WI Gov. Evers Unveils Budget; Includes Gas Tax, Minimum Wage Increase

WI’s gas tax would go up by 8 cents per gallon and be indexed to allow for automatic increases in the future as part of WI Governor Tony Evers budget unveiled last night during his address before the state legislature.

Indexing was initiated in 1985, and then repealed 20 years later by Republican lawmakers and Democratic Gov. Jim Doyle.

Wisconsin’s current gas tax is 30.9 cents per gallon, or 32.9 cents when all state taxes are included. Evers’ plan would raise the state’s overall share of the gas tax to 40.9 cents per gallon. The governor’s office said it would offset the gas tax increase by eliminating Wisconsin’s minimum markup law for gasoline purchases. Also known as the Unfair Sales Act, the law prevents big retailers from selling gasoline below cost.

Evers would also increase a registration fee for heavy trucks by 27 percent.

Evers’ $83.4 billion, two-year spending plan would also legalize medical marijuana and offer state-issued driver’s licenses and ID cards to immigrants living in the country illegally.  It would also increase the state’s minimum wage by $1 in January with subsequent 75 cent increases in each of the next three years before indexing the minimum wage to inflation in 2024. The budget also sets up a task force to study other ways to move toward a $15 per hour minimum wage.

Many of the budget’s proposed programming would be paid for in a number of ways, including collecting hundreds of millions more from manufacturers and capital gains than the state does right now and limiting a tax break for investors.

Currently, people who hold capital gains for more than a year don’t have to pay the full state tax on the income.  Evers would require higher-income investors to pay the same tax rate on their capital gains as they pay for regular wages and salaries. That change is expected to generate about $505 million for state government over two years.

Evers would also scale back tax credit for manufacturers that earn more than $300,000, generating another $516 million for the state.

Those two sources of revenue are expected to offset a new $832 million tax cut Evers wants for individuals who earn below $80,000 and families that earn below $125,000. They’d receive a 10 percent tax credit under the governor’s budget. Evers would also expand Wisconsin’s Earned Income Tax Credit.

The governor priorities, however, are likely dead on arrival in the Republican-controlled state Legislature. Sen. Majority Leader Scott Fitzgerald, R-Juneau, said Republicans would set Evers’ proposal aside and build their own budget.

Some other budget provisions would:

  • Repeal the private sector “Right to Work” law passed by Walker and Republican legislators in 2015.
  • Remove some state work requirements and drug testing for programs including Medicaid, food stamps and unemployment insurance.
  • Impose a tax on e-cigarettes equal to 71 percent of the manufacturer’s list price.
  • Provide a 2 percent raise for state employees, effective Jan. 1, 2020, and a second 2 percent pay raise Jan. 1, 2021.
  • Create a Bureau of Natural Resources Science, with five new full-time scientists, within the state Department of Natural Resources.
  • Spend $50 million on a program to add broadband throughout Wisconsin.
  • Repeal the so-called “dark store loophole” used by large retailers to reduce their local property tax burden.
  • Borrow up to $70 million to address water quality issues, like replacing lead service lines.

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