GOP plan would raise state gas taxes

Kooyenga proposal also cuts income tax

MADISON - Wisconsin would increase taxes on gasoline and slash income taxes and borrowing for roads, under a proposal being discussed privately by top Assembly Republicans.

The sweeping plan by Rep. Dale Kooyenga (R-Brookfield) is expected to be presented to rank-and-file GOP lawmakers in the Assembly as soon as Thursday and then to the public.

Several sources who have had parts of the plan shared with them cautioned that its details have been changing and could shift again. But the plan takes on a pair of ambitious goals over the coming years: filling a long-term shortfall in the state roads fund while remaking the state’s income taxes in a more conservative mold.

“The plan, while it does not include everybody’s wish list, certainly makes progress on a long-term solution” on transportation, Assembly Speaker Robin Vos (R-Rochester) said.

At a stop in Sun Prairie, Gov. Scott Walker reiterated his opposition to raising taxes on gas. He told reporters he had been briefed on parts of Kooyenga’s plans but that some changes had been made to it since then.

“I want to see it in its totality,” Walker said. “Obviously, I made it consistent from day

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one that I don’t think we need to raise the gas tax or the vehicle registration fee and I remain consistent to that.”

For months, Walker and some conservative GOP senators have said repeatedly that they won’t back an increase in taxes on gasoline. But even if it fails as a whole, elements from the plan could be incorporated into a final budget being negotiated by Republicans who control the Legislature.

Minority Democrats pilloried the proposal.

“In its totality, it’s just a complete nonstarter,” said Assembly Minority Leader Peter Barca (DKenosha).

Here’s some of what Kooyenga has discussed:

Applying the state’s 5% sales tax to gasoline, which could bring in up to 10 cents per gallon at current gasoline prices in the Milwaukee area. Unlike the current flat gas tax, the sales tax on gasoline could rise — or fall — as fuel prices go up and down.

Eliminating 4 to 5 cents of the state’s 32.9cent-per-gallon gasoline tax, which would soften the overall tax increase on drivers.

Making significant cuts to income taxes as part of a plan to move to a 4% flat tax over many years. “The long-term goal is to say we have a flat tax,” Vos acknowledged.

Cutting roughly $300 million of the $500 million in borrowing for roads contained in Walker’s two-year budget bill. That means that over the next two years much of the new money being raised would go for debt reduction rather than for additional road projects — a potential sticking point for road builders who have been seeking more money for highways.

Reducing the statemandated markup on gasoline prices from its current level of 9.18% over the average wholesale price to something lower, such as 3%. That could help shield drivers from cost increases from the new taxes, but this provision will be controversial and likely draw opposition from some Wisconsin retailers such as convenience store chain Kwik Trip.

Repealing the state’s minimum wage standards — known as the prevailing wage — for workers on public works projects such as road and bridge construction.

Cutting about 180 Department of Transportation engineers who were added to the department’s payroll in 2013. Their work would likely be picked up by privatesector engineers.

Applying to the federal government for permission to place tolls on certain state highways.

The plan could still see changes. But Assembly GOP leaders praised Kooyenga’s work.

“I think Dale’s doing a good job,” said Rep. John Nygren (R-Marinette), co-chairman of the budget-writing Joint Finance Committee.

The plans for the minimum markup law generated opposition from the Wisconsin Grocers Association. The tax changes in the package would also have clear implications for drivers across the state, said Brandon Scholz, the group’s president.

“Real simple: You’re going to pay more at the pump,” he said.

Democrats support getting more money for roads, but they oppose the massive cuts in income taxes that Kooyenga is pairing with his proposal. That means that he’ll have to win substantial support from Republicans and conservative groups.

It’s unclear so far if that backing will materialize.

“I have to withhold comment until I see the final package and run the numbers, but I’m keeping an open mind,” said Eric Bott, the Wisconsin director for Americans for Prosperity, a businessfunded group that favors cutting taxes and regulations.

Senate Majority Leader Scott Fitzgerald (R-Juneau) said he wouldn’t comment on Kooyenga’s plan until it is publicly announced, adding he hasn’t yet seen all the details.

“I give him credit for putting together a solution,” said Sen. Alberta Darling (R-River Hills), the co-chairwoman of the Legislature’s budget committee. But “it’s a broad plan so I definitely have to pick through it.”

Democrats were more willing to weigh in.

Sen. Jon Erpenbach (D-Middleton) said that he doubted even Republicans would back the proposal, saying the income tax cuts would end up starving schools and health care programs of money.

“I have to believe it’s a nonstarter,” Erpenbach said of the Assembly GOP plan.

Increasing taxes on gasoline while cutting income taxes amounted to a “Trojan horse” that would shift money from schools and universities to highways over the long run, said Rep. Gordon Hintz (D-Oshkosh).

“It amounts to a bait and switch,” he said.