TRUCKERS OPPOSE FUEL TAX INDEXING
The automatic tax or "indexing" that goes into effect every year will hike the state's fuel tax another .8 cents per gallon on April 1st.
The additional increase will bring Wisconsin's tax on diesel fuel (inclusive of the 3 cent per gallon petroleum inspection fee) to 32.9 cents per gallon. That would give Wisconsin the second highest diesel fuel tax in the country and the highest among midwestern states. The federal tax on diesel fuel is 24.4 cents per gallon.
A new memo from the Legislative Fiscal Bureau indicates that the cost to taxpayers of the automatic gas tax hike has now exceeded $3 billion. The recently released memo from the non-partisan Fiscal Bureau concluded: "It is estimated that indexing the state's fuel tax rate each year has resulted in approximately $3.2 billion in additional fuel tax revenues from 1985 thru 2004." The memo also indicates that the tax, which will go up again April 1st without a legislative vote, will cost taxpayers an additional $365.8 million in 2005 alone.
The Fiscal Bureau memo indicates that the tax will increase by .8 cents on April 1st bringing the total increase since the automatic tax hike was enacted to 10.9 cents per gallon. During the same period, the Legislature voted twice to raise the fuel tax by a total of only three cents.
"Our members favor eliminating the automatic increase in fuel taxes," commented Wisconsin Motor Carriers Association (WMCA) President, Thomas Howells. "Although transportation is very vital to this state, we have always felt that taxation and expenditure levels should be debated and approved by the Legislature, instead on hiding behind indexing to raise the necessary funds."
"Truckers need good roads and bridges and are willing to pay for them. However, recent changes in the Transportation Fund have meant that motor vehicle user fees that are collected are no longer only used for transportation. It is now more important than ever, to stop the automatic tax increases and let the Legislature debate how the money should be raised and how it should be spent," said Howells.
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 12.9 cents per gallon higher than Minnesota's (20.0 cents per gallon) and 9.4 cents per gallon higher than Iowa's rate of 23.5 cents per gallon.
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 one of 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.
Based on the Department of Energy's weekly national survey, a gallon of diesel fuel costs a trucker approximately $2.25 while last year at this time it was $1.64.
"Spiking fuel prices over the last year have stretched some of our members to the limit", commented Howells. "These increased costs are difficult to absorb because profit margins in the trucking industry are very thin."
"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.
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© 1999
March 31, 2005
