As I continue to talk with area residents, the number one issue on everyone's mind is the economy. The national recession has hit our state hard resulting in lost jobs and a state budget deficit. The number one priority of your state government should be focused on improving our business climate, fostering economic development, and creating jobs.
However, there is a provision in the governor's budget proposal that would have the opposite effect if it is approved. Governor Doyle's budget imposes a new tax (the Oil Franchise Tax) on a motor vehicle fuel supplier's gross receipts from the sale of gasoline in Wisconsin. Like it or not, gasoline and diesel fuel are a cornerstone in our economy, and increasing taxes on this vital commodity will impact everyone negatively.
Now, we can all agree that we do not like paying high gas prices to the big oil companies, especially when money goes overseas to the Middle East. The problem is our economy is too heavily reliant on foreign sources of oil. I believe all levels of government need to work together with the private sector to help reduce our nation's demand for oil. We can take a large step forward by investing in, and promoting, renewable sources of energy like solar, wind, and biofuels.
I have multiple concerns with the new tax proposed in the budget. Nearly all economists will tell you that this new tax is essentially a hidden gas tax increase and will be simply passed along to the consumer. According to the Office of Transportation and Air Quality of the U.S. Environmental Protection Agency, the average motorist would pay about $317 more per year as a result of higher prices at the pump. In addition, the new tax would increase transportation costs for businesses, resulting in either higher prices for products or possible lost jobs.
Ultimately, the proposal would result in a $271 million tax increase at current gas prices. That figure could rise to nearly $400 million if gas prices increase due to the fact the tax increases proportionally to the price of gas. If enacted, the new hidden gas tax would increase fuel taxes to $.55 per gallon and make Wisconsin have the second highest gas tax in the nation. I believe we already pay enough in gas taxes in Wisconsin. We currently have the 8th highest combined federal and state gas tax, and increasing it would only slow our economic recovery.
In addition, this tax would not be needed if the governor did not raid the state's transportation fund to pay for non-transportation related projects. The gas tax, along with DMV fees, is designed to pay for our roads, highways and transportation infrastructure. However, the governor has raided the transportation fund to the tune of over $1.1 billion during his tenure, including $77.5 million in this current budget proposal. If these funds were not raided, then the additional money leveraged by this new tax would not be needed.
Finally, one of the most troubling effects this new tax would have is the negative impact upon local cooperatives. According to the Cooperative Network, Wisconsin's wholesale motor fuel supplier cooperatives paid more than $36 million to their local Wisconsin farm supply cooperative members in 2007 and 2008. They estimate that the new tax would likely eliminate future cash patronage distributions from the local cooperatives to their member-owners. Examples of cooperatives in our area that would be affected are: Landmark Coop, Frontier FS Coop, Southern WI Coop, Blanchardville Coop, and Pecatonica Coop. This new tax would hurt our local agriculture economy, which is exactly the opposite action that state government should be taking.
A new hidden increase in the gas tax will only hurt economic development in our state. It will do nothing to solve the problem of our reliance on foreign oil and gasoline. I am hopeful we can make progress on enacting legislation that will promote renewable alternative energy sources, which will not only boost our economy, but our environment as well.
I want to hear from you so please feel welcome to express your thoughts or let me know if I can be helpful to you in any way by calling 888-534-0080, e-mailing me at Rep.Davis@legis.wi.gov or by writing or stopping by 11 West, State Capitol, Madison, WI 53708.
- Rep. Brett Davis, R-Oregon, serves the 80th Assembly District, which includes all of Green County and parts of Lafayette, Rock and Dane counties.
However, there is a provision in the governor's budget proposal that would have the opposite effect if it is approved. Governor Doyle's budget imposes a new tax (the Oil Franchise Tax) on a motor vehicle fuel supplier's gross receipts from the sale of gasoline in Wisconsin. Like it or not, gasoline and diesel fuel are a cornerstone in our economy, and increasing taxes on this vital commodity will impact everyone negatively.
Now, we can all agree that we do not like paying high gas prices to the big oil companies, especially when money goes overseas to the Middle East. The problem is our economy is too heavily reliant on foreign sources of oil. I believe all levels of government need to work together with the private sector to help reduce our nation's demand for oil. We can take a large step forward by investing in, and promoting, renewable sources of energy like solar, wind, and biofuels.
I have multiple concerns with the new tax proposed in the budget. Nearly all economists will tell you that this new tax is essentially a hidden gas tax increase and will be simply passed along to the consumer. According to the Office of Transportation and Air Quality of the U.S. Environmental Protection Agency, the average motorist would pay about $317 more per year as a result of higher prices at the pump. In addition, the new tax would increase transportation costs for businesses, resulting in either higher prices for products or possible lost jobs.
Ultimately, the proposal would result in a $271 million tax increase at current gas prices. That figure could rise to nearly $400 million if gas prices increase due to the fact the tax increases proportionally to the price of gas. If enacted, the new hidden gas tax would increase fuel taxes to $.55 per gallon and make Wisconsin have the second highest gas tax in the nation. I believe we already pay enough in gas taxes in Wisconsin. We currently have the 8th highest combined federal and state gas tax, and increasing it would only slow our economic recovery.
In addition, this tax would not be needed if the governor did not raid the state's transportation fund to pay for non-transportation related projects. The gas tax, along with DMV fees, is designed to pay for our roads, highways and transportation infrastructure. However, the governor has raided the transportation fund to the tune of over $1.1 billion during his tenure, including $77.5 million in this current budget proposal. If these funds were not raided, then the additional money leveraged by this new tax would not be needed.
Finally, one of the most troubling effects this new tax would have is the negative impact upon local cooperatives. According to the Cooperative Network, Wisconsin's wholesale motor fuel supplier cooperatives paid more than $36 million to their local Wisconsin farm supply cooperative members in 2007 and 2008. They estimate that the new tax would likely eliminate future cash patronage distributions from the local cooperatives to their member-owners. Examples of cooperatives in our area that would be affected are: Landmark Coop, Frontier FS Coop, Southern WI Coop, Blanchardville Coop, and Pecatonica Coop. This new tax would hurt our local agriculture economy, which is exactly the opposite action that state government should be taking.
A new hidden increase in the gas tax will only hurt economic development in our state. It will do nothing to solve the problem of our reliance on foreign oil and gasoline. I am hopeful we can make progress on enacting legislation that will promote renewable alternative energy sources, which will not only boost our economy, but our environment as well.
I want to hear from you so please feel welcome to express your thoughts or let me know if I can be helpful to you in any way by calling 888-534-0080, e-mailing me at Rep.Davis@legis.wi.gov or by writing or stopping by 11 West, State Capitol, Madison, WI 53708.
- Rep. Brett Davis, R-Oregon, serves the 80th Assembly District, which includes all of Green County and parts of Lafayette, Rock and Dane counties.
