Ad claiming Evers tried to ‘make us pay even more at the pump’ is running on half tank

Drivers are taking a hit to the wallet as world events, such as Russia’s invasion of Ukraine, are causing crude oil prices to increase, sending gasoline prices to record-breaking levels.

During the week of March 7, 2022, the average national gas price hit $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 nudged downward, with GasBuddy reporting $3.69 to $3.79 per gallon in Milwaukee, Franklin, Wauwatosa and Waukesha and $3.85 in Lannon on April 1.

In the midst of that, an affiliate of Wisconsin Manufacturers & Commerce (WMC) – the WMC Issues Mobilization Council – released a TV ad that slammed Gov. Tony Evers’ economic record. 

Among the claims in the ad: Evers "tried to make us pay even more at the pump by hiking the gas tax."

Is the group right?

When asked for backup or the claim, Nick Novak, WMC’s vice president of communications and marketing, pointed to the Legislative Fiscal Bureau’s summary of Evers’ proposed 2019-21 budget. 

On page 406, under the heading "Motor Vehicle Fuel Tax Rate Increase," is the following: 

"Increase the motor vehicle fuel tax rate (gasoline, gasoline blended with ethanol, and diesel) by eight cents per gallon resulting in 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 final annual indexing adjustment increased the rate to the current 30.9 cents per gallon rate." 

In other words, the gas tax would be increased and – in the future – be tied and rise automatically with the rate of inflation. That’s what’s meant by indexing.

For instance, the fiscal bureau estimated the gas tax under the plan would rise to 39.7 cents in April 2020 and 40.5 cents in April 2021. These increases would have cost Wisconsinites $41.6 million over the 2019-21 budget period. (A more recent memo from the bureau, dated March 31, 2022, estimated that the indexing would have brought the total to 42.0 cents per gallon on April 1, 2022. )

So, Evers definitely pushed a gas tax increase.

But that’s only part of the picture.

When the increase was proposed – with the money it generated to go toward increased transportation funding – Evers also proposed eliminating the state’s longstanding minimum markup law for gasoline.

The minimum markup law was created during the Great Depression to protect small business from larger rivals. The law mandates a price floor where goods like gas, groceries, and beer are "marked up" so they are not used as "loss leaders" at a price level where the other businesses can’t compete. 

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The state Department of Administration – overseen by Evers – said repealing the minimum markup law (which it labeled 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 drivers at the pump of 6 cents per gallon.

(From that perspective, even with rises tied to indexing in the subsequent years, based on the new fiscal bureau memo there would still be a per-gallon savings – though, of course, this is taking a narrow look at the gas tax, not overall economic matters that would affect price.)

At  the time, the Wisconsin Institute for Law and Liberty, a conservative law firm, in an analysis of the Evers proposal noted elimination of the minimum markup law "could immediately put more money back into the pockets of hard-working Wisconsinites all over the state" but argued it "should be fully repealed – not just for gasoline – and it should not be contingent on a tax increase." 

The idea from Evers was not entirely new.

Republican lawmakers floated a similar plan in 2017 that would have raised the gas tax while curbing the minimum markup law, but the idea flopped when then-Gov. Scott Walker said he would not back it. 

This time, the GOP-held Legislature ultimately rejected Evers’ proposal and instead raised the title fee paid when vehicles are purchased by 137%, from $69.50 to $164.50. They also raised annual vehicle registration fees by $10, from $75 to $85.

In any case, all of that goes against the idea that the primary aim of Evers’ plan was to simply raise the gas tax

Kayla Anderson, an Evers campaign spokeswoman, said the governor "was intentionally trying to ensure consumers would pay less at the pump, not more, by repealing the state's minimum markup law. Studies from both sides of the aisle have shown that the minimum markup law results in higher prices for consumers."

That’s fair, to a point. 

But Novak, the WMC spokesman, noted "even the Legislative Fiscal Bureau explained at the time that there may not be a change in the retail price of fuel by repealing the minimum markup law."

Indeed, a March 2019 summary of the governor’s 2019-21 budget from the fiscal bureau said: "Changes in retail fuel prices as a result of the provision, if any, would be subject to a variety of market and competitive factors, which are assumed to exert considerable influence on final retail prices independent of the statutory markup."

A WMC Issues Mobilization Council ad claimed Evers "tried to make us pay even more at the pump by hiking the gas tax."

In his first budget, the governor did propose an increase in the gas tax. But the ad ignores what was coupled with it: A move to eliminate the state’s "minimum markup" law as it relates to gasoline, which Evers and his office argued would be a net reduction for drivers. 

The inclusion of the elimination of the minimum markup law for gasoline in the plan undermines the idea that Evers was trying to make consumers pay more. At the same time, it was – and remains – far from clear that the elimination would reduce prices in the long run. And we have already seen, with inflation, that much of that initial savings would already have been eaten up.

For a statement that is partially accurate but leaves out important details or takes things out of context, our rating is Half True.