Wisconsin Legislative Update


Splits on gas tax, markup law show difficult path for Gov. Tony Evers' transportation plan

Patrick Marley, Alison Dirr and Molly Beck, Milwaukee Journal Sentinel

Highway funding marks a rare budget area where Republicans and Democrats could find agreement, but already Gov. Tony Evers' highway plans face serious trouble. 

As lawmakers clashed over the Democratic governor's transportation plan, Evers suggested he would consider vetoing the entire state budget if GOP lawmakers refuse to make deals with him. 

At a stop at an elementary school in Appleton, Evers noted he has some of the most expansive veto powers of any governor in the country.

"If I need to use it I will," he said. "I don’t know if that means that I’ll veto the entire budget, but if it’s a completely inadequate budget for the people of Wisconsin, I will veto it."

Wisconsin governors have the power to strike out individual words and phrases in spending legislation, allowing them to reshape budgets after lawmakers finish their work.

Evers in January said he would not rule out vetoing the entire budget, but his veto comments were the first he made on the topic since introducing his budget. 

Transportation fight ahead

The complexities of negotiating a transportation deal were underscored recently when the top Democrat in the state Senate refused to say whether she backed a part of Evers' plan that would eliminate a requirement that gas prices be marked up by a set amount. 

"It's a start, it's a start," Senate Minority Leader Jennifer Shilling of La Crosse said as she hurried away from reporters at a Madison hotel. 

Shilling expressed support for Evers' plan to raise the gas tax by 8 cents a gallon but declined to address repealing the minimum markup law for gasoline. 

Her evasive exchange with reporters spelled out the challenges Evers faces as he tries to get his $83 billion, two-year spending plan through a Legislature controlled by Republicans. 

GOP leaders have said they will throw out the vast majority of Evers' budget, which includes about $1 billion in tax increases and an expansion of the BadgerCare Plus health-care program under Obamacare. 

Evers defended proposing tax increases, even though he said before last year's election, "I'm planning on raising no taxes."

"I understand there’s some tax increases," Evers said Friday. "The reason the budget is the way it is, is we listened to the people of Wisconsin. They said they wanted better schools, more adequately resourced schools, they said they wanted health care, and affordable and accessible health care, and they said they wanted to fix the roads. So those issues, basically there’s a cost involved in that."

Hurdles from both parties

Both sides have said they see a need for putting more money toward transportation, opening a chance for Evers to secure funds to fix the state's roads. But his plan so far faces hurdles from Democrats and Republicans alike. 

Evers contends his plan would bring fuel prices down, even when accounting for a higher gas tax, because he says the markup law adds 14 cents to the price of a gallon of gasoline. The markup law requires retailers to increase the price of gas in most cases by 9.18 percent above the average wholesale price. 

Evers' plan is modeled in part on a proposal Assembly Republicans wrote in 2017 that quickly fell apart when then-Gov. Scott Walker ruled it out. 

With past Republican support for a similar deal, Evers is hoping to gain traction with the GOP now. But such an approach also broadens the opportunities for disagreement because Republicans have been split on the minimum markup law, just as they're split on transportation funding. 

Those who oppose the minimum markup law say it unnecessarily drives up costs for consumers. Those who support it argue it protects shoppers because without it some retailers would sell gas below cost until they drive out their competitors — and then jack up their prices. 

Evers' plan would repeal the Depression-era law for gasoline, but not other products. 

Conservatives for years have pushed for repeal of the law, but haven't made headway, even when Republicans controlled all of state government. 

Legislative leaders suggested tying the repeal to a gas tax increase may be unpalatable.

"Little bit of a shell game there," Senate Majority Leader Scott Fitzgerald of Juneau said recently. "Governor’s willing to raise 8 cents and then he’s trying to convince everybody in the state that suddenly repealing minimum markup will put more money in their pocket? I just don’t see it right now."

Even so, free-market conservatives praised the proposal. Colin Roth, a policy analyst for the conservative law firm Wisconsin Institute for Law & Liberty, called the idea "a commonsense, bipartisan idea" that could establish common ground between Democrats and conservatives.

Eric Bott, state director of Americans for Prosperity-Wisconsin, said, "It’s one of a few positives in the budget."

“Otherwise this budget looks to be a mess,” Bott tweeted.

It's not just the minimum markup law that divides Republicans. Road funding does, too. 

Assembly Republicans have shown support for raising the gas tax or finding other new revenue for roads, but Senate Republicans have resisted those ideas. 

GOP leaders from the two houses have said they want to explore tolling as a way to fund roads. Evers didn't propose that in the budget but hasn't ruled out the idea. 

Assembly Minority Leader Gordon Hintz of Oshkosh said he hopes Evers' transportation plan makes it through the months-long budget process. 

“If we’re not going to do transportation, are we going to keep driving up the cost billions of dollars down the road by borrowing? By letting our roads become gravel? By continuing to punt? Or are they going to come up with something else?” the Democratic leader said. “What are the Republicans going to do? Because I’m hearing a lot of criticism and I’m not hearing a lot of answers.” But Hintz acknowledged Evers' overall budget isn't going anywhere as written.   

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