Ad claiming Evers tried to ‘make us pay even more at the pump’ runs half full
Drivers are taking a hit on the wallet as world events, such as Russia’s invasion of Ukraine, drive up crude oil prices, driving gasoline prices to record highs.
During the week of March 7, 2022, the national average gas price reached $4.104 per gallon according to GasBuddy.com. The previous all-time high was set in 2008 at $4.103 per gallon. Since then, prices have fallen, with GasBuddy fetching $3.69 to $3.79 per gallon in MilwaukeeFranklin, Wauwatosa and Waukesha and $3.85 in Lannon the 1st of April.
In the midst of this, a subsidiary of Wisconsin Manufacturers & Commerce (WMC) – the WMC Issues Mobilization Council – released a TV advertising that smashed Governor Tony Evers’ economic record.
Among the claims in the ad: Evers “tried to make us pay even more at the pump by raising the gas tax.”
Is the band right?
Plan ties gas tax to inflation rate
When asked for a backup or claim, Nick Novak, WMC’s vice president of communications and marketing, pointed to the Legislative Tax Office’s summary of Evers’ proposed budget for 2019-21.
On page 406, under the heading “Motor Vehicle Fuel Tax Rate Increase,” is the next:
“Increase the tax rate on motor fuels (gasoline, gasoline blended with ethanol and diesel) by eight cents per gallon, to a rate of 38.9 cents per gallon, effective October 1, 2019 The current motor vehicle fuel tax rate has been in effect since April 1, 2006, when the last annual indexing adjustment increased the rate to the current rate of 30.9 cents per gallon.
In other words, the gasoline tax would be increased and – in the future – linked and automatically increased with the rate of inflation. This is what is meant by indexing.
For example, the tax office estimated that the gasoline tax under the plan would increase to 39.7 cents in April 2020 and 40.5 cents in April 2021. Those increases would have cost Wisconsinites $41.6 million. dollars over the 2019-21 budget period. (A more recent note from officeas of March 31, 2022, estimated escalation would have brought the total to 42.0 cents per gallon as of April 1, 2022. )
So Evers definitely pushed for a gas tax increase.
But that’s only part of the picture.
When the raise was offered – with the money it generated to go towards a raise transport financing – Evers also proposed eliminating the state’s longstanding minimum markup law for gasoline.
The minimum profit margin law was created during the Great Depression to protect small businesses from big rivals. The law imposes a price floor where goods like gasoline, groceries and beer are “marked” so they are not used as “loss leaders” at a price level where other businesses can’t compete.
The Department of State Administration – overseen by Evers – said repealing the minimum mark-up law (which it called a “hidden tax”) would save up to 14 cents per gallon. In other words, the Evers plan would have resulted in a net reduction for pump drivers of 6 cents per gallon.
(From this perspective, even with escalation-related increases in later years, based on the new tax office memo, there would still be a saving per gallon – although, of course, that throws a narrow look at the gasoline tax, not the overall economic issues that would affect the price.)
At the time, the Wisconsin Institute for Law and Liberty, a conservative law firm, in a analysis of the Evers proposal noted that eliminating the minimum markup law “could immediately put more money back into the pockets of hard-working Wisconsin workers across the state,” but argued that it “should be repealed entirely — not only for gasoline – and that it should not depend on a tax increase.”
Evers’ idea was not entirely new.
Republican lawmakers floated a similar plan in 2017 that would have raised the gas tax while limiting the minimum markup law, but the idea fell through when the government at the time. Scott Walker said he wouldn’t support it.
This time, the GOP-held legislature ultimately rejected Evers’ proposal and instead increased the title fee paid when purchasing vehicles by 137 percent, from $69.50 to $164.50. They also increased the annual vehicle registration fee by $10, from $75 to $85.
In any case, all of this goes against the idea that the primary objective of Evers’ plan was simply to increase the tax on gasoline.
Kayla Anderson, a spokeswoman for the Evers campaign, said the governor was “intentionally trying to ensure consumers pay less at the pump, not more, by repealing the state’s minimum mark-up law. studies from both sides of the aisle have shown that the minimum mark-up law translates into higher prices for consumers.”
That’s right, up to a point.
But Novak, the WMC spokesman, noted that “even the Legislative Tax Office explained at the time that there might be no change in the retail price of fuel by repealing the Minimum Margin Act. “.
Indeed, a March 2019 Governor of the Governor’s 2019-21 Budget Summary tax office said: “Changes to retail fuel prices resulting from the provision, if any, would be subject to a variety of market and competitive factors, which are believed to significantly influence final retail prices regardless of the legal increase.”
An advertisement from the WMC Issues Mobilization Council claimed that Evers “tried to make us pay even more at the pumps by raising the gas tax”.
In his first budget, the governor proposed an increase in the gas tax. But the announcement ignores what was associated with it: a decision to eliminate the state’s “minimum margin” law on gasoline, which Evers and his office say would constitute a net reduction for drivers.
Including the elimination of the gas minimum markup law in the plan undermines the idea that Evers was trying to charge consumers more. At the same time, it was – and remains – far from clear that elimination would lower prices in the long run. And we have already seen, with inflation, that a large part of this initial savings would have already been swallowed up.
For a statement that is partially accurate but omits important details or takes things out of context, our rating is half true.