WISCONSIN’S
FUEL TAX NOW TOPS IN THE COUNTRY
The
automatic tax or “indexing” that goes into effect every April 1 has hiked
the state’s fuel tax another .4 cents of a cent per gallon, now making
Wisconsin’s diesel fuel tax rate the highest in the country! As of April 1,
Wisconsin’s fuel tax will be 31.5 cents per gallon (including the three cents
per gallon for the Environmental Cleanup Fund). On
October 1, 2002, the national average for diesel fuel tax was 24.4 cents per
gallon, making Wisconsin’s rate over 7 cents per gallon higher than what the
average state charges. Wisconsin’s
high diesel fuel tax rate leads to problems for retailers and truck stops near
the state border. For instance, Wisconsin’s diesel fuel tax rate is 11.5 cents
per gallon higher than Minnesota’s (20.0 cents per gallon) and 9.0 cents per
gallon higher than Iowa’s rate of 22.5 cents per gallon. The
state’s fuel tax is adjusted annually on April 1, based on changes in the
Consumer Price Index. Since 1985,
the fuel tax has risen 9.0 cents per gallon because of these automatic
increases. During the same period, the Legislature voted twice to raise the fuel
tax by a total of only three cents. The
average truck consumes approximately 14,000 gallons of fuel per year. The nine
cent per gallon increase in the fuel tax from indexing means an additional
$1,260 per truck in taxes without any legislative approval. Tom
Howells, Wisconsin Motor Carriers Association (WMCA) President, indicated that,
“Transportation is very vital to this state. Taxation and expenditure levels
should be debated and approved by the Legislature, instead on hiding behind
indexing schemes to raise the necessary funds.” A
Study by the American Trucking Associations showed that 1,000 motor carriers
with five or more trucks would go out of business every time the price of fuel
goes up 10 cents per gallon. Fuel constitutes the second largest expense for
most trucking companies, behind labor costs.
“The
last two years have been difficult for our members”, commented Howells. “A
combination of increased insurance costs, spiking fuel prices, and reduced
freight volumes have stretched some of our members to the limit. These increased
costs are difficult to absorb because profit margins in the trucking industry
are very thin.“ Wisconsin's
fuel tax is not the only high tax paid by trucking companies. The annual truck
registration fee of $2,044 for an 80,000 pound combination currently ranks 10th
in the nation. The national average is $1,586, making
Wisconsin’s fee over $450 higher than what the average state charges. The
reliance of Wisconsin’s taxation of highway users to help fund a variety of
entities and programs not related to the building and maintenance of our roads
and bridges has driven our gas tax to be the highest in the country.
It should also be noted that while other states use one or more
additional forms of revenue including general-purpose revenue (GPR) to help fund
their rail, transit and harbor programs, Wisconsin does not.
“We need to look beyond funding transportation exclusively with fuel tax and registration fee revenues in Wisconsin” said Marc Bentley, a lobbyist for WMCA. “What we really need is transportation finance reform and not increased taxes,” said Bentley. CONTACT:
|
|
Copyright 1999 |
