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Evers’ inflation scheme would have driven high gas prices higher

By M.D. Kittle

MADISON — While Gov. Tony Evers falsely blames businesses for soaring inflation, he probably doesn’t want you to remember that one of his first budget proposals would have caused a lot of pain at the pump.

In his first days in office, the governor proposed what amounted to a 8-cent increase in the state’s gas tax, bringing it to one of the highest rates in the nation.

Evers also pitched restoring indexing, or automatically increasing the state’s gasoline tax by the rate of inflation every April. Evers, working with his state road builder allies, was looking to raise quick cash for his Department of Transportation, led by a long-time road builder lobbyist.

Tying Wisconsin’s already costly 30.9-cent per-gallon gas tax to the rate of inflation would have added to the rapidly rising prices at the pump — at an average $3.29 per gallon on Wednesday, according to AAA.

If Evers’ indexing scheme had gone into effect, Wisconsin motorists would be looking at 9 cents more per gallon, or a gas tax of 40.1 cents, according to the non-partisan Legislative Fiscal Bureau. The current gasoline tax is 32.9 cents when including all petroleum assessments.

Analysts project prices could approach $4 a gallon nationally come Memorial Day. Since Evers’ plan would automatically increase the gas tax every April,  the inflation-tied gas tax increase would be even more pronounced.

The governor’s transportation proposal was estimated to bring in more than $600 million, the brunt of that revenue from the gas tax. Republicans rejected the tax hike and the indexing scheme, which would have brought back an unpopular automatic tax.

“Certainly when you index the gas tax to the national rate of inflation, you’re talking about an automatic tax increase at a time when consumers can least afford them,” said Scott Manley, executive vice president of Government Relations for Wisconsin Manufacturers & Commerce

Big Government, Bad Inflation

Wholesale inflation soared to 9.7 percent last month from the same time last year, according to the U.S. Department of Labor. The agency reported the producer price index jumped 1 percent in December. Prices for everything from groceries to gasoline are devouring personal earnings gains.

After his lockdowns and COVID restrictions crippled and closed Wisconsin businesses, Evers in his State of the State Address blamed employers for the surging inflation. He accused them of “squeez(ing) consumers for every extra penny, raising everyday costs for folks in Wisconsin and across our country.”

Manley said that’s the perspective of someone who doesn’t understand simple economics. But not surprising, he said, from an educrat who has spent his entire career insulated from the economy and the basic principles of macroeconomics.

Now Evers is singing from the same political hymnal as the Biden administration, which downplayed inflationary forces for months before politically attacking “the greed” of corporations for rapidly raising prices.

The rhetoric, Manley said, couldn’t be farther from the truth. The blame, he said, rests on the shoulders of big government and bad public policy.

“When you flood the economy with a bunch of printed money and increase demand for goods and services at a level higher than what the supply chain and our businesses can deliver and at the same time provide overly generous government benefits that encourage the unemployed not to work, that’s a recipe for higher prices and a broken supply chain.”

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