The Capitol Report, produced by WisPolitics.com — a nonpartisan, Madison-based news service that specializes in coverage of government and politics — provides a weekly analysis of issues being debated in Wisconsin state government. It is underwritten by the WNA and produced exclusively for its members. WisPolitics.com President Jeff Mayers is a former editor and reporter for the Associated Press and a former political writer for the Wisconsin State Journal.
Democratic Gov. Tony Evers on the campaign trail has been floating the idea of a temporary gas tax holiday even as prices at the pump were trending down.
Evers, seeking his second four-year term this fall, made a Racine stop in late July as part of his “pothole patrol” tour to emphasize his support of good roads and up-to-date infrastructure. Democrats in general are pushing infrastructure spending, given President Biden signing a huge national infrastructure bill that passed on a bipartisan vote.
Appearing with local Democrat officeholders, Evers said a gas tax suspension “has to be temporary. We use the tax from gasoline to fix the roads, and if we don’t have that money, we’re not going to be able to fix the roads. So, I’m in favor of a temporary one using some of the surplus that we have. We have millions of dollars that are in our coffers, and having that holiday would be appropriate. We’re considering it.”
That surplus is big, really big — an estimated $5.4 billion, according to Revenue Secretary Peter Barca. Evers previously proposed sending a lot of the surplus back to taxpayers, but Republican legislative leaders never took it up.
One leader of the GOP-run Joint Finance Committee also rejects this latest Evers idea. Co-chair Sen. Howard Marklein told WisPolitics.com he objects to using the state’s surplus on a “gimmick.”
The Spring Green Republican said he thinks holding onto the money will pay off eventually, especially considering rising inflation.
“I am glad that we are in a very positive financial position and that we have a strong surplus right now because I know that we are going to need that surplus to manage our finances in the future,” Marklein said. “I believe that we will be thankful for our conservative approach when we are managing our state budget next spring and are facing tremendous inflationary increases.”
But two Assembly leaders signaled a positive response — though nobody expects the Legislature to return and give Evers a victory before the November election. Assembly Speaker Robin Vos recently told WisPolitics.com he would be open to a temporary suspension of the gas tax if other state resources are used for road projects.
“I would not want to delay any projects for transportation because we are already behind a lot of the jobs that we need to get done,” Vos said. “I would certainly be open to looking at temporary suspension of the gas tax as long as we use state resources to make up the difference so there’s no reduction in the total number of road projects we’re doing.”
Assembly Speaker Pro Tempore Tyler August in a WisPolitics.com interview also signaled support for a temporary suspension of the gas tax in an effort to bring prices down, as long as the lost revenue isn’t made up by bonding infrastructure projects.
Trade groups, meanwhile, point to other factors driving high gas prices, including trends in the global crude oil market and economic and regulatory policies at the federal level.
Matthew Hauser, president and CEO of the Wisconsin Petroleum Marketers & Convenience Store Association, says temporarily suspending the state’s gas tax “may provide some relief at the pump.” But he said many external factors — such as the price of crude oil — can’t be controlled by retailers or state governments.
“A gas tax holiday will raise expectations among consumers that prices will fall significantly at the pump, which simply may not be the case given the volatile global market,” he said in a statement.
And Steve Baas, executive director of the Wisconsin Transportation Builders Association, argues gas tax holidays have been shown to be “largely more sound bite than solution” when it comes to lowering prices for consumers.
“We do appreciate the governor’s commitment to ensuring the Transportation Fund is kept whole as he considers his options, but we hope that in the end he will work with the administration and Congress in Washington to address the economic and regulatory policies that are actually driving high fuel costs rather than scapegoating the gas tax,” Baas said.
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