Just Fix It Wisconsin

Other Views: Veterans of road funding battle in 1995 favor gas tax hike 7/31/2017

7/31/2017, Janesville Gazette – By Steven Walters

Two Republican legislative leaders in 1995—when the budget for highways was separated from other state spending and finally passed on Nov. 16—say it’s time to raise the state gas tax by least 5 cents.

Legislators “should stand up and say, ‘I did not promise not to raise taxes—someone else did’,” said former Sen. Mike Ellis, referring to Republican Gov. Scott Walker, who made that promise and has repeatedly said he will not accept any increase in the 30.9-cent per gallon gas tax or the $75 annual vehicle registration fee for cars, SUVs and light trucks.

It would be “a lousy nickel” increase when the gas-pump price is $2.19 cents per gallon, said Ellis. A former Senate president and majority leader, he had a 34-year career in the Legislature before retiring in 2014.

Now, “I can fill up my truck for $40—not $70,” Ellis added.

Writing for Isthmus, Madison’s weekly newspaper, former Assembly speaker and Supreme Court justice David Prosser recommended a 5-cent per gallon increase in the gas tax and going to back to “indexing” that tax, which tied it to annual inflation nationally.

According to the non-partisan Legislative Fiscal Bureau, a 5-cent increase in the gas tax would bring in $168.5 million more a year for highways. It would cost the owner of a car getting 30 miles per gallon driven 8,000 miles per year an additional $14 per year, and the owner of a car getting 15 miles per gallon driven 16,000 miles per year about $53 a year.

Generations of Capitol politicians have been fighting over how to pay for highways. So, the current impasse between Walker and Republicans who control the Legislature should not surprise anyone, although it is holding up approval of the 2017-19 state budget.

In some ways, the current impasse mirrors the 1995 fight, also waged by a Republican governor, Tommy G. Thompson, with leaders of his party. Current Republican leaders have said they plan to avoid a repeat of 1995, when highway funding was separated from all other state spending and approved months later.

In the mid-1980s, Democratic Gov. Tony Earl pushed indexing the gas tax, then 23.4-cents per gallon. Indexing was the law between 1985 and 2006, when Republican legislators repealed it and another Democratic governor, Jim Doyle, signed the repeal into law. Doyle was up for re-election that year.

“Stable transportation funding was one of [Earl’s] most significant accomplishments,” wrote Prosser, who served in the Assembly from 1979 until 1996.

Prosser said it was “short-sighted” of Republican legislators to repeal indexing in 2006, since that denied the Transportation Fund about $1.4 billion over the last 10 years.

Prosser and Ellis had other ideas to break the current deadlock in the Capitol over highway funding.

The $75 annual vehicle registration fee should be raised to $100, Prosser said. It would “still be less than the fee in several neighboring states,” he wrote in Isthmus.

Raising the $75 registration fee to $100 would generate an additional $118 million per year for highways. The fee has not been changed since 2008.

Ellis noted that sales tax collections from auto-related purchases—new and used cars, parts and supplies—totaled $559.6 million in 2015, according to the Fiscal Bureau. That was 11 percent of the $5 billion in sales tax collections.

Phasing in the diversion of that $559.6 million—from the state’s general fund to the Transportation Fund—over several years would go a long way toward solving the highway funding problem, Ellis said.

But that diversion would cause problems in paying for important non-transportation programs—aid to K-12 schools and local governments, Medicaid, credits to offset property taxes and the UW and prison systems, for example.

Ellis’s solution to that problem: “If you got a (deficit) hole, why don’t you cut spending?”

Wisconsin gets about 90 percent of transportation fund revenues from only two sources: the gas tax and vehicle registration fee. That’s one reason for the current Capitol impasse over funding.

In 1995, then-Republican Gov. Tommy G. Thompson proposed a new “oil company franchise fee,” which would have brought in about $115 million more a year. But Republican legislators killed Thompson’s plan, delaying approval of the transportation budget until Nov. 16.

Don’t borrow any more for highways, Ellis warned.

Why? “You’re eating yourself alive.”