke, (608) 219-8203

Posted: May 23, 2007